Exhibit 10.1

Disney Key Employees Retirement Savings Plan

Effective as of January 1, 2012                                 

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Contents

 

 

Article 1. Introduction

     1   

1.1 Background and History

     1   

1.2 Purpose of the Plan

     1   

1.3 Status of the Plan

     1   

Article 2. Definitions and Construction

     3   

2.1 Definitions

     3   

2.2 Gender and Number

     8   

2.3 Headings

     8   

2.4 Requirement to Be in “Written Form”

     8   

2.5 Severability

     9   

2.6 Applicable Law

     9   

Article 3. Participation and Vesting

     10   

3.1 Participation

     10   

3.2 Duration

     10   

3.3 Transfers

     10   

3.4 Vesting

     10   

Article 4. Participant Accounts

     12   

4.1 Participant Accounts

     12   

4.2 Determination of Credits to Participant Accounts

     12   

4.3 Hypothetical Investment of Accounts

     13   

Article 5. Distribution of Participant Accounts

     14   

5.1 General

     14   

5.2 Time of Payment

     14   

5.3 Amount and Form of Payment

     14   

Article 6. Rehires and Other Special Situations

     16   

6.1 Effect and Applicability

     16   

6.2 Code Section 409A Aggregation Rules

     16   

6.3 Effect of Rehire or Return to Work After Separation from Service

     16   

6.4 Additional Contribution Credits Following a Change in Control

     17   

6.5 Permissible Delays or Accelerations

     17   

Article 7. Death Benefit

     18   

7.1 Amount of Death Benefit

     18   

7.2 Time and Form of Payment for Death Benefit

     18   

 

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Article 8. Financing and Administration

     19   

8.1 Financing

     19   

8.2 Plan Administrative Committee

     19   

8.3 Duties of Committee

     19   

8.4 Meetings

     20   

8.5 Actions by the Committee

     20   

8.6 Compensation and Bonding

     20   

8.7 Establishment of Rules and Interpretation of Plan

     20   

8.8 Limitation of Liability

     21   

8.9 Indemnification

     21   

8.10 Claims Procedures

     21   

8.11 Limitation on Actions

     23   

8.12 Class Action Forum

     24   

8.13 Records

     25   

Article 9. Amendment and Termination

     26   

9.1 Amendments

     26   

9.2 Termination of Plan

     26   

9.3 Successors

     26   

9.4 Prohibition on Changes Due to Code Section 409A

     27   

9.5 Additional Participating Employers

     27   

Article 10. Miscellaneous Provisions

     28   

10.1 Good-Faith Valuation Binding

     28   

10.2 Taxation

     28   

10.3 Withholding

     28   

10.4 Offset for Obligations to the Company or an Affiliate

     28   

10.5 No Enlargement of Employment Rights

     28   

10.6 Non-Alienation

     29   

10.7 No Examination or Accounting

     29   

10.8 Incompetency

     29   

10.9 Notice of Address

     29   

10.10 Data

     30   

10.11 Service of Legal Process

     30   

10.12 Qualified Military Service

     30   

10.13 Counterparts

     30   

 

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Section 1.1

 

Article 1. Introduction

1.1 Background and History

Effective January 1, 2012, The Walt Disney Company (“Company”) is establishing
the Disney Key Employees Retirement Savings Plan (“Plan”) to provide retirement
income to certain employees and to equalize the benefits of certain employees
participating in the Disney Retirement Savings Plan (the “Qualified Plan”).

1.2 Purpose of the Plan

The Company desires to provide certain designated key management and highly
compensated employees with enhanced retirement benefits over and above those
provided under the applicable portion(s) of the Qualified Plan due to the
application of the limits under Code sections 415 and 401(a)(17). The purpose of
the Plan document is to set forth the terms and conditions pursuant to which
these benefits are accrued and to describe the nature and extent of the
employees’ rights to these accrued benefits.

1.3 Status of the Plan

 

(a) Nonqualified Plan. The Plan is not qualified within the meaning of Code
section 401(a). The Plan is intended to provide an unfunded and unsecured
promise to pay money in the future and thus not to involve, pursuant to Treasury
Regulations section 1.83-3(e), the transfer of “property” for purposes of Code
section 83. Likewise, benefits credited under this Plan are not intended to
confer an economic benefit upon the Participant nor is the right to the receipt
of future benefits under the Plan intended to result in any Participant,
Beneficiary or alternate payee being in constructive receipt of any amount so as
to result in any benefit due under the Plan being includible in the gross income
of any Participant, Beneficiary or alternate payee in advance of the date on
which payment of any benefit due under the Plan is actually made. For tax
purposes and purposes of Title I of ERISA, the Plan is intended to be an
unfunded, nonqualified deferred compensation plan covering certain designated
employees who are within a select group of key management or highly compensated
employees.

 

(b) Compliance with Code Section 409A. This Plan is intended to comply with Code
section 409A and related regulatory guidance. Therefore, the Plan shall be
administered and interpreted in a manner consistent with that purpose. The
Committee shall have full authority to take any and all actions as it deems
necessary or appropriate to carry out this intent and purpose of the Plan.

 

(c)

Additional or Special Arrangements. Except as provided in the following
sentence, the Committee, the Company, or any other Employer may, in its sole
discretion, provide by a separate written agreement that the benefits payable to
any individual who is also an Eligible Employee under the Plan shall be
determined in accordance with the terms of the Plan, as the same may be modified
in respect of that Eligible Employee under such agreement. No such agreement
shall provide benefits

 

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Section 1.3

 

  for an individual unless the individual is, as of the date the agreement is
executed, an “Eligible Employee” as this term is defined in the Qualified Plan
on that date. Any such agreement may provide such Eligible Employee with
additional years of service, credit for service with affiliated companies, a
different vesting schedule, an individualized formula for the determination of
amounts credited to such Eligible Employee’s Account, or such other modification
(which may constitute an enhancement or limitation) of the benefits provided
hereby as the Committee, Company, or other Employer shall specify. Further, any
separate agreement may provide for benefits which may be partially or wholly in
addition to or in lieu of any benefits provided hereunder, and which may be
greater than, less than or equal to any benefits provided hereunder and any such
benefits may or may not be calculated or otherwise determined by reference to
the benefits provided by the Plan or by reference to, or by incorporation by
reference of, any of the terms or provisions of the Plan. However, deferrals of
compensation under this Plan and such other separate written agreement, if any,
shall be aggregated with respect to the Eligible Employee to the extent required
under Code section 409A and related regulations for purposes of assuring
compliance with those rules.

 

(d) No Guarantees of Intended Tax Treatment. The Plan shall be administered and
interpreted so as to satisfy the requirements for the intended tax treatment
under the Code described in this Plan section. However, the treatment of
benefits earned under and benefits received from this Plan, for purposes of the
Code and other applicable tax laws (such as state income and employment tax
laws), shall be determined under the Code and other applicable tax laws and no
guarantee or commitment is made to any Participant, Beneficiary or alternate
payee with respect to the treatment of accruals under or benefits payable from
the Plan for purposes of the Code and other applicable tax laws.

 

2

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Section 2.1

 

Article 2. Definitions and Construction

2.1 Definitions

Whenever used in the Plan, the following terms shall have the respective
meanings set forth below, unless otherwise expressly provided; and when the
defined meaning is intended, the term is capitalized.

 

(a) “Account” means a record-keeping account maintained for a Participant under
the Plan to track Employer contribution amounts credited to the Participant
under Plan section 4.2 and adjustments for hypothetical investment gains and
losses pursuant to Plan section 4.3. A Participant’s Account may be divided into
subaccounts, as determined by the Committee.

 

(b) “Account Value” means the value of a Participant’s Account as of a given
Valuation Date. A Participant’s Account Value as of a Valuation Date shall be
determined by:

 

  (1) Crediting the Participant’s Account with any Employer contribution
credited to the Participant under Plan section 4.2 since the immediately
preceding Valuation Date;

 

  (2) Increasing or reducing the Participant’s Account by hypothetical
investment gains and losses, determined pursuant to Plan section 4.3, since the
immediately preceding Valuation Date; and

 

  (3) Reducing the Participant’s Account by any payments made under the Plan on
behalf of the Participant since the immediately preceding Valuation Date.

 

(c) “Affiliate” generally means any corporation or other entity that is required
to be aggregated with the Company under Code sections 414(b) or (c).

 

(d) “Beneficiary” means any person, persons, or entity named by a Participant by
written designation filed with the Committee to receive benefits payable in the
event of the Participant’s death, provided that if the Participant has a Spouse
and he designates someone other than his Spouse as the Beneficiary, the
Participant must file a spousal consent with the Committee. Any Beneficiary
designation or spousal consent shall be made in the form and manner prescribed
by the Committee. If any Participant fails to designate a Beneficiary, or if the
Beneficiary designated by a deceased Participant dies before the Participant,
the Participant’s Beneficiary shall be:

 

  (1) The Participant’s surviving Spouse, if any, and if not;

 

  (2) The Participant’s surviving Domestic Partner, if any, and if not;

 

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Section 2.1

 

  (3) The Participant’s surviving natural and legally-adopted children, if any,
and if not;

 

  (4) The Participant’s surviving parents, if any, and if not;

 

  (5) The Participant’s surviving siblings, if any, and if not;

 

  (6) The Participant’s estate.

 

(e) “Benefit Valuation Date” means the Valuation Date as of which the Account
Value is determined for purposes of the first payment made as a result of a
given Payment Event and, unless otherwise explicitly provided, such date shall
be:

 

  (1) With respect to a Participant whose Payment Event is a Separation from
Service:

 

  (A) If the Participant is not a Specified Employee on the date of his
Separation from Service, the first day of the fourth calendar month following
the calendar month in which the Participant’s Separation from Service occurs or,
if that is not a business day, the first business day thereafter; or

 

  (B) If the Participant is a Specified Employee on the date of his Separation
from Service, the first day of the calendar month following the calendar month
containing the date that is six months after the date of the Participant’s
Separation from Service or, if that is not a business day, the first business
day thereafter; and

 

  (2) With respect to a Participant whose Payment Event is a Change in Control,
the first business day following the date of the Change in Control; and

 

  (3) With respect to a Beneficiary, the first day of the fourth calendar month
following the calendar month in which the Participant’s death occurs or, if that
is not a business day, the first business day thereafter.

 

(f) “Board” means the Board of Directors of the Company.

 

(g) “Change in Control” means an event described under paragraphs (1), (2), (3),
(4) or (5) as follows:

 

  (1)

The acquisition within any 12-month period 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, as amended) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d—3 promulgated under the Securities Exchange Act of 1934, as
amended) of thirty percent (30%) or more of the total voting power of the then
outstanding stock of the Company entitled to vote generally in the

 

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Section 2.1

 

  election of directors, but excluding the following transactions (the “Excluded
Acquisitions”):

 

  (A) Any acquisition directly from the Company (other than an acquisition by
virtue of the exercise of a conversion privilege of a security that was not
acquired directly from the Company),

 

  (B) Any acquisition by the Company, and

 

  (C) Any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company;

 

  (2) Any time during a period of 12 months or less, individuals who at the
beginning of such period constitute the Board (and any new directors whose
election by the Board or nomination for election by the Company’s shareholders
was approved by a vote of at least a majority of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was so approved) ceasing for any reason to
constitute a majority thereof;

 

  (3) An acquisition (other than an Excluded Acquisition) by any Person of fifty
percent (50%) or more of the voting power or value of the Company’s stock;

 

  (4) The consummation of a merger, consolidation, reorganization or similar
corporate transaction, whether or not the Company is the surviving company in
such transaction, other than a merger, consolidation, or reorganization that
would result in the Persons who are beneficial owners of the Company’s stock
outstanding immediately prior thereto continuing to beneficially own, directly
or indirectly, in substantially the same proportions, at least fifty percent
(50%) of the combined voting power or value of the Company’s stock (or the stock
of the surviving entity) outstanding immediately after such merger,
consolidation or reorganization; or

 

  (5) The sale or other disposition during any 12-month period of all or
substantially all of the assets of the Company, provided that such sale is of
assets having a total gross fair market value equal to or greater than 40% of
the total gross fair market value of the assets of the Company immediately prior
to such sale or disposition.

The foregoing definition of “Change in Control” is intended to comply with the
requirements of Code section 409A and the guidance issued thereunder and shall
be interpreted and applied by the Committee in a manner consistent with this
intent.

 

(h) “Code” means the Internal Revenue Code of 1986, as amended and any
succeeding federal tax provisions.

 

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Section 2.1

 

(i) “Committee” means the Investment and Administrative Committee of The Walt
Disney Company Sponsored Qualified Benefit Plans and Key Employees Deferred
Compensation and Retirement Plan.

 

(j) “Company” means The Walt Disney Company.

 

(k) “Death Benefit” means the benefit described in Article 7.

 

(l) “Domestic Partner” means the individual determined by the Company in its
sole discretion to be the Participant’s same-sex domestic partner in accordance
with the Company’s procedures for identifying domestic partners.

 

(m) “Eligible Employee” means a salaried Employee of an Employer who is an
“Eligible Employee” and a “Participant,” as those terms are defined in the
Qualified Plan, and who is designated by the Company or an Employer as an
executive-level Employee under the customary employee classification procedures
of the Company or Employer.

 

(n) “Employee” means any individual who is employed as a common-law employee of
the Company or an Affiliate, including officers, but excluding independent
contractors and leased employees (or any individuals designated as independent
contractors or leased employees under the customary worker classification
procedures of the Company or an Affiliate) and directors who are not officers or
otherwise employees.

 

(o) “Employer” means the Company and all Affiliates that have been designated as
Employers with respect to the Plan in accordance with the terms of Plan
section 9.5.

 

(p) “Employer Contributions” means the contributions made to the Qualified Plan
on behalf of an Eligible Employee.

 

(q) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

 

(r) “Investment Funds” means hypothetical investment funds that mirror the
“Investment Funds” available, from time to time, for investment of contributions
and accounts under the Qualified Plan.

 

(s) “Military Leave” means leave subject to reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994, as amended
from time to time.

 

(t) “Participant” means any person who has been admitted to, and has not been
removed from, participation in the Plan pursuant to the provisions of Article 3.

 

(u)

“Payment Date” means the date on which any vested Account is payable to the
Participant under Plan section 5.2 or, if the Participant has died before his
vested

 

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Section 2.1

 

  Account has been paid in full, the date on which any Death Benefit is payable
to the Participant’s Beneficiary under Plan section 7.2. Notwithstanding any
other Plan provision to the contrary and solely for purposes of determining
compliance with Code section 409A and related Treasury Regulations, a payment
shall be deemed made on the Payment Date if the benefit actually commences by
the end of the calendar year in which the Payment Date occurs or, if later, by
the 15th day of the third month following the Payment Date.

 

(v) “Payment Event” means the applicable event triggering a payment of vested
benefits under the Plan. The applicable event shall be one of the following:

 

  (1) With respect to a Participant, the earlier of:

 

  (A) The Participant’s Separation from Service, or

 

  (B) A Change in Control;

 

  (2) With respect to a Beneficiary, the Participant’s death.

 

(w) “Plan” means the Disney Key Employees Retirement Savings Plan, as contained
herein and as amended from time to time.

 

(x) “Qualified Plan” means the Disney Retirement Savings Plan, as in effect from
time to time. The Qualified Plan constitutes a qualified employer plan as
defined under Treasury Regulations section 1.409A-1(a)(2).

 

(y) “Separation from Service” means, as provided in the following paragraphs of
this subsection, an Employee’s termination from employment with the Company and
all Affiliates, whether by retirement, resignation from or discharge by the
Company or an Affiliate (but not by a transfer among the Company and Affiliates
or death).

 

  (1) A Separation from Service shall be deemed to have occurred on a certain
date if an Employee and the Company and Affiliates reasonably anticipate, based
on the facts and circumstances, that either:

 

  (A) The Employee will not provide any additional services for the Company or
any Affiliate after that date; or

 

  (B) The level of bona fide services performed by the Employee after that date
will permanently decrease to no more than 40 percent of the average level of
bona fide services performed by the Employee over the immediately preceding 36
months.

 

  (2)

If an Employee is absent from employment due to Military Leave, sick leave, or
any other bona fide leave of absence authorized by the Company or an Affiliate
and there is a reasonable expectation that the Employee will return to

 

7

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Section 2.2

 

  perform services for the Company or an Affiliate, then a Separation from
Service shall not occur until the later of:

 

  (A) The first date immediately following the date that is six months after the
first date that an Employee was absent from employment; and

 

  (B) To the extent the Employee retains a right to reemployment with the
Company or any Affiliate under an applicable statute or by contract, the date
the Employee no longer retains a right to reemployment.

If a Participant fails to return to work upon the expiration of any Military
Leave, sick leave, or other bona fide leave of absence where such leave is for
less than six months, the Separation from Service shall occur as of the date of
the expiration of such leave.

 

(z) “Specified Employee” means any person determined to be a specified employee
under Code section 409A and Treasury Regulations section 1.409A-1(i).

 

(aa) “Spouse” means a “spouse” as defined by the Defense of Marriage Act (Pub.
Law No. 104-199) and shall also include a former spouse of a Participant to the
extent required by a domestic relations order, within the meaning of Code
section 414(p)(1)(B) and permitted under Treasury Regulations
section 1.409A-3(j)(4)(ii).

 

(bb) “Treasury Regulations” means the regulations promulgated by the United
States Department of the Treasury under the Code.

 

(cc) “Valuation Date” means each business day on which the New York Stock
Exchange is open.

2.2 Gender and Number

Except as otherwise indicated by the context, any masculine or feminine
terminology shall also include the opposite gender, and the definition of any
term in the singular or plural shall also include the opposite number.

2.3 Headings

The headings of this Plan are inserted for convenience of reference only, and
they are not to be used in the construction of the Plan.

2.4 Requirement to Be in “Written Form”

Various notices provided by the Company, the Committee, or any duly authorized
agent of either of them and various elections made by Participants,
Beneficiaries or other payees are required to be in written form.
Notwithstanding anything to the contrary in this Plan, any notices and elections
related to, or that may constitute part of, the Plan may be conveyed through an
electronic system or any other system approved by the Committee unless otherwise
provided under applicable law or regulatory guidance.

 

8

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Section 2.5

 

2.5 Severability

If a provision of this Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included in the Plan.

2.6 Applicable Law

To the extent not preempted by ERISA or other federal law, the Plan and all
rights hereunder shall be governed, construed, and administered in accordance
with the laws of the state of California.

 

9

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Section 3.1

 

Article 3. Participation and Vesting

3.1 Participation

Each Eligible Employee for whom Employer contributions under the Qualified Plan,
for any calendar year, are limited by Code section 415 and/or Code section
401(a)(17) shall be a Participant in the Plan. Notwithstanding the foregoing,
but subject to the following sentence, each Employee who becomes an Eligible
Employee pursuant to an agreement approved by the Committee shall become a
Participant as of the date, if any, specified in such agreement or otherwise
specified by the Committee. No such agreement shall provide for participation by
an individual unless the individual is, as of the date the agreement is
executed, an “Eligible Employee” as this term is defined in the Qualified Plan
on that date.

3.2 Duration

An individual who becomes a Participant under the Plan shall remain a
Participant for as long as he remains an Employee or is entitled to receive any
payments hereunder.

3.3 Transfers

 

(a) Transfers to Eligible Employee Status. An Employee who transfers employment
such that he becomes an Eligible Employee and satisfies the requirements of Plan
section 3.1 shall be a Participant in the Plan as of the date he satisfies such
requirements.

 

(b) Transfers from Eligible Employee Status. To the extent a Participant
transfers employment to an Affiliate and is no longer an Eligible Employee:

 

  (1) The Participant may become vested in his Account pursuant to Plan
section 3.4, even though he is no longer an Eligible Employee.

 

  (2) The Participant shall, if he is or becomes vested in his Account, remain a
Participant in the Plan and be eligible to make investment election changes
under Plan section 4.3 until the date his vested Account is distributed from the
Plan.

 

  (3) To the extent the Participant has no vested interest in his Account under
the Plan but remains employed by an Affiliate, the Participant shall remain a
Participant in the Plan and be eligible to make investment election changes
under Plan section 4.3 until the date he ceases to be employed by the Company
and all Affiliates at a time when he has no vested interest in his Account under
the Plan. If he remains employed by an Affiliate until his Account under the
Plan vests, his status as a Participant shall be determined under paragraph (2).

3.4 Vesting

 

(a)

Vested Benefit. A Participant who is vested under the Qualified Plan shall be
100 percent vested in his Account and shall be entitled to a benefit from the
Plan. Except as provided otherwise in subsection (b), if a Participant has a
Separation from

 

10

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Section 3.4

 

  Service prior to becoming vested under the Qualified Plan, his Account under
the Plan shall be immediately forfeited.

 

(b) Vesting on Change in Control. If a Change in Control occurs, each
Participant shall become 100 percent vested in his Account (if he is not already
100 percent vested) upon the Change in Control.

 

11

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Section 4.1

 

Article 4. Participant Accounts

4.1 Participant Accounts

For record-keeping purposes only, the Committee shall maintain, or cause to be
maintained, records showing the balance of the Account (including any
subaccounts) maintained for a Participant from time to time under the Plan.
Periodically, each Participant shall be furnished with a statement setting forth
the Participant’s Account Value under the Plan as of a specified Valuation Date.

4.2 Determination of Credits to Participant Accounts

 

(a) Employer Contribution Credit Amount. For each calendar year, an Eligible
Employee’s Account shall be credited with an Employer contribution equal to the
excess (if any) of the gross contribution amount described in paragraph (1) over
the actual Qualified Plan contribution amount described in paragraph (2):

 

  (1) The gross contribution amount equals the aggregate amount of Employer
Contributions that would have been allocated to the Eligible Employee’s
Qualified Plan account for the calendar year if those contributions were
determined:

 

  (A) Without regard to the limits imposed by Code section 415;

 

  (B) As if the annual compensation cap imposed by Code section 401(a)(17) for
the calendar year were $1,000,000; and

 

  (C) By taking into account any equity in lieu of bonus received by the
Participant during the calendar year as if it were contribution-eligible
compensation under the Qualified Plan.

 

  (2) The gross contribution amount described in paragraph (1) shall be reduced
by the total Employer Contributions actually allocated to the Eligible
Employee’s Qualified Plan account for such calendar year.

 

(b) Timing of Credit to Account. The annual Employer contribution credit
described in subsection (a) shall be determined and credited to the Eligible
Employee’s Account:

 

  (1) If the Eligible Employee does not die or have a Separation from Service
during the calendar year, as of the date Employer Contributions are actually
credited to his Qualified Plan account for the fourth quarter of the calendar
year; or

 

  (2) If the Eligible Employee dies or has a Separation from Service during the
calendar year, as of the date Employer Contributions are actually credited to
the Eligible Employee’s Qualified Plan account for the calendar quarter during
which the Participant’s death or Separation from Service occurs, as applicable.

 

12

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Section 4.3

 

4.3 Hypothetical Investment of Accounts

 

(a) Hypothetical Investment Options Available. A Participant’s Account shall be
adjusted for hypothetical investment gains and losses as if the Participant’s
Account had been invested in the Investment Funds, in accordance with his
investment elections under subsection (b).

 

(b) Election of Investment Options.

 

  (1) Initial Election for Future Contribution Credits. A Participant shall
elect, in such form and at such time in advance as may be prescribed by the
Committee, the percentages (in multiples of 1%) in which Employer contributions
credited to his Account shall be deemed to be invested among any or all of the
Investment Funds at the time such contribution amounts are credited. If the
Participant makes no election, the Participant shall be deemed to have elected
the default investment fund under the Qualified Plan.

 

  (2) Change in Election for Future Contribution Credits. A Participant may
elect, in such form and at such time in advance as may be prescribed by the
Committee, to change the percentages in which future Employer contribution
credits to his Plan Account shall be deemed to be invested among any or all of
the Investment Funds at the time such contribution amounts are credited.
However, any rules, limitations, or restrictions on investment election changes
that apply under the Qualified Plan shall also apply to changes in investment
elections under the Plan.

 

  (3) Transfer Among Investment Options. A Participant may elect, in such form
and at such time in advance as may be prescribed by the Committee, to transfer
amounts in his Plan Account between or among any of the Investment Funds.
However, any rules, limitations, or restrictions applicable to transfers into or
out of investment options under the Qualified Plan shall also apply to transfers
into or out of Investment Funds under the Plan.

 

13

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Section 5.1

 

Article 5. Distribution of Participant Accounts

5.1 General

A Participant’s Account, if vested pursuant to Plan section 3.4, shall be
payable, for reasons other than the Participant’s death, at the time and in the
form determined in this Article 5. A Participant shall not receive payment of
his Account if he does not become vested under Plan section 3.4.

5.2 Time of Payment

 

(a) Default Time of Payment. Except as otherwise provided under the terms of the
Plan, the Participant shall be entitled to a payment of his vested Account in
the form provided in Plan section 5.3 as of the Payment Date for the applicable
Payment Event, as determined below:

 

  (1) If the Payment Event is the Participant’s Separation from Service, then
the Payment Date is the first business day following the Benefit Valuation Date;
or

 

  (2) If the Payment Event is a Change in Control, then the Payment Date shall
occur, as determined by the Committee in its sole discretion, within 90 days
following the date on which the Change in Control occurs, provided that the
Participant shall not be permitted to designate the taxable year of the payment.

 

(b) Earlier Payments. An earlier payment may be made, as determined by the
Committee in its sole discretion, only to the extent that a permissible Code
section 409A and related Treasury Regulations exception (e.g., the payment of
employment taxes) may be applied.

 

(c) Continued Payments. Once a Participant’s Payment Date has occurred, the
payment of his Account shall not be delayed or accelerated, except as provided
for in accordance with Plan section 6.5 or in Article 7.

5.3 Amount and Form of Payment

 

(a) Applicable Form of Payment and Payment Amount.

 

  (1)

If a Participant’s Account is payable due to a Separation from Service under
Plan section 5.2(a)(1), the Participant’s Account shall be paid to him in ten
annual installments, beginning on the applicable Payment Date (described in Plan
section 5.2(a)(1)) and continuing to be paid on each subsequent anniversary of
the applicable Payment Date (or, if the anniversary is not a business day, the
first business day thereafter) until ten installments have been paid. The amount
of the first installment shall be determined by dividing the Participant’s
Account Value as of the Benefit Valuation Date by ten and the amount of each
subsequent installment shall be determined by dividing the Participant’s Account
Value as of the Valuation Date immediately preceding the date on which the
installment is to be paid by the then remaining number of

 

14

--------------------------------------------------------------------------------

Section 5.3

 

  installments. Each installment shall be deducted from the Investment Funds in
which the Participant’s Account is deemed to be invested on the installment
payment date, ratably or in such other manner as may be prescribed by
administrative procedures established by the Committee. This installment option
is treated as an entitlement to a single payment for purposes of Treasury
Regulations section 1.409A-2(b)(2)(iii).

 

  (2) If a Participant’s Account is payable due to a Change in Control under
Plan section 5.2(a)(2), the Participant’s Account Value as of the Benefit
Valuation Date shall be paid to the Participant on the applicable Payment Date
(described in Plan section 5.2(a)(2)) in the form of a single lump sum payment.

 

(b) Benefit Payments. All benefit payments hereunder shall be made in cash. No
adjustments shall be made to the amount of any lump sum or installment after the
applicable Valuation Date.

 

(c) Death of Participant After Separation from Service or Change in Control. If
the death of a Participant (including a Specified Employee) occurs before the
Payment Date for any payment under this Article 5, payment shall be made to the
Participant’s Beneficiary in accordance with Article 7.

 

15

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Section 6.1

 

Article 6. Rehires and Other Special Situations

6.1 Effect and Applicability

This Article provides additional information and rules covering special
situations under which a Participant’s vested Account may become payable. In the
event of a conflict between a provision of this Article and any other Plan
provision, the provision of this Article shall govern with respect to the
Participants or circumstances specified in this Article and the other Plan
provisions shall continue to govern with respect to other Participants and
circumstances.

6.2 Code Section 409A Aggregation Rules

Except as provided in the following sentence, the Company has the authority to
provide to any individual or individuals selected by the Company or Committee
benefits under the Plan or under a separate agreement, method, program or other
arrangement that constitutes an account balance plan. No such agreement entered
into shall provide benefits for an individual unless the individual is, as of
the date the agreement is executed, an “Eligible Employee” as this term is
defined in the Qualified Plan on that date. To the extent any Participant is
entitled to a deferral of compensation under any such account balance plan,
then, only to the extent required by Code section 409A and related Treasury
Regulations, the separate account balance plan shall be aggregated with the
Plan.

6.3 Effect of Rehire or Return to Work After Separation from Service

 

(a) Resumption of Eligible Employee Status. If a Participant becomes eligible
for payment of benefits on account of a Separation from Service and:

 

  (1) Is subsequently rehired as or transfers to a position as an Eligible
Employee;

 

  (2) Returns to work as an Eligible Employee following the leave of absence
that resulted in the Separation from Service; or

 

  (3) Increases his level of bona fide services as an Eligible Employee
following the Separation from Service, such that he may have a subsequent
Separation from Service,

the provisions of this Plan section 6.3 shall apply.

 

(b) Payments Relating to Prior Separation. If a Participant described in
subsection (a) resumes Eligible Employee status before he receives all payments
due under the Plan as a result of his Separation from Service, the payments
related to such Separation from Service shall continue to be made as if the
applicable event described in subsection (a) had not occurred.

 

(c) Eligibility for Additional Contributions During Year of Separation. If the
applicable event described in subsection (a) occurs during the same calendar
year as the Participant’s Separation from Service:

 

16

--------------------------------------------------------------------------------

Section 6.4

 

  (1) his Employer contribution (if any) with respect to his employment as an
Eligible Employee during the calendar year and prior to the Separation from
Service shall be determined and credited under Plan section 4.2 as if the
applicable event described in subsection (a) had not occurred, and

 

  (2) his Employer contribution (if any) with respect to his employment as an
Eligible Employee during the calendar year and after the Separation from Service
shall equal the total Employer contribution that would have been credited to the
Participant under Plan section 4.2 for the calendar year if the Separation from
Service were disregarded, reduced by the Employer contribution described in
paragraph (1).

 

(d) Separate Accounting for Additional Employer Contributions. If a Participant
described in subsection (a) has additional Employer contributions credited to
his Account for his employment as an Eligible Employee following his Separation
from Service, the Committee shall, if necessary, establish a separate subaccount
within the Participant’s Account for such additional Employer contributions (and
related hypothetical investment gains and losses). This separate subaccount
shall be paid to the Participant or his Beneficiary upon a subsequent Payment
Event in accordance with Article 5 or Article 7, as applicable, disregarding any
subaccount maintained for amounts credited to the Participant for his employment
as an Eligible Employee prior to his Separation from Service.

6.4 Additional Contribution Credits Following a Change in Control

If a Participant has a Payment Event due to a Change in Control and additional
Employer contributions are subsequently credited to his Account, the
Participant’s Account attributable to such additional Employer contributions
(and related hypothetical investment gains and losses) shall be paid to the
Participant upon a subsequent Payment Event in accordance with Article 5 or
Article 7, as applicable.

6.5 Permissible Delays or Accelerations

If the Company or Committee determines that a delay or an acceleration of any
payment to the Participant under the Plan is permitted or required by Code
section 409A and related Treasury Regulations (e.g., a delay to comply with Code
section 162(m) or an acceleration to pay employment taxes), the Company or the
Committee may either delay or accelerate the payment in accordance with the
terms of Code section 409A and related Treasury Regulations in its sole
discretion as it deems advisable.

 

17

--------------------------------------------------------------------------------

Section 7.1

 

Article 7. Death Benefit

7.1 Amount of Death Benefit

In the event of a Participant’s death before he receives payment of his entire
vested Account under Article 5, the Participant’s Beneficiary shall be entitled
to a Death Benefit. The Death Benefit shall equal the Participant’s Account
Value as of the Benefit Valuation Date.

7.2 Time and Form of Payment for Death Benefit

 

(a) Time of Payment of Death Benefit. The Beneficiary’s Payment Date for the
Death Benefit payable pursuant to Plan section 7.1 shall be the first business
day following the Benefit Valuation Date.

 

(b) Form of Payment of Death Benefit. The Death Benefit payable pursuant to Plan
section 7.1 shall be paid to the Beneficiary in the form of a single lump sum
payment in cash. No adjustments shall be made to the amount of any lump sum
after the Benefit Valuation Date.

 

(c) Earlier Payments. An earlier payment may be made, as determined by the
Committee in its sole discretion, only to the extent that a permissible Code
section 409A and related Treasury Regulations exception may be applied.

 

18

--------------------------------------------------------------------------------

Section 8.1

 

Article 8. Financing and Administration

8.1 Financing

 

(a) General Creditors. The Plan constitutes a mere promise of the Employer to
make payments in accordance with the terms of the Plan. This Plan does not give
any Participant or Beneficiary any interest, lien, or claim in or against any
specific assets of the Company or any Affiliate. The Participant and/or
Beneficiary shall have only the rights of general, unsecured creditors of the
Employer with respect to their rights under the Plan.

 

(b) Allocation Among Employers. The obligation to pay benefits hereunder shall
be the obligation of the Employers whose Employees are Participants entitled to
benefits hereunder. The Company and each Employer shall provide the benefits
described in the Plan and allocable to such entity from its general assets.
Notwithstanding the foregoing, the Company, in its sole discretion, shall have
the authority to allocate the total liability to pay benefits under the Plan
among the Employers in such manner and amounts as it deems appropriate.

 

(c) Alternative Funding. The Company may, but shall not be required to,
establish a grantor trust as a funding source for its obligations under the
Plan. If such a trust is so established, it shall be the intention of the
Company that the trust shall constitute an unfunded arrangement for purposes of
the Plan, such that the Plan shall continue to be an unfunded plan maintained
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees under ERISA. With respect to any
Participant, the assets of the trust so established shall remain subject to the
claims of the creditors of that Participant’s Employer in the event of the
Employer’s bankruptcy or insolvency. However, to the extent that funds placed in
a trust and allocable to the benefits payable under the Plan are sufficient, the
trust assets may be used to pay benefits under the Plan. If such trust assets
are not sufficient to pay all benefits due under the Plan, then the appropriate
Employer shall have the obligation, and the Participant or Beneficiary who is
due such benefits shall look to such Employer to provide such benefits.

8.2 Plan Administrative Committee

The general administration of the Plan and the responsibility for carrying out
the provisions of the Plan resides with the Committee. The members of the
Committee shall be determined under the provisions of the Qualified Plan.

8.3 Duties of Committee

The members of the Committee shall elect a chairman from their number and a
secretary who may be but need not be one of the members of the Committee; may
appoint from their number such subcommittees with such powers as they shall
determine; and may authorize one or more of their number or any agent to execute
or deliver any instrument or make any payment on their behalf. In addition, the
Committee may retain counsel, employ agents, and

 

19

--------------------------------------------------------------------------------

Section 8.4

 

provide for such clerical, accounting, actuarial and consulting services as it
may require in carrying out the terms of the Plan; and may allocate among its
members or delegate all or such portion of the duties under the Plan, as it, in
its sole discretion, shall decide.

8.4 Meetings

The Committee shall hold meetings upon such notice, at such place or places, and
at such time or times as it may from time to time determine.

8.5 Actions by the Committee

Any act which the Plan authorizes or requires the Committee to do may be done,
if done at a meeting, by a majority of a quorum of members. A quorum is 50% of
all members of the Committee then in office. The action of that majority
expressed from time to time by a vote at a meeting shall constitute the action
of the Committee and shall have the same effect for all purposes as if assented
to by all members of the Committee at the time in office. Alternatively, any
action required or permitted to be taken by the Committee may be done by
unanimous written consent in lieu of a meeting.

8.6 Compensation and Bonding

No member of the Committee shall receive any compensation from the Plan for his
services as such. Except as may otherwise be required by law, no bond or other
security need be required of any member in that capacity in any jurisdiction.

8.7 Establishment of Rules and Interpretation of Plan

The Committee shall have full discretionary power and authority as may be
necessary to carry out the provisions of the Plan, including, without limiting
the generality of the foregoing, the discretionary power to:

 

(a) Promulgate and enforce rules and regulations as it deems necessary or
appropriate for the administration of the Plan;

 

(b) Construe and interpret the Plan and decide all matters arising thereunder,
including the right to remedy possible ambiguities, inconsistencies, and
omissions and correct defects;

 

(c) Make factual determinations and decide all questions relating to
individuals’ eligibility for participation or for benefits under the Plan,
vesting, forfeitures, the amount, manner and timing of payment of benefits, and
the status of persons as Participants, Employees, Eligible Employees, Spouses,
Beneficiaries and alternate payees; and

 

(d) Require any person to furnish such documentation, information, or other
matter as the Committee may require for the proper administration of the Plan
and as a prerequisite to any payment or distribution by the Plan.

All decisions of the Committee relating to matters within its jurisdiction shall
be final, conclusive, and binding. If, pursuant to Plan section 8.3, the
Committee delegates all or any

 

20

--------------------------------------------------------------------------------

Section 8.8

 

portion of its duties under the Plan, the individual, entity, or group of
persons to which duties have been delegated shall have the same discretionary
power and authority as the Committee unless the delegation specifically provides
otherwise.

8.8 Limitation of Liability

Except as and to the extent otherwise provided by applicable law, no liability
whatever shall attach to or be incurred by the members of the Committee or by
the shareholders, directors, officers, or employees of the Company or an
Affiliate under or by reason of any of the terms and conditions contained in the
Plan or in any of the contracts procured pursuant thereto or implied therefrom.

8.9 Indemnification

To the maximum extent permitted by the Company’s by-laws, as amended from time
to time, the Company shall indemnify each member of the Committee, and each
director, officer, and employee or agent of the Company or an Affiliate against
any expenses and liabilities that such person may incur as a result of any act
or failure to act, made in good faith, by such person in relation to the Plan.

8.10 Claims Procedures

 

(a) Every claim for benefits under the Plan by a person (hereinafter referred to
as “Claimant”) or by a Claimant’s authorized representative shall be filed by
submitting to the person (“claim administrator”) designated by the Committee, a
written application on a form designated by the Committee. The claim
administrator shall process such application and approve or disapprove it.
Claims for benefits under the Plan shall be governed by subsections (b) through
(f). Subsection (g) and Plan sections 8.11 and 8.12 shall apply to all claims
under the Plan, including, but not limited to claims for benefits (both based on
the terms of the Plan and those based on an alleged violation of the law),
claims for breach of fiduciary duty, and other claims that some aspect of the
Plan’s operation, administration or design or some aspect of the Plan’s
investments, is unlawful or violates the terms of the Plan.

 

(b) If a Claimant is denied any benefits under the Plan either in total or in an
amount less than the full benefit to which he claims to be entitled, the claim
administrator shall advise the Claimant of the denial within 90 days after
receipt of the claim by the claim administrator. The claim administrator shall
furnish the Claimant with a written notice setting forth:

 

  (1) The computation of the Claimant’s benefit, if any;

 

  (2) The specific reason or reasons for the denial;

 

  (3) The specific Plan sections on which the denial is based;

 

  (4) A description of any additional material or information necessary for the
Claimant to perfect his claim, if possible, and an explanation of why such
material or information is needed; and

 

21

--------------------------------------------------------------------------------

Section 8.10

 

  (5) A description of the Plan’s claim review procedures, the time limits under
such procedures and a statement of the Claimant’s right to bring a civil action
under ERISA section 502(a) following a denial of benefits on appeal.

If unforeseeable or special administrative problems or circumstances require an
extension of time for processing the claim, the claim administrator shall
furnish a written notice to the Claimant prior to close of the 90-day period
explaining why an extension of time is needed and the approximate date by which
the claim administrator expects to have processed the claim. In no event shall
the claim administrator render a final decision on the validity of a claim later
than 180 days after the claim administrator initially receives the claim.

 

(c) Within 60 days of receipt of the information described in subsection (b),
the Claimant or his duly authorized representative may file written appeal of
the determination with the Committee. As part of his appeal, the Claimant may
submit written comments, documents, records and other information relating to
the claim.

 

(d) As long as the Claimant’s appeal is pending (including the 60-day period
described in subsection (c)) the Claimant or his duly authorized representative
shall be provided, upon request and free of charge, access to and copies of all
documents, records and other information relevant to the claim and may review
pertinent Plan documents and may submit issues and comments in writing to the
Committee.

 

(e) The Committee shall notify the Claimant in writing of the appeals decision
(whether or not adverse) in written or electronic form within a reasonable
period of time, but not later than 60 days after the Committee’s receipt of the
appeal. Notwithstanding, if the Committee determines that special circumstances
(for example, the need to hold a hearing) require an extension of time, the
Committee shall notify the Claimant of the reason or reasons for the extension
and of the date by which it expects to make its decision. This extended period
shall not exceed 60 days from the end of the initial 60-day period. The
Committee’s decision on appeal shall take into account all comments, documents,
records and other information submitted by the Claimant and relevant to the
claim, without regard to whether such information was submitted or considered in
the initial benefit determination.

 

(f) If the Committee decides to deny benefits on appeal, the Committee shall
provide the Claimant in writing with:

 

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

 

  (2) The specific Plan provisions on which the denial is made;

 

  (3) A statement that the Claimant is entitled to receive, upon request and
free of charge, access to and copies of all documents, records and other
information relevant to the claim; and

 

22

--------------------------------------------------------------------------------

Section 8.11

 

  (4) A statement regarding the Claimant’s right to bring a civil action under
ERISA section 502(a) following a denial of benefits on appeal.

 

(g) Any person eligible to receive benefits under the Plan shall furnish to the
claim administrator or the Committee any information or evidence requested by
the claim administrator or the Committee and reasonably required for the proper
administration of the Plan. Failure on the part of any person to comply with any
such request within a reasonable period of time shall be sufficient grounds for
delay in the payment of any benefits that may be due under the Plan until such
information or evidence is received by the claim administrator or the Committee.
If any person claiming benefits under the Plan makes a false statement that is
material to the claim for benefits, the claim administrator or the Committee may
offset against future payments any amount paid to such person to which he was
not entitled under the provisions of the Plan.

8.11 Limitation on Actions

 

(a) Notwithstanding any Plan provision to the contrary, none of the following
claims or action may be filed in any court unless and until the requirements of
subsection (b) are fully met.

 

  (1) A claim or action to recover benefits allegedly due under the provisions
of the Plan or by reason of any law;

 

  (2) A claim or action to enforce rights under the Plan;

 

  (3) A claim or action to clarify rights to future benefits under the Plan;

 

  (4) Any other claim or action that

 

  (A) Relates to the Plan, and

 

  (B) Seeks a remedy, ruling, or judgment of any kind against the Plan or the
Committee.

 

(b) The requirements of this subsection are not met:

 

  (1) Until the Claimant (as defined in Plan section 8.10(a)) has exhausted the
administrative review procedure set forth in Plan section 8.10; and

 

  (2) Unless such claim or action is filed in a court with jurisdiction over
such claim or action no later than 36 months after:

 

  (A) In the case of a claim or action to recover benefits, the date the first
benefit payment was actually made or was allegedly due whichever is earlier;

 

  (B)

In the case of a claim or action to enforce a right, the date the Committee or
its delegate first denied the Claimant’s request to exercise such right,

 

23

--------------------------------------------------------------------------------

Section 8.12

 

  regardless of whether such denial occurred during administrative review
pursuant to Plan section 8.10;

 

  (C) In the case of a claim or action to clarify rights to future benefits, the
date the Committee first repudiated its alleged obligation to provide such
future benefits, regardless of whether such repudiation occurred during
administrative review pursuant to Plan section 8.10; or

 

  (D) In the case of any other claim or action described in subsection (a)(4),
above, the earliest date on which the claimant knew or should have known of the
material facts on which such claim or action is based;

provided that if a request for administrative review pursuant to Plan
section 8.10 is pending before the claims administrator designated by the
Committee to review such claims when the 36-month period described in this
paragraph (2) expires, the deadline for filing such claim or action in a court
with proper jurisdiction shall be extended to the date that is 60 calendar days
after the final denial of the claim on administrative review.

 

  (3) The period described in paragraph (2), above, is hereafter referred to as
the “Applicable Limitations Period.” The Applicable Limitations Period replaces
and supersedes any limitations period that might otherwise be deemed applicable
under state or federal law in the absence of this Plan section 8.11. Except as
provided in the following two sentences, a claim or action filed after the
expiration of the Applicable Limitations Period shall be deemed time-barred. The
Committee shall have the discretion to extend the Applicable Limitations Period
upon a showing of exceptional circumstances that, in the opinion of the
Committee, provide good cause for extension. The exercise of this discretion is
committed solely to the Committee and is not subject to review.

8.12 Class Action Forum

 

(a) To the fullest extent permitted by law, any putative class action lawsuit
brought in whole or in part under ERISA section 502 (or any successor provision)
and relating to the Plan, the lawfulness of any Plan provision, the
administration of the Plan, the management, investment or handling of Plan
assets, or the performance or non-performance of Plan fiduciaries or
administrators shall be filed in one of the following jurisdictions:

 

  (1) The jurisdiction in which the Plan is principally administered, or

 

  (2) The jurisdiction in which the largest number of putative class members
reside (or if that jurisdiction cannot be determined, the jurisdiction in which
the largest number of class members is reasonably believed to reside).

 

24

--------------------------------------------------------------------------------

Section 8.13

 

(b) If any putative class action within the scope of subsection (a) is filed in
a jurisdiction other than one of those described in subsection (a), or if any
non-class action filed in such a jurisdiction is subsequently amended or altered
to include class action allegations, then the Plan, all parties to such action
that are related to the Plan (such as a Plan fiduciary, administrator, or party
in interest), and all alleged Participants and Beneficiaries shall take all
necessary steps to have the action removed to, transferred to, or re-filed in a
jurisdiction described in subsection (a). Such steps may include, but are not
limited to:

 

  (1) A joint motion to transfer the action, or

 

  (2) A joint motion to dismiss the action without prejudice to its re-filing in
a jurisdiction described in subsection (a), with any applicable time limits or
statutes of limitations applied as if the suit or class action allegation had
originally been filed or asserted in a jurisdiction described in subsection (a)
at the same time it was filed or asserted in a jurisdiction not described
therein.

 

(c) The provisions of this Plan section 8.12 shall be waived if no party invokes
them within 120 days of the filing of a putative class action or assertion of
class action allegations.

 

(d) Nothing in this Plan section 8.12 shall relieve any putative class member of
any obligation existing under the Plan or by law to exhaust all administrative
remedies before initiating litigation.

8.13 Records

The records of an Employer or Affiliate with respect to length of employment,
employment history, compensation, absences, and all other relevant matters may
be conclusively relied on by the Committee.

 

25

--------------------------------------------------------------------------------

Section 9.1

 

Article 9. Amendment and Termination

9.1 Amendments

The Company must necessarily and does hereby reserve the right to amend, modify,
or terminate the Plan at any time by action of its Board. The Committee in its
sole discretion shall have the power to amend the Plan to:

 

(a) Comply with laws and regulations, or as otherwise may be desirable when
prompted by a change in law or regulation; and

 

(b) Make any other change that may be necessary or desirable provided any
amendment adopted pursuant to this Plan section 9.1 shall not increase the
Company’s annual expense by more than five (5) million dollars.

Any material amendment shall be in writing and executed by a duly authorized
officer of the Company or a member of the Committee. An amendment to the Plan
may modify its terms in any respect whatsoever, and may include, without
limitation, a permanent or temporary freezing of the Plan such that the Plan
shall remain in effect with respect to existing accrued benefits without
permitting any new benefit accruals. All Participants and Beneficiaries shall be
bound by any amendment.

9.2 Termination of Plan

The Company, through action of the Board, reserves the right to discontinue and
terminate the Plan at any time, for any reason. Any action to terminate the Plan
shall be taken by the Board in the form of a written Plan amendment executed by
a duly authorized officer of the Company. If the Plan is terminated, such
discontinuance or termination shall not have the effect of decreasing the amount
credited to the Participant’s Account on the later of:

 

(a) The date the resolution to terminate and discontinue the Plan is adopted; or

 

(b) The date the termination and discontinuance is effective.

Vested Accounts and any Death Benefits shall be distributed as soon as
practicable if such distribution is permitted because the Plan’s termination and
liquidation meets the requirements of Treasury Regulations
section 1.409A-3(j)(4) and, if such requirements are not met, at the earliest
time otherwise permitted under the terms of the Plan in accordance with Code
section 409A and related Treasury Regulations. Such termination shall be binding
on all Participants and all other persons.

9.3 Successors

In case of the merger, consolidation, liquidation, dissolution or reorganization
of an Employer, or the sale by an Employer of all or substantially all of its
assets, provision may be made by written agreement between the Company and any
successor corporation acquiring or receiving a substantial part of the
Employer’s assets, whereby the Plan shall be continued by the successor. If the
Plan is to be continued by the successor, then effective as of the date of the
reorganization or transfer, the successor corporation shall be substituted for

 

26

--------------------------------------------------------------------------------

Section 9.4

 

the Employer under the Plan. To the extent applicable, such written agreement
may also specify no later than the closing date of an asset purchase
transaction, whether Employees covered by the transaction shall incur a
Separation from Service. The substitution of a successor corporation for an
Employer shall not in any way be considered a termination of the Plan.

9.4 Prohibition on Changes Due to Code Section 409A

Notwithstanding the foregoing, neither the Board nor the Committee may amend or
terminate the Plan in any manner that the Board or the Committee determines in
its sole discretion and in accordance with the advice of counsel, violates the
applicable provisions of Code section 409A and related Treasury Regulations,
including, but not limited to, the applicable time and form of payment
requirements, the applicable prohibitions on accelerations, and the plan
termination and liquidation provisions.

9.5 Additional Participating Employers

 

(a) Adoption. With the consent of the Company, any Affiliate may adopt the Plan
for its Eligible Employees and thereby become an Employer under the Plan. An
Affiliate adopting the Plan shall compile and submit all information required by
the Committee with reference to its Eligible Employees. An entity will be
considered to have adopted the Plan with the consent of the Company if it takes
significant action that is consistent with the adoption of the Plan, the Board
or Committee is aware of the action, and neither objects to the action.

 

(b) Crediting of Prior Service. If an Affiliate adopts the Plan in accordance
with subsection (a), or if any persons become Employees of an Employer as the
result of merger or consolidation or as the result of acquisition of all or part
of the assets or business of another company, the Company shall determine to
what extent, if any, previous service with the Affiliate or acquired business
shall be recognized under the Plan.

 

(c) Withdrawal by Affiliate. Any Employer may withdraw its participation in the
Plan on appropriate action by it. In addition, an Employer will automatically
cease to participate in the Plan from and after the date it ceases to be an
Affiliate. In either event, the benefits under the Plan will be earned with
respect that Employer’s participation in the Plan shall be determined by the
Committee. Benefits payable to Employees employed by the withdrawing Employer
shall be payable to such Employees when due under the Plan, but such Employees
shall not be considered Eligible Employees from and after the date of withdrawal
by their Employer.

 

27

--------------------------------------------------------------------------------

Section 10.1

 

Article 10. Miscellaneous Provisions

10.1 Good-Faith Valuation Binding

In determining the Participant’s vested Account Value, the Committee shall
exercise its best judgment, and all such determinations of value (in the absence
of bad faith) shall be binding upon all Participants and their Beneficiaries.

10.2 Taxation

It is the intention of the Company that the benefits payable hereunder shall not
be deductible by the Employers nor taxable for federal income tax purposes to
Participants or Beneficiaries until such benefits are paid by the Employers to
such Participants or Beneficiaries. Without limiting the foregoing, it is
intended that the Plan meet the requirements of Code section 409A and related
Treasury Regulations and the Committee shall use its reasonable best efforts to
interpret and administer the Plan in accordance with such requirements. When
benefits are paid hereunder, it is the intention of the Company that they shall
be deductible by the Employers under Code section 162.

10.3 Withholding

All distributions shall be net of any applicable federal, state, or local income
or employment taxes or any other amounts required to be withheld by law. In
addition, the Company or any Affiliate may withhold from a Participant’s
currently payable salary, bonus, or other compensation any applicable federal,
state, or local income or employment taxes that may be due upon accruing
benefits under the Plan.

10.4 Offset for Obligations to the Company or an Affiliate

Notwithstanding anything in the Plan to the contrary, if a Participant or
Beneficiary has any outstanding obligation to the Company or any Affiliate
(whether or not such obligation is related to the Plan), the Committee may cause
the amount payable to such Participant or Beneficiary to be reduced and offset
by, and to be applied to satisfy, the amount of such obligation; provided, the
offset is not in excess of $5,000 for any tax year (determined based on the tax
year of the Company and Affiliates) and the offset occurs at the same time as
the outstanding obligation to the Company or any Affiliate is due.

10.5 No Enlargement of Employment Rights

This Plan is strictly a voluntary undertaking on the part of the Company and the
Employers and shall not be deemed to constitute a contract between the Employers
and any Employee or Participant, Beneficiary, or alternate payee, or to be
consideration for, or an inducement to, or a condition of, the employment of any
Employee. Nothing contained in this Plan or any modification of the same or act
done in pursuance hereof shall be construed as giving any person any legal or
equitable right against the Employer, unless specifically provided herein, or as
giving any person a right to be retained in the employ of the Employer. All
Participants shall remain subject to assignment, reassignment, promotion,
transfer, layoff, reduction, suspension, and discharge to the same extent as if
this Plan had never been established.

 

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Section 10.6

 

10.6 Non-Alienation

 

(a) Except as otherwise permitted by the Plan, no benefit payable at any time
under the Plan shall be subject to the debts or liabilities of a Participant or
his Beneficiary. Any attempt to alienate, sell, transfer, assign, pledge, or
otherwise encumber any such benefit, whether presently or thereafter payable,
shall be void. Except as provided in this Plan section, no benefit under the
Plan shall be subject in any manner to attachment, garnishment, or encumbrance
of any kind.

 

(b) Payment may be made from a Participant’s vested Account to an alternate
payee, pursuant to a domestic relations order.

 

  (1) The Committee shall establish reasonable written procedures for reviewing
court orders made, pursuant to state domestic relations law (including a
community property law), relating to child support, alimony payments, or marital
property rights of a Spouse, child, or other dependent of a Participant and for
notifying Participants and alternate payees of the receipt of such orders and of
the Plan’s procedures for determining if the orders are approved domestic
relations orders and for administering distributions under domestic relations
orders.

 

  (2) Except as may otherwise be required by applicable law, such domestic
relations orders may not require a retroactive transfer of all or part of a
Participant’s Account.

10.7 No Examination or Accounting

Neither this Plan nor any action taken thereunder shall be construed as giving
any person the right to an accounting or to examine the books or affairs of the
Company or any Affiliate.

10.8 Incompetency

Every person receiving or claiming benefits under the Plan shall be conclusively
presumed to be mentally competent and of age until the date on which the
Committee receives a written notice, in a form and manner acceptable to the
Committee, that such person is incompetent or a minor, for whom a guardian or
other person legally vested with the care of his person or estate has been
appointed; provided, however, that if the Committee shall find that any person
to whom a benefit is payable under the Plan is unable to care for his affairs
because of incompetency, or is a minor, any payment due (unless a prior claim
therefore shall have been made by a duly appointed legal representative) may be
paid instead to the guardian of such person or to the person having custody of
such person, without further liability on the part of an Employer for the amount
of such payment to the person on whose account such payment is made.

10.9 Notice of Address

Each person entitled to benefits from the Plan must file with the Committee or
its agent, in writing, his post office address and each change of post office
address. Any communication, statement, or notice addressed to such a person at
his latest reported post office address will

 

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Section 10.10

 

be binding upon him for all purposes of the Plan, and neither the Committee nor
the Company shall be obliged to search for or ascertain his whereabouts.

10.10 Data

All persons entitled to benefits from the Plan must furnish to the Committee
such documents, evidence, or information, including information concerning
marital status, as the Committee considers necessary or desirable for the
purpose of administering the Plan.

10.11 Service of Legal Process

The General Counsel of the Company is hereby designated agent of the Plan for
the purpose of receiving service of summons, subpoena, or other legal process.

10.12 Qualified Military Service

Notwithstanding any provision of this Plan to the contrary and to the fullest
extent permitted under Treasury Regulations section 1.409A-2(a)(15), the
election requirements under this Plan shall be deemed satisfied to the extent
that an election is provided to the Participant to satisfy the requirements of
the Uniformed Service Employment and Reemployment Rights Act of 1994, as
amended.

10.13 Counterparts

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

In Witness Whereof, the undersigned, duly authorized by the Board, has caused
this instrument to be executed on August 4, 2011, but effective as of January 1,
2012.

 

By:  

/s/ Barbara Kellams

       Barbara A. Kellams        Vice-President – Counsel        The Walt Disney
Company

 

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