Exhibit 10.5

CARS.COM

DEFERRED COMPENSATION PLAN

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CARS.COM

DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

 

               PAGE  

1.0

   BACKGROUND      1      1.1.    Introduction      1      1.2.    Certain
Definitions      1  

2.0

   EXPLANATION OF PLAN      2      2.1.    Effective Date      2      2.2.   
Eligibility      2      2.3.    Interest in the Plan; Deferred Compensation
Account      2      2.4.    Amount of Deferral      2      2.5.    Time of
Election of Deferral      2      2.6.    Accounts and Investments      4     
2.7.    Participant’s Option to Reallocate Amounts      5      2.8.   
Reinvestment of Income      5      2.9.    Payment of Deferred Compensation     
6      2.10.    Manner of Electing Deferral, Choosing Investments and Choosing
Payment Options      9      2.11.    Deferrals of Restricted Stock or Restricted
Stock Units      10  

3.0

   ADMINISTRATION OF THE PLAN      11      3.1.    Statement of Account      11
     3.2.    Assignability      11      3.3.    Business Days      11      3.4.
   Administration      11      3.5.    Amendment      12      3.6.    Liability
     13      3.7.    Change in Control      13      3.8.    Claims      18     
3.9.    Successors      19      3.10.    Governing Law      20  

 

TOC

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CARS.COM

DEFERRED COMPENSATION PLAN

1.0     BACKGROUND

 

1.1. Introduction

In 2017, TEGNA Inc. (the “Predecessor Company”) spun off Cars.com Inc. (the
“Company”) into a separate publicly traded company (the “Spin-off”). Certain
participants in the TEGNA Inc. Deferred Compensation Plan (the “Predecessor
Plan”) had their benefits under the Predecessor Plan assumed by this Plan (the
“Transferred Participants”) as specified in that certain Employee Matters
Agreement by and between the Company and the Predecessor Company dated May 31,
2017 (the “Employee Matters Agreement”). The Company, and not the Predecessor
Company, shall be solely responsible for paying such assumed benefits. The
Employee Matters Agreement may be used as an aid in interpreting the terms of
the benefits hereunder. Notwithstanding any other provision of this Plan or the
Predecessor Plan, no Participant shall be entitled to duplicate benefits under
both such Plans with respect to the same period of service or compensation.

The list of Transferred Participants is maintained by the Company. The benefits
with respect to Transferred Participants derived from the Predecessor Plan shall
not be amended in a manner so as to subject them to additional tax under Section
409A of the Internal Revenue Code, and any amendment which would have such an
effect shall be deemed void and ineffective.

This Plan was adopted to provide the opportunity for directors of the Company
who are not also employees (“Directors”) to defer certain compensation.
Directors may defer to future years all or part of their fees. The Committee may
also allow Directors to defer such other forms of taxable income derived from
the performance of services for the Company as may be designated by the
Committee and which may be deferred pursuant to such special terms and
conditions as the Committee may establish (including, without limitation, awards
under long-term incentive and stock-based plans). Amounts that may be deferred
under this Plan are collectively referred to as “Compensation”.

 

1.2. Certain Definitions

The term “SIRs” (Stock Incentive Rights) used in this Plan includes restricted
stock awards, restricted stock units and other equity-based awards issued under
equity-based compensation plans of the Company or the Predecessor Company. The
term “Committee” used in this Plan means the Benefit Plans Committee of the
Company. The term “Company” means the Company as defined above in Section 1.1
and any successor to its business and/or assets which assumes the Plan by
operation of law or otherwise. The term “Board” means the Board of Directors of
the Company.

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2.0     EXPLANATION OF PLAN

 

2.1. Effective Date

The Effective Date of this Plan is May 31, 2017. The Predecessor Plan was
initially effective July 1, 1987. The Company intends that the Plan satisfies
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) to avoid the imposition of the taxes imposed under Section
409A. Accordingly, the requirements of Code Section 409A and the regulations and
guidance issued thereunder (collectively, “Section 409A”) are incorporated by
reference to the extent necessary to avoid any tax being imposed on a
Participant under Section 409A. The terms of this Plan can apply to amounts that
are subject to Section 409A.

For a Participant who is employed immediately following the Effective Date by
the Company or an affiliate, such Participant’s service with the Predecessor
Company or any of its subsidiaries or predecessor entities at or before the
Effective Date shall be recognized to the same extent that such service was
recognized by the Predecessor Company under the Predecessor Plan prior to the
Effective Date.

 

2.2. Eligibility

In addition to Transferred Participants, the Plan is available to Directors of
the Company who are designated as eligible by the Committee.

 

2.3. Interest in the Plan; Deferred Compensation Account

For each eligible person who elects to defer Compensation or on behalf of whom
the Company makes an award (“Participant”), one or more Deferred Compensation
Accounts shall be established in accordance with Section 2.6(a). A Participant’s
interest in the Plan shall be the Participant’s right to receive payments under
the terms of the Plan. A Participant’s payments from the Plan shall be based
upon the value attributable to the Participant’s Deferred Compensation Accounts.

 

2.4. Amount of Deferral

A Participant may elect to defer receipt of all or a part of his or her
Compensation provided that the minimum deferral for any type of Compensation
that is expected to be deferred must be $5,000 for the year of deferral or, in
the case of deferred SIRs, such minimum number of shares as the Committee may
determine.

 

2.5. Time of Election of Deferral

 

  (a)

Deferral elections are subject to the requirements of Section 409A and must be
made at such time and pursuant to such terms and conditions as are established
by the Committee. This means that, other than for the special circumstances set
forth below (each of which is subject to the requirements of Section 409A), all
elections to defer Compensation must be made before the last day of the calendar

 

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  year preceding the calendar year in which the services giving rise to the
compensation are performed.

 

  (i) In the year that a Director first becomes eligible to make elective
deferrals under the Plan (or any elective deferral plan aggregated with this
Plan under Section 409A), the Director may be permitted to make a deferral
election within 30 days of first becoming eligible. This initial deferral may
relate only to Compensation attributable to services to be performed following
the deferral election.

 

  (ii) If a Director has a legally binding right to a payment in a subsequent
year that is subject to a condition requiring the Director to continue to
provide services for a period of at least 12 months from the date the Director
obtains the legally binding right, to avoid forfeiture of the payment, the
Director may be permitted to elect to defer such Compensation on or before the
30th day after the Director obtains the legally binding right to the
Compensation, provided that the election is made at least 12 months in advance
of the earliest date at which the forfeiture condition could lapse.

 

  (iii) If a Director has a legally binding right to a payment of Compensation
in a subsequent taxable year that, absent a deferral election, would be treated
as a short-term deferral within the meaning of Section 409A, the Director may be
permitted to elect to defer such Compensation in accordance with the
requirements of Section 1.409A-2(b), applied as if the amount were a deferral of
compensation and the scheduled payment date for the amount were the date the
substantial risk of forfeiture lapses.

 

  (b) In the case of Director’s fees, whether payable in cash, Restricted Stock,
or any other form permitted to be deferred under the Plan, deferral elections
under the Plan shall relate to one-year terms (each, a “Term”) beginning with
each annual meeting of shareholders of the Company (“Annual Meeting”) and ending
immediately prior to the next Annual Meeting. Deferral elections shall be made
no later than the date specified by the Committee that is on or prior to the
last day of the calendar year preceding the commencement of the applicable Term.
The foregoing election requirements shall be subject to the rules set forth in
Section 2.5(a) above.

 

  (c) Once made, an election to defer for a particular time period is
irrevocable. No acceleration in a Payment Commencement Date or a change in a
Method of Payment may be made except as expressly permitted by the Plan and
Section 409A.

 

  (d) Notwithstanding any other provision hereof, for purposes of the year 2017
only, elections by a Transferred Participant under the Predecessor Plan shall
apply to determine deferrals hereunder.

 

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2.6. Accounts and Investments

 

  (a) All Participant records, reports and elections shall be maintained and
administered on the basis of the Participant’s Deferred Compensation Accounts
which are determined based on the Payment Commencement Dates (as defined in
Section 2.9(b)) and Method of Payments (as defined in Section 2.9(c)) elected by
the Participant, i.e., all amounts that have been elected to be paid on a
designated Payment Commencement Date under a designated Method of Payment shall
be aggregated into a single Deferred Compensation Account for a Participant for
purposes of subsequent recordkeeping and for elections that may be available
with respect to the deferred amounts, such as investment elections and payment
method elections. The maximum number of Deferred Compensation Accounts a
Participant may have at any time is five, subject to the Committee’s right to
increase such limit. Deferred Compensation Accounts are hypothetical accounts
only; no actual accounts are established for individual Participants. Except as
provided in subsection 2.9(e), the payout rules for a Deferred Compensation
Account may not be changed after the rules for that Account have been
established.

 

  (b) The amount of Compensation deferred will be credited to the Participant’s
Deferred Compensation Account or Accounts as soon as practicable after the
Compensation would have been paid had there been no election to defer.

The amounts credited in a Deferred Compensation Account will be deemed invested
in the fund or funds designated by the Participant from among funds selected by
the Committee, which may include the following or any combination of the
following:

 

  (i) money market funds;

 

  (ii) bond funds;

 

  (iii) equity funds; and

 

  (iv) the Company stock fund.

Although the Plan is not subject to section 404(c) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), the funds available to
Participants under the Plan shall, at all times, constitute a broad range of
investment alternatives that would meet the standards pertaining to the range of
investments set forth in regulations promulgated by the Department of Labor
under section 404(c) of ERISA, or any successor provision, as if that provision
were applicable to the Plan. In the discretion of the Committee, funds may be
added, deleted or substituted from time to time, subject to the preceding
sentence.

Information on the specific funds permitted under the Plan shall be made
available by the Committee to the Participants. If the Committee adds, deletes
or substitutes a particular fund, the Committee shall notify Participants in
advance of

 

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the change and provide Participants with the opportunity to change their
allocations among funds in connection with such addition, deletion or
substitution.

A Participant may allocate contributions to his or her Deferred Compensation
Accounts among the available funds pursuant to such procedures and requirements
as may be specified by the Committee from time to time. Participants shall have
the opportunity to give investment directions with respect to their Accounts at
least once in any three-month period.

With respect to the Company stock fund, the accounts of Transferred Participants
only shall also have deemed investments in shares of Predecessor Company stock
as a consequence of the Spin-off and a hypothetical fund will be established for
such stock. Notwithstanding any provision to the contrary, Participants may
elect in a manner prescribed by the Committee to allocate out of such
Predecessor Company stock fund but shall not be able to allocate any additional
amounts to the Predecessor Company stock fund.

 

  (c) Unless otherwise specified in an agreement memorializing a particular
award or as otherwise specified under the Plan, all deferrals under this Plan
and the earnings credited to them are fully vested at all times.

 

  (d) The right of any Participant to receive future payments under the
provisions of the Plan shall be a contractual obligation of the Company but
shall be subject to the claims of the creditors of the Company in the event of
the Company’s insolvency or bankruptcy as provided in the trust agreement
described below.

Plan assets may, in the Company’s discretion, be placed in a trust (the “Rabbi
Trust”) (which Rabbi Trust may be a sub-trust maintained as a separate account
within a larger trust that is also used to pay benefits under other Company-
sponsored unfunded nonqualified plans) but will nevertheless continue to be
subject to the claims of the Company’s creditors in the event of the Company’s
insolvency or bankruptcy as provided in the trust agreement. In any event, the
Plan is intended to be unfunded under Title I of ERISA.

 

2.7. Participant’s Option to Reallocate Amounts

A Participant may elect to reallocate amounts in his or her Deferred
Compensation Accounts among the available funds pursuant to such procedures and
requirements as may be specified by the Committee from time to time consistent
with Section 2.6(b).

 

2.8. Reinvestment of Income

Income from a hypothetical fund investment in a Deferred Compensation Account
shall be deemed to be reinvested in that fund as soon as practicable under the
terms of that fund. Notwithstanding the foregoing, deemed dividends relating to
hypothetical Predecessor Company stock in the hypothetical Predecessor Company
stock fund will not be deemed reinvested in Predecessor Company stock. Instead,
such deemed dividends

 

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will be hypothetically invested proportionately in the investment funds selected
by the Participant in his most recent investment direction, or, in the absence
of an explicit investment direction, in the default investment fund.

 

2.9. Payment of Deferred Compensation

 

  (a) No withdrawal may be made from the Participant’s Deferred Compensation
Accounts except as provided in this Section.

 

  (b) At the time a deferral election is made, the Participant shall choose the
date on which payment of the amount credited to the Deferred Compensation
Account is to commence, which date shall be either April 1 or October 1 of the
year of the Participant’s retirement, the year next following the Participant’s
retirement, or any other year specified by the Participant that is after the
year for which the Participant is making the deferral (“Payment Commencement
Date”). Notwithstanding the foregoing, the Payment Commencement Date shall be no
later than October 1 of the year after the Participant retires from the Board.

 

  (c) At the time the election to defer is made, the Participant may choose to
receive payments either (i) in a lump sum; or (ii) if the Payment Commencement
Date is during a year in which a Participant has attained at least age 55 and
has at least 5 years of service, in up to fifteen annual installments. The
method of paying a Deferred Compensation Account is the “Method of Payment.” The
amount of any payment under the Plan shall be the value attributable to the
Deferred Compensation Account on the last day of the month preceding the month
of the payment date, divided by the number of payments remaining to be made,
including the payment for which the amount is being determined.

Under rules prescribed by the Committee, at the time the election to defer is
made, a Participant may elect to allocate a portion of the Participant’s
deferral elections to pre-existing Deferred Compensation Accounts and/or a new
Deferred Compensation Account established for such deferral. Notwithstanding the
foregoing, the maximum number of Deferred Compensation Accounts a Participant
may have at any time is five, subject to the Committee’s right to increase such
limit. Except as provided in subsection (e), the payout rules for a Deferred
Compensation Account may not be changed after the rules for that Account have
been established

 

  (d)

In the event of a Participant’s death or Disability before the Participant has
received any payments from a Deferred Compensation Account, the value of the
Account shall be paid to the Participant’s designated beneficiary in the case of
death or to the Participant in the case of Disability, at such time and in such
form of payment as is set forth on the applicable deferral form signed by the
Participant. In the event of the Participant’s death or Disability after
installment payments from a Deferred Compensation Account have commenced, the
remaining balance of the Account shall be paid to the Participant or designated
beneficiary, as applicable, over the installments remaining to be paid. For

 

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  purposes of this Plan and consistent with such term’s definition under Section
409A, “Disability” means the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months.

Beneficiary designations shall be submitted on the form specified by the
Company. A Participant may only have a single beneficiary designation that will
apply to all of his/her Deferred Compensation Accounts, and the filing of a new
beneficiary designation shall automatically revoke any previous beneficiary
designation for all of the Participant’s Deferred Compensation Accounts. In the
event a beneficiary designation has not been made, or the beneficiary was not
properly designated (in the sole discretion of the Company), has died or cannot
be found, all payments after death shall be paid to the Participant’s estate. In
case of disputes over the proper beneficiary, the Company reserves the right to
make any or all payments to the Participant’s estate.

 

  (e) A Participant may not change an initial Payment Commencement Date or
Method of Payment for a Deferred Compensation Account after an election has been
made except as provided in the following sentence. If an active Participant
specifies a particular year as a Payment Commencement Date (rather than
retirement) and such date is a date when the Participant is less than age 60,
the Participant may elect to select a new Method of Payment or Payment
Commencement Date by delivering a written election to the Committee (a
“Subsequent Election”); provided that (i) such Subsequent Election may not take
effect until at least 12 months after the date on which the Subsequent Election
is made, (ii) the payment with respect to which such Subsequent Election is made
must be deferred for a period of not less than 5 years from the date such
payment would otherwise have been made; and (iii) the election must be made not
less than 12 months before the date the payment is scheduled to be paid (or in
the case of installment payments 12 months before the date the first amount was
scheduled to be paid).

A technical note — if a Participant has elected the year of retirement as the
Payment Commencement Date but retires on a date that is after the designated
Payment Commencement Date, the payment (or the first annual installment) will
begin on the first day of the month after the month in which the Participant
retires.

Restrictions on changing Payment Commencement Dates and Methods of Payment shall
not prevent the Participant from choosing a different Payment Commencement Date
and/or Method of Payment for amounts to be deferred in subsequent years, subject
to the limitation on the number of Deferred Compensation Accounts a Participant
may have.

 

  (f) Notwithstanding any Payment Commencement Date or Method of Payment
selected by a Participant, the following rule shall apply:

 

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  (i) If a Participant’s directorship terminates for any reason other than
(1) at or after reaching age 70 for outside Directors and age 65 for Directors
who were former Company executives, (2) by reason of such Participant’s death,
or (3) by reason of such Participant’s Disability, the Committee shall
distribute such Director Participant’s benefits in the form of a lump sum, as
soon as administratively practicable following the Participant’s termination of
service (but not later than 60 days after such termination).

 

  (g) If, in the discretion of the Committee and subject to the requirements of
Section 409A, the Participant has a need for funds due to an “unforeseeable
emergency”, benefits may be paid prior to the Participant’s Payment Commencement
Date. For this purpose, an “unforeseeable emergency” means a severe financial
hardship to the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as defined in section
152(a) of the Code) of the Participant, loss of the Participant’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
Distributions under this subsection may only be made if, consistent with Section
409A, the amounts distributed with respect to the emergency do not exceed the
amounts necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into
account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship). The Participant requesting a payment
under this subsection must supply the Committee with a statement indicating the
nature of the emergency that created the severe financial hardship, the fact
that all other reasonably available resources are insufficient to meet the need,
and any other information which the Committee decides is necessary to evaluate
whether an unforeseeable emergency exists.

 

  (h) In the Company’s discretion, payments from the Plan may be made in cash or
in the kind of property represented by the fund or funds selected by the
Participant. Notwithstanding the foregoing or any other provision of this Plan,
any portion of a Participant’s Deferred Compensation Account deemed invested in
shares of Predecessor Company may only be settled in cash.

 

  (i) All contributions to the Plan and all payments from the Plan, whether made
by the Company or the Trustee, shall be subject to all taxes required to be
withheld under applicable laws and regulations of any governmental authorities.

 

  (j)

Notwithstanding any provision to the contrary, a distribution triggered by a
specified employee’s separation from service (for any reason other than death)
may not commence before the date which is 6 months after the date of the
specified employee’s separation from service (or if, earlier, the employee’s
death). For purposes of the Plan, a “specified employee” has the meaning set
forth in Section 409A. If this provision is triggered, any amount that would
otherwise have been paid during such 6 month period shall be paid on the date

 

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  that is the first day of the seventh month after such employee’s separation
from service (or if, earlier, the employee’s death). For purposes of this Plan,
the date when a Participant is deemed to be separated from service, retired, or
terminated shall be determined consistent with the requirements of Section 409A.

 

  (k) Notwithstanding the foregoing, the Committee, in its sole discretion, may
accelerate the time or schedule of a payment, or a payment may be made under the
Plan, to pay the Federal Insurance Contributions Act (“FICA”) tax imposed under
Code sections 3101, 3121(a), and 3121(v)(2) on compensation deferred under the
plan (the “FICA Amount”). Additionally, the Committee may provide for the
acceleration of the time or schedule of a payment, or a payment may be made
under the Plan, to pay the income tax at source on wages imposed under section
3401 or the corresponding withholding provisions of applicable state, local, or
foreign tax laws as a result of the payment of the FICA Amount, and to pay the
additional income tax at source on wages attributable to the pyramiding section
3401 wages and taxes. However, the total payment under this acceleration
provision must not exceed the aggregate of the FICA Amount, and the income tax
withholding related to such FICA Amount.

 

2.10. Manner of Electing Deferral, Choosing Investments and Choosing Payment
Options

 

  (a) In order to make any elections or choices permitted hereunder, the
Participant must give written or electronic notice to the Committee. A notice
electing to defer Compensation shall specify:

 

  (i) the percentage, specified dollar amount, and/or amount above a specified
dollar amount that is to be deferred (provided that the deferral is expected to
be an amount that is a least $5,000 for the year);

 

  (ii) the type of Compensation to be deferred;

 

  (iii) the funds chosen by the Participant; and

 

  (iv) the portion of the Participant’s deferral elections that will be made to
pre-existing Deferred Compensation Accounts and/or a new Deferred Compensation
Account established for such deferral.

In the event that a new Deferred Compensation Account is established for such
deferral, the Participant must designate the payout rules that will apply to
such Deferred Compensation Account, e.g., the Method of Payment and the Payment
Commencement Date, including rules for payment in the event of the Participant’s
Disability or death. Each Deferred Compensation Account shall have Section 409A
compliant payout rules specifying the Method of Payment and the Payment
Commencement Date, including rules for payment in the event of the Participant’s
Disability or death. Once established, such payout rules may not be changed
except as provided in Section 2.9(e).

 

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  (b) Subject to the requirements of Section 409A, the Committee, in its sole
discretion, may establish rules for the manner in which deferral elections may
be made and will provide election forms to permit Participants to defer
Compensation to be earned during a calendar year. An election by a Participant
to defer Compensation shall apply only to Compensation deferred in the calendar
year for which the election is effective.

 

  (c) The last form received by the Committee directing an allocation of amounts
in a Deferred Compensation Account among the funds available shall govern until
changed by the receipt by the Committee of a subsequent allocation form.

 

  (d) Notwithstanding any provision in the Plan to the contrary, the Committee
may permit elections, designations and allocations to be made through electronic
means, and Plan statements and communications may be provided through electronic
means.

 

2.11. Deferrals of Restricted Stock or Restricted Stock Units

A Director whose fees for a Term may be paid in the form of Restricted Stock or
Restricted Stock Units may elect to defer such Restricted Stock or Restricted
Stock Units in accordance with such guidelines and restrictions as may be
established by the Committee and in accordance with the general terms of this
Plan and Section 409A, subject to the following, which shall supersede any
provision in the Plan to the contrary with respect to such deferrals:

 

  (a) An election to defer Restricted Stock or Restricted Stock Units must be
made in accordance with Section 2.5 of the Plan and Section 409A. The deferral
election may be made for all or a portion of the Restricted Stock or Restricted
Stock Units that would have otherwise been awarded.

 

  (b) An election to defer Restricted Stock or Restricted Stock Units shall
constitute a direction by the Director to have the Company, in lieu of currently
issuing shares of Restricted Stock or an award of Restricted Stock Units, defer
under this Plan an amount equal to the value of the Restricted Stock or
Restricted Stock Units, subject to the election as determined at the time of the
award. The Restricted Stock or Restricted Stock Units deferred by a Director
under this Plan for a Term shall be credited as units of stock to a separate
sub-account within the Director’s Deferred Compensation Account. The vesting
rules that would have applied to the Restricted Stock or Restricted Stock Unit
award that was deferred under the Plan shall apply to the sub-account
attributable to such award.

 

  (c) Subject to the rules applicable to Predecessor Company stock, Restricted
Stock or Restricted Stock Units deferred under the Plan shall be deemed invested
in the Company stock fund during the entire deferral period and the Director
shall not have the right to reallocate such deemed investment to any of the
other investment options otherwise available under the Plan.

 

  (d)

At the time an election to defer Restricted Stock or Restricted Stock Units is

 

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  made, the Director shall elect the time and form of payment of such deferral
and earnings thereon in accordance with Section 2.9 of the Plan. Subject to the
rules applicable to Predecessor Company stock, payments shall be made in shares
of Company common stock.

 

  (e) Any portion of a Director’s Deferred Compensation Account attributable to
deferred Restricted Stock or Restricted Stock Units, whether or not vested,
shall not be available for early withdrawal under Section 2.9(g) of the Plan.

3.0     ADMINISTRATION OF THE PLAN

 

3.1. Statement of Account

Statements setting forth the values of the funds deemed to be held in a
Participant’s Deferred Compensation Accounts will be sent to each Participant
quarterly or more often as the Committee may elect. A Participant shall have two
years from the date a statement has been sent to question the accuracy of the
statement. If no objection is made to the statement, it shall be deemed to be
accurate and thereafter binding on the Participant for all purposes.

 

3.2. Assignability

The benefits payable under this Plan shall not revert to the Company or be
subject to the Company’s creditors prior to the Company’s insolvency or
bankruptcy, nor, except pursuant to will or the laws of descent and
distribution, shall they be subject in any way to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution
or levy of any kind by the Participant, the Participant’s beneficiary or the
creditors of either, including such liability as may arise from the
Participant’s bankruptcy.

 

3.3. Business Days

In the event any date specified herein falls on a Saturday, Sunday, or legal
holiday, such date shall be deemed to refer to the next business day thereafter
or such other date as may be determined by the Committee in the reasonable
exercise of its discretion.

 

3.4. Administration

This Plan shall be administered by the Committee. The Committee has sole
discretion to interpret the Plan and to determine all questions arising in the
administration, interpretation, and application of the Plan. The Committee’s
powers include the power, in its sole discretion and consistent with the terms
of the Plan, to determine who is eligible to participate in this Plan, to
determine the eligibility for and the amount of benefits payable under the Plan,
to determine when and how amounts are allocated to a Participant’s Deferred
Compensation Account, to establish rules for determining when and how elections
can be made, to adopt any rules relating to administering the Plan and to take
any other action it deems appropriate to administer the Plan. The Committee may
delegate its authority hereunder to one or more persons. Whenever the value of a

 

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Deferred Compensation Account is to be determined under this Plan as of a
particular date, the Committee may determine such value using any method that is
reasonable, in its discretion. Whenever payments are to be made under this Plan,
such payments shall begin on or within a reasonable period of time after the
designated date, as determined by the Committee and subject to the limitations
under Section 409A, and no interest shall be paid on such amounts for any
reasonable delay in making the payments.

This Plan is intended to comply with the requirements of Section 409A, and shall
be interpreted and administered in accordance with that intent. If any provision
of the Plan would otherwise conflict with or frustrate this intent, that
provision will be interpreted and deemed amended so as to avoid the conflict.
Any reference in this Plan to “separation from service”, “retirement”,
“cessation of employment”, “termination of employment”, “termination of
employment with the Company”, “directorship termination”, “retirement from the
Board”, “Director leaves the Board”, “cessation of employment with the Company
or any Participating Affiliate” or similar term shall mean a “separation from
service” within the meaning of Section 409A.

 

3.5. Amendment

 

  (a) Subject to the requirements of Section 409A, this Plan may at any time and
from time to time be amended or terminated by the Board or the Compensation
Committee of the Board. No amendment shall, without the consent of a
Participant, adversely affect such Participant’s interest in the Plan, i.e., the
Participant’s benefit accrued to the effective date of the amendment
(hereinafter referred to as the “Protected Interest”), as determined by the
Committee in its sole discretion.

 

  (b) An amendment shall be considered to adversely affect a Participant’s
interest in the Plan if it has the effect of:

 

  (i) reducing the Participant’s Protected Interest in his or her Deferred
Compensation Accounts;

 

  (ii) eliminating or restricting a Participant’s right to give investment
directions with respect to the Participant’s Protected Interest in his or her
Deferred Compensation Accounts under Sections 2.6 and 2.7 of the Plan, except
that a change in the number or type of funds available shall not be considered
an amendment of the Plan as long as the funds available to Participants
following such change constitute a broad range of investment alternatives under
the standards pertaining to the range of investments set forth in regulations
promulgated by the Department of Labor under section 404(c) of ERISA or any
successor provision;

 

  (iii) eliminating or restricting any timing or payment option available with
respect to the Participant’s Protected Interest in his or her Deferred
Compensation Accounts, or the Participant’s right to make and change payment
elections with respect to such Protected Interest, under Section 2.9, 2.10 or
any other provision of the Plan;

 

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  (iv) reducing or diminishing any of the change in control protections provided
to the Participant under Section 3.7 or any other provision of the Plan; or

 

  (v) reducing or diminishing the rights of the Participant under this
Section 3.5 with respect to any amendment or termination of the Plan.

 

  (c) Notwithstanding anything in the foregoing to the contrary, any amendment
made for the purpose of protecting the favorable tax treatment of amounts
deferred under the Plan following a change in applicable law, including for this
purpose a change in statute, regulation or other agency guidance, shall not be
considered to adversely affect a Participant’s interest in the Plan.

 

  (d) If the Plan is terminated and if permitted by Section 409A, compensation
shall prospectively cease to be deferred as of the date of the termination. To
the extent permitted by Section 409A, each Participant will be paid the value of
his or her Deferred Compensation Accounts, including earnings credited through
the payment date based on the Participant’s investment allocations, at the time
and in the manner provided for in Sections 2.9 and 2.10.

 

3.6. Liability

 

  (a) Except in the case of willful misconduct, no Director or employee of the
Company, or person acting as the independent fiduciary provided for in
Section 3.7, shall be personally liable for any act done or omitted to be done
by such person with respect to this Plan.

 

  (b) The Company shall indemnify, to the fullest extent permitted by law,
members of the Committee, persons acting as the independent fiduciary and
Directors and employees of the Company, both past and present, to whom are or
were delegated duties, responsibilities and authority with respect to the Plan,
against any and all claims, losses, liabilities, fines, penalties and expenses
(including, but not limited to, all legal fees relating thereto), reasonably
incurred by or imposed upon such persons, arising out of any act or omission in
connection with the operation and administration of the Plan, other than willful
misconduct.

 

3.7. Change in Control

 

  (a) Participation. If a change in control occurs, each eligible person who is
participating in the Plan on the date of the change in control shall be entitled
to continue participating in the Plan and to make additional deferrals under its
terms following the change in control, until he or she ceases to meet the
criteria for an “eligible person” specified in Section 2.2 hereof (without
regard to designation by the Committee) or the Plan is terminated pursuant to
Section 3.5. No new persons may be designated as eligible to participate in the
Plan on or after a change in control.

 

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  (b) Legal Expense. If, with respect to any alleged failure by the Company to
comply with any of the terms of this Plan subsequent to a change in control,
other than any alleged failure relating to a matter within the control of the
independent fiduciary and with respect to which the Company is acting pursuant
to a determination or direction of the independent fiduciary, a Participant or
beneficiary hires legal counsel or institutes any negotiations or institutes or
responds to legal action to assert or defend the validity of, enforce his rights
under, obtain benefits promised under or recover damages for breach of the terms
of this Plan, then, regardless of the outcome, the Company shall pay, as they
are incurred, a Participant’s or beneficiary’s actual expenses for attorneys’
fees and disbursements, together with such additional payments, if any, as may
be necessary so that the net after-tax payments to the Participant or
beneficiary equal such fees and disbursements. The Company agrees to pay such
amounts within 10 days following the Company’s receipt of an invoice from the
Participant, provided that the Participant shall have submitted an invoice for
such amounts at least 30 days before the end of the calendar year next following
the calendar year in which such fees and disbursements were incurred.

 

  (c) Mandatory Contributions to Rabbi Trust. If a change in control occurs, the
Company shall make mandatory contributions to a Rabbi Trust established pursuant
to Section 2.6(d), to the extent required by the provisions of such Rabbi Trust.

 

  (d) Powers of Independent Fiduciary. Following a change in control, the Plan
shall be administered by the independent fiduciary. The independent fiduciary
shall assume the following powers and responsibilities from the Committee and
the Company:

 

  (i) The independent fiduciary shall assume all powers and responsibilities
assigned to the Committee under Section 3.4 and all other provisions of the
Plan, including, without limitation, the sole power and discretion to:

 

  (1) determine all questions arising in the administration and interpretation
of the Plan, including factual questions and questions of eligibility to
participate and eligibility for benefits;

 

  (2) adjudicate disputes and claims for benefits;

 

  (3) adopt rules relating to the administration of the Plan;

 

  (4) select the investment funds available to Participants under Section 2.6 of
the Plan (subject to the requirement that, at all times, such funds constitute a
broad range of investment alternatives under the standards pertaining to the
range of investments set forth in regulations promulgated by the Department of
Labor under section 404(c) of ERISA or any successor provision);

 

  (5) determine the amount, timing and form of benefit payments;

 

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  (6) direct the Company and the trustee of the Rabbi Trust on matters relating
to benefit payments;

 

  (7) engage attorneys, accountants, actuaries and other professional advisors
(whose fees shall be paid by the Company), to assist it in performing its
responsibilities under the Plan; and

 

  (8) delegate to one or more persons selected by it, including outside vendors,
responsibility for fulfilling some or all of its responsibilities under the
Plan.

 

  (ii) The independent fiduciary shall have the sole power and discretion to
(1) direct the investment of assets held in the Rabbi Trust, including the
authority to appoint one or more investment managers to manage any such assets
and (2) remove the trustee of the Rabbi Trust and appoint a successor trustee in
accordance with the terms of the trust agreement.

 

  (e) Review of Decisions.

 

  (i) Notwithstanding any provision in the Plan to the contrary, following a
change in control, any act, determination or decision of the Company (including
its Board or any committee of its Board) with regard to the administration,
interpretation and application of the Plan must be reasonable, as viewed from
the perspective of an unrelated party and with no deference paid to the actual
act, determination or decision of the Company. Furthermore, following a change
in control, any decision by the Company shall not be final and binding on a
Participant. Instead, following a change in control, if a Participant disputes a
decision of the Company relating to the Plan and pursues legal action, the court
shall review the decision under a “de novo” standard of review.

 

  (ii) Following a change in control, any act, determination or decision of the
independent fiduciary with regard to the administration, interpretation and
application of the Plan shall be final, binding, and conclusive on all parties.

 

  (f) Company’s Duty to Cooperate. Following a change in control, the Company
shall cooperate with the independent fiduciary as may be necessary to enable the
independent fiduciary to carry out its powers and responsibilities under the
Plan and Rabbi Trust, including, without limitation, by promptly furnishing all
information relating to Participants’ benefits as the independent fiduciary may
reasonably request.

 

  (g) Appointment of Independent Fiduciary. The independent fiduciary
responsible for the administration of the Plan following a change in control
shall be a committee composed of the individuals who constituted the Company’s
Benefit Plans Committee immediately prior to the change in control and the
Company’s chief executive officer immediately prior to the change in control.

 

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If, following a change in control, any individual serving on such committee
resigns, dies or becomes disabled, the remaining members of the committee shall
continue to serve as the committee without interruption. A successor member
shall be required only if there are less than three remaining members on the
committee. If a successor member is required, the successor shall be an
individual appointed by the remaining member or members of the committee who
(i) is eligible to be paid benefits from the assets of the Rabbi Trust or the
larger trust of which it is a part and (ii) agrees to serve on such committee.

If at any time there are no remaining members on the committee (including any
successor members appointed to the committee following the change in control),
the Trustee shall promptly submit the appointment of the successor members to an
arbiter, the costs of which shall be borne fully by the Company, to be decided
in accordance with the American Arbitration Association Commercial Arbitration
Rules then in effect. The arbiter shall appoint three successor members to the
committee who each meet the criteria for membership set forth above. Following
such appointments by the arbiter, such successor members shall appoint any
future successor members to the committee to the extent required above (i.e.,
if, at any time, there are less than three remaining members on the committee)
and subject to the criteria set forth above.

If one or more successor members are required and there are no individuals
remaining who satisfy the criteria for membership on the committee, the
remaining committee members or, if none, the Trustee shall promptly submit the
appointment of the successor member or members to an arbiter, and the Company
shall bear the costs of arbitration as provided for in the preceding paragraph.

 

  (h) Change in Control Definition. As used in this Plan, a “change in control”
means the first to occur of the following:

 

  (i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the
then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (2) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Section, the following acquisitions shall not
constitute a change in control: (A) any acquisition directly from the Company,
(B) any acquisition by the Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or one of its
affiliates or (D) any acquisition pursuant to a transaction that complies with
clauses (1), (2) and (3) of Section 3.7(h)(iii) below;

 

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  (ii) Individuals who constitute the Board of Directors of the Company as of
the Effective Date (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director subsequent to such date whose election or nomination for election by
the Company’s stockholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

 

  (iii) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its subsidiaries (each, a “Business Combination”), in
each case, unless, following such Business Combination, (1) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then- outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation or entity resulting from such Business Combination (including,
without limitation, a corporation or entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (2) no Person (excluding any employee
benefit plan (or related trust) of the Company or any corporation or entity
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding shares of common
stock of the corporation or entity resulting from such Business Combination or
the combined voting power of the then-outstanding voting securities of such
corporation or entity, except to the extent that such ownership existed prior to
the Business Combination, and (3) at least a majority of the members of the
board of directors of the corporation or entity resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or

 

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  (iv) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

Notwithstanding the foregoing, in no event will the Spin-off be treated as a
Change in Control.

 

  (i) Lump Sum Payment. Upon a change in control, the amounts credited in the
Deferred Compensation Accounts of each Participant (including retired, active
and inactive Participants), whether or not in pay status as of the date of the
Change in Control, shall be paid within 45 days after the Change in Control.

For purposes of this Section 3.7(i), a change in control means a change in
control that is also a change in ownership or effective control of the Company
or a change in the ownership of a substantial portion of the assets of the
Company within the meaning of Code Section 409A(a)(2)(A)(v) and the Treasury
regulations issued thereunder.

 

3.8. Claims

 

  (a) Claim Denials. The Committee shall maintain procedures with respect to the
filing of claims for benefits under the Plan. Pursuant to such procedures, any
Participant or beneficiary (hereinafter called “claimant”) whose claim for
benefits under the Plan is denied shall receive written notice of such denial.
The notice shall set forth:

 

  (i) the specific reasons for the denial of the claim;

 

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

 

  (iii) any additional material or information necessary to perfect the claim
and an explanation why such material or information is necessary; and

 

  (iv) a description of the procedures for review of the denial of the claim and
the time limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under ERISA following a denial on
review.

Such notice shall be furnished to the claimant within a reasonable period of
time, but no later than 90 days after receipt of the claim by the Plan unless
the Committee determines that special circumstances require an extension of time
for processing the claim. In no event shall such an extension exceed a period of
90 days from the end of the initial 90-day period. If such an extension is
required, written notice thereof shall be furnished to the claimant before the
end of the initial 90-day period, which shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to
render a decision.

 

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  (b) Right to a Review of the Denial. Every claimant whose claim for benefits
under the Plan is denied in whole or in part by the Committee shall have the
right to request a review of the denial. Review shall be granted if it is
requested in writing by the claimant no later than 60 days after the claimant
receives written notice of the denial. The review shall be conducted by the
Committee.

 

  (c) Decision of the Committee on Appeal. At any hearing of the Committee to
review the denial of a claim, the claimant, in person or by duly authorized
representative, shall have reasonable notice, shall have an opportunity to be
present and be heard, may submit written comments, documents, records and other
information relating to the claim, and may review documents, records and other
information relevant to the claim under the applicable standards under ERISA.
The Committee shall render its decision as soon as practicable. Ordinarily
decisions shall be rendered within 60 days following receipt of the request for
review. If the need to hold a hearing or other special circumstances requires
additional processing time, the decision shall be rendered as soon as possible,
but not later than 120 days following receipt of the request for review. If
additional processing time is required, the Committee shall provide the claimant
with written notice thereof, which shall indicate the special circumstances
requiring the additional time and the date by which the Committee expects to
render a decision. If the Committee denies the claim on review, it shall provide
the claimant with written notice of its decision, which shall set forth (i) the
specific reasons for the decision, (ii) reference to the specific provisions of
the Plan on which the decision is based, (iii) a statement of the claimant’s
right to reasonable access to, and copies of, all documents, records and other
information relevant to the claim under the applicable standards under ERISA,
and (iv) and a statement of the claimant’s right to bring a civil action under
ERISA. The Committee’s decision shall be final and binding on the claimant, and
the claimant’s heirs, assigns, administrator, executor, and any other person
claiming through the claimant.

 

  (d) Notwithstanding the foregoing, following a change in control, the
independent fiduciary shall be responsible for deciding claims and appeals
pursuant to the procedures described above. Any decision on a claim by the
independent fiduciary shall be final and binding on the claimant and the
claimant’s heirs, assigns, administrator, executor and any other person claiming
through the claimant.

 

3.9. Successors

The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform the Plan
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.

 

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3.10. Governing Law

To the extent not preempted by federal law, all questions pertaining to the
construction, regulation, validity and effect of the provisions of the Plan
shall be determined in accordance with the laws of the State of Delaware without
regard to the conflict of laws principles thereof.

 

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