Exhibit 10.20

AVIS RENT A CAR SYSTEM, LLC

PENSION PLAN

EFFECTIVE JUNE 1, 2006

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AVIS RENT A CAR SYSTEM, LLC PENSION PLAN

INTRODUCTION

This amended and restated Avis Rent A Car System, LLC Pension Plan (the “Plan”)
is made effective as of June 1, 2006. The Plan is an amendment and restatement
of Part II of the Cendant Corporation Pension Plan in connection with the
spin-off of Realogy Corporation by Cendant Corporation (the “Sponsor”) as part
of a special dividend distribution to its shareholders (the “Dividend
Distribution”). This Plan is identical in all material respects to Part II of
the Cendant Corporation Pension Plan.

In connection with the Dividend Distribution, the Sponsor and Realogy
Corporation agreed to separate the Cendant Corporation Pension Plan into two
plans, this Plan and the Realogy Corporation Pension Plan. The Realogy
Corporation Pension Plan is effective June 1, 2006 and is identical in all
material respects to Part I of the Cendant Corporation Pension Plan. Also
effective on June 1, 2006, the Realogy Corporation Pension Plan assumed all
liabilities and obligations under Part I of the Cendant Corporation Pension
Plan, as a successor employer. Accordingly, the Plan is being amended pursuant
to this restatement to reflect that the terms and provisions of the Cendant
Corporation Pension Plan, Part I are no longer applicable, as the remaining
assets and liabilities were transferred to the Realogy Corporation Pension Plan.

 

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AVIS RENT A CAR SYSTEM, LLC PENSION PLAN

TABLE OF CONTENTS

 

             Page

ARTICLE 1

  DEFINITIONS    1   1.1   “Absence in Military Service”    1   1.2   “Absence
on Authorized Leave”    1   1.3   “Acquisition Date”    1   1.4   “Annuity
Starting Date”    1   1.5   “Actuary”    1   1.6   “Associated Company”    1  
1.7   “Average Final Compensation”    2   1.8   “Beneficiary”    2   1.9  
“Board of Directors”    2   1.10   “Code”    2   1.11   “Committee”    2   1.12
  “Company”    2   1.13   “Compensation”    2   1.14   “Credited Service”    3  
1.15   “Date of Original Employment”    5   1.16   “Effective Date of the
Salaried Plan”    6   1.17   “Employee”    6   1.18   “Employment Commencement
Date”    7   1.19   “Equivalent Actuarial Value”    7   1.20   “ERISA”    7  
1.21   “Fund”    7   1.22   “Hour of Service”    7   1.23   “Hourly Plan”    7  
1.24   “Joint Annuitant”    7   1.25   “Member”    7   1.26   “Participating
Corporation”    7   1.27   “Participating Division”    8   1.28   (a) “Plan”   
8     (b) “Prior Plan”    8   1.29   “Plan Year”    8   1.30   (a) “Predecessor
Corporation”    8     (b) “Prior Company”    8   1.31   “Prior Salaried Plan”   
8   1.32   “Retirement Pension”    8   1.33   “Salaried Plan”    8   1.34  
“Service”    8   1.35   “Social Security Benefit”    10   1.36   “Spouse Joint
and Survivor Annuity”    10   1.37   “Terminated Member’s Spouse Joint and
Survivor Annuity”    11   1.38   “Termination of Employment”    11

 

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  1.39   “Total and Permanent Disability”    11   1.40   “Trustee”    11

ARTICLE 2

  MEMBERSHIP    12   2.1   Members on June 30, 1985    12   2.2   Break in
Service    12   2.3   Prior Plan Requirement    12   2.4   Termination of
Membership    12   2.5   Furnishing Information Required by Committee    12

ARTICLE 3

  RETIREMENT DATES    12   3.1   Normal Retirement Date    12   3.2   Early
Retirement Date    12   3.3   Disability Retirement Date    13   3.4   Deferred
Retirement Date    13

ARTICLE 4

  RETIREMENT PENSIONS    13   4.1   Normal Retirement Pension    13   4.2  
Early Retirement Pension    14   4.3   Disability Retirement Pension    14   4.4
  Deferred Retirement Pension    15   4.5   Employment After Normal Retirement
Date and Reemployment After Normal Retirement Date    15   4.6   Deductions from
Benefits    16   4.7   No Reduction in Benefits for Members of Salaries or
Hourly Plans    16

ARTICLE 5

  NORMAL FORMS OF RETIREMENT PENSION    16   5.1   Normal Form of Retirement
Pension – Unmarried Member    16   5.2   Normal Form of Retirement Pension –
Married Member    17   5.3   Small Payments    18   5.4   Facility of Payments
   19

ARTICLE 6

  TERMINATION OF SERVICE    20   6.1   Termination Prior to Retirement    20  
6.2   Vested Benefit    20   6.3   Early Commencement of Vested Benefit    20  
6.4   Normal Form of Vested Benefit – Unmarried Member    21   6.5   Normal Form
of Vested Benefit – Married Member    21

 

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  6.6   Termination Prior to January 1, 1976    22

ARTICLE 7

  OPTIONAL FORMS OF BENEFITS    22   7.1   Election of Optional Benefit    22  
7.2   Straight Life Annuity Option    23   7.3   Joint and Survivor Annuity
Option    23   7.4   Ten Year Certain Option    23   7.5   Social Security Level
Income Option    24   7.6   Exercise of Option    24   7.7   Required
Distributions    24   7.8   Rollover Distribution    30

ARTICLE 8

  DEATH BENEFITS    31   8.1   Qualified Pre-retirement Survivor Annuity    31  
8.2   Death in Service Option I    31   8.3   Death in Service Option II    32  
8.4   Consent of Spouse    33   8.5   Other Death Benefits    33

ARTICLE 9

  CONTRIBUTIONS    34   9.1   Contributions of the Company    34   9.2  
Irrevocability of Contributions    34   9.3   Use of Forfeitures    34

ARTICLE 10

  MANAGEMENT OF FUNDS    34   10.1   Medium of Funding    34   10.2   Fund to be
for Exclusive Benefit of Members    34

ARTICLE 11

  THE COMMITTEE AND CLAIMS PROCEDURE    34   11.1   Appointment of Committee   
34   11.2   Officers and Subcommittees    35   11.3   Committee Procedures    35
  11.4   Committee Powers    35   11.5   Information for Committee    36   11.6
  Plan Records    36   11.7   Instructions to Trustees    36   11.8   Allocation
of Duties, etc. Among Committee Members    37   11.9   Delegation by Committee
   37   11.10   Investment Managers    37   11.11   Costs and Expenses    37  
11.12   Standard of Care    37   11.13   Indemnification and Insurance    37  
11.14   Disputes    38

 

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  11.15   Committee Members as Participants    38   11.16   Claims Procedure   
38   11.17   Compliance with Regulations    39

ARTICLE 12

  AMENDMENTS    40

ARTICLE 13

  TERMINATION OF THE PLAN    40   13.1   Termination by the Company    40   13.2
  Certain Benefits Nonforfeitable    40   13.3   Priority of Distribution on
Termination    40   13.4   Coordination with Article 15    41

ARTICLE 14

  LIMITATION ON BENEFITS    41   14.1   Code Section 415 Limitations    41  
14.2   Code Section 415 Definitions    41

ARTICLE 15

  TEMPORARY LIMITATIONS ON AMOUNT OF BENEFITS    43

ARTICLE 16

  SERVICE AND TRANSFER RULES    45   16.1   Application of Provisions    45  
16.2   Service Other Than as an Employee    45   16.3   Service Following
Service as an Employee    45   16.4   “Affiliated Company”    45

ARTICLE 17

  NON-ALIENATION OF BENEFITS    46

ARTICLE 18

  MISCELLANEOUS    46   18.1   Rights of Employees    46   18.2   Return of
Contributions    46   18.3   Mergers    47   18.4   Monthly Benefits    47  
18.5   Governing Law    47   18.6   Headings    47

ARTICLE 19

  TOP-HEAVY PLANS    47   19.1   Effects of Top-Heavy Status    47   19.2  
Definition of Top-Heavy Plan    49   19.3   Exception to Combined Limit Rule   
51   19.4   Miscellaneous Rules    51

 

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ARTICLE 1.

Definitions

The following words and phrases shall, when used herein, have the meanings set
forth below, unless a different meaning is clearly required by the context:

1.1. “Absence in Military Service” shall mean absence of an Employee in military
service for the United States of America provided that the Employee returns to
the employ of the Company by the end of any period prescribed by the laws of the
United States during which he has reemployment rights with the Company.
Notwithstanding any provision in the Plan to the contrary, effective as of
December 12, 1994, contributions and benefits with respect to “qualified
military service” will be provided in accordance with section 414(u) of the
Code.

1.2. “Absence on Authorized Leave” shall mean any absence approved by the
Company other than absence which qualifies as Absence in Military Service under
Section 1.1. All such leaves of absence shall be granted in a nondiscriminatory
manner so that all Employees in similar situations shall receive uniform
treatment. The following periods of Absence on Authorized Leave shall be
included in determining a Member’s Service:

(i) the period of any such absence, not exceeding two years, including any such
absence during which the Member does not receive Compensation from the Company;

(ii) the period of any such absence, not exceeding two years, except as required
by law, for service with any governmental agency or any department of the United
States;

(iii) the period of any such absence during which sickness or accident benefits
are being paid by the Company.

1.3. “Acquisition Date” shall mean, with respect to any Predecessor Corporation,
the date on which the business and assets of such Predecessor Corporation, or
such part thereof as shall have been acquired by the Company, were first
acquired.

1.4. “Annuity Starting Date” shall mean the date as of which payment of a
Member’s Retirement Pension or Vested Benefit is scheduled to commence in
accordance with Articles 4 and 6 of this Plan.

1.5. “Actuary” shall mean the actuarial consultant or actuarial consultants
designated from time to time to make actuarial computations in connection with
the Plan.

1.6. “Associated Company” shall mean any division, subsidiary or affiliate of
the Company designated by the Board of Directors, or by the Committee pursuant
to authority delegated to it by the Board of Directors, as an Associated Company
for purposes of the Plan

 

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during the period for which such designation exists. For the period of time
before the Company was divested from International Telephone and Telegraph
Corporation, Associated Company shall also mean any Company which was designated
as an Associated Company under the Prior Salaried Plan.

1.7. “Average Final Compensation” means the average of a Member’s five highest
consecutive years of Compensation during the ten calendar years prior to the
earlier of: (a) the Member’s Normal, Deferred or Early Retirement Date or the
date of his Termination of Employment, whichever is applicable or (b) January 1,
1999; provided, however, that if the Member’s Compensation for his last year of
employment is included in the averaging period and such last year of employment
is less than twelve months, his Average Final Compensation shall include
Compensation during the last year of employment, the four preceding calendar
years and a pro rata portion of Compensation in the fifth preceding calendar
year in order to average Compensation for five full years.

For purposes of determining the Average Final Compensation of a Member whose
consecutive years of Compensation during the ten calendar years prior to the
Member’s Normal, Deferred or Early Retirement Date, or the date of his
Termination of Employment, whichever is applicable, are interrupted by an
Absence in Military Service, an Absence on Authorized Leave or any other absence
if his Service prior to such absence is restored pursuant to Section 1.14.2, the
years of Compensation preceding and following such absence shall be considered
consecutive.

1.8. “Beneficiary” shall mean any person, including the spouse or Joint
Annuitant of a Member, eligible to receive any benefits payable upon the death
of the Member.

1.9. “Board of Directors” shall mean the Board of Directors of Cendant
Corporation (the “Plan Sponsor”) or any successor by merger, purchase or
otherwise.

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

1.11. “Committee” shall mean the Committee appointed to administer the Plan
pursuant to Article 11.

1.12. “Company” shall mean Cendant Car Rental, Inc. (formerly HFS Car Rental,
Inc.), Avis Rent A Car System, Inc. or any successor by merger, purchase or
otherwise, with respect to its Employees, and any other Participating
Corporation or Participating Division with respect to its Employees. Effective,
June 1, 2006, “Company” shall mean Avis Rent A Car System, LLC.

1.13. “Compensation” shall mean the total remuneration paid to a Member (whether
before or after membership in the Plan) for service rendered to the Company, the
Prior Company, an Associated Company, or a Predecessor Corporation, including
any bonuses (but excluding any bonuses received pursuant to the Senior Executive
Long-Term Bonus Plan) and including any severance or separation payments and
final vacation pay (but only to the extent

 

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that such severance or separation payments and final vacation pay are granted by
the Company on a nondiscriminatory basis to employees similarly situated), but
excluding automobile, relocation or other special allowances of a similar
nature, and provided that Compensation shall be determined before giving effect
to any salary reduction or similar arrangement under a plan described in section
125 of the Code, or a transportation fringe benefit arrangement referred to in
section 132(f)(4) of the Code or any elective deferral described in section
402(g)(3) of the Code. Effective for Plan Years beginning after December 31,
2001, the annual compensation limit shall remain $170,000 and shall not be
adjusted for increases in the cost-of-living or other legislative increases in
accordance with section 401(a)(17) of the Code.

A Member’s Compensation taken into account under the Plan for each Plan Year
commencing after June 30, 1989 and prior to July 1, 1994, shall not exceed
$200,000, as adjusted by the Secretary of the Treasury at the same time and in
the same manner as under section 415(d) of the Code. In addition to other
applicable limitations set forth in the Plan, and notwithstanding any other
provision of the Plan to the contrary, for Plan Years beginning on or after
July 1, 1994, the annual Compensation of each Member 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.

For Plan Years beginning on or after July 1, 1994, 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 a Member’s contributions 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, for determination periods beginning before the first day of the first
Plan Year beginning on or after July 1, 1994, the OBRA ‘93 annual compensation
limit is $150,000.

Furthermore, effective July 1, 1989 and for Plan years ending prior to
January 1, 1997, in determining “Compensation,” the rules of section 414(q)(6)
of the Code shall apply, except that in applying such rules, the term “family”
shall include only the spouse of the Member and any lineal descendants of the
Member who have not attained age 19 before the close of the calendar year.
Notwithstanding the foregoing, effective January 1, 1997, the family aggregation
rules of section 414(q)(6) of the Code shall no longer apply.

1.14. “Credited Service,” for purposes of determining the amount of any benefit
payable to or on behalf of a Member, shall mean (a) the Member’s Credited
Service as of December 31, 1975, as determined under the Salaried Plan and/or
the Hourly Plan, including any

 

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periods of service prior to September 18, 1956 which were not treated as
Credited Service under the Salaried Plan and/or the Hourly Plan only because
such service was rendered prior to September 18, 1956, and (b) the Member’s
Service as determined under Section 1.34(b).

1.14.1 Notwithstanding the foregoing or Section 1.14.4, a Member’s Credited
Service shall not include (a) Service prior to January 1, 1976, when an Employee
was not employed on a “full-time” basis (as hereinafter defined), and
(b) Service during which a Member was not an “Employee” (as defined in
Section 1.17). A “full-time” Employee is one who worked the regular schedule in
effect for his job classification in accordance with Company policy in effect at
such time.

1.14.2 If, after incurring a Break in Service after a Severance Date (as
described in Sections 1.34.1 and 1.34.2) occurring on or after January 1, 1976,
a Member is re-employed and completes a year of Service following his
Reemployment Commencement Date, his prior years of Service and Credited Service
shall be restored for all Plan purposes, if (a) he had fulfilled the
requirements for a Vested Benefit under Section 6.2 as of such Severance Date,
or (b) the period of the Member’s Break in Service, computed to the nearest
1/12th year, is less than the greater of (i) five and (ii) the aggregate number
of his years of Service prior to such Severance Date.

1.14.3 If a Member who had fulfilled the requirements for a Vested Benefit under
Section 6.2 shall not have received any distribution under the Plan following
his prior Termination of Employment, his Service and Credited Service shall be
reinstated, in accordance with the provisions of Section 1.14.2, following his
Reemployment Commencement Date so that his Retirement Pension or Vested Benefit
upon his subsequent Termination of Employment shall be determined on the basis
of his Service, Credited Service and Average Final Compensation as of the date
of such subsequent Termination of Employment. If the Member shall have received
any distribution under the Plan following his prior Termination of Employment,
his Service shall be so reinstated, but his Credited Service shall be so
reinstated only if such distribution was not a lump sum payment made in lieu of
all other benefits to which the Member may have become entitled under the Plan
(a “lump sum distribution”). If such distribution was not a lump sum
distribution, the Retirement Pension or Vested Benefit payable in respect of the
Member upon his subsequent Termination of Employment shall be computed so as to
give effect to any Retirement Pension or Vested Benefit previously paid to the
Member on account of his prior Termination of Employment. Notwithstanding the
foregoing, if the Member had received any distribution under the Plan following
his prior Termination of Employment, his Credited Service shall, in all events,
be reinstated if the Member repays the full amount of such distribution,
together with interest thereon to the date of repayment computed at the rate
currently determined by the Secretary of the Treasury pursuant to the provisions
of section 411(c)(2)(C) of the Code, not later than the end of the five-year
period beginning with the Member’s resumption of employment as an Employee.

1.14.4 A Member’s Credited Service shall include, in the case of an Employee who
became a Member of the Prior Plan on January 1, 1976, and who had been excluded
from membership in the Salaried Plan by reason of the fact that he had reached
his fifty-fifth birthday prior to his Date of Original Employment, Service with
the Company before January 1, 1976.

 

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1.14.5 For purposes of Section 1.14.1, in the case of a Member who was employed
by a Predecessor Corporation prior to its acquisition by the Company, the
Member’s Credited Service as of December 31, 1975 shall be the greater of (a) or
(b) below:

(a) The Member’s most recent period of continuous employment with the Company
which includes December 31, 1975; or

(b) If the Acquisition Date was before July 22, 1965, the Member’s period of
continuous employment with both the Predecessor Corporation and the Company
which includes December 31, 1975 and the Acquisition Date.

1.14.6 For purposes of Section 1.14, the Committee may, in its discretion, and
subject to the provisions of applicable law, determine the extent to which a
Member’s continuous employment with a Predecessor Corporation acquired by the
Company on or after July 22, 1965, shall be deemed Credited Service under this
Plan.

1.14.7 If a former Member of the Salaried Plan or the Hourly Plan, who had not
fulfilled the requirements for a vested benefit under either Plan, incurred a
Termination of Employment prior to January 1, 1976, and thereafter was
re-employed by the Company and becomes a Member of the Plan, the Member’s
Credited Service before such Termination of Employment shall be restored and
included in his total Credited Service under the Plan, using the rule of either
(a) or (b) below, whichever produces the greater total Credited Service:

(a) The Member’s prior Credited Service shall be restored if the period of time
between the date of his Termination of Employment and the date of his
reemployment by the Company is less than his aggregate Credited Service prior to
such Termination of Employment.

(b) The Member’s prior Credited Service shall be restored if, after his
reemployment by the Company, such Member renders a period of Credited Service
equal to the lesser of (i) the period of his absence or (ii) ten years.

1.14.8 For purposes of Section 1.14.1, a Member’s Credited Service shall include
any period during which such Member was employed by International Telephone and
Telegraph Corporation prior to 1972, if such Member was employed or rehired by
the Company prior to January 1, 1976.

1.14.9 Notwithstanding anything contained herein to the contrary, for purposes
of Article 4, Service by a Member with the Company subsequent to December 31,
1998 shall not be recognized in determining the Member’s Credited Service. The
Credited Service of a Member (i) whose employment with the Company has not
terminated as of December 31, 1998 or (ii) who is named in Appendix B hereof,
shall be equal to the sum of (A) the Member’s Credited Service as otherwise
determined under Section 1.14 plus (B) two years.

1.15. “Date of Original Employment” shall mean the Date of Original Employment
by the Company or by an Associated Company.

 

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1.16. “Effective Date of the Salaried Plan” shall mean January 1, 1972.

1.17. “Employee” shall mean any person employed by the Company and with respect
to persons employed by Cendant Car Rental, Inc. only, those persons who were
previously employed by the Prior Company, and who receives Compensation, whether
on an annual or hourly basis or otherwise, other than a pension or retainer;
provided, however, that except as the Board of Directors may otherwise provide
on a basis uniformly applicable to all persons similarly situated, no person
shall be an Employee for purposes of the Plan who (a) is engaged as a consultant
or (b) is accruing benefits in respect of current service under any other
pension, retirement, qualified profit-sharing or other similar plan of the
Company or the Prior Company or of any Associated Company or of any subsidiary
or affiliated company of the Company; and provided, further, that no person
shall be an Employee for purposes of the Plan whose terms and conditions of
employment are determined by a collective bargaining agreement with the Company
which does not make this Plan applicable to him.

1.17.1 For all purposes of the Plan, any person who is an employee of an entity
(herein referred to as a “Designated Foreign Corporation”) (a) which is created
under the laws of a country other than the United States of America, (b) of
which a majority interest is owned directly or indirectly by the Company, and
(c) which has previously notified the Committee that an agreement hereinafter
described has become effective, shall be deemed to be an Employee during his
continuous employment thereafter by such Designated Foreign Corporation,
provided that the Company has entered into an agreement under section 3121(1) of
the Code and has satisfied the provisions of section 406 of the Code.

1.17.2 The Committee may designate on a non-discriminatory basis such resident
aliens of the United States, who are employed by a Designated Foreign
Corporation, who shall be deemed Employees under the Plan.

1.17.3 Resident aliens of the United States who are employed by the Company
within the United States shall be treated as Employees for all Plan purposes
while so employed.

1.17.4 Any person (other than an Employee) who provides services to the Company
or an affiliate of the Company and who is treated as an Employee of the Company
or such affiliate for purposes of certain pension requirements under section
414(n) of the Code (a “Leased Employee”), shall be deemed to be an Employee of
the Company or such affiliate for purposes of the service definitions and rules
of the Plan. Leased Employee means any person (other than an Employee of the
Company or affiliate) who, pursuant to an agreement between the Company or
affiliate and any other person (“leasing organization”), has performed services
for the Company or affiliate (or for the Company or affiliate and any 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 (1) year, and such
services are, prior to January 1, 1997, of a type historically performed by
employees in the business field of the Company, and on or after January 1, 1997,
performed under the primary direction and control of the Company or affiliate.
Notwithstanding the foregoing, no Leased Employee shall be eligible to
participate in this Plan by reason of this Section 1.17.4. For purposes of
participation in the Plan, the term Employee shall exclude any

 

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person, including but not limited to a Leased Employee, who performs services
for, and receives remuneration from, the Company or any affiliate of the Company
under an agreement, contract or arrangement under which said individual is
designated, characterized or classified as an independent contractor, as a
consultant or in any category or classification other than as an employee of the
Company or an affiliate of the Company, without regard to whether any
determination by an agency, governmental or otherwise, or by a court concludes
that such classification or characterization was in error, and without regard to
whether the individual is treated as an employee of the Company pursuant to
Sections 414(b), 414(c) or 414(m) of the Code or any regulations that may be
issued under section 414(o) of the Code.

1.18. “Employment Commencement Date” or “Reemployment Commencement Date” shall
mean the date upon which an Employee completes an Hour of Service for the
Company or Prior Company following his initial employment or, in the case of
reemployment, following his most recent Severance Date (as described in Sections
1.34.1 and 1.34.2).

1.19. “Equivalent Actuarial Value” shall mean, except as provided in Appendix A
and Section 5.3.2 hereof, equivalent value when computed on the basis of the
1984 UP Mortality Table and the interest rate promulgated by the Pension Benefit
Guaranty Corporation as applicable for valuing immediate annuities as of the
first day of the Plan Year in which the Annuity Starting Date occurs.

In the case of a Member who continues employment with the Company after age 65,
Equivalent Actuarial Value shall be computed on the basis of the actuarial
factors in effect under the Plan on the date of the Member’s actual retirement.

1.20. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

1.21. “Fund” shall mean the cash, securities and other property held for the
purposes of the Plan as set forth in Article 10.

1.22. “Hour of Service” shall mean each hour for which an Employee is directly
or indirectly compensated by the Company or Prior Company.

1.23. “Hourly Plan” shall mean the ITT Avis, Inc. Pension Plan for Hourly
Employees, effective April 1, 1968.

1.24. “Joint Annuitant” shall mean a person designated by a Member in accordance
with Article 7 to receive payments under Section 7.3 in the event of the
Member’s death.

1.25. “Member” shall mean any person included in the membership of the Plan as
provided in Article 2.

1.26. “Participating Corporation” shall mean any Associated Company which has by
appropriate action of the Board of Directors been designated as a Participating
Corporation and the board of directors of which shall have taken appropriate
action to adopt the Plan.

 

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The Board of Directors, if it so elects, may limit participation in the Plan to
one or more operating or other units of any Participating Division or
Participating Corporation or may exclude one or more of such units from
participation in the Plan and in either such event persons employed by any
operating or other unit of such Participating Division or Participating
Corporation not covered by the designation thereof as such shall not be deemed
to be Employees for purposes of the Plan until further action by the Board of
Directors.

1.27. “Participating Division” shall mean any division of a Company or an
Associated Company which has by appropriate action of the Board of Directors
been designated as a Participating Division.

1.28. (a) “Plan” shall mean the Avis Rent A Car System, LLC Pension Plan as it
may be amended from time to time. Any reference to “Plan” prior to June 1, 2006
shall refer to the Cendant Corporation Pension Plan, Part II, unless otherwise
specifically identified or it is otherwise clear from the context.

(b) “Prior Plan” shall mean the Retirement Plan for Salaried and Hourly
Employees of Avis Rent A Car System, Inc., as in effect on June 30, 1985.

1.29. “Plan Year” shall mean the calendar year.

1.30. (a) “Predecessor Corporation” shall mean any subsidiary or affiliated
company of the Company, and any predecessor or subsidiary thereof, to the extent
that all or part of the business and assets of any such corporation shall have
been acquired by the Company either before or after the Effective Date of the
Salaried Plan.

(b) “Prior Company” shall mean ARAC with respect to those Cendant Car Rental,
Inc. employees who were previously employed by ARAC and who became employees of
Cendant Car Rental, Inc. pursuant to an agreement between Cendant and ARAC,
effective September 23, 1997.

1.31. “Prior Salaried Plan” shall mean the International Telephone Retirement
Plan for Salaried Employees as in effect on December 31, 1971 as applicable to
ARAC.

1.32. “Retirement Pension” shall mean a pension or other benefit payable to a
Member or his Beneficiary pursuant to Articles 4, 6 or 8 hereof.

1.33. “Salaried Plan” shall mean the Retirement Plan for Salaried Employees of
Avis Rent A Car System, Inc., effective as of January 1, 1972.

1.34. “Service” shall mean, (a) with respect to periods prior to January 1,
1976, a Member’s most recent period of continuous employment with the Company or
Prior Company which includes December 31, 1975 and (b) with respect to periods
after December 31, 1975,

 

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periods of his employment (i) beginning on the later of January 1, 1976 or his
Employment or Reemployment Commencement Date and (ii) ending on his “Severance
Date” (as described in Sections 1.34.1 and 1.34.2). In addition, for the
purposes of Article 2 and Article 6 of the Plan, a Member’s Service, under
clause (b) of the preceding sentence, shall include the period of his absence
from employment after his most recent Severance Date, provided that he returns
to employment with the Company or Prior Company within twelve months of such
date.

1.34.1 A Member’s “Severance Date” shall mean the earlier of (a) the date on
which he retires or dies or his employment with the Company or Prior Company as
an Employee otherwise is terminated or (b) the first anniversary of the first
date of a period in which he remains absent from employment with the Company or
Prior Company for any other reason; provided, however, that if a Member retires
or dies or his employment as an Employee otherwise is terminated during a period
in which he is absent from employment with the Company or Prior Company for any
other reason, his Severance Date shall be the date of such retirement, death or
other termination of employment.

1.34.2 Notwithstanding the provisions of Section 1.34.1, no Severance Date shall
occur for a Member during a period of his Absence in Military Service or Absence
on Authorized Leave; provided, however, that periods of a Member’s Absence on
Authorized Leave shall be included in his Service only to the extent provided in
Section 1.1 or Section 1.2, as applicable.

1.34.3 In addition, in computing a Member’s Service for the purposes of Article
2 and Article 6 of the Plan, there shall be included (a) a Member’s last period
of continuous employment with a Predecessor Corporation which includes the
Acquisition Date and (b) the period of employment during which an Employee
previously performed work for the Company or Prior Company and did not accrue
benefits under either the Salaried Plan or the Hourly Plan but instead accrued
benefits for such work under a pension plan sponsored by an organization other
than the Company or Prior Company.

1.34.4 In addition, the period of time with respect to which a Member receives
any severance or separation payment or final vacation pay shall, for all Plan
purposes, be included in such Member’s Service, unless the severance or
separation payment or final vacation pay is paid to the Member as a single lump
sum payment.

1.34.5 A Member’s Service for all Plan purposes shall be expressed in terms of
completed years and months, rounding up or down, as the case may be, to the
nearest whole month.

1.34.6 A Member’s Service shall also include any period of employment by the
Company or Prior Company or by an Affiliated Company (as defined in
Section 16.4), to the extent recognized as such under Article 16 of the Plan
relating to Transfers.

1.34.7 “Break in Service” shall mean any Severance Period greater than twelve
(12) months, excluding any period of up to twelve (12) months during which an
Employee is on a maternity/paternity leave. The term “maternity/paternity leave”
means any absence of an Employee from work for reasons of (i) the pregnancy of
the Employee, (ii) the birth of a child of the Employee or the placement of a
child with the Employee for the purposes of adoption, or (iii) the care of a
child for a period beginning immediately following such birth or placement.

 

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1.34.8 “Severance Period” means each period beginning on an Employee’s Severance
Date and ending on his next Reemployment Commencement Date.

1.35. “Social Security Benefit” shall mean, except as otherwise specified below,
the estimated amount which is payable to a Member at age 65 under Title II of
the Social Security Act as in effect on the date his Service terminates, or the
estimated amount which would be payable to a Member if he were not disqualified
from receiving benefits by continuing in employment, or for any other reason.
Notwithstanding the foregoing, any Social Security Benefit determined under this
Section 1.35 subsequent to December 31, 1998, shall be based on the provisions
of Title II of the Social Security Act as in effect on December 31, 1998. In the
case of a Member who has reached his fifty-fifth birthday and has completed ten
years of Service as of December 31, 1998, his Social Security Benefit shall be
the estimated amount which would be payable to the Member at age 65, calculated
on the assumption that the Member would have no further earnings for Social
Security purposes after the earlier of his Early Retirement Date or December 31,
1998. In the case of a Member who has not reached his fifty-fifth birthday and
who has not completed ten years of Service as of December 31, 1998, his Social
Security Benefit shall be the estimated amount which would be payable to the
Member at age 65, calculated on the assumption that the Member will continue to
receive earnings until his Normal Retirement Date at his rate of Compensation as
in effect at the earlier of the date his Service terminates or December 31,
1998. All such estimated amounts shall be determined by the Committee on the
advice of the Actuary in accordance with rules applied in a nondiscriminatory
manner and without regard to Service, Compensation or changes in Title II of the
Social Security Act after December 31, 1998.

Notwithstanding the foregoing, the benefit of a Member shall be calculated or
recalculated based on his actual Social Security earnings history, if such
Member submits an official copy of his Social Security earnings history to the
Committee within six months of the later of his Severance Date or the date he is
first notified of this right. Any Member whose benefit is recalculated in
accordance with the preceding sentence shall have his benefit adjusted
retroactive to his Annuity Starting Date, if appropriate.

1.36. “Spouse Joint and Survivor Annuity” shall mean an annuity which provides
(i) actuarially reduced monthly payments to the Member during the Member’s
lifetime commencing on his Annuity Starting Date, and (ii) if the Member
predeceases his spouse, monthly payments to such spouse for the spouse’s
lifetime, equal to 50 percent of the monthly payment which the Member was
receiving as of the date of his death. The Spouse Joint and Survivor Annuity
referred to in Section 5.2 shall be subsidized, in that the actuarial reduction
of the Member’s Retirement Pension for purposes of calculating the Spouse Joint
and Survivor Annuity shall be equal to one-half of the actuarial reduction which
would otherwise be required to establish for such Member an Equivalent Actuarial
Value between this form of benefit and an unsubsidized 50 percent joint and
survivor annuity benefit.

 

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1.37. “Terminated Member’s Spouse Joint and Survivor Annuity” shall mean an
annuity which provides (i) actuarially reduced monthly payments to the Member
during the Member’s lifetime commencing on his Annuity Starting Date, and
(ii) if the Member predeceases his spouse, monthly payments to such spouse for
the spouse’s lifetime equal to 50 percent of the monthly payment which the
Member was receiving as of the date of his death. The Terminated Member’s Spouse
Joint and Survivor Annuity shall be the Equivalent Actuarial Value of the Vested
Benefit which would be payable to the Member under Section 6.4 if he were not
married.

1.38. “Termination of Employment” shall mean a Member’s ceasing to be employed
by the Company other than by reason of death. A Member’s ceasing to be an
Employee (as defined herein) shall not be deemed a Termination of Employment if
such Member either (i) continues to be employed by the Company other than as an
Employee, or (ii) continues to be employed by an Affiliated Company (as defined
in Section 16.4).

1.39. “Total and Permanent Disability” shall mean disability due to bodily or
mental injury or disease, either occupationally or non-occupationally caused,
which the Committee determines, on the basis of medical evidence satisfactory to
it, is likely to be permanent and has disabled the Member from further
performance of his normal work. The Committee shall apply uniform standards,
including reference to medical certification, in determining whether such a
disability exists. In the event that a dispute arises between the Member and the
Committee as to the existence of such a disability, it shall be settled by a
majority decision of three licensed physicians, one to be appointed by the
Committee, one by the Member, and a third to be appointed by the two physicians
so appointed.

1.40. “Trustee” shall mean the trustee or trustees by which the funds of the
Plan are held as provided in Article 10.

 

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ARTICLE 2.

Membership

2.1. Members on June 30, 1985. Each Employee of the Company or Prior Company on
July 1, 1985 (including an Employee on an Absence on Authorized Leave or Total
and Permanent Disability) who was a Member of the Prior Plan on June 30, 1985
shall be a Member of the Plan on July 1, 1985.

2.2. Break in Service. Each Member who has a Reemployment Commencement Date
after incurring a Break in Service and each Employee who (i) was a Member of the
Prior Plan at any time prior to June 30, 1985, (ii) did not become a Member on
July 1, 1985 and (iii) has a Reemployment Commencement Date after incurring a
Break in Service occurring on or after January 1, 1976, shall not be eligible to
participate in the Plan, except that such Member or Employee shall be reinstated
as a Member of the Plan, as of the first day of the month coincident with or
next following his Reemployment Commencement Date, if his Service is restored
pursuant to Section 1.14.2.

2.3. Prior Plan Requirement. Except as otherwise provided in Section 2.2 hereof,
no person who was not a member of the Prior Plan on June 30, 1985 shall become a
Member of this Plan.

2.4. Termination of Membership. A Member’s membership in the Plan shall
terminate if he (i) ceases to be an Employee, other than by reason of retirement
under the Plan, and (ii) does not have a Reemployment Commencement Date before
incurring a Break in Service, except that a Member’s membership shall continue
during any period of Absence in Military Service or Absence on Authorized Leave
or while he is not an Employee (as defined in Section 1.17) but is in the employ
of the Company, an Associated Company, or an Affiliated Company (as defined in
Section 16.4).

2.5. Furnishing Information Required by Committee. Before any Retirement Pension
shall be payable to or on the account of a Member or former Member entitled to a
Vested Benefit under the Plan, such Member or former Member shall file with the
Committee such information as it shall require to establish his rights under the
Plan.

ARTICLE 3.

Retirement Dates

3.1. Normal Retirement Date. The “Normal Retirement Date” of a Member shall be
the first day of the month coinciding with or next following his sixty-fifth
birthday; provided, however, that each Member’s accrued benefit under the Plan
shall become one hundred percent (100%) vested and nonforfeitable upon his
sixty-fifth birthday notwithstanding any contrary provision of the Plan.

3.2. Early Retirement Date. A Member who has reached his fifty-fifth birthday
and has completed ten years of Service may thereafter elect to retire on the
first day of any calendar month (herein referred to as his “Early Retirement
Date”) prior to his Normal Retirement Date.

 

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Notwithstanding the foregoing, the “Early Retirement Date” of a Member who was a
participant in the Hourly Plan on December 31, 1975 shall be the first day of
any month prior to his Normal Retirement Date and coinciding with or next
following the date on which he completes three years of Service and reaches his
sixtieth birthday, on which he elects to retire, if such date is earlier than
the date specified above.

3.3. Disability Retirement Date. A Member who suffers Total and Permanent
Disability before his Normal Retirement Date shall retire on the first day of
any calendar month (herein referred to as his “Disability Retirement Date”)
coincident with or next following the date on which it is determined that he
suffered such Total and Permanent Disability.

3.4. Deferred Retirement Date. The “Deferred Retirement Date” of a Member shall
be the first day of the month coincident with or next following the date of his
actual retirement after his Normal Retirement Date.

ARTICLE 4.

Retirement Pensions

4.1. Normal Retirement Pension. A Member who retires on his Normal Retirement
Date shall be entitled to an annual “Normal Retirement Pension” equal to 1-1/2
percent of the Member’s Average Final Compensation multiplied by the number of
years of his Credited Service, not in excess of 35 years (37 years with respect
to any Member who receives an additional two years of Credited Service pursuant
to section 1.14.9(ii)), less 1-3/7 percent of his annual Social Security Benefit
multiplied by the number of years of the Member’s Credited Service not in excess
of 35 years (37 years with respect to any Member who receives an additional two
years of Credited Service pursuant to section 1.14.9(ii)). A Normal Retirement
Pension shall commence on the Member’s Normal Retirement Date.

Unless otherwise provided under the Plan, effective on January 1, 1994, each
Section 401(a)(17) Employee’s accrued benefit under this Plan shall be the
greater of the Accrued Benefit determined for the Employee under (a) or
(b) below:

(a) the Employee’s accrued benefit determined with respect to the benefit
formula applicable for the Plan Year beginning on or after January 1, 1994, as
applied to the Employee’s total years of Credited Service taken into account
under the Plan for the purposes of benefit accruals, or

(b) the sum of:

(i) the Employee’s accrued benefit as of June 30, 1994, frozen in accordance
with Section 1.401(a)(4)-13 of the Treasury Regulations, and

 

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(ii) the Employee’s accrued benefit determined under the benefit formula
applicable for the Plan Year beginning on or after January 1, 1994, as applied
to the Employee’s years of Credited Service credited to the Employee for Plan
Years beginning on or after January 1, 1994, for purposes of benefit accruals.

A Section 401(a)(17) Employee means an Employee whose current accrued benefit as
of a date on or after the first day of the first Plan Year beginning on or after
January 1, 1994, is based on Compensation for a year beginning prior to the
first day of the first Plan Year beginning on or after January 1, 1994, that
exceeded $150,000.

4.2. Early Retirement Pension. A Member who elects to retire on an Early
Retirement Date shall be entitled to an annual “Early Retirement Pension”
determined in the manner of a Normal Retirement Pension but based on his Average
Final Compensation and Credited Service as of his Early Retirement Date. An
Early Retirement Pension shall commence on the Member’s Normal Retirement Date.

Notwithstanding this Section 4.2, a Member may elect to receive his Early
Retirement Pension commencing on his Early Retirement Date, or on the first day
of any calendar month following his Early Retirement Date and prior to his
Normal Retirement Date. If payment of a Member’s Early Retirement Pension
commences prior to his Normal Retirement Date, the Member’s Early Retirement
Pension determined under Section 4.2 shall be reduced by 1/4 of 1 percent for
each full month by which the commencement of benefits precedes the Member
reaching age 62.

4.3. Disability Retirement Pension. A Member who has suffered Total and
Permanent Disability shall be entitled to an annual “Disability Retirement
Pension” determined in the manner of a Normal Retirement Pension but based on
the Member’s Average Final Compensation and Credited Service as computed in
Section 4.3.1 or Section 4.3.2, as applicable. A Disability Retirement Pension
shall commence on the Member’s Normal Retirement Date.

4.3.1 For purposes of Section 4.3 only, the Average Final Compensation of a
Member who suffers Total and Permanent Disability prior to December 31, 1994,
shall be computed assuming that he continues to receive Compensation during the
period between the date he suffers Total and Permanent Disability and the date
his Disability Retirement Pension commences at an annual rate of Compensation
equal to his rate of Compensation for the 12 month period immediately preceding
such Total and Permanent Disability; and such a Member’s Credited Service shall
include any portion of the period between the date he suffers Total and
Permanent Disability and the date his Disability Retirement Pension commences
during which he either (1) receives (or would receive if he were eligible)
long-term disability benefits under any plan funded by the Company or Prior
Company or (2) receives disability benefits under the Social Security Act then
in effect.

4.3.2 For purposes of Section 4.3 only, the Average Final Compensation of a
Member who suffers Total and Permanent Disability on or after December 31, 1994,
shall be computed assuming that he does not continue to receive Compensation
during the period between the date he suffers Total and Permanent Disability and
the date his Disability

 

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Retirement Pension commences; and such a Member’s Credited Service shall not
include any portion of the period between the date he suffers Total and
Permanent Disability and the date his Disability Retirement Pension commences.

4.3.3 A Member entitled to a Disability Retirement Pension may elect to have
such Retirement Pension commence at any time prior to his Normal Retirement Date
after he both reaches his fifty-fifth birthday and completes ten years of
Service. In such event, his Disability Retirement Pension determined under
Sections 4.3 and 4.3.1 shall be reduced by 1/4 of 1 percent for each full month
by which the commencement of benefits precedes the Member reaching age 65.

4.3.4 If a Member entitled to a Disability Retirement Pension ceases to have a
Total and Permanent Disability prior to qualifying for a Vested Benefit, such
Member shall not be entitled to a Disability Retirement Pension hereunder, but
the period of such Total and Permanent Disability shall be recognized as Service
under the Plan.

4.4. Deferred Retirement Pension. A Member who retires on a Deferred Retirement
Date shall be entitled to an annual “Deferred Retirement Pension” determined in
the manner of a Normal Retirement Pension but based on his Average Final
Compensation and Credited Service on his Deferred Retirement Date; provided,
however, that the Deferred Retirement Pension of a Member whose Normal
Retirement Date occurred prior to January 1, 1979 and who did not have a
Termination of Employment prior to January 1, 1979 shall be the greater of
(i) the amount determined under this Section 4.4 or (ii) the Equivalent
Actuarial Value of the Normal Retirement Pension determined under Section 4.1
which would have been payable if he had retired on his Normal Retirement Date. A
Deferred Retirement Pension shall commence on the Member’s Deferred Retirement
Date.

4.5. Employment After Normal Retirement Date and Reemployment After Normal
Retirement Date. In the case of a former Member who is re-employed by the
Company or an Associated Company (a “Re-employed Member”), and who has a
Reemployment Commencement Date more than twelve months after a Severance Date
(as described in Sections 1.34.1 and 1.34.2), the total benefit payable to him
upon his subsequent Termination of Employment, including any earlier benefit he
may have retained under the Plan, shall be limited to the amount it would have
been if the Re-employed Member’s total periods of Service had been one
continuous period of Service. Payment of any Retirement Pension or Vested
Benefit to a Re-employed Member and payment of a Normal Retirement Pension to a
Member who continues his employment with the Company or an Affiliated Company
after his Normal Retirement Date, shall be suspended effective with the first
monthly benefit payable after the date of his reemployment or his continued
employment after his Normal Retirement Date. In order for the benefit payment to
be suspended under this Section 4.5, with respect to any calendar month, a
Re-employed Member or a Member continuing his employment after his Normal
Retirement Date must (i) complete at least eight (8) days of employment during
such calendar month (or such other standard as may be applicable under
Section 203(a)(3)(B) of ERISA) which employment constitutes “Section
203(a)(3)(B) Service” as defined in Section 2530.203-3(c) of the Code of Federal
Regulations and (ii) be furnished with a notice containing:

 

  (a) a description of the specific reasons for the discontinuance of payments;

 

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  (b) a general description of the Plan provisions relating to the
discontinuance;

 

  (c) a copy of such Plan provisions;

 

  (d) a statement to the effect that applicable Department of Labor regulations
may be found in Section 2530.203-3 of the Code of Federal Regulations; and

 

  (e) a description of the Plan’s claims procedure.

4.6. Deductions from Benefits. Unless the Board of Directors otherwise provides
under rules uniformly applicable to all Employees similarly situated, the
Committee shall deduct from the amount of any Retirement Pension or Vested
Benefit under the Plan any amount paid or payable to or on account of any Member
under the provisions of any present or future law, pension or benefit scheme of
any sovereign government, or any political subdivision thereof, or any fund or
organization or government agency or department, on account of which
contributions have been made or premiums or taxes paid by the Company, the Prior
Company, any Participating Corporation, any Associated Company or any
Predecessor Corporation with respect to any service which is Credited Service
for purposes of computation of benefits under the Plan; provided, however, that
pensions payable for governmental service or benefits under Title II of the
Social Security Act are not to be used to reduce the benefits otherwise provided
under this Plan except as specifically provided herein.

There shall be deducted from any Retirement Pension or Vested Benefit payable
under this Plan the part of any pension or comparable benefit, including any
lump sum payment, provided by employer contributions of the Company or the Prior
Company, an Affiliated Company (as defined in Section 16.4) or a Predecessor
Corporation under any pension plan or other agreement with respect to any
service which is treated as Credited Service under this Plan; provided, however,
that no such deduction from the Retirement Pension or Vested Benefit payable
under this Plan shall occur if the pension plan or other agreement of any such
Affiliated Company (as defined in Section 16.4) contains a deduction provision
comparable to this Section 4.6.

4.7. No Reduction in Benefits for Members of Salaried or Hourly Plans.
Notwithstanding anything to the contrary herein, in the case of any Member who
was a member of the Salaried Plan or the Hourly Plan prior to January 1, 1976,
the portion of his Retirement Pension attributable to Service prior to
January 1, 1976 shall not be less than the retirement pension he had accrued
under such Salaried Plan or Hourly Plan.

ARTICLE 5.

Normal Forms of Retirement Pension

5.1. Normal Form of Retirement Pension — Unmarried Member. For a Member who is
not married on his Annuity Starting Date, the Member’s Retirement Pension shall
be in the form of an annuity, payable monthly for life, commencing on the
Member’s Annuity Starting Date and terminating with the last monthly payment
preceding such Member’s death.

 

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5.2. Normal Form of Retirement Pension — Married Member. For a Member who is
married on his Annuity Starting Date, the Member’s Retirement Pension shall be
in the form of a Spouse Joint and Survivor Annuity.

5.2.1 A married Member may elect (and may revoke such election and thereafter
re-elect) pursuant to a Qualified Election (as defined below), at any time
before the end of the period described in Section 5.2.2 (herein referred to as
the “Election Period”), not to have his Retirement Pension paid as a Spouse
Joint and Survivor Annuity pursuant to Section 5.2. The election under this
Section 5.2.1 shall be made in writing by the Member to the Committee.

5.2.2 The Election Period shall be the ninety-day (90-day) period ending on the
Member’s Annuity Starting Date; provided, however, that in no event shall the
Election Period end within ninety (90) days after the information described in
Section 5.2.3 is mailed or delivered to the Member, unless he requests the
additional information described in Section 5.2.4, in which case the Election
Period shall end, if later, sixty (60) days after the additional information is
mailed or delivered to him. Notwithstanding the foregoing and pursuant to the
requirements of section 417(a)(7)(B) of the Code, a Member may elect, with the
consent of the Member’s spouse, to commence his distribution in the Spouse Joint
and Survivor Annuity form of payment, as provided in this Section 5.2 or
Section 6.5 or an optional form of payment, as provided in Section 7.6, on an
Annuity Starting Date which is less than thirty (30) days after the written
explanation required herein has been provided to the Member by the Committee or
as of an Annuity Starting Date which precedes the date as of which such written
explanation is provided to the Member by the Committee, provided that (i) the
Committee informs the Member that the Member has the right to a period of at
least thirty (30) days after receiving such written explanation to consider
whether to waive the Spouse Joint and Survivor Annuity payable under the terms
of this Plan and to elect a method of distribution provided in Section 7.6;
(ii) the Member is permitted to revoke an affirmative distribution election at
any time prior to the Annuity Starting Date or, if later, at any time prior to
the expiration of the seven (7) day period that begins on the day after the day
the Member receives such written explanation; and (iii) the commencement of
payments does not occur prior to the expiration of the seven (7) day period that
begins on the day after the day the Member receives such written explanation.

5.2.3 At least nine (9) months prior to the Member’s earliest Annuity Starting
Date, the Committee shall furnish to him (by mail or personal delivery) a
written explanation of: (i) the terms and conditions of the Spouse Joint and
Survivor Annuity; (ii) the Member’s right to make and the effect of an election
to waive the Spouse Joint and Survivor Annuity form of benefit; (iii) the rights
of a Member’s spouse; (iv) the right to make, and effect of, a revocation of a
previous election to waive the Spouse Joint and Survivor Annuity; and (v) the
relative value of the various optional forms of benefit under the Plan. The
explanation shall also state that the Committee will provide the information
described in Section 5.2.4, if he requests such information in writing within
sixty (60) days after the foregoing statement is mailed or delivered.

 

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5.2.4 Upon written request made by the Member within sixty (60) days of the date
the statement described in Section 5.2.3 was mailed or delivered, the Committee
shall furnish to him (by mail or personal delivery) a written explanation in
nontechnical language of the terms and conditions of the Spouse Joint and
Survivor Annuity provisions of the Plan and the financial effects upon the
Member’s Retirement Pension of his making the election under Section 5.2.1. Such
explanation shall be personally delivered or mailed to the Member within thirty
(30) days from the date of the Member’s written request.

5.2.5 A “Qualified Election” means a waiver of a Spouse Joint and Survivor
Annuity. The waiver must be in writing and must be consented to by the Member’s
spouse. The spouse’s consent to a waiver must be witnessed by a representative
of the Committee or a notary public. Notwithstanding this consent requirement,
if the Member establishes to the satisfaction of the Committee that such written
consent cannot be obtained because there is no spouse or the spouse cannot be
located, a waiver by the Member shall be deemed a Qualified Election. Any
consent necessary under this provision shall be valid only with respect to the
spouse who signs the consent, or in the event of a deemed Qualified Election,
the designated spouse. Additionally, a revocation of a prior waiver may be made
by a Member without the consent of the spouse at any time before the Member’s
Annuity Starting Date. The number of such revocations shall not be limited.

5.3. Small Payments. If the monthly benefit payable to a Member at his Normal
Retirement Date is less than $25 per month, the Equivalent Actuarial Value of
such benefit on a lump sum basis shall be paid to the Member at the time of his
Termination of Employment. If the monthly benefit payable to a Member at any
other Annuity Starting Date is less than $25 per month, the Equivalent Actuarial
Value of such benefit on a lump sum basis shall be paid to the Member at such
Annuity Starting Date.

5.3.1 If the actuarial equivalent lump sum value, as determined in
Section 5.3.2, of a Member’s benefit payable under the Plan is less than or
equal to $3,500 ($5,000 effective January 1, 1998), such lump sum shall be paid
to the Member at the time of his Termination of Employment. If such lump sum
value exceeds $3,500 ($5,000 effective January 1, 1998), no such lump sum
payment shall be made to a Member prior to the Member’s Normal Retirement Date
without the consent of such Member and the Member’s spouse, if any. If the value
of the Member’s vested benefit at the time of any distribution amounts to $3,500
($5,000 effective January 1, 1998), the value of the Member’s vested benefit at
any subsequent time will be deemed to exceed the applicable amount. The
preceding sentence shall be inapplicable to distributions made on or after
October 17, 2000.

5.3.2 For periods prior to January 1, 2000, solely for purposes of determining
whether a payout may be made under this Section 5.3 the actuarial value shall be
computed as of the Annuity Starting Date by using an interest rate: (i) if the
Member’s benefit does not exceed $25,000, not in excess of the applicable rate
that would be used by the Pension Benefit Guaranty Corporation (“PBGC”)
(determined as of the first month of the Plan Year during which falls the
Member’s Annuity Starting Date) for purposes of determining the present value of
a lump sum distribution for single employer plan terminations (the “PBGC Rate”)
and (ii) if the Member’s benefit exceeds $25,000, not in excess of 120% of the
PBGC Rate.

 

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For periods on and after January 1, 2000, but prior to January 1, 2002, the
amount of benefits payable as a lump sum shall not be less than the greater of
(i) the amount of such benefit determined under the actuarial assumptions
specified above or (ii) the amount of such benefit determined using the
“Applicable Interest Rate” and the “Applicable Mortality Table” as defined
herein.

For periods on and after January 1, 2002, the amount of benefits payable as a
lump sum shall be determined using the “Applicable Interest Rate” and the
“Applicable Mortality Table” as defined herein.

Notwithstanding the foregoing, effective for distributions with an Annuity
Starting Date on or after December 31, 2002, the “Applicable Mortality Table”
shall mean the mortality table prescribed in Revenue Ruling 2001-62.

For purposes of this Section 5.3.2, (1) “Applicable Interest Rate” means the
annual interest rate on 30-year Treasury securities, as specified by the
Commissioner of Internal Revenue in revenue rulings, notices or other guidance
published in the Internal Revenue Bulletin, based on such interest rate as of
the November of the immediately preceding Plan Year (except that for periods
prior to January 1, 2003, the rate determined as of the first month of the Plan
Year during which falls the Member’s Annuity Starting Date shall be used, if
such rate produces a greater benefit) and (2) “Applicable Mortality Table” means
the mortality table based on the prevailing Commissioner’s standard table
(described in section 807(d)(5)(A) of the Code) used to determine reserves for
group annuity contracts issued on the date as of which present value is being
determined (without regard to any other subparagraph of section 807(d)(5)(A) of
the Code), that is prescribed by the Commissioner of Internal Revenue in revenue
rulings, notices or other guidance published in the Internal Revenue Bulletin.

Notwithstanding the foregoing, for purposes of making the actuarial adjustment
required by Code section 415(b)(2)(E)(ii) for Plan Years beginning in 2004 or
2005, the interest rate shall be the greater of the “Applicable Interest Rate”
as defined herein or 5.5%; provided, however, that in the case of a Participant
receiving a distribution after December 31, 2003 and before January 1, 2005, the
substitution of 5.5% for the “Applicable Interest Rate” may not reduce the
benefit payable to the Participant below the amount determined using the
“Applicable Interest Rate” in effect as of the last day of the last Plan Year
beginning before January 1, 2004.

5.4. Facility of Payments. In the event that the Committee shall find that any
person to whom benefits are payable is unable to care for his affairs because of
illness or accident, or is a minor, or has died, then unless claim shall have
been made therefor by a duly appointed legal representative, the Committee may
direct that any benefit payment due be paid to such person’s spouse, child,
parent or other blood relative, or to any individual appointed by a court of
competent jurisdiction, or to any person deemed by the Committee to have
incurred expense for such person otherwise entitled to payment, and any such
payments made shall be a complete discharge of the liabilities of the Plan
therefor.

 

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ARTICLE 6.

Termination of Service

6.1. Termination Prior to Retirement. There are no benefits payable under the
Plan if a Member’s employment terminates after January 1, 1976 and prior to his
retirement under the Plan unless the Member meets the requirements of
Section 6.2.

6.2. Vested Benefit. A Member who is not eligible for a Retirement Pension under
Article 4 of the Plan shall be entitled to receive an annual “Vested Benefit” if
(i) he has completed ten years of Service (effective for Plan Years commencing
after June 30, 1989, five years of Service) at the date of his Termination of
Employment, (ii) his Termination of Employment results from an involuntary
layoff (other than a termination for cause) and the sum of his age and his years
of Service at the date of his Termination of Employment is at least sixty-five
(65), or (iii) the Member is an employee of We Try Harder, Inc. on September 30,
1986. For purposes of the preceding sentence, all Members similarly situated
shall be treated in similar fashion. If the amount of the Member’s Vested
Benefit at the time of his Termination of Employment is zero, the Member shall
be deemed to have received a distribution of such zero Vested Benefit. For
purposes of this Section 6.2, years of Service shall include (a) all years of
Service as an Employee and all other years of Service during a Member’s last
period of continuous Service, if any, prior to January 1, 1976, and, (b) from
and after January 1, 1976, all years of Service, subject to the rules relating
to reemployment set forth in Section 1.14.2 and 1.14.3. Such Vested Benefit
shall be determined in the manner of a Normal Retirement Pension but based on
the Member’s Average Final Compensation and Credited Service on the date of his
Termination of Employment. Such Vested Benefit shall commence on a Member’s
Normal Retirement Date except as provided in Section 6.3.

A Member who is not eligible for a Vested Benefit pursuant to the foregoing
provisions of this Section 6.2 upon his Termination of Employment shall, in all
events, be entitled to an annual Vested Benefit, computed and paid as set forth
above, provided, however, that such Vested Benefit shall be determined in the
manner of a Normal Retirement Pension but based on the Member’s Average Final
Compensation and Credited Service on June 30, 1985.

6.3. Early Commencement of Vested Benefits. A Member whose employment has
terminated and who is entitled to a Vested Benefit may elect to have his benefit
commence at any time after he reaches his fifty-fifth birthday and prior to his
Normal Retirement Date. In such event, the Member’s Vested Benefit determined
under Section 6.2 shall be reduced by (i) 5/12 of 1 percent for each full month
by which the commencement of benefits precedes the Member reaching age 65,
(ii) if the Member’s Termination of Employment results from an involuntary
layoff (other than a termination for cause) and he has completed at least
twenty-five years of Credited Service, 1/4 of 1 percent for each full month by
which the commencement of benefits precedes the Member reaching age 62, or
(iii) if the Member was an employee of We Try Harder, Inc. on September 30,
1986, and the sum of

(a) his Service under the Plan, and

 

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(b) his participation in PHH Group, Inc. Pension Plan exceeds 10 years and he is
no longer a participant in PHH Group, Inc. Pension Plan,  1/4 of 1 percent for
each full month by which the commencement of benefits precedes the Member
reaching age 62.

6.4. Normal Form of Vested Benefit — Unmarried Member. For a Member who is
entitled to a Vested Benefit in accordance with Section 6.2, and who is not
married on his Annuity Starting Date, the Member’s Vested Benefit shall be in
the form of an annuity, payable monthly for life, commencing on the Member’s
Annuity Starting Date and terminating with the last monthly payment preceding
such Member’s death.

6.5. Normal Form of Vested Benefit — Married Member. For a Member who is
entitled to a Vested Benefit in accordance with Section 6.2, and who is married
on his Annuity Starting Date, the Member’s Retirement Pension shall be in the
form of a Terminated Member’s Spouse Joint and Survivor Annuity.

6.5.1 A married Member may elect (and may revoke such election and thereafter
re-elect) pursuant to a Qualified Election (as defined below), at any time
before the end of the period described in Section 6.5.2 (herein referred to as
the “Election Period”), not to have his Vested Benefit paid as a Terminated
Member’s Spouse Joint and Survivor Annuity pursuant to Section 6.5. The election
under this Section 6.5.1 shall be made in writing by the Member to the
Committee.

6.5.2 The Election Period shall be the ninety day (90-day) period ending on the
Member’s Annuity Starting Date; provided, however, that in no event shall the
Election Period end within ninety (90) days after the information described in
Section 6.5.3 is mailed or delivered to the Member, unless he requests the
additional information described in Section 6.5.4 in which case the Election
Period shall end, if later, sixty (60) days after the additional information is
mailed or delivered to him. Notwithstanding the foregoing and pursuant to the
requirements of section 417(a)(7)(B) of the Code, a Member may elect, with the
consent of the Member’s spouse, to commence his distribution in the Spouse Joint
and Survivor Annuity form of payment, as provided in Section 5.2 or this
Section 6.5 or an optional form of payment, as provided in Section 7.6, on an
Annuity Starting Date which is less than thirty (30) days after the written
explanation required herein has been provided to the Member by the Committee or
as of an Annuity Starting Date which precedes the date as of which such written
explanation is provided to the Member by the Committee, provided that (i) the
Committee informs the Member that the Member has the right to a period of at
least thirty (30) days after receiving such written explanation to consider
whether to waive the Spouse Joint and Survivor Annuity payable under the terms
of this Plan and to elect a method of distribution provided in Section 7.6;
(ii) the Member is permitted to revoke an affirmative distribution election at
any time prior to the Annuity Starting Date or, if later, at any time prior to
the expiration of the seven (7) day period that begins on the day after the day
the Member receives such written explanation; and (iii) the commencement of
payments does not occur prior to the expiration of the seven (7) day period that
begins on the day after the day the Member receives such written explanation.

6.5.3 At least nine (9) months prior to the Member’s earliest Annuity Starting
Date, the Committee shall furnish to him (by mail or personal delivery) a
written explanation of:

(i) the terms and conditions of the Terminated Member’s Spouse Joint and
Survivor Annuity; (ii) the Member’s right to make and the effect of an election
to waive the Terminated Member’s Spouse Joint and Survivor Annuity form of
benefit; (iii) the rights of a Member’s spouse; (iv) the right to make, and the
effect of, a revocation of a previous election to waive the Terminated Member’s
Spouse Joint and Survivor Annuity and (v) the relative values of the various
optional forms of benefit under the Plan. The explanation shall also state that
the Committee will provide the information described in Section 6.5.4, if he
requests such information in writing within sixty (60) days after the foregoing
statement is mailed or delivered.

 

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6.5.4 Upon written request made by the Member within sixty (60) days of the date
the statement described in Section 6.5.3 was mailed or delivered, the Committee
shall furnish to him (by mail or personal delivery) a written explanation in
nontechnical language of the terms and conditions of the Terminated Member’s
Spouse Joint and Survivor Annuity provisions of the Plan and the financial
effects upon the Member’s Vested Benefit of his making the election under
Section 6.5.1. Such explanation shall be personally delivered or mailed to the
Member within thirty (30) days from the date of the Member’s written request.

6.5.5 A “Qualified Election” means a waiver of a Terminated Member’s Spouse
Joint and Survivor Annuity. The waiver must be in writing and must be consented
to by the Member’s spouse. The spouse’s consent to a waiver must be witnessed by
a representative of the Committee or a notary public. Notwithstanding this
consent requirement, if the Member establishes to the satisfaction of the
Committee that such written consent cannot be obtained because there is no
spouse or the spouse cannot be located, a waiver by the Member shall be deemed a
Qualified Election. Any consent necessary under this provision shall be valid
only with respect to the spouse who signs the consent, or in the event of a
deemed Qualified Election, the designated spouse. Additionally, a revocation of
a prior waiver may be made by a Member without the consent of the spouse at any
time before the Member’s Annuity Starting Date. The number of such revocations
shall not be limited.

6.6. Termination Prior to January 1, 1976. If a Member’s employment terminated
prior to January 1, 1976, his benefits, if any, shall be determined in
accordance with the provisions of the Prior Plan as in effect at the date of
such termination of employment.

ARTICLE 7.

Optional Forms of Benefits

7.1. Election of Optional Benefit. In lieu of the normal form of Retirement
Pension referred to in Section 5.1 or Section 5.2, or in lieu of the normal form
of Vested Benefit referred to in Section 6.4 or Section 6.5, whichever is
applicable, a Member may elect, in accordance with the provisions of
Section 7.6, to have his Retirement Pension or Vested Benefit paid under one of
the optional forms of benefits set forth in this Article. All optional forms of
benefits shall be determined by the Actuary on the basis of Equivalent Actuarial
Values. Regardless of the form of payment, all distributions shall comply with
section 401(a)(9) of the Code and the Treasury Regulations thereunder, including
the minimum distribution incidental death benefit requirement of section
401(a)(9)(G) of the Code and the Treasury Regulations thereunder, and such
provisions shall override any Plan provisions otherwise inconsistent therewith.

 

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7.2. Straight Life Annuity Option. A married Member may elect, in accordance
with the provisions of Section 7.6, to receive the Retirement Pension or Vested
Benefit to which he is entitled under the Plan in the form of an annuity payable
for the Member’s life and terminating with the last monthly payment preceding
such Member’s death.

7.3. Joint and Survivor Annuity Option. A Member may elect, in accordance with
the provisions of Section 7.6, to receive the Retirement Pension or Vested
Benefit to which he is entitled under the Plan in the form of a joint and
survivor annuity with a “Joint Annuitant” selected by the Member. Such joint and
survivor annuity shall provide (i) actuarially reduced monthly payments to the
Member during the Member’s lifetime and (ii) if the Member predeceases the Joint
Annuitant, monthly payments in the same amount or one half thereof, as
designated by the Member, to such Joint Annuitant for his life. If a Member dies
prior to his Normal Retirement Date and without having elected to retire on an
Early Retirement Date, the election under this Section 7.3 shall be void and no
benefit will be paid under this option. If the Member dies after his Normal
Retirement Date, or after the commencement of his Retirement Pension or Vested
Benefit, the Joint Annuitant shall receive the reduced amount of benefit
provided for him under this option. If the Joint Annuitant dies prior to the
commencement of a Retirement Pension or a Vested Benefit to the Member and prior
to the Member’s Normal Retirement Date, the election shall be void and the
Member will receive his Retirement Pension or Vested Benefit pursuant to
Sections 5.1, 5.2, 6.4 or 6.5, whichever is applicable. If the Joint Annuitant
dies after the Member’s Normal Retirement Date or after the commencement of his
Retirement Pension or Vested Benefit, the Member will receive the reduced
Retirement Pension or Vested Benefit provided for him under this option.

7.4. Ten Year Certain Option. A Member may elect, in accordance with the
provisions of Section 7.6, to receive the Retirement Pension or Vested Benefit
to which he is entitled in the form of an actuarially reduced annuity during his
lifetime, with the provision that if he dies after his Normal Retirement Date,
or after his benefits commenced but prior to receiving one hundred twenty
(120) monthly payments, the entire amount or, as the case may be, the balance of
such one hundred twenty (120) monthly payments shall be paid to the Member’s
Beneficiary. The Committee shall, at the Beneficiary’s election, provide that
all payments to the Beneficiary under this Section shall be commuted and paid in
a lump sum.

A Member who elects a Ten Year Certain Option shall, at the time of such
election, designate a primary Beneficiary or Beneficiaries to receive any
payments under such Ten Year Certain Option after the death of the Member. Such
Member shall also designate one or more secondary or contingent Beneficiaries to
receive any payments under such Ten Year Certain Option after the death of the
Member in the event that the designated primary Beneficiary or Beneficiaries
predecease the Member. Such designations shall be held on file by the Committee
and may be changed by the Member at any time prior to his death. In the event
that neither the Member nor any designated primary or secondary Beneficiary
survives to receive all payments which become due under such Ten Year Certain
Option, the remaining payments shall be made to the estate of either the Member
or his Beneficiary or Beneficiaries, whoever is last to survive.

 

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7.5. Social Security Level Income Option. A Member who is entitled to an Early
Retirement Pension or to a Vested Benefit and who commences payment of such
Pension or Benefit prior to his Normal Retirement Date may elect, in accordance
with the provisions of Section 7.6, to receive such Pension or Benefit in a form
which is actuarially adjusted so as to be larger for the months before he
becomes eligible for federal Social Security benefits and smaller for the months
after he becomes eligible for federal Social Security benefits. The effect of an
election of this Social Security Level Income Option shall be that the monthly
payments received by the Member, including both the benefits from this Plan and
the benefits under Social Security to which the Member is entitled, will be
approximately equal both before and after he becomes eligible for Social
Security benefits. For purposes of determining the amount of Social Security
benefits under this Social Security Level Income Option, the estimated amount
payable to a Member at age 62 under Title II of the Social Security Act as in
effect on the Member’s Annuity Starting Date shall be used.

7.6. Exercise of Option. The Member’s election of an option described in
Sections 7.2, 7.3, 7.4, or 7.5 must be consented to by the Member’s spouse, if
any, in the manner prescribed in and subject to the rules of Sections 5.2.2 and
5.2.5. Any such election shall become effective on the Member’s Annuity Starting
Date. Until such election becomes effective, the Member may change his prior
beneficiary or contingent annuitant designation (without notice to any prior or
new designee) or may revoke such election entirely by delivering a new election
form to the Committee; provided, however, that any such change shall require the
consent, in the manner referred to above, of the Member’s spouse, if any, unless
such change will result in payment of the Member’s benefit in the form of a
Spouse Joint and Survivor Annuity, as defined in Section 5.2, or a Terminated
Member’s Spouse Joint and Survivor Annuity, as defined in Section 6.5. Benefits
shall be paid (if any are payable) in accordance with the last duly made
election received by the Committee prior to the Member’s Annuity Starting Date.

7.7. Required Distributions. Notwithstanding any provision in the Plan to the
contrary, distributions to any Member who (i) attains age 70- 1/2 prior to
January 1, 2001 or (ii) is a 5-percent owner (as defined in Section 416(i) of
the Code) shall be made or commence no later than April 1st of the calendar year
following the year in which such Member attains age 70- 1/2 . Distributions to
Members who are non-5-percent owners and who attain age 70- 1/2 on or after
January 1, 2001 shall be made or commence no later than April 1st of the
calendar year following the later of (i) the calendar year in which the Member
attains age 70- 1/2, or (ii) the calendar year in which the Member terminates
employment.

7.7.1 Notwithstanding the foregoing, a Member who attains age 70 1 /2 on or
after January 1, 2001, but before January 1, 2002, and who has not terminated
employment with the Company, shall have the right but not the obligation to have
distribution commence not later than April 1 of the calendar year following the
calendar year in which the Member attains age 70 1/2 and in the same form as
provided in Sections 5.1, 5.2, 6.4, 6.5 and 7.6. Such distributions shall not be
less than the amount required to satisfy the requirements of section 401(a)(9)
of the Code.

 

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7.7.2 The amount of the minimum distributions required under this Section 7.7
shall be the minimum amounts required under Section 401(a)(9) of the Code and
the Treasury Regulations issued thereunder based upon the life expectancy of an
unmarried Member or the joint life expectancy of a married Member and his spouse
and shall be payable no less frequently than annually. The life expectancies
determined pursuant to this Section 7.7.2 shall not be recalculated. After the
initial benefit payment has been made, the amount of the succeeding benefit
payments must be made by the end of each of the next following calendar years.
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 Internal Revenue Code in accordance
with the regulations under section 401(a)(9) that were proposed in January 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
specified in guidance published by the Internal Revenue Service.

7.7.3 With respect to a Member who is not a 5-percent owner and whose required
distribution hereunder does not commence as of the April 1 following attainment
of age 70 1/2 because such Member has not terminated employment with the
Company, such Member’s Retirement Pension shall be actuarially increased to take
into account the period after age 70 1/2 during which such Member did not
receive a Retirement Pension. Such actuarial increase shall be the actuarial
equivalent of the Member’s Retirement Pension using an interest rate of 8% and
the 1984 UP Mortality Table and shall be determined beginning as of the April 1
following the calendar year in which the Member attains age 70 1/2 (or
January 1, 1997, if the Member attains age 70 1/2 prior to 1996) and ending on
the date on which the Member’s Retirement Pension commences after retirement in
an amount sufficient to satisfy the requirements of section 401(a)(9) of the
Code. The amount of the actuarial increase payable as of the end of the period
for which such actuarial increase must be made shall not be less than the
Actuarial Equivalent of the Member’s Retirement Pension that would have been
payable as of the date the actuarial increases must commence, plus the Actuarial
Equivalent of the additional benefits accrued after that date and reduced by the
Actuarial Equivalent of any distributions made after that date. To the extent
permitted under section 411(b)(1)(H) of the Code, the actuarial increase
otherwise required under section 401(a)(9)(C)(iii) of the Code shall reduce the
benefit accrual otherwise required under section 411(b)(1)(H) of the Code.

7.7.4 The commencement of Member’s minimum required distribution shall not
affect his entitlement to accrue further benefits under the Plan.

7.7.5 If the Member dies before distribution of his or her interest begins,
distribution of the Member’s entire interest shall be completed by December 31
of the calendar year containing the fifth anniversary of the Member’s death
except to the extent that an election is made to receive distributions in
accordance with (a) or (b) below:

(a) if any portion of the Member’s interest is payable to a designated
beneficiary, distributions may be made over the life or over a period certain
not greater than the life expectancy of the designated beneficiary commencing on
or before December 31 of the calendar year immediately following the calendar
year in which the Member died;

 

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(b) if the designated beneficiary is the Member’s surviving spouse, the date
distributions are required to begin in accordance with (a) above shall not be
earlier than the later of (1) December 31 of the calendar year immediately
following the calendar year in which the Member died and (2) December 31 of the
calendar year in which the Member would have attained age 70 1/2.

7.7.6 (i) Final Regulations.

(a) Effective Date. The provisions of this Final Regulations Section will apply
for purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.

(b) Precedence. The requirements of this Final Regulations Section will take
precedence over any inconsistent provisions of the Plan.

(c) Requirements of Treasury Regulations Incorporated. All distributions
required under this Final Regulations Section will be determined and made in
accordance with the Treasury regulations under section 401(a)(9) of the Code.

(d) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this Final Regulations section, other than Section (i)(d), 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.

(ii) Time and Manner of Distribution.

(a) Required Beginning Date. The Member’s entire interest will be distributed,
or begin to be distributed, to the Member no later than the Member’s required
beginning date.

(b) Death of Member Before Distributions Begin. If the Member dies before
distributions begin, the Member’s entire interest will be distributed, or begin
to be distributed, no later than as follows:

(1) If the Member’s surviving spouse is the Member’s sole designated
beneficiary, then, except as provided in the adoption agreement, distributions
to the surviving spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the Member died, or by
December 31 of the calendar year in which the Member would have attained age 70
 1/2, if later.

(2) If the Member’s surviving spouse is not the Member’s sole designated
beneficiary, then, except as provided in the adoption agreement, distributions
to the designated beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Member died.

 

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(3) If there is no designated beneficiary as of September 30 of the year
following the year of the Member’s death, the Member’s entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary
of the Member’s death.

(4) If the Member’s surviving spouse is the Member’s sole designated beneficiary
and the surviving spouse dies after the Member but before distributions to the
surviving spouse begin, this Section (ii)(b), other than Section (ii)(b)(1),
will apply as if the surviving spouse were the Member.

For purposes of this Sections (ii)(b) and (v), distributions are considered to
begin on the Member’s required beginning date (or, if Section (ii)(b)(4)
applies, the date distributions are required to begin to the surviving spouse
under Section (ii)(b)(1)). If annuity payments irrevocably commence to the
Member before the Member’s required beginning date (or to the Member’s surviving
spouse before the date distributions are required to begin to the surviving
spouse under Section (ii)(b)(1)), the date distributions are considered to begin
is the date distributions actually commence.

(c) Form of Distribution. Unless the Member’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 Sections (iii), (iv) and (v) of
this Final Regulations section. If the Member’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. Any part of the Member’s interest which is in
the form of an individual account described in section 414(k) of the Code will
be distributed in a manner satisfying the requirements of section 401(a)(9) of
the Code and the Treasury regulations that apply to individual accounts.

(iii) Determination of Amount to be Distributed Each Year.

(a) General Annuity Requirements. If the Member’s interest is paid in the form
of annuity distributions under the Plan, payments under the annuity will satisfy
the following requirements:

(1) the annuity distributions will be paid in periodic payments made at
intervals not longer than one year;

(2) the distribution period will be over a life (or lives) or over a period
certain not longer than the period described in Section (iv) or (v);

(3) once payments have begun over a period certain, the period certain will not
be changed even if the period certain is shorter than the maximum permitted;

(4) payments will either be nonincreasing or increase only as follows:

(A) by an annual percentage increase that does not exceed the annual percentage
increase in a cost-of-living index that is based on prices of all items and
issued by the Bureau of Labor Statistics;

 

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(B) to the extent of the reduction in the amount of the Member’s payments to
provide for a survivor benefit upon death, but only if the beneficiary whose
life was being used to determine the distribution period described in Section
(iv) dies or is no longer the Member’s beneficiary pursuant to a qualified
domestic relations order within the meaning of section 414(p);

(C) to provide cash refunds of employee contributions upon the Member’s death;
or

(D) to pay increased benefits that result from a plan amendment.

(b) Amount Required to be Distributed by Required Beginning Date. The amount
that must be distributed on or before the Member’s required beginning date (or,
if the Member dies before distributions begin, the date distributions are
required to begin under Section (ii)(b)(1) or (ii)(b)(2)) is the payment that is
required for one payment interval. The second payment need not be made until the
end of the next payment interval even if that payment interval ends in the next
calendar year. Payment intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually, or annually. All of the
Member’s benefit accruals as of the last day of the first distribution calendar
year will be included in the calculation of the amount of the annuity payments
for payment intervals ending on or after the Member’s required beginning date.

(c) Additional Accruals After First Distribution Calendar Year. Any additional
benefits accruing to the Member in a calendar year after the first distribution
calendar year will be distributed beginning with the first payment interval
ending in the calendar year immediately following the calendar year in which
such amount accrues.

(iv) Requirements For Annuity Distributions That Commence During Member’s
Lifetime.

(a) Joint Life Annuities Where the Beneficiary Is Not the Member’s Spouse. If
the Member’s interest is being distributed in the form of a joint and survivor
annuity for the joint lives of the Member and a nonspouse beneficiary, annuity
payments to be made on or after the Member’s required beginning date to the
designated beneficiary after the Member’s death must not at any time exceed the
applicable percentage of the annuity payment for such period that would have
been payable to the Member using the table set forth in Q&A-2 of section
1.401(a)(9)-6T of the Treasury regulations. If the form of distribution combines
a joint and survivor annuity for the joint lives of the Member and a nonspouse
beneficiary and a period certain annuity, the requirement in the preceding
sentence will apply to annuity payments to be made to the designated beneficiary
after the expiration of the period certain.

(b) Period Certain Annuities. Unless the Member’s spouse is the sole designated
beneficiary and the form of distribution is a period certain and no life
annuity, the period certain for an annuity distribution commencing during the
Member’s lifetime may not exceed the applicable distribution period for the
Member under the Uniform Lifetime Table set

 

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forth in section 1.401(a)(9)-9 of the Treasury regulations for the calendar year
that contains the annuity starting date. If the annuity starting date precedes
the year in which the Member reaches age 70, the applicable distribution period
for the Member is the distribution period for age 70 under the Uniform Lifetime
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the
excess of 70 over the age of the Member as of the Member’s birthday in the year
that contains the annuity starting date. If the Member’s spouse is the Member’s
sole designated beneficiary and the form of distribution is a period certain and
no life annuity, the period certain may not exceed the longer of the Member’s
applicable distribution period, as determined under this section (iv)(b), or the
joint life and last survivor expectancy of the Member and the Member’s spouse as
determined under the Joint and Last Survivor Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the Member’s and spouse’s
attained ages as of the Member’s and spouse’s birthdays in the calendar year
that contains the annuity starting date.

(v) Requirements For Minimum Distributions Where Member Dies Before Date
Distributions Begin.

(a) Member Survived by Designated Beneficiary. Except as provided in the
adoption agreement, if the Member dies before the date distribution of his or
her interest begins and there is a designated beneficiary, the Member’s entire
interest will be distributed, beginning no later than the time described in
section (ii)(b)(1) or (ii)(b)(2), over the life of the designated beneficiary or
over a period certain not exceeding:

(1) unless the annuity starting date is before the first distribution calendar
year, the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the beneficiary’s birthday in the calendar year
immediately following the calendar year of the Member’s death; or

(2) if the annuity starting date is before the first distribution calendar year,
the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the beneficiary’s birthday in the calendar year that
contains the annuity starting date.

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

(c) Death of Surviving Spouse Before Distributions to Surviving Spouse Begin. If
the Member dies before the date distribution of his or her interest begins, the
Member’s surviving spouse is the Member’s sole designated beneficiary, and the
surviving spouse dies before distributions to the surviving spouse begin, this
Section (v) will apply as if the surviving spouse were the Member, except that
the time by which distributions must begin will be determined without regard to
Section (ii)(b)(1).

 

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(vi) Definitions.

(a) Designated beneficiary. The individual who is designated as the beneficiary
under Section 1.8 of 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.

(b) Distribution calendar year. A calendar year for which a minimum distribution
is required. For distributions beginning before the Member’s death, the first
distribution calendar year is the calendar year immediately preceding the
calendar year which contains the Member’s required beginning date. For
distributions beginning after the Member’s death, the first distribution
calendar year is the calendar year in which distributions are required to begin
pursuant to section (ii)(b).

(c) Life expectancy. Life expectancy as computed by use of the Single Life Table
in section 1.401(a)(9)-9 of the Treasury regulations.

(d) Required beginning date. The date specified in Section 7.7 of the Plan.

7.8. Rollover Distribution. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee’s election under this
Section 7.8, effective January 1, 1993, a distributee may elect, at the time and
in the manner prescribed by the Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.

If a mandatory distribution under Section 5.3.1 is an eligible rollover
distribution to a Participant that exceeds $1,000 (other than a distribution to
a spouse or Code Section 414(p) alternate payee of a Participant), and if the
Participant does not affirmatively elect to have such distribution paid directly
to an eligible retirement plan specified by the Participant in a direct rollover
in accordance with this Section 7.8 or to receive the distribution directly, the
Plan shall pay the distribution in a direct rollover to an individual retirement
plan designated by the Plan Administrator and established in the name of the
Participant.

7.8.1 An eligible rollover distribution is a distribution of all or any portion
of the balance to the credit of the distributee, except that an eligible
rollover distribution does not include: (i) 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 distributee’s
designated beneficiary, or for a specified period of ten (10) years or more;
(ii) any distribution to the extent such distribution is required under section
401(a)(9) of the Code; and (iii) any hardship distribution.

7.8.2 An eligible retirement plan is (i) a plan qualified under section 401(a)
or 403(a) of the Code, (ii) a tax-sheltered annuity described in section 403(b)
of the Code, (iii) 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 the Plan, and
(iv) an individual retirement arrangement under section 408 of the Code. 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.

 

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7.8.3 A distributee is an Employee or Former Employee, the surviving spouse of
an Employee or Former Employee or an alternate payee under a qualified domestic
relations order who is the spouse or former spouse of the Participant. A direct
rollover is a payment by the Plan to the eligible retirement plan specified by
the distributee.

7.8.1 In the event that the provisions of this Section 7.8 or any part thereof
cease to be required by law as a result of subsequent legislation or otherwise,
this Section 7.8 or applicable part thereof shall be ineffective without
necessity of further amendment of the Plan.

ARTICLE 8.

Death Benefits

8.1. Qualified Pre-retirement Survivor Annuity. In the event a Member dies on or
after the first date as of which he has attained a nonforfeitable right to any
part of his accrued benefit under the Plan but prior to his Annuity Starting
Date, and such Member is survived by a spouse who has been married to the Member
throughout the one (1) year period preceding the Member’s death, a “Qualified
Pre-retirement Survivor Annuity” shall be payable for the life of such surviving
spouse.

8.1.1 In the case of a Member who dies prior to his Annuity Starting Date at the
time when (i) he is eligible for Early Retirement under Section 4.2, (ii) he has
retired with a Disability Retirement Pension under Section 4.3, (iii) he has
retired with a deferred benefit under Section 4.2, or (iv) he is eligible for
early commencement of his Vested Benefit under Section 6.3, the Qualified
Pre-retirement Survivor Annuity shall be a monthly amount equal to 50% of the
reduced monthly benefit to which the Member would have been entitled had he
commenced receiving benefits on the day before his death with an immediate
Spouse Joint and Survivor Annuity or Terminated Member’s Spouse Joint and
Survivor Annuity in effect. Such Qualified Pre-retirement Survivor Annuity shall
commence to be paid beginning as of the first day of the month coincident with
or next following the date of the Member’s death.

8.1.2 In the case of a Member who dies prior to the time he is eligible for
Early Retirement pursuant to Section 4.2, Disability Retirement pursuant to
Section 4.3, or early commencement of his Vested Benefit under Section 6.3, the
Qualified Pre-retirement Survivor Annuity shall be a monthly amount equal to 50%
of the reduced monthly benefit to which the Member would have been entitled at
his earliest Annuity Starting Date, assuming such Member had (i) separated from
service on the date of his death (if he had not previously separated from
service), (ii) survived to such Annuity Starting Date, and (iii) commenced
receiving his benefit on such Annuity Starting Date with an immediate Terminated
Member’s Spouse Joint and Survivor Annuity in effect. Payment of the Qualified
Pre-retirement Survivor Annuity in such case shall commence on such earliest
Annuity Starting Date.

8.2. Death in Service Option I. An active Member who is still employed by the
Company on or after his Early Retirement Date or, if applicable, on or after his
Normal

 

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Retirement Date and who has a spouse may elect, in accordance with the
provisions of Section 8.4, to have a Retirement Pension payable to the Member’s
spouse in an amount equal to the Retirement Pension that would have been payable
to such spouse if the Member had retired and the payment of his Retirement
Pension commenced in the month in which his death occurred, computed as if he
had elected a Joint and Survivor Annuity Option (within the meaning of
Section 7.3) with 100% continued to his spouse as Joint Annuitant, reduced by
 1/2 of 1 percent per annum for each year the election is in effect. The reduced
Retirement Pension payable to a Member who makes an election under the preceding
sentence shall be equal to the Retirement Pension to which he would otherwise be
entitled, reduced by  1/2 of 1 percent per annum for each year between the date
on which his election became effective and the earlier of his retirement date or
the date of death of his spouse.

8.3. Death in Service Option II. An active Member who is eligible to elect to
receive an Early Retirement Pension and who has not reached his Normal
Retirement Date may, by written notice received by the Committee, elect to
receive a reduced Retirement Pension upon his retirement with the provision that
if he should die after his election becomes effective but prior to the date
distribution of his Retirement Pension would have commenced but for his death, a
Retirement Pension shall be payable to any person designated by him for the
remainder of the lifetime of such person, provided, however, that a Member to
whom Section 8.1 applies may designate, in accordance with the provisions of
Section 8.4, only a person other than his spouse to receive the benefit provided
by this Section 8.3.

8.3.1 An election made under Section 8.2 or Section 8.3 above shall become
effective on the later of (i) the first day of the calendar month coincident
with or next following the date on which such election was made or, (ii) the
date the Member first becomes eligible to elect to receive an Early Retirement
Pension.

8.3.2 The reduced Retirement Pension payable to a Member who has made an
effective election under Section 8.3 above shall be equal to the Retirement
Pension to which he would otherwise be entitled, reduced for each year between
the date on which his election became effective and the earlier of his
retirement date or the date of death of the designated person, by either (i) 1
percent per annum in the case of a Member who elects to have the Retirement
Pension provided by Section 8.3.3 below paid to such designated person or
(ii)  1/2 of 1 percent per annum in the case of a Member who elects to have the
Retirement Pension provided by Section 8.3.4 below paid to such designated
person.

8.3.3 The reduced Retirement Pension payable to the designated person under this
Section 8.3.3 shall be equal to the amount of the Retirement Pension that would
have been payable to such designated person under Section 7.3 if the Member had
retired and the payment of his Retirement Pension had commenced in the month in
which his death occurred, computed as if the Member had Elected a Joint and
Survivor Annuity Option under Section 7.3 with 100% continued to his Joint
Annuitant with the designated person nominated as his Joint Annuitant, reduced
by 1 percent per annum for each year between the date on which the Member’s
election became effective and the date of his death.

 

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8.3.4 The reduced Retirement Pension payable to the designated person under this
Section 8.3.4 shall be equal to the amount of the Retirement Pension that would
have been payable to such designated person under Section 7.3 if the Member had
retired and the payment of his Retirement Pension had commenced in the month in
which his death occurred, computed as if the Member had elected a Joint and
Survivor Annuity Option under Section 7.3 with 50% continued to his Joint
Annuitant with the designated person nominated as his Joint Annuitant, reduced
by  1/2 of 1 percent per annum for each year between the date on which the
Member’s election became effective and the date of his death.

8.4. Consent of Spouse. Any election made under Section 8.2 or Section 8.3 by a
Member to whom Section 8.1 applies must be made by the Member in writing during
the election period described in Section 8.4.1 and must be consented to by the
Member’s spouse in the manner prescribed in and subject to the rules of Sections
5.2.2 and 5.2.5.

8.4.1 The election period to waive the Qualified Pre-retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Member attains age 35
and end on the date of the Member’s death. In the event a Member who is eligible
for a Vested Benefit separates from service prior to the beginning of the
election period, the election period shall begin on the date of such separation
from service.

8.4.2 With regard to the election described in Section 8.4.1, the Committee
shall provide each Member within the applicable period for such Member a written
explanation of the Qualified Pre-retirement Survivor Annuity in such terms and
in such a manner as would be comparable to the explanation provided for meeting
the requirements of Sections 5.2.2 and 5.2.3 applicable to a Spouse Joint and
Survivor Annuity.

The applicable period for a Member is whichever of the following periods ends
last: (i) the period beginning with the first day of the Plan Year in which the
Member attains age 32 and ending with the close of the Plan Year preceding the
Plan Year in which the Member attains age 35 and (ii) a reasonable period ending
after the individual becomes a Member. Notwithstanding the foregoing, notice
must be provided within a reasonable period ending after separation of service
in the case of a Member who separates from service before attaining age 35.

For purposes of the preceding paragraph, a reasonable period ending after the
event described in (ii) is the end of the two year period beginning one year
prior to the date the event occurs and ending one year after that date. In the
case of a Member who separates from service before the Plan Year in which age 35
is attained, notice shall be provided within the two year period beginning one
year prior to separation and ending one year after separation. If such a Member
thereafter returns to employment with the Company, the applicable period for
such Member shall be redetermined.

8.5. Other Death Benefits. If a Member dies at any time on or after his Annuity
Starting Date, his benefit (if any is payable) shall be paid in accordance with
the Plan provisions governing the form of payment in effect as of the date of
his death. Except as provided in this Article 8, no death benefits shall be
provided under the Plan.

 

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ARTICLE 9.

Contributions

9.1. Contributions of the Company. In order to provide for the benefits
established by this Plan, the Company shall make such contributions to the Fund
as may be required to maintain the Plan on a sound actuarial basis and meet the
funding standards of ERISA.

9.2. Irrevocability of Contributions. Except as provided in Section 18.2, the
contributions made by the Company shall be irrevocable and shall be transferred
to the Trustee or insurance company, as provided for in Article 10, to be used
in accordance with the provisions of the Plan to pay the benefits established by
the same. Neither such contributions nor the income therefrom shall be used for
or applied to purposes other than the exclusive benefit of the Members or their
Beneficiaries prior to satisfaction of all liabilities hereunder.

9.3. Use of Forfeitures. Any amounts forfeited by Members shall be used to
reduce future Company contributions hereunder and shall not be used to increase
the benefits any Member or other person would otherwise receive under the Plan.

ARTICLE 10.

Management of Funds

10.1. Medium of Funding. The Fund shall be held by a Trustee or Trustees
appointed from time to time by the Board of Directors, in one or more trusts
(such trusts being herein collectively referred to as the “Trust”), under a
trust instrument or instruments approved or authorized by the Board of Directors
for use in providing the benefits of the Plan and paying any expenses of the
Plan not paid directly by the Company; provided, however, that the Company may,
in its discretion, also enter into any type of contract with any insurance
company or companies selected by it for providing benefits under the Plan.

10.2. Fund to be for Exclusive Benefit of Members. Prior to the satisfaction of
all liabilities with respect to persons entitled to benefits, except for the
payment of expenses, no part of the corpus or income of the Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of Members,
former Members entitled to Vested Benefits, retired Members, Beneficiaries of
Members and other persons who are or may become entitled to benefits hereunder.

ARTICLE 11.

The Committee and Claims Procedure

11.1 Appointment of Committee. The administration of the Plan, as provided
herein, including the supervision of the payment of all benefits to Participants
and Beneficiaries, shall be vested in and be the responsibility of the Employee
Benefits Committee which shall be called the “Committee” herein. The Committee
shall be the Plan Administrator and a Named Fiduciary of the Plan for purposes
of the Act. The Committee shall consist of such number of

 

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persons, not less than three (3), as shall from time to time be determined by
the Compensation Committee of the Board. The members of the Committee and their
successors shall be appointed from time to time by the Compensation Committee of
the Board. If no Committee is appointed, the term Committee shall refer to the
Board of Directors of the Company.

11.2 Officers and Subcommittees. The Committee shall elect a Chairman and shall
appoint such subcommittees as it shall deem necessary and appropriate.

11.3 Committee Procedures. A majority of the members of the Committee then
serving shall constitute a quorum for the transaction of business. All
resolutions or other action taken by the Committee shall be by vote of a
majority of those present at such meeting and entitled to vote. Resolutions may
be adopted or other action taken without a meeting of the Committee. Any member
of the Committee shall nave the power to execute on behalf of the Committee all
instruments and documents necessary or required by the Trustee in connection
with the application for contracts on the lives of Participants, and the act of
such member for such purpose shall be binding on the Committee to the same
extent as though such instrument or instruments had been executed by the
Committee. Subject to the foregoing, the chairman of the Committee may act on
the Committee’s behalf and may contract for actuarial, legal, investment,
advisory, medical, accounting, clerical, and other services determined necessary
by it for the administration of the Plan and the Fund.

11.4 Committee Powers. The Committee shall have all powers necessary to carry
out its duties hereunder, including, but not limited to, the power to:

(a) Determine all questions affecting the eligibility of any Employee to
participate herein;

(b) Compute the amount of benefits payable hereunder to any Participant or
Beneficiary;

(c) Make rules and regulations for the implementation, administration and
interpretation of the Plan, which are not inconsistent with the terms and
provisions of the Plan. Such rules and regulations as are adopted by the
Committee shall be binding upon any persons having an interest in or under the
Plan;

(d) Communicate the funding policy to the Trustee and other investment managers
whose duties are to determine the investment policy of the Fund; and

(e) Appoint such investment managers with respect to all or any designated part
of the Fund as it shall deem appropriate.

In carrying out its duties herein, the Committee shall have discretionary
authority to exercise all powers and to make all determinations, consistent with
the terms of the Plan, in all matters entrusted to it, and its determinations
shall be given deference and shall be final and binding on all interested
parties. Notwithstanding the foregoing, the Committee shall administer the Plan
in accordance with its terms, and shall have all powers necessary to carry out
the

 

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provisions of the Plan not otherwise reserved to the Company, the Board of
Directors or the Trustee. The Committee shall have all powers to administer the
Plan, within its discretion, other than the power to invest or reinvest the
assets of the Plan to the extent such powers have been delegated to the Trustee,
an insurance company and/or an asset manager. The Committee shall have total and
complete discretion to interpret the Plan and to determine all questions arising
in the administration, interpretation and application of the Plan including the
power to construe and interpret the Plan; to decide the questions relating to an
individual’s eligibility to participate in the Plan and/or eligibility for
benefits and the amounts thereof; to have fact finder discretionary authority to
decide all facts relevant to the determination of eligibility for benefits or
participation; to make such adjustments as it deems necessary or desirable to
correct any arithmetical or accounting errors; to determine the amount, form and
timing of any distribution to be made hereunder; as well as to resolve any
conflict. The Committee shall have the discretion to make factual determinations
as well as decisions and determinations relating to the amount and manner of
allocations and distributions of benefits. In making its decisions, the
Committee shall be entitled to, but need not rely upon, information supplied by
a Member, Beneficiary or representative thereof. The Committee shall have full
and complete discretion to determine whether a domestic relations order
constitutes a “qualified domestic relations order” under applicable law and
whether the putative alternate payee under such an order otherwise qualifies for
benefits hereunder. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in such manner and to such extent as it shall deem
necessary to carry out the purposes of this Plan. The Committee’s decision in
such matters shall be binding and conclusive as to all parties.

11.5 Information for Committee. The members of the Committee may inspect the
records of the Company to the extent that it may reasonably be necessary for
them to determine any fact in connection with acts to be performed by them under
this Plan, but the members of the Committee shall not be required to make such
inspection but may rely upon any written statement or other communication
believed by them to be genuine and to be signed by an authorized officer of the
Company. In this connection, the Company agrees to furnish the Committee with
such information and data relative to the Plan as is necessary for the proper
administration thereof.

11.6 Plan Records. The Committee, or the Secretary of the Committee shall keep
or cause to be kept records reflecting administration of the Plan, which records
shall be subject to audit by the Company. A Participant may examine only those
records pertaining directly to him.

11.7 Instructions to Trustees. The Committee shall provide appropriate written
instructions to the Trustee signed by an authorized member or members of the
Committee to enable it to make the distributions provided for in the Plan. The
Trustee shall be entitled to rely upon any written notice, instruction,
direction, certificate or other communication reasonably believed by it to be
genuine and to be signed by an authorized member of the Committee or an officer
of the Company, and the Trustee shall be under no duty to make investigation or
inquiry as to the truth or accuracy of any statement contained therein, unless
it knows that the direction or instruction constitutes a breach of the
Committee’s or the Company’s fiduciary responsibility with respect to the Plan.

 

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11.8 Allocation of Duties, etc. Among Committee Members. The duties, powers and
responsibilities reserved to the Committee may be allocated among its respective
members so long as such allocation is pursuant to action of a majority of its
respective members or by written agreement executed by a majority of its
respective members, in which case, except as may be required by the Act, no
member of the Committee shall have any responsibility or liability with respect
to any duties, powers or responsibilities not allocated to him or for the acts
or omissions of any other member.

11.9 Delegation by Committee. The Committee shall have full power and authority
to delegate powers and duties to any persons or firms (including, but not
limited to, corporate resources departments, accountants, trustee(s), counsel,
investment manager(s), actuaries, physicians, appraisers, consultants,
professional plan administrators, insurers and other specialists), or otherwise
act to secure specialized advice or assistance, as it deems necessary or
desirable in connection with the management of the Plan; to the extent not
prohibited by the Act, the Committee shall be entitled to rely conclusively
upon, and shall be fully protected in any action or omission taken by it in good
faith reliance upon, the advice or opinion of such persons or firms provided
such persons or firms were prudently chosen by the Committee, taking into
account the interests of the Participants and Beneficiaries and with due regard
to the ability of the persons or firms to perform their assigned functions.

11.10 Investment Managers. The Committee’s power to retain the services of an
investment manager(s) for the management of (including the power to acquire and
dispose of) all or any part of the Fund’s assets, shall be limited to the
retention of such persons or firms that are registered as investment managers
under the Investment Advisers Act of 1940, as Banks (as defined in that Act), or
which are insurance companies qualified to manage, acquire or dispose of the
Fund’s assets under the laws of more than one state, and provided that each of
such persons or firms has acknowledged to the Committee and the Trustee in
writing that he is a fiduciary with respect to the Plan. In such event, the
Trustee shall not be liable for the acts or omissions of such investment manager
or managers, nor shall it be under any obligation to invest or otherwise manage
any assets which are subject to the management of such investment manager or
managers.

11.11 Costs and Expenses. Unless otherwise determined by the Compensation
Committee of the Board, the Committee shall serve without compensation for its
services as such. However, the expenses of administering the Plan, including the
printing of literature and forms related thereto, the disbursement of benefits
thereunder, the compensation of professional plan administrators, agents,
appraisers, actuaries, consultants, counsel, investment advisors, insurers or
other specialists may be paid from the Fund unless otherwise directed by the
Company.

11.12 Standard of Care. The members of the Committee shall use ordinary care and
reasonable diligence in the performance of their administrative duties.

11.13 Indemnification and Insurance. To the extent permitted by law, neither the
Committee, nor its members, nor any other person performing duties hereunder,
shall incur

 

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any liability for any act done, determination made or failure to act, if in good
faith, and the Company shall indemnify the Committee, its members and such other
persons against any and all liability which is incurred as a result of the good
faith performance or good faith nonperformance of their duties hereunder.
Nothing in this Plan shall preclude the Company from purchasing liability
insurance to protect such persons with respect to their duties under this Plan.
The protection provided in this Section applies only to those Committee members
and other persons who are Employees.

11.14 Disputes. In the event that any dispute shall arise as to any act to be
performed by the Committee, the Committee may postpone the performing of such
act until actual adjudication of such dispute shall have been made in a court of
competent jurisdiction or until they shall be indemnified against loss, to their
satisfaction, by the Company.

11.15 Committee Members as Participants. No member of the Committee shall be
precluded from becoming a Participant of the Plan if he would be otherwise
eligible, but he shall not be entitled to vote or act upon, or sign any
documents relating specifically to, his own participation under the Plan except
when it relates to benefits generally. If this disqualification results in the
lack of a Committee quorum, then the Compensation Committee of the Board of
Directors shall appoint a sufficient number of temporary members of the
Committee who shall serve for the sole purpose of determining such a question.

11.16 Claims Procedure.

(a) Initial Claim. If an eligible Employee or an eligible Employee’s surviving
spouse or other beneficiary (hereinafter referred to as a “Claimant”) is denied
any benefit under this Plan, the Claimant may file a claim in writing with the
Committee. The Committee shall review the claim itself or appoint an individual
or an entity to review the claim. The Claimant shall be notified within ninety
(90) days after receipt of the claim by the Committee, whether the claim is
allowed or denied, unless the Claimant receives written notice prior to the end
of the ninety (90) day period stating that circumstances require an extension of
the time for decision and the date that a decision is expected to be provided to
the Claimant. Such notification shall be given within one hundred and eighty
(180) days after the claim is filed. The notice of the decision shall be in
writing, in a manner calculated to be understood by the Claimant, sent by mail
to the Claimant’s last known address, and, if the notice is a denial of the
claim, the notice must contain the following information:

(1) the specific reason or reasons for the denial;

(2) a reference to specific provisions of the Plan on which the denial is based;
and

(3) if applicable, a description of any additional material or information
necessary to perfect the claim and an explanation of why such material or
information is necessary; and

(4) an explanation of the Plan’s claims review procedure for the denied or
partially denied claim and any applicable time limits, and a statement that the
Claimant has a right to bring a civil action under Section 502(a) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), following
an adverse benefit determination on review.

 

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(b) Review Procedure. A Claimant or his duly authorized representative is
entitled to request a review by the Committee of any denial of the Claimant’s
claim. The request for review must be submitted to the Committee in writing
within sixty (60) days of receipt of notice of the denial. Absent a request for
review within the sixty (60) day period, the claim will be deemed to be
conclusively denied. The review of a denial of a claim shall be conducted by the
Committee or an individual or entity appointed by the Committee. The reviewer
shall afford the Claimant or the Claimant’s representative upon request and free
of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the Claimant’s claim for benefits. The review
shall take into account all comments, documents, records, and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.
The reviewer shall render a review decision in writing, within sixty (60) days
after receipt of a request for a review, provided that, the reviewer may extend
the time for decision (if special circumstances require) by not more than sixty
(60) days upon written notice to the Claimant (such written notice shall state
the circumstances that require an extension of time for the decision and the
date a decision is expected to be provided to the Claimant). The Claimant shall
receive written notice of the reviewer’s decision in a manner calculated to be
understood by the Claimant. The notice shall set forth:

(1) the specific reason or reasons for the denial of the appeal of the claim;

(2) a reference to specific provisions of the Plan on which the denial is based;
and

(3) a statement of the Claimant’s right to bring a civil action under ERISA
section 502(a) and a description of any applicable limitation under the Plan.

A Claimant may not commence a civil action in court for any benefit claim until
he has fully exhausted these claims procedures.

In reviewing claims, the Committee shall have sole and full discretionary
authority to interpret the terms of the Plan, including any uncertain terms, to
determine eligibility for, entitlement to, and the amount of any benefits, and
to make factual findings and determine any other claims related to the Plan. Any
interpretation or determination made pursuant to such discretionary authority
shall be given full force and effect and shall be final, binding and conclusive
on all interested parties and shall be afforded the maximum deference permitted
by law.

11.17 Compliance With Regulations. The review of all claims hereunder shall be
made in accordance with applicable regulations under the Act.

 

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ARTICLE 12.

Amendments

12.1. The Board of Directors shall have the power to modify or amend the Plan at
any time in accordance with its established rules of procedure; provided,
however, that none of the assets of the Plan, because of any modification or
amendment, may be used for any purpose other than the exclusive benefit of
active Members and retired Members and their Beneficiaries prior to the
satisfaction of all liabilities hereunder. In no case shall such amendments or
modifications directly or indirectly cause any portion of the assets of the Plan
to revert to the Company or to be used for any purpose other than the exclusive
benefit of such Members prior to the satisfaction of all liabilities under the
Plan.

12.2. No amendment to the Plan shall retroactively adversely affect benefits to
which the Members and their Beneficiaries are entitled, without their consent,
unless such amendment is necessary in order to conform the Plan to the
requirements of sections 401 and 501 of the Code.

ARTICLE 13.

Termination of the Plan

13.1. Termination by the Company. This Plan may be terminated by vote of the
Board of Directors at any time in accordance with its established rules of
procedure; provided, however, that such termination shall not cause any of the
assets held under the Plan to be used for any purpose other than the exclusive
benefit of active Members and retired Members and their Beneficiaries or to
revert to the Company prior to the satisfaction of all liabilities under the
Plan. Notwithstanding the foregoing or the provisions of Section 9.2, 10.2, 12.1
or any other provision of the Plan to the contrary, any assets held under the
Plan after the satisfaction of all liabilities under the Plan subsequent to its
termination shall revert to the Company.

13.2. Certain Benefits Nonforfeitable. In case of termination of the Plan due to
any cause, or partial termination in accordance with the regulations of the
Treasury, the right of all Members to benefits will become nonforfeitable to the
extent funded or, if greater, to the extent as guaranteed by the Pension Benefit
Guaranty Corporation.

13.3. Priority of Distribution on Termination. Except as provided in
Section 13.1 hereof, in the event of termination of the Plan, the assets
remaining in the Plan shall be used and disposed of for the benefit of the
Members and their Beneficiaries in accordance with the provisions of Title IV of
ERISA. Without limiting the generality of the foregoing, if the Internal Revenue
Service determines that any allocation made pursuant to this Section 13.3
results in “discrimination” (within the meaning of section 401(a)(4) of the
Code) then, if required to prevent disqualification of the Plan (or any trust
under the Plan) under section 401(a) of the Code, the assets allocated under
section 4044(a) of ERISA shall be reallocated to the extent necessary to avoid
such discrimination. Subject to regulations of the Pension Benefit Guaranty
Corporation, any amount allocated for the benefit of a Member, spouse, or
Beneficiary shall be applied for his benefit, as the Committee determines in its
sole discretion, either by a cash

 

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payment or by the purchase of an insurance company contract or by the
continuance of the Trust Fund and the payment of benefits thereunder in such
amounts as may be provided by the property so allocated, or by any combination
of the foregoing.

13.4. Coordination with Article 15. The priorities for distribution of Plan
assets established under Section 13.3 shall be subject to the limitations
provided in Article 15 if the termination of the Plan occurs prior to the tenth
anniversary of the commencement date (as defined in Section 15.1), or prior to
the time when the full current costs of the Plan for the first ten years from
the establishment date have been funded. In the event that the limitations
provided in Article 15 become applicable, adjustments shall be made in such
priorities of distribution as may be required to satisfy the requirements of
Article 15.

ARTICLE 14.

Limitation on Benefits

14.1. Code Section 415 Limitations. In addition to other limitations set forth
in the Plan and notwithstanding any other provision of the Plan, the Retirement
Pension, including the right to any optional benefits provided in the Plan (and
all other defined benefit plans required to be aggregated with this Plan under
the provisions of section 415 of the Code), shall not increase to an amount in
excess of the amount permitted under section 415 of the Code at any time. This
shall not require the re-computation of benefits accrued in “limitation years”
beginning before July 1, 1987. For purposes of this Article 14, the “limitation
year” shall be the Plan Year. Effective for Limitation Years ending after
December 31, 2001 (“EGTRRA Effective Date”) and notwithstanding any other
provision in the Plan to the contrary, the accrued benefit for any Member shall
be determined by applying the terms of the Plan implementing the limitations of
Section 415(b) of the Code as was in effect on the day immediately prior to the
EGTRRA Effective Date.

14.1.2 Combined Limitations. In the case where (i) this Plan and another defined
benefit plan or defined contribution plan of the Company cover the same Member
and (ii) reductions in either the amount of the annual benefit payable under
this Plan or the amount of annual benefit or annual addition under such other
plan with respect to the Member (or both) are necessary in order to comply with
section 415 of the Code, a reduction in the annual benefit payable under this
Plan to the Member shall be made to the extent necessary to comply with section
415 of the Code prior to any reduction in the annual benefit or annual addition
under such other plan with respect to the Member. Effective for Limitation Years
beginning on or after January 1, 2000 (the “SBJPA Effective Date”), and
notwithstanding any other provision of the Plan, the retirement benefit for any
Member shall be determined by applying the terms of the Plan implementing the
limitations of section 415 of the Code as if the limitations of section 415 of
the Code continued to include the limitations of section 415(e) of the Code as
in effect on the day immediately prior to the SBJPA Effective Date. For this
purpose, a Member’s defined contribution fraction is set equal to the Member’s
defined contribution fraction as of the day immediately prior to the SBJPA
Effective Date.

14.1.3 Commencement Prior to Age 62. Notwithstanding the above, if a Member’s
annual pension benefit begins before the Member’s 62nd birthday, the
determination as to whether the benefit limitation under section 415 of the Code
has been satisfied shall be made by

 

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adjusting such limitations so that it is the actuarial equivalent of the section
415 limit annual benefit beginning at age 62. For purposes of making such an
adjustment, actuarial equivalent shall mean, of the two reductions below, the
one which will result in the lesser benefit payable to the Member:

(i) The reduction based on the Plan’s early retirement reduction factors under
Section 4.2 hereof, or

(ii) The actuarial reduction based on a 5% interest rate and the mortality table
described in Section 5.3.2 hereof.

14.1.4 Commencement Prior to Social Security Retirement Age. Notwithstanding the
above, if a Member’s annual pension benefit begins after attaining age 62, but
prior to the Member’s Social Security Retirement Age, the determination as to
whether the benefit limitation under section 415 of the Code has been satisfied
shall be made by adjusting such limitations so that it is the actuarial
equivalent of the section 415 limit annual benefit beginning at Social Security
Retirement Age. For purposes of making such an adjustment, the limitation shall
be reduced by 6  2/3% per year for the first three years, and 5% per year for
any additional years, by which the Member’s annual pension benefit commences
after age 62, but prior to the Member’s Social Security Retirement Age. The
interest rate assumption used to adjust the limitation under this section shall
not be less than the greater of 5% or the rate otherwise specified herein.

14.1.5 Adjustment for Certain Other Forms of Benefit. If the benefit to the
Member is payable in any form other than a straight life annuity, the
determination as to whether the benefit limitation under section 415 of the Code
has been satisfied shall be made by adjusting such limitations so that it is the
actuarial equivalent of the section 415 limit annual benefit payable in the form
of a straight life annuity. For purposes of making such an adjustment, actuarial
equivalent shall mean, of the two reductions below, the one which will result in
the greater benefit:

(i) The reduction based on the Plan’s factors, or

(ii) The actuarial reduction based on a 5% interest rate (or with respect to
lump sum payments or other decreasing annuities (i.e., Level Income Option) the
interest rate described in Section 5.3.2 hereof) and the mortality table
described in Section 5.3.2 hereof.

14.2. Code Section 415 Definitions. For purposes of this Article 14, the
following terms shall have the following meanings:

14.2.1 “Related Company” means any other company which is, together with the
Company, a member of a “controlled group of corporations” or under “common
control” as determined under sections 414(b) and (c) of the Code as modified by
section 415(h) of the Code, or a member of an “affiliated service group” within
the meaning of section 414(m) of the Code, and any other entity required to be
aggregated with the Company pursuant to regulations that may be issued under
section 414(o) of the Code.

14.2.2 “Compensation,” for purposes of section 415 of the Code and this Article
14, means a Member’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 Company or any Related Company (including, but
not limited to, commissions paid

 

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salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses); and effective January 1,
1998, any elective deferral (as defined in section 402(g)(3) of the Code) and
any amount contributed or deferred by the Company or any Related Company at the
election of the Member which is not includible in the gross income of the Member
under section 125, section 132(f)(4) or section 457 of the Code for a Plan Year
but excluding the following:

(i) Company or Related Company contributions to a plan of deferred compensation
which are not included in the Member’s gross income for the taxable year in
which contributed, or Company or Related Company contributions under a
simplified employee pension plan to the extent such contributions are deductible
by the Member or any distributions from a plan of deferred compensation;

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

(iii) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option;

(iv) other amounts which received special tax benefits, or contributions made by
the Company or any Related Company (whether or not under a salary reduction
agreement) towards 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 Member).

Compensation for any Plan Year is the compensation actually paid or includible
in gross income during such year or, effective January 1, 1998, which would have
been paid or includible during such year had such compensation not been subject
to elective deferral or exclusion under section 402(g)(3), 125, 132(f)(4) or 457
of the Code.

14.2.3 “Social Security Retirement Age” means the Social Security retirement age
as defined under section 415(b)(8) of the Code which shall mean age 65 in the
case of a Member attaining age 62 before January 1, 2000 (i.e., born before
January 1, 1938), age 66 for a Member attaining age 62 after December 31, 1999,
and before January 1, 2017 (i.e., born after December 31, 1937, but before
January 1, 1955), and age 67 for a Member attaining age 62 after December 31,
2016 (i.e., born after December 31, 1954).

ARTICLE 15.

Temporary Limitations on Amount of Benefits

15.1. Effective January 1, 1994, the provisions of this Article 15 shall apply
(a) in the event the Plan is terminated, to any Member who is a highly
compensated employee or highly compensated former employee (as defined in
section 414(q)(1) of the Code) of the Company and (b) in any other event, to any
Member who is one of the twenty-five highest compensated Employees or former
Employees of the Company for a Plan Year. The amount of the annual payments
under the Plan to any Member to whom this Section 15.1 applies shall not

 

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exceed an amount equal to the payments that would be made under the Plan during
the Plan Year on behalf of the Member under a single life annuity which is of
Equivalent Actuarial Value to the sum of all of the Member’s accrued benefits
under the Plan.

15.2. The provisions of Section 15.1 shall not apply if (a) the value of the
benefits which would be payable under the Plan to a Member described in the
immediately preceding paragraph is less than one percent of the value of the
current liabilities (as defined in section 412(l)(7) of the Code) under the Plan
or (b) the value of the Plan’s assets equals or exceeds, immediately after
payment of a benefit under the Plan to a Member described in the immediately
preceding paragraph, one hundred ten percent of the value of the current
liabilities under the Plan.

15.3. Notwithstanding the preceding provisions of this Article 15, in the event
the Plan is terminated, the restrictions contained in Section 15.1 shall not be
applicable if the benefits payable under the Plan to any Member who is a highly
compensated Employee or a highly compensated former Employee are limited to
benefits which are non-discriminatory under section 401(a)(4) of the Code.

15.4. If it should subsequently be determined by statute, court decision
acquiesced in by the Commissioner of Internal Revenue or ruling by the
Commissioner of Internal Revenue that the provisions of this Article 15 are no
longer necessary to qualify the Plan under section 401(a) of the Code, this
Article 15 shall be ineffective without the necessity of further amendment to
the Plan.

15.5. For the purposes of this Article 15, “highly compensated employee” means,
effective for years beginning after December 31, 1996, any Employee who: (1) was
a 5-percent owner at any time during the year or the preceding year, or (2) for
the preceding year had compensation from the Employer in excess of $80,000 and,
if the Employer so elects, was in the top-paid group for the preceding year. The
$80,000 amount is adjusted at the same time and in the same manner as under
section 415(d) of the Code, except that the base period is the calendar quarter
ending September 30, 1996.

For this purpose the applicable year of the plan for which a determination is
being made is called a determination year and the preceding 12-month period is
called a look-back year.

A highly compensated former employee is based on the rules applicable to
determining highly compensated employee status as in effect for that
determination year, in accordance with section 1.414(q)-1T, A-4 of the temporary
Income Tax Regulations and Notice 97-45.

In determining whether an Employee is a highly compensated employee for years
beginning in 1997, this Section is treated as having been in effect for years
beginning in 1996.

For this purpose the definition of compensation shall mean compensation as

 

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defined in section 415(c)(3) of the Code. Notwithstanding the above, for
limitation years beginning after December 31, 1997, compensation shall include
elective amounts that are not includible in the gross income of the Member by
reason of section 132(f)(4) of the Code.

ARTICLE 16.

Service and Transfer Rules

16.1. Application of Provisions. Notwithstanding any provision to the contrary
contained in the Plan, the provisions of this Article 16 shall apply to (a) any
Member who ceases to be an Employee and who either (i) remains in the employ of
the Company as other than an Employee or (ii) transfers to the employ of an
Affiliated Company (as defined in Section 16.4), and (b) any individual either
(i) in the employ of the Company other than as an Employee, or (ii) in the
employ of an Affiliated Company (as defined in Section 16.4), who ceases such
employment and simultaneously becomes an Employee.

16.2. Service Other Than as an Employee. All service rendered by an individual
in the employ of the Company, or in the employ of an Affiliated Company (as
defined in Section 16.4), which is rendered immediately prior to his transfer to
employment as an Employee shall be included as Service under Section 1.34 for
the purposes of Article 2 and Article 6 of the Plan, but shall not be included
as Credited Service for the purpose of computing the amount of any benefits
pursuant to Articles 4 and 6 of the Plan.

16.3. Service Following Service as an Employee. Transfer of a Member from
employment as an Employee to other employment with the Company, or to employment
with an Affiliated Company (as defined in Section 16.4), shall not be deemed
Termination of Employment with the Company for purposes of the Plan and shall
not terminate such Employee’s participation in the Plan; provided (i) that any
such employment with the Company or with an Affiliated Company (as defined in
Section 16.4) rendered on and after the date of such transfer shall be included
as Service only for the purposes of Article 2 and Article 6 of the Plan and as
Credited Service only for purposes of Section 6.3(ii) of the Plan, and (ii) that
the benefits payable to such a Member under the Plan shall be computed under the
terms of the Plan in effect on the date on which such Member’s employment with
the Company and all Affiliated Companies (as defined in Section 16.4)
terminates, but only on the basis of the Member’s accrued Credited Service and
Compensation as an Employee.

16.4. “Affiliated Company,” for purposes of Articles 16 and 19, shall mean any
other entity, whether or not incorporated, which is, together with the Company,
a member of a “controlled group of corporations” or under “common control,” as
determined under sections 414(b) and (c) of the Code, or a member of an
“affiliated service group” as defined in section 414(m) of the Code; and any
other entity required to be aggregated with the Company pursuant to regulations
that may be issued under section 414(o) of the Code, provided, however, that
except as otherwise specifically provided herein, service with any such other
entity shall be recognized for purposes of this Plan only for the period of such
affiliation.

 

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ARTICLE 17.

Non-Alienation of Benefits

No benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
attempt so to do shall be void, except as specifically provided in the Plan, nor
shall any such benefit be in any manner liable for or subject to garnishment,
attachment, execution or levy, or liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled to such benefit.
Notwithstanding any provision of the Plan to the contrary, with respect to
certain judgments, orders, decrees and/or settlements issued or entered into on
or after August 5, 1997, this Article 17 shall not preclude any offset of a
Member’s Retirement Pension in an amount which a Member is required to pay to
the Plan in accordance with section 401(a)(13)(C) of the Code.

This Article 17 shall also apply to the creation, assignment, or recognition of
a right to any benefit payable with respect to a Member pursuant to a domestic
relations order, unless such order is determined by the Committee to be a
qualified domestic relations order, within the meaning of section 414(p) of the
Code or such order was entered before January 1, 1985.

Upon written receipt of a domestic relations order, the Committee shall review
this order, inform the Trustee, and gather such facts as it may deem
appropriate. The Committee may consult with legal counsel for the Plan in such
matters. The Committee shall reach a decision within eighteen (18) months of
receipt of the order whether it is a Qualified Domestic Relations Order.

ARTICLE 18.

Miscellaneous

18.1. Rights of Employees. Nothing herein contained shall be deemed to give any
Employee the right to be retained in the employ of the Company or to interfere
with the right of the Company to discharge such Employee at any time, nor shall
it be deemed to give the Company the right to require the Employee to remain in
its employ, nor shall it interfere with the Employee’s right to terminate his
employment at any time.

18.2. Return of Contributions.

18.2.1 The obligation of the Company to make any contribution to the Plan hereby
is conditioned upon the continued qualification of the Plan under section 401(a)
of the Code and the exempt status of the Trust Fund under section 501(a) of the
Code and upon the deductibility of such contribution under section 404(a) of the
Code. To the extent any such deduction is disallowed, the Company shall, within
one year following the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such contribution within
one year following the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Company, but any losses
attributable thereto must reduce the amount so returned.

 

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18.2.2 Notwithstanding the provisions of Section 9.2 or any provision of the
Plan, that portion of any Company contribution which is made by reason of a good
faith mistake in determining the deductibility of such contribution or a good
faith mistake of fact shall be returned to the Company, provided that the
twelve-month period commencing on the date the deduction was disallowed or the
date such contribution was made, whichever is applicable, has not expired. The
amount which shall be returned to the Company pursuant to the preceding sentence
shall be an amount equal to the excess of the amount actually contributed over
the amount that would have been contributed if the mistake had not been made;
provided, however, that gains attributable to the returnable portion shall be
retained in the Trust Fund; and provided, further, that the returnable portion
shall be reduced by any losses attributable thereto.

18.3. Mergers. This Plan shall not be merged into any other pension or
retirement plan under circumstances resulting in a transfer of assets or
liabilities from this Plan to any other Plan unless immediately after any such
merger, consolidation, or transfer each Member would (if the Plan then
terminated) receive a benefit which would be equal to or greater than the
benefit he would have been entitled to receive immediately before such merger,
consolidation, or transfer.

18.4. Monthly Benefits. All monthly benefits shall be payable on the first date
of each month.

18.5. Governing Law. Except to the extent preempted by federal law, the
provisions of the Plan will be construed according to the laws of the State of
New York.

18.6. Headings. The headings of this Plan are inserted for convenience of
reference only and shall have no effect upon the meaning of the provisions
hereof.

ARTICLE 19.

Top-Heavy Plans

19.1. Effects of Top-Heavy Status. In the event that the Plan shall be deemed to
be a Top-Heavy Plan in accordance with the provisions of Section 19.2 at any
time on or after July 1, 1985, the following provisions shall automatically
become applicable and shall supersede any contrary provision of the Plan:

19.1.1 The vested portion of any Member’s Accrued Benefit derived from Company
contributions shall be a percentage of such Member’s Accrued Benefit derived
from Company contributions determined on the basis of the Member’s years of
Service, in accordance with the following tables:

 

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(i) For Plan Years commencing prior to July 1, 1989:

 

Years of Service

   Percentage  

2

   20 %

3

   40 %

4

   60 %

5

   80 %

6 or more

   100 %

(ii) For Plan Years commencing on or after July 1, 1989:

 

Years of Service

   Percentage  

Less than 3

   0 %

3 or more

   100 %

In the event a Member’s vested portion of his Accrued Benefit derived from
Company contributions under the terms of the Plan determined without regard to
this Subsection 19.1.1 at any time exceeds the percentage determined above, such
Member shall be entitled to such greater percentage.

The vesting schedule under this Section 19.1.1 shall not apply if the Plan
ceases to be Top-Heavy except to the extent that the Plan resumes Top-Heavy
status or to the extent that Members with 5 or more years of Service (effective
for Plan Years commencing after June 30, 1989, 3 or more years of Service) elect
in accordance with section 411(a)(10) of the Code to have it continue to
determine the nonforfeitable percentage of their Accrued Benefit.

19.1.2 In any year in which the Plan is a Top-Heavy Plan, a Member who is not a
Key Employee shall accrue a benefit derived from Company contributions which,
when expressed as an Annual Retirement Benefit, shall not be less than the
Applicable Percentage of the Member’s Average Compensation.

19.1.3 The term “Annual Retirement Benefit” means a benefit in the form of an
annuity for the Member’s life (with no ancillary benefits) beginning at age 65.

19.1.4 A Member’s “Applicable Percentage” means the lesser of (A) 2% multiplied
by his number of years of Service, or (B) 20%. For purposes of the preceding
sentence, years of Service shall be determined under the rules of paragraphs
(4), (5) and (6) of section 411(a) of the Code. Years of Service shall be
disregarded to the extent that (i) they were completed within a Plan Year
beginning prior to January 1, 1984 or (ii) the Plan was not a Top-Heavy Plan
during the Plan Year ending within such year of Service. Notwithstanding the
foregoing, if a Member is also a Member in one or more defined contribution
plans maintained by the Company or an Affiliated Company, the percentage in
(A) above shall be reduced by .4% for each 1% (and proportionately for fractions
thereof) of the Member’s compensation that is contributed by the Company or an
Affiliated Company (including forfeitures and for plan years beginning on or
after January 1, 1985, salary reduction contributions made by the Member under a
plan qualifying under section 401(k) of the Code) to such plan on behalf of the
Member.

 

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19.1.5 A Member’s “Average Compensation” means his average compensation during
the period of consecutive years of Service (not exceeding five) during which his
aggregate compensation from the Company and/or Prior Company is the greatest.
Years of Service (and compensation paid to the Member during such periods) shall
be excluded in computing a Member’s Average Compensation if such years of
Service are (A) completed prior to January 1, 1984 or (B) begin after the close
of the last Plan Year in which the Plan was a Top-Heavy Plan.

19.1.6 Prior to January 1, 2000, the requirements of sections 415(e)(2)(B) and
(3)(B) of the Code as set forth in Section 14.3 hereof shall be applied to the
Plan by substituting “1.0” for “1.25” wherever the latter appears therein.

19.1.7 For purposes of this Article 19, the term “compensation” shall have the
same meaning as set forth in section 414(q) of the Code.

19.2. Definition of Top-Heavy Plan. This Plan shall be a “Top-Heavy Plan” in any
Plan Year if the present value of the cumulative accrued benefits (as that
phrase is used in section 416(g) of the Code) under the Plan for Key Employees
as of the Determination Date exceeds 60% of the present value of the cumulative
accrued benefits under the Plan for all Members as of such date. In the event
the Plan is part of an Aggregation Group, it shall be a “Top-Heavy Plan” in any
Plan Year if the sum of the present value of the cumulative accrued benefits for
Key Employees under all defined benefit plans which are part of the Aggregation
Group plus the aggregate account balances of Key Employees under all defined
contribution plans which are part of such group as of the Determination Date
exceeds 60% of the sum of all benefits accrued by and the account balances of,
participants in all such plans as of such date.

19.2.1 The term “Aggregation Group” includes all plans of the Company and any
Affiliated Company in which a Key Employee participates, all other plans
maintained by the Company and any Affiliated Company which enable a plan in
which a Key Employee participates to comply with the requirements of sections
401(a)(4) or 410 of the Code and any other plans of the Company and any
Affiliated Group which are designated as part of the Aggregation Group, provided
that all such plans in such group would continue to satisfy the requirements of
sections 401(a)(4) and 410 of the Code.

19.2.2 The term “Key Employee” means any Member or former Member (or beneficiary
of such Member) who at any time during the Plan Year or any of the four
preceding Plan Years is:

(i) an officer of the Company or any Affiliated Company having an annual
compensation (as defined in section 414(q) of the Code) greater than: (a) for
all Plan Years prior to January 1, 1989, 150% of the amount in effect under
section 415(c)(1)(A) of the Code for any such Plan Year, and (b) for all Plan
Years after December 31, 1988, 50% of the amount in effect under section
415(b)(1)(A) of the Code for any such Plan Year;

(ii) one of the ten employees having annual compensation (as defined in section
414(q) of the Code) from the Company or any Affiliated Company of more than the
limitation in

 

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effect under section 415(c)(1)(A) of the Code and owning (or considered as
owning within the meaning of section 318 of the Code) the largest interest in
the Company or any Affiliated Company;

(iii) a 5% owner of the Company or any Affiliated Company; or

(iv) a 1% owner of the Company or any Affiliated Company if his compensation (as
defined in section 414(q) of the Code) from the Company or such Affiliated
Company exceeds $150,000.

For purposes of (i) above, the number of Members who shall be deemed officers
(and therefore Key Employees) shall not exceed the lesser of (1) 50 or (2) the
greater of 3 or 10% of the total number of employees of the Company and all
Affiliated Companies. For the purpose of (ii) above, if two employees have the
same interest in the Company or an Affiliated Company, the employee having
greater annual compensation (as defined in section 414(q) of the Code) from the
Company or Affiliated Company shall be treated as having a larger interest. For
the purposes of (iii) and (iv) above, the terms “5% owner” and “1% owner” shall
have the meanings set forth in section 416(i)(1)(B) and (C) of the Code. For
purposes of this Section 19.2.2, the term “compensation” shall have the same
meaning as under section 414(q)(7) of the Code.

A “non-Key Employee” is any individual who is not a Key Employee.

Notwithstanding the foregoing, effective January 1, 2002, Key Employee means any
Member or former Member (including any deceased employee) who at any time during
the Plan Year that includes the determination date was an officer of the plan
sponsor (or of any corporation required to be aggregated with the plan sponsor
under section 414(b), (c), (m) or (o) of the Code) 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 plan sponsor,
or a 1-percent owner of the plan sponsor 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.

19.2.3 “Determination Date” means (i) the last day of the preceding Plan Year,
or (ii) in the case of the first Plan Year, the last day of such Plan Year.

19.2.4 For purposes of this Article 19, the present value of the cumulative
accrued benefits shall be determined in accordance with the actuarial factors
set forth in Appendix A hereto. If the plans in the Aggregation Group use
different actuarial assumptions for purposes of determining the present value of
the cumulative accrued benefits for Key Employees under all defined benefit
plans which are part of the Aggregation Group, (i) for Key Employees, the
actuarial funding assumptions used to maintain the funding standard account
under a selected plan in the Aggregation Group, shall be used, and (ii) for
Members who are non-Key Employees, such benefit shall accrue not more rapidly
than the slowest accrual rate permitted under section 411(b)(1)(C) of the Code.

 

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19.3. Exception to Combined Limit Rule. Prior to January 1, 2000, the
requirements of Section 19.1.6 shall not apply notwithstanding the fact that the
Plan may be a Top-Heavy Plan in the event that (i) the present value of the
cumulative accrued benefits under the Plan for Key Employees as of the
Determination Date does not exceed 90% of the present value of the cumulative
accrued benefits for all Members as of such date, and (ii) the definition of
Applicable Percentage is modified, in Plan Years for which a Key Employee
exceeds the limits of Section 19.1.4, by substituting “3%” for “2%,” and
increasing the 20% limit by 1% (up to a maximum of 10%) for each Plan Year in
which the Plan is a Top-Heavy Plan.

19.4. Miscellaneous Rules.

19.4.1 Effective January 1, 2002, for purposes of determining the present value
of accrued benefits and the amounts of account balances for any Member as of the
Determination Date, such present value shall be increased by the aggregate
distributions made with respect to such individual from the Plan and any plan
aggregated with the Plan under section 416(g)(2) of the Code during the one-year
period ending on the Determination Date (even if such Plan had been terminated),
and, in the case of a distribution made for a reason other than severance from
employment, death, or disability, this provision shall be applied by
substituting “five-year period” for “one-year period.

19.4.2 Except to the extent provided by Treasury Regulations, the actuarial
value of the cumulative accrued benefit for any Member shall not include any
rollover contributions made by the Member into the Plan from a plan that was not
maintained by the Company or an Affiliated Company if initiated by the Member
and occurring after December 31, 1983.

19.4.3 If a Member is a non-Key Employee with respect to a Plan Year but was a
Key Employee with respect to any prior Plan Year, the accrued benefit of such
Member (and the account of such Member) shall not be taken into account for
purposes of determining whether the Plan is a Top-Heavy Plan.

19.4.4 The determination of whether the benefit and vesting requirements of
Section 19.1 have been met when the Plan is a Top-Heavy Plan shall be made
without taking into account any benefits or contributions under chapters 2 or 21
of Title II of the Social Security Act or any other federal or state law.

19.4.5 Effective January 1, 2002, the accrued benefits and accounts of any
individual who has not performed services for the for the Company or any
Affiliated Company during the one-year period ending on the Determination Date
shall not be taken into account.

19.4.6 Notwithstanding anything contained in this Article 19 to contrary,
effective January 1, 2002, for purposes of satisfying the minimum benefit
requirements of section 416(c)(1) of the Code and the Plan, in determining years
of service with the Company or any Affiliated Company, any service with the
Company or any Affiliated Company shall be disregarded to the extent that such
service occurs during a Plan Year when the Plan benefits (within the meaning of
section 410(b) of the Code) no Key Employee or former Key Employee.

 

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IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by the Company,
it has caused the same to be signed by its officers thereunto duly authorized,
and its corporate seal to be affixed thereto, this 30th day of May, 2006.

 

        AVIS RENT A CAR SYSTEM, LLC Attest:             By:  

 

    Name:       Title:  

 

      Assistant Secretary      

[Corporate Seal]