Exhibit 10.5

 

NPS PHARMACEUTICALS, INC.

DEFERRED COMPENSATION PLAN

 

NPS Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby
establishes the NPS Pharmaceuticals, Inc., Deferred Compensation Plan (the
“Plan”), effective June 1, 2014 (the “Effective Date”), for the purpose of
attracting and retaining high quality executives and Directors, and promoting in
them increased efficiency and an interest in the successful operation of the
Company.  The Plan is intended to, and shall be interpreted to, comply in all
respects with Code Section 409A and those provisions of ERISA applicable to an
unfunded plan maintained primarily to provide deferred compensation benefits for
a select group of “management or highly compensated employees.”

 

ARTICLE I
DEFINITIONS

 

1.1          “Account” or “Accounts” shall mean the bookkeeping account or
accounts established under this Plan pursuant to Article 4.

 

1.2          “Base Salary” shall mean a Participant’s annual base salary,
excluding incentive and discretionary bonuses, commissions, reimbursements and
other non-regular remuneration, received from the Company prior to reduction for
any salary deferrals under benefit plans sponsored by the Company, including but
not limited to, plans established pursuant to Code Section 125 or qualified
pursuant to Code Section 401(k).

 

1.3          “Beneficiary” or “Beneficiaries” shall mean the person, persons or
entity designated as such pursuant to Section 7.1.

 

1.4          “Board” shall mean the Board of Directors of the Company.

 

1.5          “Bonus(es)” shall mean amounts paid to the Participant by the
Company in the form of discretionary or annual incentive compensation or any
other bonus designated by the Committee, before reductions for contributions to
or deferrals under any pension, deferred compensation or benefit plans sponsored
by the Company.

 

1.6          “Code” shall mean the Internal Revenue Code of 1986, as amended, as
interpreted by Treasury regulations and applicable authorities promulgated
thereunder.

 

1.7          “Committee” shall mean the person or persons appointed by the Board
to administer the Plan in accordance with Article 9.

 

1.8          “Commissions” shall mean commissions payable to the Participant for
the applicable Plan Year (as determined by the Committee in compliance with Code
Section 409A)

 

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before reductions for contributions to or deferrals under any pension, deferred
compensation or benefit plans sponsored by the Company.

 

1.9          “Company Contributions” shall mean the contributions made by the
Company pursuant to Section 3.3.

 

1.10        “Company Contribution Account” shall mean the Account maintained for
the benefit of the Participant which is credited with Company Contributions, if
any, pursuant to Section 4.2.

 

1.11        “Compensation” shall mean all amounts eligible for deferral for a
particular Plan Year under Section 3.1.

 

1.12        “Crediting Rate” shall mean the notional gains and losses credited
on the Participant’s Account balance which are based on the Participant’s choice
among the investment alternatives made available by the Committee pursuant to
Section 3.4 of the Plan.

 

1.13        “Deferral Account” shall mean an Account maintained for each
Participant that is credited with Participant deferrals pursuant to Section 4.1

 

1.14        “Director” shall mean a non-employee member of the Board.

 

1.15        “Director’s Fees” shall mean compensation for services as a member
of the Board of Directors of the Company, excluding reimbursement of expenses or
other non-regular forms of compensation, before reductions for contributions to
or deferrals under any deferred compensation plan sponsored by the Company. The
Committee may, in its discretion, provide for separate Participant Elections for
the portion of the Director’s Fees that serves as a cash retainer and the
portion of the Director’s Fees that reflects meeting fees, as applicable.

 

1.16        “Disability” or “Disabled” shall mean (consistent with the
requirements of Code Section 409A) that the Participant (a) 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, or (b) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering
employees of the Participant’s Employer.  For purposes of this Plan, a
Participant shall be deemed Disabled if determined to be totally disabled by the
Social Security Administration.  A Participant shall also be deemed Disabled if
determined to be disabled in accordance with the applicable disability insurance
program of such Participant’s Employer, provided that the definition of
“disability” applied under such disability insurance program complies with the
requirements of this Section.

 

1.17        “Distributable Amount” shall mean the vested balance in the
applicable Account as determined under Article 4.

 

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1.18        “Eligible Executive” shall mean a highly compensated or management
level employee or Director of an Employer selected by the Committee to be
eligible to participate in the Plan.

 

1.19        “Employer(s)” shall be defined as follows:

 

(a)           Except as otherwise provided in part (b) of this Section, the term
“Employer” shall mean the Company and/or any of its subsidiaries (now in
existence or hereafter formed or acquired) that have been selected by the Board
to participate in the Plan and have adopted the Plan as a sponsor.

 

(b)           For the purpose of determining whether a Participant has
experienced a Separation from Service, the term “Employer” shall mean:

 

(1)           The entity for which the Participant performs services and with
respect to which the legally binding right to compensation deferred or
contributed under this Plan arises; and

 

(2)           All other entities with which the entity described above would be
aggregated and treated as a single employer under Code
Section 414(b) (controlled group of corporations) and Code Section 414(c) (a
group of trades or businesses, whether or not incorporated, under common
control), as applicable.  In order to identify the group of entities described
in the preceding sentence, the Committee shall use an ownership threshold of at
least 50% as a substitute for the 80% minimum ownership threshold that appears
in, and otherwise must be used when applying, the applicable provisions of
(A) Code Section 1563 for determining a controlled group of corporations under
Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2 for determining the trades
or businesses that are under common control under Code Section 414(c).

 

1.20        “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended, including Department of Labor and Treasury regulations and
applicable authorities promulgated thereunder.

 

1.21        “Financial Hardship” shall mean 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 Code Section 152, without
regard to Code Section 152(b)(1), (b)(2), and (d)(1)(B))) 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, but shall in all events correspond to the
meaning of the term “unforeseeable emergency” under Code Section 409A.

 

1.22        “Fund” or “Funds” shall mean one or more of the investments selected
by the Committee pursuant to Section 3.4 of the Plan.

 

1.23        “Hardship Distribution” shall mean an accelerated distribution of
benefits or a cancellation of deferral elections pursuant to Section 6.5 to a
Participant who has suffered a Financial Hardship.

 

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1.24        “Interest Rate” shall mean, for each Fund, an amount equal to the
net gain or loss on the assets of such Fund during each month, as determined by
the Committee.

 

1.25        “LTIP Amounts” shall mean any portion of the compensation
attributable to a Plan Year that is earned by a Participant under a long-term
incentive plan or any other long-term incentive arrangement designated by the
Committee, before reductions for contributions to or deferrals under any
pension, deferred compensation or benefit plans sponsored by the Company.

 

1.26        “Participant” shall mean any Eligible Executive who becomes a
Participant in this Plan in accordance with Article 2.

 

1.27        “Participant Election(s)” shall mean the forms or procedures by
which a Participant makes elections with respect to (a) voluntary deferrals of
his/her Compensation, (b) the Funds, which shall act as the basis for crediting
of interest on Account balances, and (c) the form and timing of distributions
from Accounts.  Participant Elections may take the form of an electronic
communication followed by appropriate confirmation according to specifications
established by the Committee.

 

1.28        “Payment Date” shall mean the date by which a total distribution of
the Distributable Amount shall be made or the date by which installment payments
of the Distributable Amount shall commence.

 

(a)           For benefits triggered by the Participant’s Separation from
Service, the Payment Date shall be the first business day of the seventh month
commencing after the month in which the Separation from Service occurs, and the
applicable amount shall be calculated as of the last business day of the sixth
month commencing after the month in which the Separation from Service occurs. 
Subsequent installments, if any, shall be calculated as of the last business day
of March of each Plan Year following the Plan Year in which the initial
installment occurs, and shall be made in April of such succeeding Plan Year.

 

(b)           For benefits triggered by the death or Disability of a
Participant, the Payment Date shall be the first business day of the month
commencing after the month in which the event triggering the payout occurs, and
the applicable amount shall be calculated as of the last business day of the
month in which the event triggering the payout occurs.  In the case of death,
the Committee shall be provided with documentation reasonably necessary to
establish the fact of the Participant’s death; and

 

(c)           The Payment Date of a Scheduled Distribution shall be the first
business day of April of the Plan Year in which the distribution is scheduled to
commence, and the applicable Distributable Amount shall be calculated as of the
last business day of March of such Plan Year.  Subsequent installments, if any,
shall be calculated as of the last business day of March of each succeeding Plan
Year, and shall be made in April of such succeeding Plan Year. Notwithstanding
the foregoing, the Payment Date shall not be before the earliest date on which
benefits may be distributed under Code Section 409A without violation of the
provisions thereof, as reasonably determined by the Committee.

 

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1.29        “Performance-Based Compensation” shall mean compensation the
entitlement to or amount of which is contingent on the satisfaction of
pre-established organizational or individual performance criteria relating to a
performance period of at least 12 consecutive months, as determined by the
Committee in accordance with Treas. Reg. §1.409A-1(e).

 

1.30        “Plan Year” shall mean the calendar year, except that the first Plan
Year shall begin on the Effective Date and end on the last day of the calendar
year in which the Effective Date occurs.

 

1.31        “Restricted Stock Units” shall mean rights to receive shares of
Stock selected by the Committee in its sole discretion and awarded to the
Participant under an equity incentive plan or director compensation program, and
the deferred amount shall be calculated using the closing price of Stock at the
end of the business day closest to the date such Restricted Stock Unit would
otherwise vest, but for the election to defer.  The portion of any Restricted
Stock Unit deferred shall, at the time the Restricted Stock Unit would otherwise
vest under the terms of the applicable equity incentive plan or director
compensation program, but for the election to defer, be reflected on the books
of the Company as an unfunded, unsecured promise to deliver to the Participant a
specific number of actual shares of Stock in the future.

 

1.32        “Separation from Service” shall mean a termination of services
provided by a Participant to his or her Employer, whether voluntarily or
involuntarily, other than by reason of death or Disability, as determined by the
Committee in accordance with Treas. Reg. §1.409A-1(h).  In determining whether a
Participant has experienced a Separation from Service, the following provisions
shall apply:

 

(a)           For a Participant who provides services to an Employer as an
employee, except as otherwise provided in part (c) of this Section, a Separation
from Service shall occur when such Participant has experienced a termination of
employment with such employer.  A Participant shall be considered to have
experienced a termination of employment when the facts and circumstances
indicate that the Participant and his or her employer reasonably anticipate that
either (i) no further services will be performed for the employer after a
certain date, or (ii) that the level of bona fide services the Participant will
perform for the employer after such date (whether as an employee or as an
independent contractor) will permanently decrease to no more than 20% of the
average level of bona fide services performed by such Participant (whether as an
employee or an independent contractor) over the immediately preceding 36-month
period (or the full period of services to the employer if the Participant has
been providing services to the Employer less than 36 months).

 

If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer
shall be treated as continuing intact, provided that the period of such leave
does not exceed 6 months, or if longer, so long as the Participant retains a
right to reemployment with the Employer under an applicable statute or by
contract.  If the period of a military leave, sick leave, or other bona fide
leave of absence exceeds 6 months and the Participant does not retain a right to
reemployment under an applicable

 

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statute or by contract, the employment relationship shall be considered to be
terminated for purposes of this Plan as of the first day immediately following
the end of such 6-month period.  In applying the provisions of this paragraph, a
leave of absence shall be considered a bona fide leave of absence only if there
is a reasonable expectation that the Participant will return to perform services
for the Employer.

 

(b)           For a Participant, if any, who provides services to an Employer as
an independent contractor, except as otherwise provided in part (c) of this
Section, a Separation from Service shall occur upon the expiration of the
contract (or in the case of more than one contract, all contracts) under which
services are performed for such Employer, provided that the expiration of such
contract(s) is determined by the Committee to constitute a good-faith and
complete termination of the contractual relationship between the Participant and
such Employer.

 

(c)           For a Participant, if any, who provides services to an Employer as
both an employee and an independent contractor, a Separation from Service
generally shall not occur until the Participant has ceased providing services
for such Employer as both an employee and as an independent contractor, as
determined in accordance with the provisions set forth in parts (a) and (b) of
this Section, respectively.  Similarly, if a Participant either (i) ceases
providing services for an Employer as an independent contractor and begins
providing services for such Employer as an employee, or (ii) ceases providing
services for an Employer as an employee and begins providing services for such
Employer as an independent contractor, the Participant will not be considered to
have experienced a Separation from Service until the Participant has ceased
providing services for such Employer in both capacities, as determined in
accordance with the applicable provisions set forth in parts (a) and (b) of this
Section.

 

Notwithstanding the foregoing provisions in this part (c), if a Participant
provides services for an Employer as both an employee and as a Director, to the
extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such
Participant as a Director shall not be taken into account in determining whether
the Participant has experienced a Separation from Service as an employee, and
the services provided by such Participant as an employee shall not be taken into
account in determining whether the Participant has experienced a Separation from
Service as a Director.

 

1.33        “Scheduled Distribution” shall mean a scheduled distribution date
elected by the Participant for distribution of amounts from a specified Deferral
Account, including notional earnings thereon, as provided under Section 6.4.

 

1.34        “Stock” shall mean the Company’s common stock, $0.001 par value per
share, or any other equity securities of the Company designated by the
Committee.

 

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ARTICLE II
PARTICIPATION

 

2.1                                     Enrollment Requirements; Commencement of
Participation

 

(a)           As a condition to participation, each Eligible Executive shall
complete, execute and return to the Committee the appropriate Participant
Elections, as well as such other documentation and information as the Committee
reasonably requests, by the deadline(s) established by the Committee.  In
addition, the Committee shall establish from time to time such other enrollment
requirements as it determines, in its sole discretion, are necessary.

 

(b)           Each Eligible Executive shall commence participation in the Plan
on the date that the Committee determines that the Eligible Executive has met
all enrollment requirements set forth in this Plan and required by the
Committee, including returning all required documents to the Committee within
the specified time period.

 

(c)           If an Eligible Executive fails to meet all requirements
established by the Committee within the period required, that Eligible Executive
shall not be eligible to participate in the Plan during such Plan Year.

 

ARTICLE III
CONTRIBUTIONS & DEFERRAL ELECTIONS

 

3.1          Elections to Defer Compensation.   Elections to defer Compensation
shall take the form of a whole percentage (less applicable payroll withholding
requirements for Social Security and income taxes and employee benefit plans, as
determined in the sole and absolute discretion of the Committee) of up to a
maximum of:

 

(1)           75% of Base Salary,

(2)           100% of Bonuses,

(3)           100% of Restricted Stock Units,

(4)           100% of LTIP Amounts,

(5)           100% of Commissions, and

(6)           100% of Director’s Fees.

 

The Committee may, in its sole discretion, adjust for subsequent Plan Years on a
prospective basis the minimum and maximum deferral percentages described in this
Section for one or more types of Compensation (including, without limitation,
for particular types of Bonuses) and for one or more subsequent Plan Years; such
revised deferral percentages shall be indicated on a Participant Election form
approved by the Committee.  Notwithstanding the foregoing, in no event shall the
minimum and maximum deferral percentages be adjusted after the last date on
which deferral elections for the applicable type(s) of Compensation must be
submitted and become irrevocable in accordance with Section 3.2 below and the
requirements of Code Section 409A.

 

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3.2          Timing of Deferral Elections; Effect of Participant Election(s).

 

(a)           General Timing Rule for Deferral Elections.  Except as otherwise
provided in this Section 3.2, in order for a Participant to make a valid
election to defer Compensation, the Participant must submit Participant
Election(s) on or before the deadline established by the Committee, which shall
be no later than the December 31st preceding the Plan Year in which such
compensation will be earned.  In the case of deferrals of Restricted Stock
Units, except where otherwise permitted in accordance with this Section 3.2 and
Code Section 409A, the Participant must submit such Participant Election on or
before the deadline established by the Committee, which shall be no later than
the December 31st preceding the Plan Year in which Restricted Stock Units may be
initially granted to the Participant under the terms of the applicable equity
incentive plan or director compensation program.

 

Any deferral election made in accordance with this Section 3.2(a) shall be
irrevocable; provided, however, that if the Committee permits or requires
Participants to make a deferral election by the deadline described above for an
amount that qualifies as Performance-Based Compensation, the Committee may
permit a Participant to subsequently change his or her deferral election for
such compensation by submitting new Participant Election(s) in accordance with
Section 3.2(d) below.

 

(b)           Timing of Deferral Elections for New Plan Participants.  An
Eligible Executive who first becomes eligible to participate in the Plan on or
after the beginning of a Plan Year, as determined in accordance with Treas. Reg.
§1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in Treas. Reg.
§1.409A-1(c)(2), may be permitted to make an election to defer the portion of
Compensation attributable to services to be performed after such election,
provided that the Participant submits Participant Election(s) on or before the
deadline established by the Committee, which in no event shall be later than
thirty (30) days after the Participant first becomes eligible to participate in
the Plan.

 

If a deferral election made in accordance with this Section 3.2(b) relates to
compensation earned based upon a specified performance period, the amount
eligible for deferral shall be equal to (i) the total amount of compensation for
the performance period, multiplied by (ii) a fraction, the numerator of which is
the number of days remaining in the service period after the Participant’s
deferral election is made, and the denominator of which is the total number of
days in the performance period.

 

Any deferral election made in accordance with this Section 3.2(b) shall become
irrevocable no later than the 30th day after the date the Participant first
becomes eligible to participate in the Plan.

 

(c)           Timing of Deferral Elections for Performance-Based Compensation. 
Subject to the limitations described below, the Committee may determine that an
irrevocable deferral election for an amount that qualifies as Performance-Based
Compensation may be made by submitting Participant Election(s) on or before the
deadline established by the Committee, which in no event shall be later than six
(6) months before the end of the performance period.

 

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In order for a Participant to be eligible to make a deferral election for
Performance-Based Compensation in accordance with the deadline established
pursuant to this Section 3.2(c), the Participant must have performed services
continuously from the later of (i) the beginning of the performance period for
such compensation, or (ii) the date upon which the performance criteria for such
compensation are established, through the date upon which the Participant makes
the deferral election for such compensation.  In no event shall a deferral
election submitted under this Section 3.2(c) be permitted to apply to any amount
of Performance-Based Compensation that has become readily ascertainable.

 

(d)           Timing Rule for Deferral of Compensation Subject to Risk of
Forfeiture.  With respect to compensation (i) to which a Participant has a
legally binding right to payment in a subsequent year, and (ii) that is subject
to a forfeiture condition requiring the Participant’s continued services for a
period of at least twelve (12) months from the date the Participant obtains the
legally binding right, the Committee may determine that an irrevocable deferral
election for such compensation may be made by timely delivering Participant
Election(s) to the Committee in accordance with its rules and procedures, no
later than the 30th day after the Participant obtains the legally binding right
to the compensation, provided that the election is made at least twelve (12)
months in advance of the earliest date at which the forfeiture condition could
lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5).

 

Any deferral election(s) made in accordance with this Section 3.2(d) shall
become irrevocable no later than the 30th day after the Participant obtains the
legally binding right to the compensation subject to such deferral election(s).

 

(e)           Separate Deferral Elections for Each Plan Year.  In order to defer
Compensation for a Plan Year, a Participant must submit a separate deferral
election with respect to Compensation for such Plan Year by affirmatively filing
a Participant Election during the enrollment period established by the Committee
prior to the beginning of such Plan Year (or at such other time contemplated
under this Section 3.2), which election shall be effective on the first day of
the next following Plan Year (unless otherwise specified on the Participant
Election).

 

3.3          Company Contributions.  The Company shall have the discretion to
make Company Contributions to the Plan at any time and in any amount on behalf
of any Participant.  Company Contributions shall be made in the complete and
sole discretion of the Company and no Participant shall have the right to
receive any Company Contribution in any particular Plan Year regardless of
whether Company Contributions are made on behalf of other Participants.

 

3.4          Investment Elections.

 

(a)           Participant Designation.  At the time of entering the Plan and/or
of making a deferral election under the Plan, the Participant shall designate,
on a Participant Election provided by the Committee, the Funds in which the
Participant’s Accounts shall be deemed to be invested for purposes of
determining the amount of earnings and losses to be credited to each Account. 
The Participant may specify that all or any percentage of his or her Accounts
shall be deemed to be invested, in whole percentage increments, in one or more
of the Funds selected as alternative investments under the Plan from time to
time by the Committee pursuant to

 

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subsection (b) of this Section.  If a Participant fails to make an election
among the Funds as described in this section, the Participant’s Account balance
shall automatically be allocated into the lowest-risk Fund, as determined by the
Committee in its sole discretion.  A Participant may change any designation made
under this Section as permitted by the Committee by filing a revised election,
on a Participant Election provided by the Committee. Notwithstanding the
foregoing, the Committee, in its sole discretion, may impose limitations on the
frequency with which one or more of the Funds elected in accordance with this
Section may be added or deleted by such Participant; furthermore, the Committee,
in its sole discretion, may impose limitations on the frequency with which the
Participant may change the portion of his or her Account balance allocated to
each previously or newly elected Fund.

 

(b)           Investment Funds. Prior to the beginning of each Plan Year, the
Committee may select, in its sole and absolute discretion, each of the types of
commercially available investments communicated to the Participant pursuant to
subsection (a) of this Section to be the Funds.  The Interest Rate of each such
commercially available investment shall be used to determine the amount of
earnings or losses to be credited to the Participant’s Account under
Article IV.  The Participant’s choice among investments shall be solely for
purposes of calculation of the Crediting Rate on Accounts.  The Company and the
Employers shall have no obligation to set aside or invest amounts as directed by
the Participant and, if the Company and/or the Employer elects to invest amounts
as directed by the Participant, the Participant shall have no more right to such
investments than any other unsecured general creditor.

 

(c)           Company Stock Unit Fund.

 

(1)               A Participant’s Restricted Stock Unit deferrals will be
automatically and irrevocably allocated to a Fund that tracks the performance of
the Company’s Stock (the “Company Stock Unit Fund”).  Participants may not
select any other Fund to be used to determine the amounts to be credited or
debited to their Restricted Stock Unit deferrals.  Furthermore, no other portion
of the Participant’s Accounts can be either initially allocated or re-allocated
to the Company Stock Unit Fund.  Amounts allocated to the Company Stock Unit
Fund shall only be distributable in actual shares of Stock.

 

(2)               Any stock dividends, cash dividends or other non-cash
dividends that would have been payable on the Stock credited to a Participant’s
Accounts shall be credited to the Participant’s Accounts in the form of
additional shares of Stock and shall automatically and irrevocably be deemed to
be re-invested in the Company Stock Unit Fund until such amounts are distributed
to the Participant.  The number of shares credited to the Participant for a
particular stock dividend shall be equal to (A) the number of shares of Stock
credited to the Participant’s Account as of the payment date for such dividend
in respect of each share of Stock, multiplied by (B) the number of additional or
fractional shares of Stock actually paid as a dividend in respect of each share
of Stock.  The number of shares credited to the Participant for a particular
cash dividend or other non-cash dividend shall be equal to (A) the number of
shares of Stock credited to the Participant’s Account as of the payment date for
such dividend in respect of each share of Stock, multiplied by (B) the fair
market value of the dividend, divided by (C) the “fair market value” of the
Stock on the payment date for such dividend.

 

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(3)                                             The number of shares of Stock
credited to the Participant’s Account may be adjusted by the Committee, in its
sole discretion, to prevent dilution or enlargement of Participants’ rights with
respect to the portion of his or her Account allocated to the Company Stock Unit
Fund in the event of any reorganization, reclassification, stock split, or other
unusual corporate transaction or event which affects the value of the Stock,
provided that any such adjustment shall be made taking into account any
crediting of shares of Stock to the Participant under this Section.

 

(4)                                             For purposes of this Section,
the fair market value of the Stock shall be, in the event the Stock is traded on
a recognized securities exchange, an amount equal to the closing price of the
Stock on such exchange on the date set for valuation or, if no sales of Stock
were made on said exchange on that date, the closing price of the Stock on the
next preceding day on which sales were made on such exchange; or, if the Stock
is not so traded, the value determined, in its sole discretion, by the Committee
in compliance with Section 409A.

 

3.5                               Distribution Elections.

 

(a)                                 Initial Election.  At the time of making a
deferral election under the Plan, the Participant shall designate the time and
form of distribution of deferrals made pursuant to such election from among the
alternatives specified under Article VI for the applicable distribution.  Such
distribution election for a given Plan Year shall relate solely to that Plan
Year’s deferrals.  A new distribution election may be made at the time of
subsequent deferral elections, in accordance with the Participant Election
forms.

 

(b)                                 Modification of Election.  A distribution
election with respect to previously deferred amounts may only be changed under
the terms and conditions specified in Code Section 409A and this Section.  
Except as permitted under Code Section 409A, no acceleration of a distribution
is permitted.  A subsequent election that delays payment or changes the form of
payment shall be permitted if and only if all of the following requirements are
met:

 

(1)                                             the new election does not take
effect until at least twelve (12) months after the date on which the new
election is made;

 

(2)                                             in the case of payments made on
account of Separation from Service or a Scheduled Distribution, the new election
delays payment for at least five (5) years from the date that payment would
otherwise have been made, absent the new election; and

 

(3)                                             in the case of payments made
according to a Scheduled Distribution, the new election is made not less than
twelve (12) months before the date on which payment would have been made (or, in
the case of installment payments, the first installment payment would have been
made) absent the new election.

 

For purposes of application of the above change limitations, installment
payments shall be treated as a single payment under Code Section 409A.  Election
changes made pursuant to this Section shall be made in accordance with
rules established by the Committee and shall comply with all requirements of
Code Section 409A and applicable authorities.

 

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ARTICLE IV
ACCOUNTS

 

4.1                               Deferral Accounts.  The Committee shall
establish and maintain up to six (6) Deferral Accounts for each Participant
under the Plan, one of which may be payable upon the Participant’s Separation
from Service, as further described in Section 6.1 (the “Separation from Service
Account”), and five (5) of which may be payable upon a fixed date or pursuant to
a fixed schedule, as further described in Section 6.4 (the “Scheduled
Distribution Accounts”).  Each Participant’s Deferral Accounts shall be further
divided into separate subaccounts (“Fund Subaccounts”), each of which
corresponds to a Fund designated pursuant to Section 3.4.  A Participant’s
Deferral Accounts shall be credited as follows:

 

(a)                                 As soon as reasonably possible after amounts
are withheld and deferred from a Participant’s Compensation, the Committee shall
credit the Fund Subaccounts of the Participant’s Deferral Accounts with an
amount equal to Compensation deferred by the Participant in accordance with the
designation under Section 3.4; that is, the portion of the Participant’s
deferred Compensation designated to be deemed to be invested in a Fund shall be
credited to the Fund Subaccount to be invested in that Fund;

 

(b)                                 Each business day, each Fund Subaccount of a
Participant’s Deferral Accounts shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such Fund
Subaccount as of the prior day, less any distributions valued as of the end of
the prior day, by the Interest Rate for the corresponding Fund as determined by
the Committee pursuant to Section 3.4(b); and

 

(c)                                  In the event that a Participant elects for
a given Plan Year’s deferral of Compensation a Scheduled Distribution, all
amounts attributed to the deferral of Compensation for such Plan Year shall be
accounted for in a manner which allows separate accounting for the deferral of
Compensation and investment gains and losses associated with amounts allocated
to each such separate Scheduled Distribution.

 

4.2                               Company Contribution Account.  The Committee
shall establish and maintain a Company Contribution Account for each Participant
under the Plan.  Each Participant’s Company Contribution Account shall be
further divided into separate Fund Subaccounts corresponding to the Fund
designated pursuant to Section 3.4(a).  A Participant’s Company Contribution
Account shall be credited as follows:

 

(a)                                 As soon as reasonably possible after a
Company Contribution is made, the Company shall credit the Fund Subaccounts of
the Participant’s Company Contribution Account with an amount equal to the
Company Contributions, if any, made on behalf of that Participant, that is, the
proportion of the Company Contributions, if any, designated to be deemed to be
invested in a certain Fund shall be credited to the Fund Subaccount to be
invested in that Fund.  Unless the Participant elects otherwise, any Company
Contribution that may not be deemed

 

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invested in such a Fund shall be deemed invested in the default Fund selected by
the Committee for such purpose; and

 

(b)                                 Each business day, each Fund Subaccount of a
Participant’s Company Contribution Account shall be credited with earnings or
losses in an amount equal to that determined by multiplying the balance credited
to such Fund Subaccount as of the prior day, less any distributions valued as of
the end of the prior day, by the Interest Rate for the corresponding Fund as
determined by the Committee pursuant to Section 3.4(b).

 

4.3                               Trust.  The Company shall be responsible for
the payment of all benefits under the Plan.  At its discretion, the Company may
establish one or more grantor trusts for the purpose of providing for payment of
benefits under the Plan.  Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Company’s creditors. 
Benefits paid to the Participant from any such trust or trusts shall be
considered paid by the Company for purposes of meeting the obligations of the
Company under the Plan.

 

4.4                               Statement of Accounts.  The Committee shall
provide each Participant with electronic statements at least quarterly setting
forth the Participant’s Account balance as of the end of each calendar quarter.

 

ARTICLE V
VESTING

 

5.1                               Vesting of Deferral Accounts.  The Participant
shall be vested at all times in amounts credited to the Participant’s Deferral
Account(s).

 

5.2                               Vesting of Company Contribution Account. 
Amounts credited to the Participant’s Company Contribution Account shall be
vested based upon the schedule or schedules determined by the Company in its
sole discretion and communicated to the Participant.

 

ARTICLE VI
DISTRIBUTIONS

 

6.1                               Separation from Service Distributions.

 

(a)                                 Timing and Form of Separation from Service
Distributions.  Except as otherwise provided herein, in the event of a
Participant’s Separation from Service, the Distributable Amount credited to the
Participant’s Deferral Accounts and Company Contribution Account shall be paid
to the Participant in a lump sum on the Payment Date following the Participant’s
Separation from Service, unless the Participant has made an alternative benefit
election on a timely basis to receive substantially equal annual installments
over up to ten (10) years.

 

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(b)                                 Small Benefit Exception.  Notwithstanding a
distribution election to the contrary, if on commencement of benefits payable by
reason of a Participant’s Separation from Service (i.e., the Separation from
Service Account, Company Contribution Account and any Scheduled Distribution
Accounts for which payment has not commenced) the total Distributable Amount
payable by reason of such Separation from Service is less than or equal to
twenty-five thousand dollars ($25,000), such Distributable Amount shall be paid
in a lump sum on the Payment Date following the Participant’s Separation from
Service.

 

6.2                               Disability Distributions. Except as otherwise
provided herein, in the event of a Participant’s Disability prior to Separation
from Service, the Distributable Amount credited to the Participant’s Deferral
Accounts and Company Contribution Account shall be paid to the Participant in a
lump sum on the Payment Date following the Participant’s Disability.

 

6.3                               Death Benefits.  In the event that a
Participant dies prior to complete distribution of his or her Accounts, the
Company shall pay to the Participant’s Beneficiary a death benefit equal to the
total Distributable Amount remaining in the Participant’s Deferral Accounts and
Company Contribution Account in a lump sum on the Payment Date following the
Participant’s death.

 

6.4                               Scheduled Distributions.

 

(a)                                 Scheduled Distribution Election. 
Participants shall be entitled to elect to receive a Scheduled Distribution from
a Deferral Account.  In the case of a Participant who has elected to receive a
Scheduled Distribution, such Participant shall receive the Distributable Amount,
with respect to the specified deferrals, including earnings thereon, which have
been elected by the Participant to be subject to such Scheduled Distribution
election in accordance with Section 3.5 of the Plan.  The Committee shall
determine the earliest commencement date that may be elected by the Participant
for each Scheduled Distribution and such date shall be indicated on the
Participant Election.  The Participant may elect to receive the Scheduled
Distribution in a single lump sum or substantially equal annual installments
over a period of up to five (5) years.  A Participant may delay and change the
form of a Scheduled Distribution, provided such extension complies with the
requirements of Section 3.5.

 

(b)                                 Small Benefit Exception.  Notwithstanding
any distribution election to the contrary, if on commencement of a Scheduled
Distribution Account the balance of such Scheduled Distribution Account is less
than or equal to ten thousand dollars ($10,000), the Scheduled Distribution
shall be paid in the form of a single lump sum distribution on the scheduled
commencement date.

 

(c)                                  Relationship to Other Benefits.

 

(1)                                 In the event of a Participant’s Separation
from Service, Disability or death prior to commencement of a Scheduled
Distribution, the amounts subject to such Scheduled Distribution shall not be
distributed under this Section 6.4, but rather shall be distributed in
accordance with the other applicable Section of this Article VI.  Accordingly,

 

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any Scheduled Distribution Accounts for which a Separation from Service occurs
prior to commencement of distribution shall be distributed at such time and in
such form as applicable under Section 6.1 above.

 

(2)                                 In the event of a Participant’s Separation
from Service or Disability after a Scheduled Distribution Account has commenced
installment payments, such Scheduled Distribution Accounts shall continue to be
paid at the same time and in the same form as they would have been paid to the
Participant had the Separation from Service or Disability, as applicable, not
occurred.

 

(3)                                 In the event of a Participant’s death after
a Scheduled Distribution Account has commenced installment payments, the amounts
subject to such Scheduled Distribution shall not be distributed under this
Section 6.4, but rather shall be distributed in accordance with Section 6.3.

 

6.5                               Hardship Distribution.  Upon a finding that
the Participant has suffered a Financial Hardship, in accordance with Code
Section 409A, the Committee may, at the request of the Participant, accelerate
distribution of benefits and/or approve cancellation of deferral elections under
the Plan, subject to the following conditions:

 

(a)                                 The request to take a Hardship Distribution
shall be made by filing a form provided by and filed with the Committee prior to
the end of any calendar month.

 

(b)                                 Upon a finding that the Participant has
suffered a Financial Hardship in accordance with Treasury Regulations
promulgated under Code Section 409A, the Committee may, at the request of the
Participant, accelerate distribution of benefits and/or approve cancellation of
current deferral elections under the Plan in the amount reasonably necessary to
alleviate such Financial Hardship.  The amount distributed pursuant to this
Section with respect to the Financial Hardship shall not exceed the amount
necessary to satisfy such Financial Hardship, 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).

 

(c)                                  The amount (if any) determined by the
Committee as a Hardship Distribution shall be paid in a single cash lump sum as
soon as practicable after the end of the calendar month in which the Hardship
Distribution determination is made by the Committee.

 

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ARTICLE VII

PAYEE DESIGNATIONS AND LIMITATIONS

 

7.1                               Beneficiaries.

 

(a)                                 Beneficiary Designation.  The Participant
shall have the right, at any time, to designate any person or persons as
Beneficiary (both primary and contingent) to whom payment under the Plan shall
be made in the event of the Participant’s death.  If the Participant names
someone other than his or her spouse as a Beneficiary, the Committee may, in its
sole discretion, determine that spousal consent is required to be provided in a
form designated by the Committee, executed by such Participant’s spouse and
returned to the Committee.  The Beneficiary designation shall be effective when
it is submitted to and acknowledged by the Committee during the Participant’s
lifetime in the format prescribed by the Committee.

 

(b)                                 Absence of Valid Designation.  If a
Participant fails to designate a Beneficiary as provided above, or if every
person designated as Beneficiary predeceases the Participant or dies prior to
complete distribution of the Participant’s benefits, then the Committee shall
deem the Participant’s estate to be the Beneficiary and shall direct the
distribution of such benefits to the Participant’s estate.

 

7.2                               Payments to Minors.  In the event any amount
is payable under the Plan to a minor, payment shall not be made to the minor,
but instead such payment shall be made (a) to that person’s living parent(s) to
act as custodian, (b) if that person’s parents are then divorced, and one parent
is the sole custodial parent, to such custodial parent, to act as custodian, or
(c) if no parent of that person is then living, to a custodian selected by the
Committee to hold the funds for the minor under the Uniform Transfers or Gifts
to Minors Act in effect in the jurisdiction in which the minor resides.  If no
parent is living and the Committee decides not to select another custodian to
hold the funds for the minor, then payment shall be made to the duly appointed
and currently acting guardian of the estate for the minor or, if no guardian of
the estate for the minor is duly appointed and currently acting within sixty
(60) days after the date the amount becomes payable, payment shall be deposited
with the court having jurisdiction over the estate of the minor.

 

7.3                               Payments on Behalf of Persons Under
Incapacity.  In the event that any amount becomes payable under the Plan to a
person who, in the sole judgment of the Committee, is considered by reason of
physical or mental condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person.  Any
payment made pursuant to such determination shall constitute a full release and
discharge of any and all liability of the Committee and the Company under the
Plan.

 

ARTICLE VIII

LEAVE OF ABSENCE

 

8.1                               Paid Leave of Absence.  If a Participant is
authorized by the Participant’s Employer to take a paid leave of absence from
the employment of the Employer, and such leave of absence does not constitute a
Separation from Service, (a) the Participant shall continue to be considered
eligible for the benefits provided under the Plan, and (b) deferrals shall
continue to be withheld during such paid leave of absence in accordance with
Article III.

 

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8.2                               Unpaid Leave of Absence  If a Participant is
authorized by the Participant’s Employer to take an unpaid leave of absence from
the employment of the Employer for any reason, and such leave of absence does
not constitute a Separation from Service, such Participant shall continue to be
eligible for the benefits provided under the Plan.  During the unpaid leave of
absence, the Participant shall not be allowed to make any additional deferral
elections.  However, if the Participant returns to employment, the Participant
may elect to defer for the Plan Year following his or her return to employment
and for every Plan Year thereafter while a Participant in the Plan, provided
such deferral elections are otherwise allowed and a Participant Election is
delivered to and accepted by the Committee for each such election in accordance
with Article III above.

 

ARTICLE IX

ADMINISTRATION

 

9.1                               Committee. The Plan shall be administered by a
Committee appointed by the Board, which shall have the exclusive right and full
discretion (a) to appoint agents to act on its behalf, (b) to select and
establish Funds, (c) to interpret the Plan, (d) to decide any and all matters
arising hereunder (including the right to remedy possible ambiguities,
inconsistencies, or admissions), (e) to make, amend and rescind such rules as it
deems necessary for the proper administration of the Plan and (f) to make all
other determinations and resolve all questions of fact necessary or advisable
for the administration of the Plan, including determinations regarding
eligibility for benefits payable under the Plan.  All interpretations of the
Committee with respect to any matter hereunder shall be final, conclusive and
binding on all persons affected thereby.  No member of the Committee or agent
thereof shall be liable for any determination, decision, or action made in good
faith with respect to the Plan.  The Company will indemnify and hold harmless
the members of the Committee and its agents from and against any and all
liabilities, costs, and expenses incurred by such persons as a result of any
act, or omission, in connection with the performance of such persons’ duties,
responsibilities, and obligations under the Plan, other than such liabilities,
costs, and expenses as may result from the bad faith, willful misconduct, or
criminal acts of such persons.

 

9.2                               Claims Procedure.  Any Participant, former
Participant or Beneficiary may file a written claim with the Committee setting
forth the nature of the benefit claimed, the amount thereof, and the basis for
claiming entitlement to such benefit.  The Committee shall determine the
validity of the claim and communicate a decision to the claimant promptly and,
in any event, not later than ninety (90) days after the date of the claim.  The
claim may be deemed by the claimant to have been denied for purposes of further
review described below in the event a decision is not furnished to the claimant
within such ninety (90) day period.  If additional information is necessary to
make a determination on a claim, the claimant shall be advised of the need for
such additional information within forty-five (45) days after the date of the
claim.  The claimant shall have up to one hundred eighty (180) days to
supplement the claim information, and the claimant shall be advised of the
decision on the claim within forty-five (45) days after the earlier of the date
the supplemental information is supplied or the end of the one hundred

 

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eighty (180) day period.  Every claim for benefits which is denied shall be
denied by written notice setting forth in a manner calculated to be understood
by the claimant (a) the specific reason or reasons for the denial, (b) specific
reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based,
(c) description of any additional material or information that is necessary to
process the claim, and (d) an explanation of the procedure for further reviewing
the denial of the claim and shall include an explanation of the claimant’s right
to submit the claim for binding arbitration in the event of an adverse
determination on review.

 

9.3                               Review Procedures.  Within sixty (60) days
after the receipt of a denial on a claim, a claimant or his/her authorized
representative may file a written request for review of such denial.  Such
review shall be undertaken by the Committee and shall be a full and fair review.
The claimant shall have the right to review all pertinent documents.  The
Committee shall issue a decision not later than sixty (60) days after receipt of
a request for review from a claimant unless special circumstances, such as the
need to hold a hearing, require a longer period of time, in which case a
decision shall be rendered as soon as possible but not later than one hundred
twenty (120) days after receipt of the claimant’s request for review.  The
decision on review shall be in writing and shall include specific reasons for
the decision written in a manner calculated to be understood by the claimant
with specific reference to any provisions of the Plan on which the decision is
based and shall include an explanation of the claimant’s right to submit the
claim for binding arbitration in the event of an adverse determination on
review.

 

ARTICLE X
MISCELLANEOUS

 

10.1                        Termination of Plan.  Although each Employer
anticipates that it will continue the Plan for an indefinite period of time,
there is no guarantee that any Employer will continue the Plan or will not
terminate the Plan at any time in the future.  Accordingly, each Employer
reserves the right to terminate the Plan with respect to all of its
Participants.  In the event of a Plan termination, no new deferral elections
shall be permitted for the affected Participants and such Participants shall no
longer be eligible to receive new Company Contributions.  However, after the
Plan termination the Account balances of such Participants shall continue to be
credited with deferrals attributable to any deferral election that was in effect
prior to the Plan termination to the extent deemed necessary to comply with Code
Section 409A and related Treasury Regulations, and additional amounts shall
continue to be credited or debited to such Participants’ Account balances
pursuant to Article IV.   In addition, following a Plan termination, Participant
Account balances shall remain in the Plan and shall not be distributed until
such amounts become eligible for distribution in accordance with the other
applicable provisions of the Plan.  Notwithstanding the preceding sentence, to
the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix) or as otherwise
permitted under Code Section 409A, the Employer may provide that upon
termination of the Plan, all Account balances of the Participants shall be
distributed, subject to and in accordance with any rules established by such
Employer deemed necessary to comply with the applicable requirements and
limitations of Code Section 409A.  The termination and

 

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liquidation of the Plan pursuant to Treas. Reg. §1.409A-3(j)(4)(ix)(B) may only
occur proximate to a “change in control event” as provided under Treas. Reg.
§1.409A-3(i)(5).

 

10.2                        Amendment  Any Employer may, at any time, amend or
modify the Plan in whole or in part with respect to that Employer. 
Notwithstanding the foregoing, no amendment or modification shall be effective
to decrease the value of a Participant’s vested Account balance in existence at
the time the amendment or modification is made.

 

10.3                        Unsecured General Creditor. The benefits paid under
the Plan shall be paid from the general assets of the Company, and the
Participant and any Beneficiary or their heirs or successors shall be no more
than unsecured general creditors of the Company with no special or prior right
to any assets of the Company for payment of any obligations hereunder. It is the
intention of the Company that this Plan be unfunded for purposes of ERISA and
the Code.

 

10.4                        Restriction Against Assignment. The Company shall
pay all amounts payable hereunder only to the person or persons designated by
the Plan and not to any other person or entity.  No part of a Participant’s
Accounts shall be liable for the debts, contracts, or engagements of any
Participant, Beneficiary, or their successors in interest, nor shall a
Participant’s Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner
whatsoever.  No part of a Participant’s Accounts shall be subject to any right
of offset against or reduction for any amount payable by the Participant or
Beneficiary, whether to the Company or any other party, under any arrangement
other than under the terms of this Plan.

 

10.5                        Withholding. The Participant shall make appropriate
arrangements with the Company for satisfaction of any federal, state or local
income tax withholding requirements, Social Security and other employee tax or
other requirements applicable to the granting, crediting, vesting or payment of
benefits under the Plan. There shall be deducted from each payment made under
the Plan or any other Compensation payable to the Participant (or Beneficiary)
all taxes that are required to be withheld by the Company in respect to such
payment or this Plan.  To the extent permissible under Code Section 409A, the
Company shall have the right to reduce any payment (or other Compensation) by
the amount of cash sufficient to provide the amount of said taxes.

 

10.6                        Code Section 409A. The Company intends that the Plan
comply with the requirements of Code Section 409A (and all applicable Treasury
Regulations and other guidance issued thereunder) and shall be operated and
interpreted consistent with that intent. Notwithstanding the foregoing, the
Company makes no representation that the Plan complies with Code Section 409A.

 

10.7                        Receipt or Release.  Any payment made in good faith
to a Participant or the Participant’s Beneficiary shall, to the extent thereof,
be in full satisfaction of all claims against the Committee, its members, the
Employer and the Company.  The Committee may require such

 

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Participant or Beneficiary, as a condition precedent to such payment, to execute
a receipt and release to such effect.

 

10.8                        Errors in Account Statements, Deferrals or
Distributions.  In the event an error is made in an Account statement, such
error shall be corrected on the next statement following the date such error is
discovered.  In the event of an operational error, including, but not limited
to, errors involving deferral amounts, overpayments or underpayments, such
operational error shall be corrected in a manner consistent with and as
permitted by any correction procedures established under Code Section 409A.  If
any portion of a Participant’s Account(s) under this Plan is required to be
included in income by the Participant prior to receipt due to a failure of this
Plan to comply with the requirements of Code Section 409A, the Committee may
determine that such Participant shall receive a distribution from the Plan in an
amount equal to the lesser of (i) the portion of his or her Account required to
be included in income as a result of the failure of the Plan to comply with the
requirements of Code Section 409A, or (ii) the unpaid vested Account balance.

 

10.9                        Domestic Relations Orders.  Notwithstanding any
provision in this Plan to the contrary, in the event that the Committee receives
a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to
which a court has determined that a spouse or former spouse of a Participant has
an interest in the Participant’s benefits under the Plan, the Committee shall
have the right to immediately distribute the spouse’s or former spouse’s
interest in the Participant’s benefits under the Plan to such spouse or former
spouse to the extent necessary to fulfill such domestic relations order,
provided that such distribution is in accordance with the requirements of Code
Section 409A.

 

10.10                 Employment Not Guaranteed.  Nothing contained in the Plan
nor any action taken hereunder shall be construed as a contract of employment or
as giving any Participant any right to continue the provision of services in any
capacity whatsoever to the Employer.

 

10.11                 No Guarantee of Tax Consequences.  The Employer, Company,
Board and Committee make no commitment or guarantee to any Participant that any
federal, state or local tax treatment will apply or be available to any person
eligible for benefits under the Plan and assume no liability whatsoever for the
tax consequences to any Participant.

 

10.12                 Successors of the Company.  The rights and obligations of
the Company under the Plan shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Company.

 

10.13                 Notice.  Any notice or filing required or permitted to be
given to the Company or the Participant under this Agreement shall be sufficient
if in writing and hand-delivered, or sent by registered or certified mail, in
the case of the Company, to the principal office of the Company, directed to the
attention of the Committee, and in the case of the Participant, to the last
known address of the Participant indicated on the employment records of the
Company.  Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.  Notices to the Company may be permitted by
electronic communication according to specifications established by the
Committee.

 

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10.14      Headings.  Headings and subheadings in this Plan are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof.

 

10.15      Gender, Singular and Plural.  All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require.  As the context may require, the singular
may be read as the plural and the plural as the singular.

 

10.16      Governing Law.  The Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for a select
group of “management or highly compensated employees” within the meaning of
Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3
and 4 of Title I of ERISA.  To the extent any provision of, or legal issue
relating to, this Plan is not fully preempted by federal law, such issue or
provision shall be governed by the laws of the State of New Jersey.

 

10.17      Entire Agreement.  Unless specifically indicated otherwise, this Plan
supersedes any and all prior communications, understandings, arrangements or
agreements between the parties, including the Employer, the Company, the Board,
the Committee and any and all Participants, whether written, oral, express or
implied relating thereto.

 

10.18      Binding Arbitration.  Any claim, dispute or other matter in question
of any kind relating to this Plan which is not resolved by the claims procedures
under this Plan shall be settled by arbitration in accordance with the
applicable employment dispute resolution rules of the American Arbitration
Association.  Notice of demand for arbitration shall be made in writing to the
opposing party and to the American Arbitration Association within a reasonable
time after the claim, dispute or other matter in question has arisen.  In no
event shall a demand for arbitration be made after the date when the applicable
statute of limitations would bar the institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question.  The
decision of the arbitrators shall be final and may be enforced in any court of
competent jurisdiction.  The arbitrators may award reasonable fees and expenses
to the prevailing party in any dispute hereunder and shall award reasonable fees
and expenses in the event that the arbitrators find that the losing party acted
in bad faith or with intent to harass, hinder or delay the prevailing party in
the exercise of its rights in connection with the matter under dispute.

 

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IN WITNESS WHEREOF, the Board of Directors of the Company has approved the
adoption of this Plan as of the Effective Date and has caused the Plan to be
executed by its duly authorized representative this         day of
                      , 2014.

 

 

 

NPS PHARMACEUTICALS, INC.,

 

 

 

 

 

By

 

 

 

 

 

Name

 

 

 

 

 

Title

 

 

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