Exhibit 10.36

 

FGX INTERNATIONAL INC.

 

AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

 

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FGX INTERNATIONAL INC.

 

AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

 

THIS AMENDED AND RESTATED PLAN is adopted and enacted as of the first day of
January, 2008, by FGX International Inc., a corporation organized and existing
under the laws of the State of Delaware, hereinafter referred to as the “Plan
Sponsor”.

 

WHEREAS, the Plan Sponsor adopted this Plan effective as of January 1, 2007; and

 

WHEREAS, the Plan sponsor wishes to amend and restate the Plan to comply with
the requirements of Section 409A of the Code, as added by The American Jobs
Creation Act of 2004, and any Treasury Regulations and other applicable guidance
thereunder issued by the Treasury Department or the Internal Revenue Service;
and

 

WHEREAS, the Plan Sponsor intends that the Plan shall at all times be
administered and interpreted in such a manner as to constitute a “Top-Hat”
unfunded nonqualified deferred compensation plan for tax purposes and for
purposes of Title I of ERISA.  This Plan is not intended to qualify for
favorable tax treatment pursuant to Section 401(a) of the Code or any successor
section or statute;

 

NOW, THEREFORE, the Plan Sponsor hereby amends and restates the Plan, as set
forth below.

 

ARTICLE 1

 

Definitions

 

For the purpose of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

 

1.1                               “Account” or “Accounts” shall mean a book
account reflecting amounts credited to a Participant’s Separation Account and/or
vested Plan Sponsor Contribution Account, as adjusted for deemed investment
performance and all distributions or withdrawals made by the Participant or his
or her Beneficiary.  To the extent that it is considered necessary or
appropriate, the Plan Administrator shall maintain separate subaccounts for each
source of contribution under this Plan or shall otherwise provide a means for
determining that portion of an Account attributable to each contribution source.

 

1.2                               “ANNUAL BONUS” SHALL MEAN ANY COMPENSATION, IN
ADDITION TO BASE SALARY AND PERFORMANCE-BASED COMPENSATION RELATING TO SERVICES
PERFORMED DURING ANY PLAN YEAR, WHETHER OR NOT PAID IN SUCH PLAN YEAR OR
INCLUDED ON THE FEDERAL INCOME TAX FORM W-2 FOR SUCH PLAN YEAR, PAYABLE TO A
PARTICIPANT AS AN EMPLOYEE UNDER ANY OF THE PLAN SPONSOR’S ANNUAL BONUS OR CASH
INCENTIVE PLANS, EXCLUDING STOCK OPTIONS.  ANNUAL BONUS SHALL CONSIST OF ANY
AMOUNT OR PORTION OF ANY AMOUNT THAT WILL BE PAID EITHER REGARDLESS OF
PERFORMANCE OR BASED ON A LEVEL OF PERFORMANCE THAT IS SUBSTANTIALLY CERTAIN TO
BE MET.

 

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1.3                               “Annual Deferral Amount” shall mean that
portion of a Participant’s Base Salary and Annual Bonus and/or Performance-Based
Compensation that a Participant elects to defer for any one Plan Year.

 

1.4                               “Affiliate” shall mean any business entity
other than the Plan Sponsor that is a member of a controlled group of
corporations, within the meaning of Section 414(b) of the Code, of which the
Plan Sponsor is a member; all other trade or business (whether or not
incorporated) under common control, within the meaning of Section 414(c) of the
Code, with the Plan Sponsor; any service organization other than the Plan
Sponsor that is a member of an Affiliated service group, within the meaning of
Section 414(m) of the Code, of which the Plan Sponsor is a member; and any other
organization that is required to be aggregated with the Plan Sponsor under
Section 414(o) of the Code and whose Eligible Employees are authorized to
participate in this Plan by the Plan Administrator.

 

1.5                               “Applicable Guidance” shall mean Section 409A
of the Code and any Treasury Regulations and other applicable guidance
thereunder issued by the Treasury Department or the Internal Revenue Service.

 

1.6                               “Base Salary” shall mean the annual cash
compensation relating to services performed during any Plan Year, (excluding
bonuses, commissions, overtime, fringe benefits, incentive payments,
non-monetary awards, relocation expenses, retainers, directors fees and other
fees, severance allowances, pay in lieu of vacations, insurance premiums paid by
the Plan Sponsor, insurance benefits paid to the Participant or his or her
Beneficiary, stock options and grants, and car allowances) paid to a Participant
for services rendered to the Plan Sponsor or an Affiliate.  Base Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed
by the Participant pursuant to all qualified or non-qualified plans of the Plan
Sponsor or an Affiliate and shall be calculated to include amounts not otherwise
included in the Participant’s gross income under Sections 125, 402(e)(3),
402(h), or 403(b) of the Code pursuant to plans established by the Plan Sponsor;
provided, however, that all such amounts will be included in Compensation only
to the extent that, had there been no such Plan, the amounts would have been
payable in cash to the Participant.

 

1.7                               “Beneficiary” shall mean one or more persons,
trusts, estates or other entities that are entitled to receive benefits under
this Plan upon the death of the Participant.

 

1.8                               “Cause” shall mean any of the following acts
or circumstances:

 

(a)                                  willful destruction by the Participant of
property of the Plan Sponsor or an Affiliate having a material value to the Plan
Sponsor or such Affiliate;

 

(b)                                 fraud, embezzlement, theft, or comparable
dishonest activity committed by the Participant (excluding acts involving a de
minimis dollar value and not related to the Plan Sponsor or an Affiliate);

 

(c)                                  the Participant’s conviction of or entering
a plea of guilty or nolo contendere to any crime constituting a felony or any
misdemeanor involving fraud,

 

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dishonesty or moral turpitude (excluding acts involving a de minimis dollar
value and not related to the Plan Sponsor or an Affiliate);

 

(d)                                 the Participant’s breach, neglect, refusal,
or failure to materially discharge the Participant’s duties (other than due to
physical or mental illness) commensurate with the Participant’s title and
function or the Participant’s failure to comply with the lawful directions of
the Board of Directors or a senior managing officer of the Plan Sponsor, or of
the Board of Directors or a senior managing officer of an Affiliate that employs
the Participant, in any such case that is not cured within fifteen (15) days
after the Participant has received written notice thereof from such Board of
Directors or senior managing officer;

 

(e)                                  any willful misconduct by the Participant
which may cause substantial economic or reputation injury to the Plan Sponsor,
including, but not limited to, sexual harassment, or;

 

(f)                                    a willful and knowing material
misrepresentation to the Board or a senior managing officer of the Plan Sponsor
or to the Board of Directors or a senior managing officer of an Affiliate that
employs the Participant.

 

1.9                               “Change of Control” shall mean the occurrence
of the events described in any of subparagraph (a), (b), or (c), below, or any
combination of said event(s) as described within the meaning of Treasury
Regulations 1.409A-3(g)(5):

 

(a)                                  Change of Ownership of the Plan Sponsor.  A
change of ownership occurs on the date that any one person, or more than one
person acting as a group, acquires ownership of the stock of the Plan Sponsor
that, together with stock held by such person or group, constitutes more than
fifty percent (50%) of the total fair market value or total voting power of the
stock of the Plan Sponsor or of any corporation that owns at least fifty percent
(50%) of the total fair market value and total voting power of the Plan
Sponsor.  However, if any person, or more than one person acting as a group, is
considered to own more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Plan Sponsor, the acquisition of
additional stock by the same person or group of persons is not considered to
cause a Change of Control.  For this purpose, an increase in the percentage of
stock owned by any one person or group, as a result of a transaction in which
the Plan Sponsor acquires its stock in exchange for property will be treated as
an acquisition of stock.  The rule set forth in the immediately preceding
sentence applies only when there is a transfer of stock of the Plan Sponsor (or
issuance of stock of the Plan Sponsor) and the stock of the Plan Sponsor remains
outstanding after the transaction.  Persons will not be considered to be acting
as a group solely because they purchase or own stock of the Plan Sponsor at the
same time or as a result of the same public offering.  However, persons will be
considered to be acting as a group if they are shareholders of a corporation
that enters into a merger, consolidation, purchase or acquisition of stock or
similar business transaction with the Plan Sponsor or its parent.  Persons will
also be considered to be acting as a group to the extent set forth in Applicable
Guidance.

 

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(b)                                 Effective Change of Control.  Effective
Change of Control shall occur on the date that either:

 

(i)                                     Any one person, or more than one person
acting as a group, acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Plan Sponsor possessing thirty-five percent (35%) or
more of the total voting power of the stock of the Plan Sponsor; or

 

(ii)                                  A majority of the members of the Plan
Sponsor’s Board of Directors is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Plan Sponsor’s Board of Directors prior to the date of the
appointment or election.

 

(c)                                  Change in Ownership of Plan Sponsor’s
Assets.  A change in the ownership of a substantial portion of the Plan
Sponsor’s assets occurs on the date that any one person, or more than one person
acting as a group, acquires or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons of
assets from the Plan Sponsor that have a total gross fair market value equal to
or more than forty percent (40%) of the total gross fair market value of all of
the assets of the Plan Sponsor immediately prior to such initial acquisition or
acquisitions.  For this purpose, gross fair market value means the value of the
assets of the Plan Sponsor, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

 

There will be no Change of Control under this Subparagraph (c) when there is a
transfer to an entity that is controlled by the shareholders of the Plan Sponsor
immediately after the transfer.  A transfer of assets by the Plan Sponsor is not
treated as a change in ownership of such assets if the assets are transferred
to:

 

(i)                                     A shareholder of the Plan Sponsor
(immediately before the asset transfer) in exchange for or with respect to its
stock;

 

(ii)                                  An entity, fifty percent (50%) or more of
the total value or voting power of which is owned directly or indirectly by the
Plan Sponsor;

 

(iii)                               A person, or more than one person, acting as
a Group, that owns, directly or indirectly, fifty percent (50%) or more of the
total value or voting power of all the outstanding stock of the Plan Sponsor; or

 

(iv)                              An entity, at least fifty percent (50%) of the
total value or voting power of which is owned, directly or indirectly, by a
person described in (iii) above.

 

Notwithstanding the above, the definition of Change of Control shall in any
event comply with Section 409A and Applicable Guidance.

 

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1.10                         “Claimant” shall mean a person who believes that he
or she is being denied a benefit to which he or she is entitled hereunder.

 

1.11                         “Code” shall mean the Internal Revenue Code of
1986, as amended.

 

1.12                         “Compensation” shall mean the total cash
remuneration, including regular Base Salary, Annual Bonus, and/or
Performance-Based Compensation paid by the Plan Sponsor to an Eligible Employee
with respect to his or her services performed for the Plan Sponsor or an
Affiliate.

 

1.13                         “Deemed Investments” shall be defined as provided
in Paragraph 4.2 below.

 

1.14                         “Deemed Investment Options” shall be defined as
provided in Paragraph 4.1 below.

 

1.15                         “Disability” shall mean a condition of the
Participant whereby he or she either: (i) 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 twelve (12) months, or (ii) 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 twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of the Plan Sponsor.  The Plan Administrator will determine
whether a Participant has incurred a Disability based on its own good faith
determination and may require a Participant to submit to reasonable physical and
mental examinations for this purpose.  A Participant will also be deemed to have
incurred a Disability if determined to be totally disabled by the Social
Security Administration or in accordance with a disability insurance program,
provided that the definition of disability applied under such disability
insurance program complies with the requirements of Treasury Regulation
1.409A-3(g)(4) and Applicable Guidance.

 

1.16                         “Effective Date” shall mean January 1, 2007.

 

1.17                         “Election Form” shall mean the form or forms
established from time to time by the Plan Administrator on which the Participant
makes certain designations as required on that form and under the terms of this
Plan.

 

1.18                         “Eligible Employee” shall mean for any Plan Year
(or applicable portion of a Plan Year), a person who is determined by the Plan
Sponsor, or its designee, to be a member of a select group of management or
highly compensated employees of the Plan Sponsor, and who is designated by the
Plan Sponsor, or its designee, to be an Eligible Employee under the Plan.  If
the Plan Sponsor determines that an individual first becomes an Eligible
Employee during a Plan Year, the Plan Sponsor shall notify the individual of its
determination and of the date during the Plan Year on which the individual shall
first become an Eligible Employee.

 

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1.19                         “Entry Date” shall mean the first day of the pay
period following the date on which an individual first becomes an Eligible
Employee.

 

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

 

1.21                         “Participant” shall mean any (a) Eligible Employee
(i) who is selected to participate in this Plan, (ii) who elects to participate
in this Plan by signing a Participation Agreement, (iii) who completes and signs
certain Election Form(s) required by the Plan Administrator, and (iv) whose
signed Election Form(s) are accepted by the Plan Administrator or (b) former
Eligible Employee who continues to be entitled to a benefit under this Plan.  A
spouse or former spouse of a Participant shall not be treated as a Participant
in this Plan or have an Account balance under this Plan, even if he or she has
an interest in the Participant’s benefits under this Plan as a result of
applicable law or property settlements resulting from legal separation or
marital dissolution or divorce.

 

1.22                         “Participation Agreement” shall mean the document
executed by the Eligible Employee and Plan Administrator whereby the Eligible
Employee agrees to participate in the Plan.

 

1.23                         “Performance-Based Compensation” shall mean that
portion of a Participant’s Compensation that is contingent on the satisfaction
of pre established organizational or individual performance criteria relating to
a performance period of at least twelve (12) consecutive months in which the
Participant performs services.  Organizational or individual performance
criteria are considered pre-established if established in writing by no later
than ninety (90) days after the commencement of the period of services to which
the criteria relate, provided that the right to receive the contingent portion
is substantially uncertain, or the amount of the contingent portion is not
readily ascertainable, at the time the criteria is established within the
meaning of Treasury Regulation 1.409A-1(e) and Applicable Guidance.

 

1.24                         “Permissible Payments” shall mean one or more of
the following events upon which payment may be made to a Participant or his
Beneficiary under the terms of the Plan: (i) the Participant’s Separation from
Service, (ii) the Participant’s death, (iii) the Participant’s Disability, or
(iv) a Change in Control of the Plan Sponsor.

 

1.25                         “Plan” shall mean the FGX International Inc.
Deferred Compensation Plan which shall be evidenced by this instrument, as
amended from time to time.

 

1.26                         “Plan Administrator” shall be the Board of
Directors of the Plan Sponsor or its designee.  A Participant in the Plan should
not serve as a singular Plan Administrator.  If a Participant is part of a group
of persons designated as a committee or Plan Administrator, then the Participant
may not participate in any activity or decision relating solely to his or her
individual benefits under this Plan.  Matters solely affecting the applicable
Participant will be resolved by the remaining Plan Administrator members.

 

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1.27                         “Plan Sponsor Contribution Account” shall be
defined as provided in Paragraph 3.4 below.

 

1.28                         “Plan Year” shall mean, for the first plan year,
the period beginning on the Effective Date of the Plan and ending December 31 of
such calendar year, and thereafter, a twelve (12) month period beginning
January 1 of each calendar year and continuing through December 31 of such
calendar year.

 

1.29                         “Separation Account” shall mean: (i) the sum of the
Participant’s Annual Deferral Amount that may be allocated in whole or in part
by a Participant pursuant to his or her deferral election to the Separation
Account for each Plan Year, plus (ii) amounts credited (net of amounts debited,
which may result in an aggregate negative number) from Deemed Investment
Options, less (iii) all distributions made to, or withdrawals by, the
Participant and his or her Beneficiary, and tax withholding amounts which may
have been deducted from the Participant’s Separation Account.  At the time of
the Participant’s deferral election for each Plan Year, the Participant may
specify the form in which payment shall be made to the Participant or his or her
Beneficiary from this Account.  The Participant may be permitted to change the
form of payment subject to Paragraph 6.7 (Subsequent Changes in the Time or
Form of Payment) below.

 

1.30                         “Section 409A” shall mean Section 409A of the Code
and the Treasury Regulations or other authoritative guidance issued under that
Section.

 

1.31                         “Separation From Service” shall mean a
Participant’s termination of active employment, whether voluntary or
involuntary, other than by death, Disability, or leave of absence with the Plan
Sponsor and Affiliate, within the meaning of Section 409A(a)(2)(A)(i) of the
Code, and Applicable Guidance.

 

1.32                         “Treasury Regulations” shall mean regulations
promulgated by the Internal Revenue Service for the U.S. Department of the
Treasury, either proposed, temporary or final as they may be amended from time
to time.

 

1.33                         “Trust” shall mean a trust that may be established
in accordance with the terms of Article 12 of this Plan.

 

1.34                         “Unforeseeable Emergency” shall mean a severe
financial hardship of the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, or the Participant’s dependent(s) (as
defined in Section 152(a) of the Code) or 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, within the
meaning of Section 409A and Treasury Regulation 1.409A-3(g)(3).

 

1.35                         “Valuation Date” shall mean each day at the close
of business (currently 4:00 p.m. Eastern Time) of the New York Stock Exchange
(“NYSE”), on days that the (NYSE) is open for trading or any other day on which
there is sufficient trading in securities of the applicable fund to materially
affect the unit value of the fund and the corresponding unit value of the
Participant’s Deemed Investment Options.  If the NYSE extends its closing beyond
4:00 p.m.

 

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Eastern Time, and continues to value after the time of closing, the Plan
Administrator reserves the right to treat communications received after
4:00 p.m. Eastern Time as being received as of the beginning of the next day.

 

1.36                         “Year of Plan Participation” shall mean each twelve
(12) month period during which the Participant is employed on a full-time basis
by the Plan Sponsor, (determined without regard to whether deferrals have been
made by a Participant for any Plan Year), inclusive of any approved leaves of
absence, beginning on the Participant’s date of entry into this Plan.

 

1.37                         “Year of Service” shall mean each twelve (12) month
period during which the Participant is employed on a full-time basis by the Plan
Sponsor, with a minimum of 1,000 hours of service, inclusive of any approved
leaves of absence, beginning on the Participant’s date of hire.

 

ARTICLE 2

 

Selection, Enrollment, Eligibility

 

2.1                               Selection by Plan Sponsor.  Participation in
this Plan shall be limited to a select group of management or highly compensated
employees of the Plan Sponsor, as determined by the Plan Sponsor in its sole and
absolute discretion.  The initial group of Eligible Employees shall become
Participants on the Effective Date of this Plan.  Any individual selected as an
Eligible Employee after the Effective Date, shall become a Participant on the
first Entry Date occurring on or after the date on which he or she becomes an
Eligible Employee.

 

2.2                               Re-Employment.  If a Participant who incurs a
Separation from Service is subsequently re-employed by the Plan Sponsor, he or
she may at the sole and absolute discretion of the Plan Administrator, become a
Participant in accordance with the provisions of this Plan.

 

2.3                               Enrollment Requirements.  As a condition to
participation in this Plan, each selected Eligible Employee shall complete,
execute, and return to the Plan Administrator a Participation Agreement and
Election Form within the time specified by the Plan Administrator in accordance
with Article 3.  In addition, the Plan Administrator shall establish such other
enrollment requirements as it determines necessary or advisable.  All elections
to defer Compensation with respect to a Plan Year shall be irrevocable, except
as permitted in the event of an Unforeseeable Emergency pursuant to Paragraph
3.2(d) below.

 

2.4                               Plan Aggregation Rules.  This Plan shall
constitute an “account balance plan” as defined in Treasury Regulations
31.3121(v)(2)-1(c)(1)(ii)(A).  For purposes of Section 409A, all amounts
deferred by or on behalf of a Participant under this Plan shall be aggregated
with deferred amounts under other “account balance plans” currently maintained
or adopted in the future by the Plan Sponsor, as required by Applicable Guidance
and all amounts shall be treated as deferred under the rules governing a single
plan.

 

2.5                               Termination of Participation and/or
Deferrals.  If the Plan Administrator determines that a Participant who has not
experienced a Separation from Service no longer

 

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qualifies as a member of a select group of management or highly compensated
employees or that such a Participant’s participation in the Plan could
jeopardize the status of this Plan as “unfunded” and “maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees,” the Plan Administrator shall
have the right to terminate any deferral election the Participant has made for
the remainder of the Plan Year but only to the extent such termination complies
with the requirements of Sections 409A, and/or to prevent the Participant from
making future deferral elections and receiving Plan Sponsor Contribution Amounts
under the Plan.

 

ARTICLE 3

 

Contributions and Credits

 

3.1                               Annual Deferral Amount.

 

(a)                                  Minimum Deferrals.  For each Plan Year, a
Participant may elect to defer Compensation in fixed dollar amounts or
percentages subject to the minimums (if any) set forth in his or her Election
Form.  If the election is made for less than the stated minimum amount, or if no
election is made, the amount deferred shall be zero.

 

(b)                                 Maximum Deferrals.  For each Plan Year, a
Participant may elect to defer Compensation in fixed dollar amounts or
percentages subject to the maximums (if any) set forth in his or her Election
Form.  If the election is made for more than the stated maximum amount, then the
amount deferred shall default to the maximum amount.

 

3.2                               Election to Defer Compensation.

 

(a)                                  Deferral Election Rules.  A Participant
shall make an election to defer Compensation for each Plan Year on the Election
Form provided by the Plan Sponsor.  For the election to be effective, the
Election Form must be delivered to the Plan Administrator during the
Participant’s taxable year before the Plan Year in which the services are
performed.  If no Election Form is timely delivered for a Plan Year, the Annual
Deferral Amount shall be zero for that Plan Year.  An election to defer
Compensation shall include an election as to both the time and form of payment.

 

(b)                                 Short Plan Year.  If an Eligible Employee
becomes a Participant after the beginning of a Plan Year, he or she may make an
initial deferral election within thirty (30) days after the date he or she first
becomes an Eligible Employee with respect to Compensation paid for services to
be performed subsequent to the election.  In the event an election of deferral
is made with respect to an Annual Bonus in the first year of eligibility but
after the beginning of a performance period, the deferral election will apply to
the portion of the Annual Bonus paid for services performed subsequent to the
election and will be calculated based on the total Annual Bonus for the
performance period multiplied by a fraction whose numerator is the number of
days remaining in the performance period after the election and whose
denominator is the total number of days in the performance period.

 

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(c)                                  Bonus Qualifying as Performance-Based
Compensation.  Not-withstanding anything in Paragraph 3.2(a) or (b) above to the
contrary, to the extent that the Plan Sponsor determines that an Eligible
Employee’s bonus constitutes Performance-Based Compensation, within the meaning
of Section 409A(a)(4)(B)(iii) of the Code, based on services performed over a
period of at least twelve (12) months, an election to defer Performance-Based
Compensation with respect to a performance period shall be made on or before the
day which is six (6) months before the end of the performance period.  In no
event may an election to defer Performance-Based Compensation be made after such
has become both substantially certain to be paid and readily ascertainable,
within the meaning of Treasury Regulations 1.409A-2(a)(7).

 

(d)                                 Terminations of Deferral Elections Following
an Unforeseeable Emergency.  If a Participant receives a payment upon an
Unforeseeable Emergency under this Plan, the deferral election for that Plan
Year shall terminate upon payment from his or her Account to the Participant.  A
Participant may again elect to defer Compensation for any succeeding Plan Year,
in accordance with the terms of this Plan.

 

3.3                               Withholding and Crediting of Annual Deferral
Amounts.  For each Plan Year, the Base Salary portion of the Annual Deferral
Amount shall be withheld from each regularly scheduled payroll in approximately
equal amounts (or as otherwise specified by the Plan Administrator), as adjusted
from time to time for increases and decreases in Base Salary if the Annual
Deferral Amount with respect to Base Salary is expressed as a percentage.  The
Annual Bonus and/or Performance-Based Compensation portion of the Annual
Deferral Amount shall be withheld at the time such Compensation otherwise would
be paid to the Participant.  Annual Deferral Amounts shall be credited to a
Participant’s Separation Account at the time such amounts would otherwise have
been paid to a Participant.

 

3.4                               Plan Sponsor Discretionary Contributions.  The
Plan Sponsor may make discretionary contributions as it may determine from time
to time and may direct that such contributions be allocated to those
Participants that it may select.  The amount so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero.  No Participant
shall have a right to compel the Plan Sponsor to make a Plan Sponsor
discretionary contribution under this Article and no Participant shall have the
right to share in any such contribution for any Plan Year unless selected by the
Plan Sponsor, in its sole and absolute discretion.

 

ARTICLE 4

 

Earnings or Losses on Account(s)

 

4.1                               Deemed Investment Options.  The Plan
Administrator shall select from time to time certain mutual funds, insurance
company separate accounts, indexed rates or other methods (the “Deemed
Investment Options”) for purposes of crediting or debiting additional amounts to
each Participant’s Account(s).  The Plan Administrator may discontinue,
substitute or add

 

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Deemed Investment Options.  Any discontinuance, substitution, or addition of a
Deemed Investment Option will take effect as soon as administratively practical.

 

4.2                               Allocation of Deemed Earnings or Losses on
Accounts.  Subject to Paragraph 4.3 below, each Participant shall have the right
to direct the Plan Administrator as to how the Participant’s Annual Deferral
Amounts and Plan Sponsor matching and/or discretionary contributions shall be
deemed to be invested, (“Deemed Investments”), subject to any operating
rules and procedures imposed from time to time by the Plan Administrator.  As of
each Valuation Date, the Participant’s Account(s) will be credited or debited to
reflect the Participant’s Deemed Investments.

 

4.3                               Deemed Investment Directions of Participants. 
A Participant’s Deemed Investment directions for his or her Separation Account
and Plan Sponsor Contribution Account shall be subject to the following rules:

 

(a)                                  Any initial or subsequent Deemed Investment
direction shall be in writing, on a form supplied by and filed with the Plan
Sponsor (or made in any other manner specified by the Plan Administrator), and
shall be effective on such date as specified by the Plan Administrator.

 

(b)                                 All Deemed Investment directions shall
continue indefinitely until changed by the Participant in the manner permitted
by the Plan Administrator.

 

(c)                                  If the Plan Sponsor receives an initial or
revised Deemed Investment direction which it determines to be incomplete,
unclear or improper, the Participant’s Deemed Investment direction then in
effect shall remain in effect (or, in the case of a deficiency in an initial
Deemed Investment direction, the Participant shall be deemed to have filed no
Deemed Investment direction) until a date so designated by the Plan
Administrator in its sole and absolute discretion, unless the Plan Administrator
provides for, and permits the application of, corrective action prior to that
date.

 

(d)                                 Each Participant, as a condition of his or
her participation in the Plan, agrees to indemnify and hold harmless the Plan
Sponsor and the Plan Administrator from any losses or damages of any kind
relating to the Deemed Investment of the Participant’s Account(s).

 

(e)                                  Each reference in this Article to a
Participant shall be deemed to include, where applicable, the Beneficiary.

 

(f)                                    In making any election described in this
Article, the Participant shall specify on the deemed investment Election
Form (or in any other manner specified by the Plan Administrator), in increments
of at least one full percent (1.0%), the percentage of the Participant’s
Account(s) to be allocated to a Deemed Investment Option.  A Participant’s
election must total one hundred percent (100%).  If the Plan Administrator
possesses (or is deemed to possess, as provided in Paragraph 4.3(c) above) at
any time Deemed Investment directions of less than 100% of a Participant’s
Separation Account,

 

11

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or Plan Sponsor Contribution Account, the Participant shall be deemed to have
directed that the undesignated portion of the said Account(s) be deemed to be
invested in a money market, fixed income, or similar fund made available under
this Plan as determined by the Plan Administrator.

 

(g)                                 At the end of each calendar quarter (or such
shorter period as the Plan Administrator may determine), the Plan Sponsor shall
compute the total return for the quarter (or such shorter period) as to each
Participant’s Deemed Investment Elections and may reduce such returns for that
quarter (or shorter period) by items such as money management fees, mortality
charges, cost of insurance, taxes and deemed investment expenses associated
specifically with each deemed investment alternative.  The total return for each
deemed investment alternative shall be that deemed investment alternative’s
total return for that quarter (or shorter period) reduced by applicable expenses
as described above and approved by the Plan Administrator.

 

(h)                                 The Deemed Investment Options are to be used
for measurement purposes only, and a Participant’s election of any such Deemed
Investments, the allocation of such Deemed Investments to his or her Account(s),
the calculation of additional amounts and the crediting or debiting of such
amounts to a Participant’s Account(s) shall not be considered or construed in
any manner as an actual investment of his or her Account balance in any such
Deemed Investments.  In the event that the Plan Sponsor or the trustee of the
Trust, in its own discretion, decides to invest funds in any or all of the
investments on which any of the Deemed Investments are based, no Participant (or
Beneficiary) shall have any rights in or to such investments themselves. 
Without limiting the foregoing, a Participant’s Account(s) shall at all times be
a bookkeeping entry only and shall not represent any investment made on his or
her behalf by the Plan Sponsor or the Trust.  The Participant (or Beneficiary)
shall at all times remain an unsecured creditor of the Plan Sponsor.  Any
liability of the Plan Sponsor to any Participant, former Participant, or
Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by this Plan.

 

ARTICLE 5

 

Vesting and Taxes

 

5.1                               Vesting of Benefits.

 

(a)                                  A Participant shall at all times be 100%
vested in his or her Separation Account.

 

(b)                                 A Participant shall be vested in his or her
Plan Sponsor Contribution Account based on the schedule below:

 

12

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Completed Years of Service

 

Vested %

 

Less than 1 year

 

00.00

%

1 year but less than 2

 

20.00

%

2 years but less than 3

 

40.00

%

3 years but less than 4

 

60.00

%

4 years but less than 5

 

80.00

%

5 years or more

 

100.00

%

 

(c)                                  A Participant shall be 100% vested in his
or her Plan Sponsor Contribution Account if the Participant’s employment is
terminated by reason of his or her death, upon the Participant’s Disability, or
upon a Change of Control.

 

(d)                                 In the event the Participant’s employment is
terminated for Cause, no benefits of any kind will be due or payable under the
terms of this Plan from amounts credited to the Plan Sponsor Contribution
Account (as adjusted for deemed investment performance) and all rights of the
Participant, his or her designated Beneficiary, executors, or administrators, or
any other person, to receive payments thereof shall be forfeited.

 

5.2                               FICA, Withholding and Other Taxes.

 

(a)                                  Annual Deferral Amounts.  For each Plan
Year in which an Annual Deferral Amount is being withheld from a Participant,
the Plan Sponsor shall withhold from that portion of the Participant’s Base
Salary, and Performance-Based Compensation that is not being deferred, in a
manner determined in the sole discretion of the Plan Sponsor, the Participant’s
share of FICA and other employment taxes on such Annual Deferral Amount.  If
necessary, the Plan Sponsor may reduce all or a portion of the Annual Deferral
Amount in order to comply with this Paragraph 6.2.

 

(b)                                 Plan Sponsor Contribution Account.  When a
Participant becomes vested in a portion of his or her Plan Sponsor Contribution
Account, the Plan Sponsor shall withhold from the Participant’s Compensation
that is not deferred, in a manner determined in the sole discretion of the Plan
Sponsor, the Participant’s share of FICA and other employment taxes on such
vested Plan Sponsor Contribution Account.  If necessary, the Plan Sponsor may
reduce all or a portion of the Annual Deferral Amount in order to comply with
this Paragraph 5.2.

 

(C)                                  DISTRIBUTIONS.  THE PLAN SPONSOR, OR
TRUSTEE OF THE TRUST, SHALL WITHHOLD FROM ANY PAYMENTS MADE TO A PARTICIPANT OR
BENEFICIARY UNDER THIS PLAN ALL FEDERAL, STATE AND LOCAL INCOME, EMPLOYMENT AND
OTHER TAXES REQUIRED TO BE WITHHELD BY THE PLAN SPONSOR IN A MANNER ELECTED BY
THE PARTICIPANT OR BENEFICIARY (OR IN THE ABSENCE OF SUCH AN ELECTION, IN A
MANNER DETERMINED IN THE SOLE AND ABSOLUTE DISCRETION OF THE PLAN SPONSOR OR THE
TRUSTEE OF THE TRUST), PROVIDED THAT SUCH MANNER COMPLIES WITH APPLICABLE TAX
WITHHOLDING REQUIREMENTS.

 

13

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ARTICLE 6

 

Entitlement to Payment of Benefits

 

6.1                               Method of Payment.  A Participant (or his or
her Beneficiary) shall become entitled to receive, on the date designated as
provided in Article 6, a distribution (or commencement of distribution) in an
aggregate amount equal to the Participant’s Account(s).

 

(a)                                  Form of Payment.  A Participant, in
connection with his or her commencement of participation in the Plan, may elect
the form of payment for the applicable Permissible Payment Event.  Upon the
occurrence of a Permissible Payment Event, the Participant’s Account(s) shall be
calculated as of the Valuation Date of said event.  If a Participant has failed
to select a form of payment, his Account(s) shall be paid in a lump sum. 
Installment payments (if applicable) made after the first payment shall be paid
on or about the applicable modal anniversary of the first payment date until all
required installments have been paid.  The amount of each payment shall be
determined by dividing the value of the Participant’s Account(s) immediately
prior to such payment by the number of payments remaining to be paid.  Any
unpaid Account balance shall continue to be deemed to be invested pursuant to
Article 4, in which case any deemed income, gains, losses, or expenses shall be
reflected in the actual payments.  The final installment payment shall be equal
to the balance of the Account, calculated as of the applicable modal
anniversary.

 

(b)                                 Medium of Payment.  All payments made under
the Plan shall be made in cash.

 

(c)                                  Definition of Payment.  The term “payment”
shall be treated as a single payment for purposes of subsequent deferrals of
time or form of payment, within the meaning of section 1.409A-2(b)(4) of the
proposed Treasury Regulations.

 

(d)                                 Permissible Payment Events.  A Participant
in connection with his or her commencement of participation in this Plan shall
elect on his or her Election Form to receive payment of his or her Account(s),
based on the earlier of the following permissible payment events:

 

(i)                                     Separation from Service,

 

(ii)                                  Change of Control,

 

(iii)                               Death,

 

(iv)                              Disability

 

6.2                               Payment Following Separation From Service. 
Except as provided below, a Participant shall be paid his or her vested Account
balance with payments being made or commencing within ninety (90) days following
the Participant’s Separation from Service. 

 

14

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Amounts shall be distributed according to the form of payment selected by the
Participant and permitted by the Plan.

 

6.3                               Payment Following Disability.  Except as
provided below, in the event of a qualifying Disability, the Participant shall
be paid his or her vested Account balance with payment or payments being made or
commencing within ninety (90) days following the determination of a
Participant’s Disability.  Amounts shall be distributed according to the form of
payment selected by the Participant and permitted by the Plan Sponsor.

 

6.4                               Payment Following Death Prior to Commencement
of Retirement Benefits.  In the event of the Participant’s death while in the
employment of the Plan Sponsor or an Affiliate and prior to commencement of 
benefit payments, the Plan Sponsor shall pay a death benefit equal to the
greater of: (a) the Participant’s Vested Account Balance as of the date of his
or her death, or (b) a dollar amount specified in the Participation Agreement
and attached hereto.  Amounts shall be distributed according to the form of
payment selected by the Participant and permitted by the Plan Sponsor.

 

6.5                               Payment Following Death After Commencement of
Retirement Benefits.  In the event of the Participant’s death, the Participant’s
Beneficiary shall be paid the Participant’s vested Account balance with payment
or payments being made or commencing within ninety (90) days following the date
of death of the Participant.  Amounts shall be distributed according to the form
of payment selected by the Participant and permitted by the Plan Sponsor.

 

6.6                               Payment Following Change in Control.  A
Participant shall be paid his or her vested Account balance following a Change
in Control with payments being made or commencing within ninety (90) days
following the Change in Control event, but only to the extent such
payment(s) complies with regulations and other guidance issued by the United
States Secretary of the Treasury or Internal Revenue Service with respect to
Section 409A(a)(2)(A)(v) of the Code.  Amounts shall be distributed in a single
lump sum following a Change in Control Event.

 

6.7                               Payment in the Event of an Unforeseeable
Emergency.  If the Participant experiences an Unforeseeable Emergency, the
Participant may petition the Plan Administrator for payment of an amount that
shall not exceed the lesser of: (i) the Participant’s vested Account(s), or
(ii) the amount reasonably needed to satisfy the Unforeseeable Emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
payment.  A Participant may not receive such a payment to the extent that the
Unforeseeable Emergency is or may be relieved: (a) through reimbursement or
compensation by insurance or otherwise, or (b) by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship.  If the Plan Administrator approves a
Participant’s petition for such a payment then the Participant shall receive
said payment, in a lump sum, as soon as administratively feasible after such
approval.

 

6.8                               Subsequent Changes in the Time or Form of
Payment.  If permitted by the Plan Sponsor, but subject to limitations below, a
Participant may elect to change the time or form

 

15

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

 

of payment to him or her, by submitting a new Election Form to the Plan
Administrator, provided the following conditions are met:

 

(a)                                  Such change will not take effect until at
least twelve (12) months after the date on which the new election is made and
approved by the Plan Administrator.

 

(b)                                 If the original election is pursuant to a
specified time or fixed schedule, the change cannot be made less than twelve
(12) months before the date of the first scheduled original payment,

 

(c)                                  In the case of an election related to a
payment other than a payment on account of death, disability, or unforeseeable
emergency, the first payment with respect to which the change is made must be
deferred for a period of not less than five (5) years from the date such payment
would otherwise have been made.

 

6.9                               No Accelerations.  Notwithstanding anything in
this Plan to the contrary, neither the Plan Sponsor nor a Participant may
accelerate the time of any payment or amount scheduled to be paid under this
Plan, except as otherwise permitted by Applicable Guidance.  The Plan Sponsor
shall deny any change made to an election if the Plan Sponsor determines that
the change violates the requirements of Applicable Guidance.  The Plan Sponsor
may, however, accelerate certain distributions under this Plan to the extent
permitted under Applicable Guidance as follows:

 

(a)                                  Domestic Relations Order.  Direct payment
of a Participant’s vested Account Balance may be made to an individual other
than a Participant as necessary to fulfill a domestic relations order, as
defined in Section 414(p)(1)(B) of the Code.

 

(b)                                 Conflicts of Interest.  Acceleration of the
time of payment under this Plan may be made to the extent necessary to avoid the
violation of an applicable Federal, state or local ethics law or conflicts of
interest law.

 

(c)                                  De Minimis and Specified Amounts.  The time
of payment to a Participant may be accelerated, provided that: (i) the payment
accompanies the termination in the entirety of the Participant’s interest in
this Plan and all similar plans; and (iii) the sum of all benefits payable to
the Participant under this Plan and all similar plans if less than or equal to
the applicable dollar amount under Section 402(g)(1)(B) of the Code.

 

(d)                                 Payment of Employment Taxes.  The time of a
payment to pay the Federal Insurance Contributions Act (FICA) tax imposed on
Compensation deferred by a Participant and Plan Sponsor contributions under this
Plan (the “FICA amount”) may be accelerated.  Additionally, the acceleration of
the time a payment to pay the income tax on wages imposed as a result of the
payment of the FICA amount, and to pay the additional income tax on wages
attributable to the pyramiding of wages and taxes also is permissible.  However,
the total payment under this acceleration provision may not

 

16

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

 

exceed the aggregate of the FICA amount plus the income tax required to be
withheld with respect to such FICA amount.

 

(e)                                  Payment upon Income Inclusion under
Section 409A.  The time of a payment to a Participant may be accelerated at any
time this Plan fails to meet the requirements of Section 409A and related
Treasury Regulations.  However, such payment may not exceed the amount required
to be included in income as a result of the failure to comply with the
requirements of Section 409A and Applicable Guidance.

 

6.10                         Unsecured General Creditor Status of Participant.

 

(a)                                  Payment to the Participant or any
Beneficiary hereunder shall be made from assets which shall continue, for all
purposes, to be part of the general, unrestricted assets of the Plan Sponsor and
no person shall have any interest in any such asset by virtue of any provision
of this Plan.  The Plan Sponsor’s obligation hereunder shall be an unfunded and
unsecured promise to pay money in the future.  To the extent that any person
acquires a right to receive payments from the Plan Sponsor under the provisions
hereof, such right shall be no greater than the right of any unsecured general
creditor of the Plan Sponsor and no such person shall have or acquire any legal
or equitable right, interest or claim in or to any property or assets of the
Plan Sponsor.

 

(b)                                 In the event that the Plan Sponsor purchases
an insurance policy or policies insuring the life of a Participant or employee,
to allow the Plan Sponsor to recover or meet the cost of providing benefits, in
whole or in part, hereunder, no Participant or Beneficiary shall have any rights
whatsoever in said policy or the proceeds therefrom.  The Plan Sponsor or the
Trustee of the Trust shall be the primary owner and beneficiary of any such
insurance policy or property and shall possess and may exercise all incidents of
ownership therein.

 

(c)                                  In the event that the Plan Sponsor
purchases an insurance policy or policies on the life of a Participant as
provided for above, then all of such policies shall be subject to the claims of
the creditors of the Plan Sponsor.

 

(d)                                 If the Plan Sponsor chooses to obtain
insurance on the life of a Participant in connection with its obligations under
this Plan, the Participant hereby agrees to take such physical examinations and
to truthfully and completely supply such information as may be required by the
Plan Sponsor or the insurance company designated by the Plan Sponsor.

 

6.11                         Facility of Payment.  If a distribution is to be
made to a minor, or to a person who is otherwise incompetent, then the Plan
Administrator may make such distribution: (i) to the legal guardian, or if none,
to a parent of a minor payee with whom the payee maintains his or her residence,
or (ii) to the conservator or administrator or, if none, to the person having
custody of an incompetent payee.  Any such distribution shall fully discharge
the Plan Sponsor and the Plan Administrator from further liability on account
thereof.

 

17

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6.12                         Delay in Payment by Plan Sponsor.

 

(a)                                  In the case of payments by the Plan Sponsor
to a Participant or Participant’s Beneficiary, the deduction for which would be
limited or eliminated by the application of Section 162(m) of the Code, payments
that would otherwise violate securities laws, or payments that would jeopardize
the Plan Sponsor’s ability to continue as a going concern, said payments may be
delayed.  In the case of deduction limitations imposed by Section 162(m) of the
Code payment will be deferred either to any date in the first calendar year in
which the Plan Sponsor reasonably anticipates that a payment of such amount
would not result in a limitation under Section 162(m) or, if later, during the
period beginning on the day the Participant separates from service and ending on
the later of the last day of the calendar year during which the separation
occurs or the 15th day of the third month following the separation from
service.  Payments delayed for other permissible reasons must be made in the
first calendar year in which the Plan Sponsor reasonably anticipates that the
payment would not jeopardize the Plan Sponsor’s ability to continue as a going
concern, and the payment would not result in a violation of Federal securities
laws or other applicable laws.

 

(b)                                 Treatment of Payment as Made on Designated
Payment Date.  Each payment under this Plan is deemed made on the required
payment date even if the payment is made after such date, provided the payment
is made by the latest of: (i) the end of the calendar year in which the payment
is due; (ii) the 15th day of the third calendar month following the payment due
date; (iii) in case the Plan Sponsor cannot calculate the payment amount on
account of administrative impracticality which is beyond the Participant’s
control (or the control of the Participant’s estate), in the first calendar year
in which payment is practicable; (iv) in case the Plan Sponsor does not have
sufficient funds to make the payment without jeopardizing the Plan Sponsor’s
solvency, in the first calendar year in which the Plan Sponsor’s funds are
sufficient to make the payment.

 

6.13                         Six-Month Delay in Payment for Specified
Employees.  Notwithstanding anything herein to the contrary, in the event a
Participant who is a “specified employee” within the meaning of
Section 409A(a)(2)(B)(i) of the Code is entitled to a distribution from the Plan
due to the Participant’s Separation from Service, any payment or the
commencement of any installment payment, as the case may be, shall not occur
before the date that is the earlier of (1) six months following the
Participant’s Separation from Service for reasons other than death or (2) the
Participant’s death.

 

ARTICLE 7

 

Beneficiary Designation

 

7.1                               Designation of Beneficiaries.

 

(a)                                  Each Participant may designate any person
or persons (who may be named contingently or successively) to receive any
benefits payable under the Plan upon the Participant’s death, and the
designation may be changed from time to time by the

 

18

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

 

Participant by filing a new designation.  Each designation will revoke all prior
designations by the same Participant, shall be in the form prescribed by the
Plan Administrator, and shall be effective only when filed in writing with the
Plan Administrator during the Participant’s lifetime.

 

(b)                                 In the absence of a valid Beneficiary
designation, or if, at the time any benefit payment is due to a Beneficiary,
there is no living Beneficiary validly named by the Participant, the Plan
Sponsor shall pay the benefit payment to the Participant’s spouse, if then
living, and if the spouse is not then living to the Participant’s then living
descendants, if any, per stripes, and if there are no living descendants, to the
Participant’s estate.  In determining the existence or identity of anyone
entitled to a benefit payment, the Plan Sponsor may rely conclusively upon
information supplied by the Participant’s personal representative, executor or
administrator.

 

(c)                                  If a question arises as to the existence or
identity of anyone entitled to receive a death benefit payment under the Plan,
or if a dispute arises with respect to any death benefit payment under the Plan,
the Plan Sponsor may distribute the payment to the Participant’s estate without
liability for any tax or other consequences, or may take any other action which
the Plan Sponsor deems to be appropriate.

 

7.2                               Information to be Furnished by Participants
and Beneficiaries; Inability to Locate Participants or Beneficiaries.  Any
communication, statement or notice addressed to a Participant or to a
Beneficiary at his or her last post office address as shown on the Plan
Sponsor’s records shall be binding on the Participant or Beneficiary for all
purposes of this Plan. The Plan Sponsor shall not be obligated to search for any
Participant or Beneficiary beyond the sending of a registered letter to the last
known address.

 

ARTICLE 8

 

Termination, Amendment or Modification

 

8.1                               Plan Termination.  The Plan Sponsor reserves
the right to terminate this Plan in accordance with one of the following,
subject to the restrictions imposed by Section 409A and Applicable Guidance:

 

(a)                                  Corporate Dissolution or Bankruptcy.  This
Plan may be terminated within twelve (12) months of a corporate dissolution
taxed under Section 331 of the Code, or with the approval of a bankruptcy court
pursuant to 11 U.S.C. Section 503(b)(1)(A), and distributions may then be made
to Participants provided that the amounts deferred under this Plan are included
in the Participants’ gross income in the latest of:

 

(i)                                     The calendar year in which the Plan
termination occurs;

 

(ii)                                  The calendar year in which the amount is
no longer subject to a substantial risk of forfeiture; or

 

19

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(iii)                               The first calendar year in which the payment
is administratively practicable.

 

(b)                                 Change of Control.  This Plan may be
terminated within the thirty (30) days preceding or the twelve (12) months
following a Change in Control.  This plan will then be treated as terminated
only if all substantially similar arrangements sponsored by the Plan Sponsor or
any of its Affiliates are terminated so that all participants in all similar
arrangements are required to receive all amounts of Compensation deferred under
the terminated arrangements within twelve (12) months of the date of termination
of the arrangements.

 

(c)                                  Discretionary Termination.  The Plan
Sponsor may also terminate this Plan and make distributions provided that:

 

(i)                                     All plans sponsored by the Plan Sponsor
that would be aggregated with any terminated arrangements under Treasury
Regulations 1.409A-1(c) that are terminated;

 

(ii)                                  No payments other than payments that would
be payable under the terms of this plan if the termination had not occurred are
made within twelve (12) months of this plan termination;

 

(iii)                               All payments are made within twenty-four
(24) months of this plan termination; and

 

(iv)                              Neither the Plan Sponsor nor any of its
Affiliates adopts a new plan that would be aggregated with any terminated plan
if the same Participant participated in both arrangements, at any time within
five years following the date of termination of this Plan.

 

The Plan Sponsor also reserves the right to suspend the operation of this Plan
for a fixed or indeterminate period of time.

 

8.2                               Amendment.  The Plan Sponsor reserves the
right to amend this Plan at any time to comply with Section 409A and other
Applicable Guidance or for any other purpose, provided that such amendment will
not cause the Plan to violate the provisions of Section 409A.  Except as this
Plan and Applicable Guidance otherwise may require, the Plan Sponsor may make
any such amendments effective immediately.  Except to the extent necessary to
bring this Plan into compliance with Section 409A: (i) no amendment or
modification shall be effective to decrease the value or vested percentage of a
Participant’s Account(s) in existence at the time an amendment or modification
is made, and (ii) no amendment or modification shall materially and adversely
affect the Participant’s rights to be credited with additional amounts on such
Account(s), or otherwise materially and adversely affect the Participant’s
rights with respect to such Account(s).  A change in the Deemed Investment
Options offered under this Plan shall not constitute an amendment or
modification that is materially adverse to the Participant’s rights with respect
to the Participant’s Account(s) for purposes of the preceding sentence.

 

20

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ARTICLE 9

 

Administration

 

9.1                               Plan Administrator Duties.  The Plan
Administrator shall be responsible for the management, operation and
administration of the Plan.  The Plan Administrator shall act at meetings by
affirmative vote of a majority of its members.  Any action permitted to be taken
at a meeting may be taken without a meeting if, prior to such action, a
unanimous written consent to the action is signed by all members and such
written consent is filed with the minutes of the proceedings of the Plan
Administrator, provided, however that no member may vote or act upon any matter
which relates solely to himself or herself as a Participant.  The Chair or any
other member or members of the Plan Administrator designated by the Chair may
execute any certificate or other written direction on behalf of the Plan
Administrator.  When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a
Participant or the Plan Sponsor.  No provision of this Plan shall be construed
as imposing on the Plan Administrator any fiduciary duty under ERISA or other
law, or any duty similar to any fiduciary duty under ERISA or other law.

 

9.2                               Plan Administrator Authority.  The Plan
Administrator shall enforce this Plan in accordance with its terms, shall be
charged with the general administration of this Plan, and shall have all powers
necessary to accomplish its purposes, including, but not by way of limitation,
the following:

 

(a)                                  To select the Deemed Investment Options
available from time to time;

 

(b)                                 To construe and interpret the terms and
provisions of this Plan;

 

(c)                                  To compute and certify the amount and kind
of benefits payable to Participants and their Beneficiaries; to determine the
time and manner in which such benefits are paid; and to determine the amount of
any withholding taxes to be deducted;

 

(d)                                 To maintain all records that may be
necessary for the administration of this Plan;

 

(e)                                  To provide for the disclosure of all
information and the filing or provision of all reports and statements to
Participants, Beneficiaries and governmental agencies as shall be required by
law;

 

(f)                                    To make and publish such rules for the
regulation of this Plan and procedures for the administration of this Plan as
are not inconsistent with the terms hereof;

 

(g)                                 To administer this Plan’s claims procedures;

 

(h)                                 To approve election forms and procedures for
use under this Plan; and

 

21

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(i)                                     To appoint a plan record keeper or any
other agent, and to delegate to them such powers and duties in connection with
the administration of this Plan as the Plan Administrator may from time to time
prescribe.

 

9.3                               Binding Effect of Decision.  The decision or
action of the Plan Administrator with respect to any question arising out of or
in connection with the administration, interpretation and application of this
Plan and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in this Plan.

 

9.4                               Compensation, Expenses and Indemnity.  The
Plan Administrator shall serve without compensation for services rendered
hereunder.  The Plan Administrator is authorized at the expense of the Plan
Sponsor to employ such legal counsel and/or Plan record keeper as it may deem
advisable to assist in the performance of its duties hereunder.  Expense and
fees in connection with the administration of this Plan shall be paid by the
Plan Sponsor.

 

9.5                               Plan Sponsor Information.  To enable the Plan
Administrator to perform its functions, the Plan Sponsor shall supply full and
timely information to the Plan Administrator, on all matters relating to the
Compensation of its Participants, the date and circumstances of the Disability,
death, or Separation From Service of its employees who are Participants, and
such other pertinent information as the Plan Administrator may reasonably
require.

 

9.6                               Periodic Statements.  Under procedures
established by the Plan Administrator, a Participant shall be provided a
statement of account on an annual basis (or more frequently as the Plan
Administrator shall determine) with respect to such Participant’s Accounts.

 

ARTICLE 10

 

Claims Procedures

 

10.1                         Claims Procedure.  This Article is based on final
regulations issued by the Department of Labor and published in the Federal
Register on November 21, 2000 and codified in Section 2560.503-1 of the
Department of Labor Regulations.  If any provision of this Article conflicts
with the requirements of those regulations, the requirements of those
regulations will prevail.

 

(a)                                  Claim.  A Participant or Beneficiary
(hereinafter referred to as a “Claimant”) who believes he or she is entitled to
any Plan benefit under this Plan may file a claim with the Plan Sponsor.  The
Plan Sponsor shall review the claim itself or appoint an individual or entity to
review the claim.

 

(b)                                 Claim Decision.  The Claimant shall be
notified within ninety (90) days after the claim is filed whether the claim is
allowed or denied, unless the claimant receives written notice from the Plan
Sponsor or appointee of the Plan Sponsor prior to the end of the ninety (90) day
period stating that special circumstances require an extension of the time for
decision.  Such extension is not to extend beyond the day which is one hundred
eighty (180) days after the day the claim is filed.  If the Plan Sponsor

 

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denies the claim, it must provide to the Claimant, in writing or by electronic
communication:

 

(i)                                     The specific reasons for such denial;

 

(ii)                                  Specific reference to pertinent provisions
of this Plan on which such denial is based;

 

(iii)                               A description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation why such material or such information is necessary; and

 

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

 

(c)                                  Review Procedures.  A request for review of
a denied claim must be made in writing to the Plan Sponsor within sixty (60)
days after receiving notice of denial.  The decision upon review will be made
within sixty (60) days after the Plan Sponsor’s receipt of a request for review,
unless special circumstances require an extension of time for processing, in
which case a decision will be rendered not later than one hundred twenty (120)
days after receipt of a request for review.  A notice of such an extension must
be provided to the Claimant within the initial sixty (60) day period and must
explain the special circumstances and provide an expected date of decision.  The
reviewer shall afford the Claimant an opportunity to review and receive, without
charge, all relevant documents, information and records and to submit issues and
comments in writing to the Plan Sponsor.  The reviewer shall take into account
all comments, documents, records and other information submitted by the Claimant
relating to the claim regardless of whether the information was submitted or
considered in the benefit determination.  Upon completion of its review of an
adverse initial claim determination, the Plan Sponsor will give the Claimant, in
writing or by electronic notification, a notice containing:

 

(i)                                     its decision;

 

(ii)                                  the specific reasons for the decision;

 

(iii)                               the relevant Plan provisions on which its
decision is based;

 

(iv)                              a statement that the Claimant is entitled to
receive, upon request and without charge, reasonable access to, and copies of,
all documents, records and other information in the Plan’s files which is
relevant to the Claimant’s claim for benefit;

 

(v)                                 a statement describing the Claimant’s right
to bring an action for judicial review under ERISA Section 502(a); and

 

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(vi)                              if an internal rule, guideline, protocol, or
other similar criterion was relied upon in making the adverse determination on
review, a statement that a copy of the rule, guideline, protocol or other
similar criterion will be provided without charge to the Claimant upon request.

 

(d)                                 Calculation of Time Periods.  For purposes
of the time periods specified in this Article, the period of time during which a
benefit determination is required to be made begins at the time a claim is filed
in accordance with this Plan procedures without regard to whether all the
information necessary to make a decision accompanies the claim.  If a period of
time is extended due to a Claimant’s failure to submit all information
necessary, the period for making the determination shall be tolled from the date
the notification is sent to the Claimant until the date the Claimant responds.

 

(e)                                  Failure of Plan to Follow Procedures.  If
the Plan Sponsor fails to follow the claims procedure required by this Article,
a Claimant shall be deemed to have exhausted the administrative remedies
available under this Plan and shall be entitled to pursue any available remedy
under Section 502(a) of ERISA on the basis that this Plan has failed to provide
a reasonable claims procedure that would yield a decision on the merits of the
claim.

 

(f)                                    Failure of Claimant to Follow
Procedures.  A Claimant’s compliance with the foregoing provisions of this
Article is a mandatory prerequisite to the Claimant’s right to commence any
legal action with respect to any claim for benefits under the Plan.

 

10.2                         Arbitration of Claims.  All claims or controversies
arising out of or in connection with this Plan shall, subject to the initial
review provided for in the foregoing provisions of this Article be resolved
through arbitration as provided in this Paragraph 10.2.  Except as otherwise
agreed mutual by the parties, any arbitration shall be administered under and by
the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with
the JAMS procedure then in effect.  The arbitration shall be held in the JAMS
office nearest to where the Claimant is or was last employed by the Plan Sponsor
or at a mutually agreeable location.  The prevailing party in the arbitration
shall have the right to recover its reasonable attorney’s fees, disbursements
and costs of the arbitration (including enforcement of the arbitration
decision), subject to any contrary determination by the arbitrator.

 

ARTICLE 11

 

The Trust

 

11.1                         Establishment of Trust.  The Plan Sponsor may
establish a grantor trust, of which the Plan Sponsor is the grantor, within the
meaning of subpart E, part I, subchapter J, subtitle A of the Code, to pay
benefits under this Plan (the “Trust”).  If the Plan Sponsor establishes the
Trust, all benefits payable under this Plan to a Participant shall be paid
directly by the Plan Sponsor from the Trust.  To the extent such benefits are
not paid from the Trust, the benefits shall be paid from the general assets of
the Plan Sponsor.  The Trust, if any, shall be an irrevocable grantor trust
which conforms to the terms of the model trust as described in IRS

 

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Revenue Procedure 92-64, I.R.B. 1992 33, as same may be amended or modified from
time to time.  If the Plan Sponsor establishes a Trust, the assets of the Trust
will be subject to the claims of the Plan Sponsor’s creditors in the event of
its insolvency.  Except as may otherwise be provided under the Trust, the Plan
Sponsor shall not be obligated to set aside, earmark or escrow any funds or
other assets to satisfy its obligations under this Plan, and the Participant
and/or his or her designated Beneficiaries shall not have any property interest
in any specific assets of the Plan Sponsor other than the unsecured right to
receive payments from the Plan Sponsor, as provided in this Plan.

 

11.2                         Interrelationship of the Plan and the Trust.  The
provisions of this Plan shall govern the rights of a Participant to receive
distributions pursuant to this Plan.  The provisions of the Trust (if
established) shall govern the rights of the Participant and the creditors of the
Plan Sponsor to the assets transferred to the Trust.  The Plan Sponsor and each
Participant shall at all times remain liable to carry out its obligations under
this Plan.  The Plan Sponsor’s obligations under this Plan may be satisfied with
Trust assets distributed pursuant to the terms of the Trust.

 

11.3                         Contribution to the Trust.  Amounts may be
contributed by the Plan Sponsor to the Trust at the sole discretion of the Plan
Sponsor.

 

ARTICLE 12

 

Miscellaneous

 

12.1                         Validity.  In case any provision of this Plan shall
be illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and enforced
as if such illegal or invalid provision had never been inserted herein.  To the
extent any provision of this Plan is determined by the Plan Administrator
(acting in good faith), the Internal Revenue Service, the United States
Department of the Treasury or a court of competent jurisdiction to fail to
comply with Section 409A of the Code or Applicable Guidance with respect to any
Participant or Participants, such provision shall have no force or effect with
respect to such Participant or Participants.

 

12.2                         Nonassignability.  Neither any Participant nor any
other person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable hereunder, or
any part hereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable.  No part of the amounts payable shall,
prior to actual payment, be subject to seizure, attachment, garnishment (except
to the extent the Plan Sponsor may be required to garnish amounts from payments
due under this Plan pursuant to applicable law) or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a Participant
or any other person, be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency or be transferable
to a spouse as a result of a property settlement or otherwise.  If any
Participant, Beneficiary or successor in interest is adjudicated bankrupt or
purports to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber transfer, hypothecate, alienate or convey in advance of
actual receipt, the amount, if any, payable hereunder, or any part thereof, the
Plan Administrator, in its

 

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discretion, may cancel such distribution or payment (or any part thereof) to or
for the benefit of such Participant, Beneficiary or successor in interest in
such manner as the Plan Administrator shall direct.

 

12.3                         Not a Contract of Employment.  The terms and
conditions of this Plan shall not be deemed to constitute a contract of
employment between the Plan Sponsor and the Participant.  Nothing in this Plan
shall be deemed to give a Participant the right to be retained in the service of
the Plan Sponsor as an employee or otherwise or to interfere with the right of
the Plan Sponsor to discipline or discharge the Participant at any time.

 

12.4                         Unclaimed Benefits.  In the case of a benefit
payable on behalf of such Participant, if the Plan Administrator is unable to
locate the Participant or Beneficiary to whom such benefit is payable, such Plan
benefit may be forfeited to the Plan Sponsor upon the Plan Administrator’s
determination.  Notwithstanding the foregoing, if, subsequent to any such
forfeiture, the Participant or beneficiary to whom such Plan benefit is payable
makes a valid claim for such Plan benefit, such forfeited Plan benefit shall be
paid by the Plan Administrator to the Participant or Beneficiary, without
interest from the date it would have otherwise been paid.

 

12.5                         Governing Law.  Subject to ERISA, the provisions of
this Plan shall be construed and interpreted according to the internal laws of
the State of Texas, without regard to its conflicts of laws principles.

 

12.6                         Notice.  Any notice, consent or demand required or
permitted to be given under the provisions of this Plan shall be in writing and
shall be signed by the party giving or making the same.  If such notice, consent
or demand is mailed, it shall be sent by United States certified mail, postage
prepaid, addressed to the addressee’s last known address as shown on the records
of the Plan Sponsor.  The date of such mailing shall be deemed the date of
notice consent or demand.  Any person may change the address to which notice is
to be sent by giving notice of the change of address in the manner aforesaid.

 

12.7                         Coordination with Other Benefits.  The benefits
provided for a Participant and Participant’s Beneficiary under this Plan are in
addition to any other benefits available to such Participant under any other
plan or program for employees of the Plan Sponsor.  This Plan shall supplement
and shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided herein.

 

12.8                         Compliance.  A Participant shall have no right to
receive payment with respect to the Participant’s Account balance until all
legal and contractual obligations of the Plan Sponsor relating to establishment
of the Plan and the making of such payments shall have been complied with in
full.

 

12.9                         Successor Company.  The Plan may be continued after
a sale of assets of the Plan Sponsor, or a merger or consolidation of the Plan
Sponsor into another corporation or entity only if and to the extent that the
transferee, purchaser or successor entity agrees to continue the Plan.  In the
event that the Plan is not continued by the transferee, purchaser or successor
entity,

 

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the Plan shall automatically terminate, and the provisions of Paragraph 9.1
shall become operative.

 

12.10                   Compliance with Section 409A and Applicable Guidance. 
Notwithstanding anything in this Plan to the contrary, all provisions of this
Plan, including but not limited to the definitions of terms, elections to defer,
and distributions, shall be made in accordance with and shall comply with
Section 409A and any Applicable Guidance.  The Plan Sponsor will amend the terms
of this Plan retroactively if necessary, to the extent required to comply with
Section 409A and any Applicable Guidance.  No provision of this Plan shall be
followed to the extent that following such provision would result in a violation
of Section 409A or the Applicable Guidance, and no election made by a
Participant hereunder, and no change made by a Participant to a previous
election, shall be accepted by the Plan Sponsor if the Plan Sponsor determines
that acceptance of such election or change could violate any of the requirements
of Section 409A or the Applicable Guidance.  This Plan and any accompanying
forms shall be interpreted in accordance with, and incorporate the terms and
conditions required by Section 409A and the Applicable Guidance, including,
without limitation, any such Treasury Regulations or other guidance that may be
issued after the date hereof.

 

IN WITNESS WHEREOF, the Plan Sponsor has signed this amended and restated Plan
document as of November 21, 2008.

 

 

 

FGX INTERNATIONAL INC.

 

 

 

 

 

By:

/s/ Alec Taylor

 

Title: Alec Taylor, CEO

 

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