Exhibit 10.16

WPX ENERGY

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective January 1, 2013

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Table of Contents

 

ARTICLE I Purpose and Intent

     1   

1.1 Purpose of the Plan

     1   

1.2 Intent and Construction

     1   

ARTICLE II Definitions

     1   

2.1 Account

     1   

2.2 Administrative Committee

     1   

2.3 Affiliate

     1   

2.4 AIP

     1   

2.5 Base Salary

     1   

2.6 Beneficiary or Beneficiaries

     2   

2.7 Benefits Committee

     2   

2.8 Board

     2   

2.9 Code

     2   

2.10 Company

     2   

2.11 Compensation Committee

     2   

2.12 Deferral Account

     2   

2.13 Deferral Credits

     2   

2.14 Deferred AIP Bonus

     2   

2.15 Deferred Base Salary

     2   

2.16 Disability and Disabled

     3   

2.17 Eligible Employee

     3   

2.18 Emergency Distribution

     3   

2.19 Employer

     3   

2.20 ERISA

     3   

2.21 Excess Compensation

     3   

2.22 Fund or Funds

     3   

2.23 Matching Account

     3   

2.24 Matching Contribution Credits

     3   

2.25 Participant

     3   

2.26 Plan

     3   

2.27 Plan Year

     3   

2.28 Qualified Plan

     3   

2.29 Retirement

     4   

2.30 Retirement Account

     4   

2.31 Scheduled In-Service Account

     4   

2.32 Scheduled In-Service Distribution

     4   

2.33 Section 409A

     4   

2.34 Separation from Service

     4   

2.35 Unforeseeable Emergency

     4   

2.36 Years of Service

     4   

ARTICLE III Participation

     5   

 

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ARTICLE IV Deferral Elections and Matching Contribution Credits

     5   

4.1 Elections to Defer Base Salary

     5   

4.2 Elections to Defer AIP Bonuses

     6   

4.3 Matching Contribution Credits

     7   

4.4 Account Allocation Elections

     7   

4.5 Irrevocability of Deferral Elections and Account Allocation Elections

     8   

4.6 Suspension of Deferral Elections

     8   

ARTICLE V Deemed Investment of Accounts

     8   

5.1 Participant Designation

     8   

5.2 Investment Funds

     9   

5.3 Earnings Allocations

     9   

5.4 Purpose of Investment Elections

     9   

ARTICLE VI Accounts

     9   

6.1 Nature of Accounts

     9   

6.2 Crediting of Subaccounts

     9   

6.3 Vesting

     10   

6.4 Scheduled In-Service Accounts and Retirement Accounts

     10   

ARTICLE VII Distributions

     10   

7.1 Distribution upon Retirement

     10   

7.2 Distribution Upon Death or Determination of Disability

     11   

7.3 Distribution upon Separation from Service Other than due to Retirement,
Disability or Death

     12   

7.4 Scheduled In-Service Distribution Elections

     12   

7.5 Distribution Election Changes

     13   

7.6 Valuation of Distributions

     13   

7.7 Emergency Distribution

     14   

7.8 No Acceleration of AIP Bonus

     14   

ARTICLE VIII Beneficiary Designations

     15   

8.1 Beneficiary

     15   

8.2 Beneficiary Designation; Change of Beneficiary Designation

     15   

8.3 Acknowledgment

     15   

8.4 No Beneficiary Designation

     15   

8.5 Divorce

     15   

8.6 Doubt as to Beneficiary

     15   

8.7 Discharge of Obligations

     15   

ARTICLE IX Administration

     16   

9.1 Administrative Committee

     16   

9.2 Benefits Committee

     16   

 

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ARTICLE X Claims and Review Procedure

     17   

10.1 Claims Procedure

     17   

10.2 Review Procedure

     18   

10.3 Disability Claims

     18   

10.4 Exhaustion of Administrative Remedies

     18   

10.5 Deadline to File Legal Action

     19   

ARTICLE XI Amendment and Termination of the Plan

     19   

11.1 Amendments

     19   

11.2 Termination of the Plan

     19   

ARTICLE XII Miscellaneous

     21   

12.1 Unfunded and Unsecured

     21   

12.2 Restriction Against Assignment

     21   

12.3 Trust

     21   

12.4 Withholding

     22   

12.5 Payment in Event of Incapacity

     22   

12.6 Protective Provisions

     22   

12.7 Compliance with Section 409A

     22   

12.8 Recovery of Overpayments

     23   

12.9 Employment Not Guaranteed

     23   

12.10 Participants Should Consult Advisors

     23   

12.11 Successors

     23   

12.12 Indemnification

     23   

12.13 Headings

     23   

12.14 Construction of Provisions

     23   

12.15 Governing Law

     23   

 

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WPX ENERGY

NONQUALIFIED DEFERRED COMPENSATION PLAN

ARTICLE I

PURPOSE AND INTENT

1.1 Purpose of the Plan. WPX Energy Services Company, LLC, a Delaware limited
liability company (the “Company”), hereby establishes the WPX Energy
Nonqualified Deferred Compensation Plan (the “Plan”), effective January 1, 2013
(the “Effective Date”). The purpose of the Plan is to enable certain employees
to defer compensation and to be credited with matching allocations and earnings.
The Plan is intended to attract and retain highly qualified employees and to
reward such individuals for their contributions to the success of the Company
and its Affiliates. The Plan is also intended to assist such individuals in
saving for retirement by providing benefits that are in excess of benefits
permitted by applicable law under a qualified defined contribution retirement
plan.

1.2 Intent and Construction. The Plan is intended to be an unfunded and
unsecured plan maintained by the Company primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees. The Plan shall be “unfunded” for tax purposes and for purposes of
Title I of ERISA. A Participant’s interests under the Plan do not represent or
create a claim against specific assets of the Company or any Affiliate. Nothing
herein shall be deemed to create a trust of any kind or create any fiduciary
relationship between the Company, an Affiliate, the Administrative Committee,
the Benefits Committee and a Participant, the Participant’s Beneficiary or any
other person. To the extent any person acquires a right to receive payments
under this Plan, such right is no greater than the right of any other unsecured
general creditor of the Company or applicable Employer. The Plan is intended to
be in compliance with Section 409A of the Code and shall be interpreted, applied
and administered at all times in accordance with Section 409A of the Code and
the guidance issued thereunder.

ARTICLE II

DEFINITIONS

2.1 “Account” shall mean the bookkeeping account maintained under the Plan to
reflect a Participant’s Deferral Credits and Matching Contribution Credits and
any earnings credited thereto. A Participant’s “Account” shall consist of his or
her Deferral Account and Matching Account.

2.2 “Administrative Committee” shall mean the committee which is initially
comprised of an individual or of those individuals who are appointed to serve on
the Administrative Committee by the Benefits Committee, as well as any
individual who becomes a member of the Administrative Committee pursuant to
Section 9.1, until the time that any such individual ceases to be a member of
the Administrative Committee pursuant to Section 9.1.

2.3 “Affiliate” shall mean all persons with whom the Company would be considered
a single employer under Sections 414(b) and 414(c) of the Code.

2.4 “AIP” shall mean the WPX Energy Annual Incentive Plan, as amended from time
to time.

2.5 “Base Salary” shall mean, for each Plan Year, the salary or wages paid to an
Eligible Employee by an Employer while the Eligible Employee is entitled to
participate in the Plan, including base pay, short term disability paid by an
Employer, overtime and commissions. Base Salary shall be calculated before any
salary reduction amounts contributed to the Qualified Plan and any cafeteria
plan,

 

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flexible benefit plan, or qualified transportation plan established by an
Employer in accordance with Section 125 and related sections of the Code. Base
Salary shall include a differential wage payment under Section 3401(h)(2) of the
Code. Base Salary shall not include severance pay, housing pay, relocation pay
(including mortgage interest differential), other fringe benefits (taxable and
non-taxable) and other extraordinary compensation, all as determined by the
Administrative Committee in its sole and absolute discretion. Base Salary also
shall not include Employer contributions to or distributions from a nonqualified
deferred compensation plan, amounts included in income or realized from the
grant or exercise of a stock option, amounts realized when restricted stock
becomes transferable or is vested or is included in income pursuant to an
election under Section 83(b) of the Code and amounts realized from the sale,
exchange or other disposition of stock acquired under a stock option. Base
salary shall not include any bonus paid under the AIP, but shall include other
bonuses, if any, unless such bonuses are specifically excluded under a written
bonus arrangement.

2.6 “Beneficiary” or “Beneficiaries” shall mean, with respect to a Participant,
the person or persons designated or otherwise determined in accordance with
Article IX to receive any benefits which may become payable under the Plan by
reason of the death of the Participant. A person designated or otherwise
determined to be a Beneficiary under the terms of the Plan has no interest in or
right under the Plan until the Participant in question has died. A person will
cease to be a Beneficiary on the day on which all benefits to which such person
is entitled under the Plan have been distributed.

2.7 “Benefits Committee” shall mean the committee which is composed of an
individual or those individuals who are appointed by the Company, as well as any
individual who becomes a member of the Benefits Committee pursuant to
Section 9.2, until the time that any such individual ceases to be a member of
the Benefits Committee pursuant to Section 9.2.

2.8 “Board” shall mean the board of directors of WPX Energy, Inc.

2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended (including,
when the context requires, all regulations, interpretations and rulings issued
thereunder). Any reference to a specific provision of the Code includes a
reference to that provision as it may be amended from time to time and to any
successor provision.

2.10 “Company” shall mean WPX Energy Services Company, LLC.

2.11 “Compensation Committee” shall mean the committee of the Board designated
as the Compensation Committee.

2.12 “Deferral Account” shall mean the bookkeeping account maintained on behalf
of a Participant to reflect his or her Deferral Credits.

2.13 “Deferral Credits” shall mean the amount of Deferred Base Salary credited
to a Participant’s Deferral Account in accordance with Section 4.1 and the
amount of Deferred AIP Bonus credited to a Participant’s Deferral Account in
accordance with Section 4.2.

2.14 “Deferred AIP Bonus” shall mean the amount deferred by a Participant in
accordance with Section 4.2 from bonuses payable to the Participant under the
AIP.

2.15 “Deferred Base Salary” shall mean the Base Salary deferred by a Participant
in accordance with Section 4.1.

 

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2.16 “Disability” and “Disabled” shall mean (consistent with the requirements of
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
Employer. The Administrative Committee may require that the Participant submit
evidence of such qualification for disability benefits to determine that the
Participant is disabled under this Plan.

2.17 “Eligible Employee” shall mean an employee of an Employer who is in a class
of employees designated by the Compensation Committee to be eligible to
participate in the Plan.

2.18 “Emergency Distribution” shall mean an accelerated distribution of benefits
pursuant to Section 7.4 with respect to a Participant who has suffered an
Unforeseeable Emergency.

2.19 “Employer” shall mean the Company and any Affiliate which has been
designated by the Compensation Committee as a participating employer in the
Plan.

2.20 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended (including, when the context requires, all regulations, interpretations
and rulings issued thereunder). Any reference to a specific provision of ERISA
includes a reference to that provision as it may be amended from time to time
and to any successor provision.

2.21 “Excess Compensation” shall mean for a Plan Year the excess, if any, of
(a) the sum of (i) the Participant’s Base Salary for the Plan Year for services
rendered for an Employer, and (ii) the Participant’s AIP bonus payable with
respect to a performance period that coincides with the Plan Year or that ends
within the Plan Year, over (b) the annual compensation limit under Code
Section 401(a)(17) in effect for the calendar year in which the Plan Year
begins.

2.22 “Fund” or “Funds” shall mean one or more of the investment options
designated as an available investment option under the Plan pursuant to Section
5.2.

2.23 “Matching Account” shall mean the bookkeeping account maintained on behalf
of a Participant to reflect his or her Matching Contribution Credits.

2.24 “Matching Contribution Credits” shall mean the amounts credited to a
Participant’s Matching Account pursuant to Section 4.3.

2.25 “Participant” shall mean an Eligible Employee for whom an Account is
maintained. An individual will cease to be a Participant at such time that the
Participant’s Account has been fully distributed or forfeited in accordance with
the Plan.

2.26 “Plan” shall mean the WPX Energy Nonqualified Deferred Compensation Plan,
as amended.

2.27 “Plan Year” shall mean the calendar year.

2.28 “Qualified Plan” shall mean the WPX Energy Savings Plan, as amended.

 

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2.29 “Retirement” shall mean Separation from Service after attaining age
fifty-five (55) and having been credited with five (5) or more Years of Service.

2.30 “Retirement Account” shall mean a bookkeeping account maintained on behalf
of a Participant to which all or a portion of the Participant’s Account may be
allocated pursuant to the election or deemed election of the Participant in
accordance with Section 4.4.

2.31 “Scheduled In-Service Account” shall mean a bookkeeping account maintained
on behalf of a Participant to which all or a portion of the Participant’s
Account may be allocated pursuant to the election of the Participant in
accordance with Section 4.4.

2.32 “Scheduled In-Service Distribution” shall mean a scheduled distribution of
a specified portion of a Participant’s Account to commence prior to Separation
from Service, as provided under Section 7.4.

2.33 “Section 409A” shall mean Section 409A of the Code, as amended, and all
rules, regulations, interpretations and rulings issued thereunder.

2.34 “Separation from Service” shall mean the complete termination of a
Participant’s services as an employee of an Employer, whether voluntary or
involuntary, for any reason or, if less than a complete termination, such
services decrease to a level that is less than twenty percent (20%) of the
average level of services performed by the Participant over the immediately
preceding thirty-six (36) month period (or the full period of services if the
Participant has been employed by the Employer for less than thirty-six
(36) months). For purposes of applying this Section 2.34, the term “Separation
from Service” shall be applied in conformance with Section 1.409A-1(h) of the
Treasury Regulations. For the limited purpose of determining whether a
Separation from Service has occurred, the term “Employer” shall include the
person for whom the Participant performs services and all persons with whom such
person would be considered a single employer under Sections 414(b) and (c) of
the Code, except that in applying Sections 1563(a)(1), (2), and (3) of the Code
for purposes of determining a controlled group of corporations under
Section 414(b) of the Code, the language “at least 50 percent” is used instead
of “at least 80 percent” each place it appears in Section 1563(a)(1), (2), and
(3), and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes
of determining trades or businesses that are under common control for purposes
of Section 414(c) of the Code, “at least 50 percent” is used instead of “at
least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury
Regulations.

2.35 “Unforeseeable Emergency” 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 Section 152 of the Code,
without regard to subsections 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
Section 409A(a)(2)(B)(ii) of the Code and Section 1.409A-3(i)(3) of the Treasury
Regulations).

2.36 “Years of Service” shall mean the aggregate period of time during which an
individual was employed by an Employer or an Affiliate beginning with the
individual’s date of hire (or rehire, if applicable) and ending on the date of
the individual’s Separation from Service, subject to the following:

(a) Fractional periods of a year will be expressed in terms of days and
aggregated on the basis that 365 days of employment constitutes a “Year of
Service”.

 

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(b) If an individual terminates employment with an Employer or an Affiliate and
is rehired by an Employer or an Affiliate, all periods of time during which the
individual was employed by an Employer or an Affiliate shall be taken into
account and aggregated for purposes of determining the individual’s Years of
Service.

(c) If an individual: (i) was employed by The Williams Companies, Inc.
(“Williams”) or an affiliate of Williams on December 30, 2011; and
(ii) transferred employment directly from Williams to the Company prior to 11:59
p.m. on December 31, 2012, the individual’s service with Williams or its
affiliates shall be taken into account for purposes of determining the
individual’s years of service. For this purpose, an “affiliate” of Williams
shall be any person or entity with whom Williams would be considered a single
employer under Sections 414(b), (c) or (m) of the Code.

ARTICLE III

PARTICIPATION

An Eligible Employee shall become a Participant in the Plan by completing and
submitting to the Administrative Committee the appropriate deferral election,
including such other documentation and information as the Administrative
Committee may reasonably request, during the enrollment period established by
the Administrative Committee with respect to the first Plan Year in which the
Eligible Employee elects to participate in the Plan.

ARTICLE IV

DEFERRAL ELECTIONS AND MATCHING CONTRIBUTION CREDITS

4.1 Elections to Defer Base Salary.

(a) For each Plan Year, an Eligible Employee may elect to defer, as Deferred
Base Salary, up to 75% of the Base Salary to be otherwise paid to the Eligible
Employee for such Plan Year. The Eligible Employee’s Deferred Base Salary will
be deferred on a prorated basis for each payroll period of the Plan Year.

(b) Base Salary deferral elections must be filed:

(1) With respect to an individual who is an Eligible Employee as of the
December 31 preceding the Plan Year for which the deferral election is to be
effective, no later than such December 31 (or such earlier date as established
by the Administrative Committee); or

(2) With respect to an individual who first becomes an Eligible Employee during
a Plan Year, within thirty (30) days following the first date he or she becomes
an Eligible Employee. For purposes of this rule, an Eligible Employee will be
treated as first becoming an Eligible Employee during a Plan Year only if:

(i) he or she was not eligible to participate in the Plan or any other plan
required by Section 409A to be aggregated with the Plan at any time during the
twenty-four (24) month period ending on the date during the Plan Year he or she
becomes an Eligible Employee; or

(ii) he or she was paid all amounts previously due under the Plan and any other
plan required by Section 409A to be aggregated with the Plan and,

 

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on and before the date of the last such payment, was not eligible to continue to
participate in the Plan and any other plan required by Section 409A to be
aggregated with the Plan for periods after such payment.

A deferral election under this Section 4.1(b)(2) will be effective no earlier
than the payroll period beginning after the payroll period in which the deferral
election is received by the Administrative Committee or its designee.

(3) An Eligible Employee’s Deferred Base Salary with respect to a Plan Year
shall be credited to the Eligible Employee’s Deferral Account for such Plan Year
and shall also be allocated to a Retirement Account or to a Scheduled In-Service
Account or Accounts in accordance with Section 4.4.

(4) If a payroll period begins in one Plan Year and ends in the following Plan
Year, the Deferred Base Salary with respect to such payroll period shall be
determined by the Eligible Employee’s deferral election made with respect to the
Plan Year in which the payroll period ends, consistent with the default rules
under Section 1.409A-2(a)(13) of the Treasury Regulations.

(5) The total Base Salary deferred by a Participant shall be limited, if
necessary, to satisfy Social Security taxes, other employment taxes, federal,
state or local income taxes, employee benefit plan deferrals or contributions,
and any other required or necessary withholding requirements as determined by
the Administrative Committee.

4.2 Elections to Defer AIP Bonuses.

(a) For each Plan Year, an Eligible Employee may elect to defer all or a portion
of the bonus (if any) under the AIP to be otherwise paid to the Eligible
Employee with respect to a performance period under the AIP that coincides with
the Plan Year or that ends within the Plan Year.

(b) AIP bonus deferral elections must be filed:

(1) With respect to an individual who is an Eligible Employee as of the
December 31 preceding the performance period for which the deferral election is
to be effective, no later than such December 31 (or such earlier date as
established by the Administrative Committee).

(2) With respect to an individual who first becomes an Eligible Employee during
a Plan Year, within thirty (30) days following the first date he or she becomes
an Eligible Employee. For purposes of this rule, an Eligible Employee will be
treated as first becoming an Eligible Employee during a Plan Year only if:

(i) he or she was not eligible to participate in the Plan or any other plan
required by Section 409A to be aggregated with the Plan at any time during the
twenty-four (24) month period ending on the date during the Plan Year he or she
becomes an Eligible Employee; or

(ii) he or she was paid all amounts previously due under the Plan and any other
plan required by Section 409A to be aggregated with the Plan and, on and before
the date of the last such payment, was not eligible to continue to

 

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participate in the Plan and any other plan required by Section 409A to be
aggregated with the Plan for periods after such payment.

An AIP bonus deferral election under this Section 4.2(b)(2) will be effective
only with respect to an AIP bonus paid for services performed after such
election. For this purpose, the amount of the AIP bonus payable to the Eligible
Employee for services performed after the Eligible Employee’s deferral election
will be determined by multiplying the AIP bonus by a fraction, the numerator of
which is the number of calendar days remaining in the performance period after
the election and the denominator of which is the total number of calendar days
in such performance period. For purposes of this Section 4.2(b)(2), the date of
an Eligible Employee’s election is the date the deferral election is received by
the Administrative Committee or its designee.

(3) An Eligible Employee’s Deferred AIP Bonus with respect to a performance
period that coincides with a Plan Year or that ends within a Plan Year shall be
credited to the Eligible Employee’s Deferral Account for such Plan Year and
shall also be allocated to a Retirement Account or to a Scheduled In-Service
Account or Accounts in accordance with Section 4.4.

(4) The total AIP bonus deferred by a Participant shall be limited, if
necessary, to satisfy Social Security taxes, other employment taxes, federal,
state or local income taxes, employee benefit plan deferrals or contributions,
and any other required or necessary withholding requirements as determined by
the Administrative Committee.

4.3 Matching Contribution Credits. If a Participant is employed by the Employer
on the last day of the Plan Year and if the Participant has made a deferral
election for such Plan Year pursuant to Sections 4.1 or 4.2, a Matching
Contribution Credit will be credited to the Participant’s Matching Account in an
amount equal to the total amount of Deferred Base Salary and Deferred AIP Bonus
credited to the Participant’s Deferral Account with respect to such Plan Year;
provided, however, in no event shall the Matching Contribution Credit for such
Plan Year exceed 6% of the Participant’s Excess Compensation for such Plan Year.
Notwithstanding the preceding sentence, a Matching Contribution Credit for a
Plan Year shall not be made with respect to any Deferred Base Salary or Deferred
AIP Bonus for such Plan Year that has been withdrawn in accordance with
Section 7.7.

4.4 Account Allocation Elections.

(a) At the same time that a Participant makes an election to defer Base Salary
or an AIP bonus, the Participant shall also make an election to allocate the
amounts subject to each such deferral election to the Participant’s Retirement
Account or to a Scheduled In-Service Account or Accounts. Such election shall
apply to any Deferral Credits and Matching Contribution Credits allocated to
such Participant’s Account with respect to such Plan Year.

(b) If, at the time of a Participant’s deferral election, the Participant fails
to make an allocation election under Section 4.4(a), then all amounts credited
to the Participant’s Account for such Plan Year shall be allocated to the
Participant’s Retirement Account.

(c) Amounts allocated to a Scheduled In-Service Account shall be distributed in
accordance with the Scheduled In-Service Distribution election applicable to
such Account, subject to the terms of Section 7.4. Amounts allocated to a
Retirement Account shall be distributed in accordance with the provisions of
Article VIII, exclusive of Section 7.4.

 

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4.5 Irrevocability of Deferral Elections and Account Allocation Elections.

(a) Except as otherwise provided herein and in Section 4.6, once made for a Plan
Year, deferral elections under Sections 4.1 and 4.2 and the corresponding
account allocation elections under Section 4.4 are irrevocable after the latest
date by which the deferral election is required to be filed.

(b) A deferral election for one Plan Year will not automatically be given effect
for a subsequent Plan Year, so that if a deferral of Base Salary or an AIP bonus
is desired for a subsequent Plan Year, a separate election must be made by the
Participant.

(c) In the event a Participant has a Separation from Service for any reason,
then his or her election to defer Base Salary, if any, will terminate as of the
date of such Separation from Service (but will be effective with respect to the
last regular paycheck issued to such Participant), regardless of whether the
Participant continues to receive Base Salary or other remuneration from any
Employer or Affiliate thereafter. If a Participant has a Separation from Service
for any reason and is rehired (whether or not as an Eligible Employee) within
the same Plan Year, his or her election to defer Base Salary, if any, shall be
automatically reinstated and shall remain in effect for the remainder of such
Plan Year.

(d) In the event a Participant has a Separation from Service for any reason,
then his or her election to defer an AIP bonus, if any, will remain in effect
with respect to the AIP bonus, if any, subject to such deferral election. If a
Participant has a Separation from Service for any reason and is rehired (whether
or not as an Eligible Employee) within the same Plan Year or the same
performance period, his or her election to defer an AIP bonus, if any, will
remain in effect with respect to the AIP bonus, if any, subject to any such
deferral election.

4.6 Suspension of Deferral Elections.

(a) In the event a Participant receives a distribution from the Qualified Plan
(or any other plan or successor plan sponsored by an Employer or an Affiliate)
on account of hardship, which distribution is made pursuant to
Section 1.401(k)-1(d)(3) of the Treasury Regulations and requires suspension of
deferrals under other arrangements such as this Plan, the Participant’s deferral
elections under Sections 4.1 and 4.2 shall be cancelled for the Plan Year in
which the hardship distribution is received and such Participant shall be
ineligible to defer Base Salary or an AIP bonus for such additional time period
as is necessary to comply with Section 1.401(k)-1(d)(3) of the Treasury
Regulations.

(b) In the event a Participant requests a distribution pursuant to Section 7.7
due to an Unforeseeable Emergency, or the Participant requests a cancellation of
deferrals under the Plan to alleviate his or her Unforeseeable Emergency, and
the Administrative Committee determines that the Participant’s Unforeseeable
Emergency may be relieved through the cessation of deferrals under the Plan, the
Participant’s deferral elections under Sections 4.1 and/or 4.2, if any, for such
Plan Year as determined by the Administrative Committee, shall be cancelled as
soon as administratively practicable following such determination by the
Administrative Committee.

ARTICLE V

Deemed Investment of Accounts

5.1 Participant Designation. Each Participant shall designate, in accordance
with any procedures, restrictions and conditions established by the
Administrative Committee, the manner in which

 

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the amounts credited to the Participant’s Account shall be deemed to be invested
for purposes of determining the amount of earnings and losses to be credited to
such Account. For this purpose, a Participant may specify that all or any
percentage of his or her Account shall be deemed to be invested, in such
percentage increments as the Administrative Committee may prescribe, in one or
more of the Funds that have been designated as alternative investments under the
Plan pursuant to Section 5.2. A Participant shall be permitted to make separate
investment elections with respect to each Scheduled In-Service Account and his
or her Retirement Account. A Participant’s designation shall remain in effect
until a new designation is made in the manner required by the Administrative
Committee, subject to the termination and/or replacement of a Fund as an
available investment option and further subject to any timing restrictions
imposed by the Administrative Committee. If a Participant fails to provide a
designation in the manner required by the Administrative Committee, the
Participant’s Account (or any Scheduled In-Service Account or Retirement Account
for which a designation is not provided) shall be deemed to be invested in a
default Fund designated by the Company or its designee from time to time for
such purpose.

5.2 Investment Funds. The Company or its designee shall specify the investment
options that will constitute the Funds and may change the available investment
options from time to time. The Company may designate employees of the Company or
other individuals or entities to act, solely in an agency capacity, on behalf of
the Company for this purpose. The Company and any employee of the Company and
other individual or entity designated to act on behalf of the Company for the
purpose of selecting the Funds, as well as the Administrative Committee and the
Benefits Committee, make no promise or guarantee regarding the performance of
any Fund and shall have no liability to any Participant, Beneficiary or any
other individual or entity with respect to the selection of the Funds or any
decrease (or lack of increase) in a Participant’s or Beneficiary’s Account as a
result of the performance or lack thereof of: (i) the Funds selected by the
Participant; or (ii) the default Fund applicable to amounts for which a
Participant or Beneficiary has failed to provide an investment designation in
the manner required by the Administrative Committee. A Participant or
Beneficiary assumes all risk associated with his or her investment designation
or failure to provide an investment designation, as well as all risk associated
with the unsecured nature of the Plan as described in Section 12.1.

5.3 Earnings Allocations. The balance of a Participant’s Account shall reflect
the result of daily pricing of the assets in which such Account is deemed
invested from time to time until the time of distribution.

5.4 Purpose of Investment Elections. A Participant’s Fund elections shall be
solely for purposes of calculation of the notional gains and losses credited on
the Participant’s Account. The Employers shall have no obligation to set aside
or invest amounts as directed by the Participant and, if an 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.

ARTICLE VI

ACCOUNTS

6.1 Nature of Accounts. Each Participant’s Account and any subaccounts created
thereunder will be used solely as a measuring device to determine the amount to
be paid to a Participant under this Plan. The Accounts do not constitute, nor
will they be treated as, property or a trust fund of any kind. A Participant’s
rights hereunder are limited to the right to receive Plan benefits as provided
herein.

6.2 Crediting of Subaccounts. Deferral Credits and Matching Contribution Credits
will be credited to each Participant’s Account as follows:

 

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(a) Deferral Credits (with respect to Deferred Base Salary and Deferred AIP
Bonuses) will be credited to the Participant’s Deferral Account as soon as
reasonably practicable following the date such Base Salary or AIP bonus, as
applicable, would have otherwise been paid in cash.

(b) Matching Contribution Credits for a Plan Year will be credited to the
Participant’s Matching Account as of a date established by the Administrative
Committee following the end of the Plan Year to which such Matching Contribution
Credits relate (provided that such date shall be no later than the last day of
the next following Plan Year).

A Participant’s Account, including any earnings credited thereto, will be
maintained until the Participant’s Plan benefits have been paid in full.

6.3 Vesting. A Participant shall be vested at all times in amounts credited to
his or her Deferral Account and Matching Account, including earnings thereon.

6.4 Scheduled In-Service Accounts and Retirement Accounts.

(a) Establishment of Accounts. For purposes of recordkeeping the distribution
and investment elections made by a Participant pursuant to Sections 4.4 and 5.1,
respectively, the Administrative Committee shall establish and maintain: (i) a
Scheduled In-Service Account for each Scheduled In-Service Distribution (up to
five (5)) elected by the Participant; and (ii) a Retirement Account for all
amounts that are not subject to a Scheduled In-Service Distribution election. A
Participant’s Account shall be divided among a Participant’s Scheduled
In-Service Account(s), if any, and the Participant’s Retirement Account in
accordance with the elections made by the Participant pursuant to Section 4.4.

(b) Establishment of Fund Subaccounts. Each Scheduled In-Service Account and
Retirement Account shall be further divided into separate subaccounts (“Fund
Subaccounts”), each of which corresponds to the Funds elected by the Participant
pursuant to Section 5.1 with respect to such Scheduled In-Service Account and
Retirement Account. As soon as reasonably practicable after amounts are
allocated to a Scheduled In-Service Account or a Retirement Account, the
Administrative Committee shall credit the applicable Fund Subaccounts of such
Accounts in accordance with the Participant’s investment elections.

ARTICLE VII

DISTRIBUTIONS

7.1 Distribution upon Retirement. In the event of a Participant’s Retirement,
the Participant’s Account shall be paid in accordance with the distribution
elections described in this Section 7.1. The elections made pursuant to this
Section 7.1 shall govern the distribution of the Participant’s Retirement
Account; provided that, pursuant to Section 7.4(e), amounts allocated to a
Scheduled In-Service Account shall also be governed by these distribution
elections in the event the Participant’s Retirement occurs prior to commencement
of the applicable Scheduled In-Service Distribution.

(a) Initial Elections. At the time of making an initial deferral election
pursuant to Sections 4.1 or 4.2:

(1) The Participant shall elect whether to receive distribution of the
Participant’s Account upon the Participant’s Retirement in:

 

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(i) a single lump sum payment; or

(ii) a series of substantially equal annual installment payments to be paid over
a predetermined period of up to fifteen (15) years;

provided, however, that if the value of the Participant’s Account to be paid in
installment payments falls below $25,000 as of any date an installment payment
is to be paid, the Participant’s Account shall instead be paid in a single lump
sum payment on such payment date.

(2) The Participant shall elect whether distribution of the Participant’s
Account upon the Participant’s Retirement shall be paid (or commence to be
paid):

(i) within the thirty (30) day period beginning on the first day of the seventh
(7th) month commencing after the Participant’s Retirement; or

(ii) within the thirty (30) day period beginning on the first day of the
thirteenth (13th) month commencing after the Participant’s Retirement.

If the Participant has elected to receive installment payments, subsequent
installments shall be paid during February of calendar years following the
calendar year in which the initial installment is paid.

(3) If the Participant fails to make a distribution election at the time of the
initial deferral election, the Participant shall be deemed to have elected to
receive distribution in the form of a single lump-sum payment payable within the
thirty (30) day period beginning on the first day of the seventh (7th) month
commencing after the Participant’s Retirement.

(b) The distribution elections made pursuant to Section 7.1(a) shall apply to
amounts credited to a Participant’s Account in subsequent Plan Years. A
Participant shall not be permitted to make separate distribution elections with
respect to amounts credited to a Participant’s Account in subsequent Plan Years.

(c) A Participant may make one (1) change to delay payment or change the form of
payment of the Participant’s Account upon Retirement, provided that any such
change shall be subject to the election change restrictions described in
Section 7.5.

7.2 Distribution Upon Death or Determination of Disability.

(a) In the event a Participant is determined to be Disabled or dies prior to the
commencement of payment of Plan benefits, the Participant’s Account shall be
paid to the Participant or, in the case of death, the Participant’s Beneficiary,
in a single lump sum payment of cash within the ninety (90) day period beginning
on the date of determination of Disability or the date of death, as applicable.

(b) In the event a Participant is determined to be Disabled or dies after the
commencement of installment payments, the remaining amount credited to a
Participant’s Account shall be paid to the Participant or, in the case of death,
the Participant’s Beneficiary, in a single lump sum payment of cash within the
ninety (90) day period beginning on the date of determination of Disability or
the date of death, as applicable.

 

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7.3 Distribution upon Separation from Service Other than due to Retirement,
Disability or Death. In the event of a Participant’s Separation from Service
other than by reason of Retirement, Disability or death, the Participant’s
Account shall be paid to the Participant in a single lump sum payment of cash
within the thirty (30) day period beginning on the first day of the seventh
(7th) month commencing after such Separation from Service.

7.4 Scheduled In-Service Distribution Elections.

(a) At the time of making a deferral election pursuant to Sections 4.1 or 4.2, a
Participant may elect to receive a Scheduled In-Service Distribution of all or a
specified percentage of amounts credited to the Participant’s Account with
respect to the Plan Year for which the deferral election is made, subject to the
limitations described herein. A Scheduled In-Service Account shall be
established to recordkeep amounts subject to such Scheduled In-Service
Distribution. At the time of such election, the Participant shall elect whether
to receive the Scheduled In-Service Distribution:

(1) in a single lump sum payment to be paid during February of a calendar year
specified by the Participant; or

(2) in a series of substantially equal annual installment payments to be paid
over a predetermined period of up to five (5) years, to commence to be paid
during February of a calendar year specified by the Participant. Subsequent
installments shall be paid during February of calendar years following the
calendar year in which the initial installment is paid.

provided, however, that if the value of a Participant’s Scheduled In-Service
Account to be paid in installment payments falls below $25,000 as of any date an
installment payment is to be paid, such Scheduled In-Service Account shall
instead be paid in a single lump sum payment on such payment date.

(b) The initial payment date for a Scheduled In-Service Account shall be no
earlier than the February 1 of the second Plan Year beginning after the Plan
Year for which Deferral Credits are first allocated to such Scheduled In-Service
Account.

(c) A Participant may make up to five (5) separate Scheduled In-Service
Distribution elections, provided that no portion of the Participant’s Account
may be subject to more than one (1) Scheduled In-Service Distribution election.
If a Participant has made five (5) Scheduled In-Service Distribution elections,
such Participant shall only be permitted to make a new Scheduled In-Service
Distribution election following complete payment of at least one (1) Scheduled
In-Service Distribution.

(d) A Participant may elect to allocate amounts credited to the Participant’s
Account with respect to subsequent Plan Years to an existing Scheduled
In-Service Account; provided, however, that such amounts may not be allocated to
a Scheduled In-Service Account during the year that it is scheduled to be paid.

(e) In the event of a Participant’s Separation from Service (for a reason other
than death or determination of Disability) prior to commencement of a Scheduled
In-Service Distribution, the Scheduled In-Service Distribution election shall be
nullified and the Scheduled In-Service Account shall be distributed in the form
and at the time applicable to such Separation from Service under Sections 7.1 or
7.3, as applicable. In the event of a Participant’s Separation

 

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from Service (for a reason other than death or determination of Disability)
after a Scheduled In-Service Distribution has commenced installment payments,
such installment payments shall continue to be paid in the form and at the time
as they would have been paid to the Participant had the Participant not
Separated from Service. In the event of a Participant’s death or determination
of Disability at any time, the Scheduled In-Service Distribution election shall
be nullified and the Scheduled In-Service Account shall be distributed in the
form and at the time described in Section 7.2.

(f) A Participant may make two (2) changes to delay payment or change the form
of payment with respect to a Scheduled In-Service Distribution, provided that
any such change shall be subject to the election change restrictions described
in Section 7.5.

(g) Amounts paid to a Participant pursuant to a Scheduled In-Service
Distribution shall reduce the amount credited to the Participant’s Account and
shall reduce the amount available for distribution to the Participant upon the
Participant’s Retirement or other Separation from Service, death or Disability.

7.5 Distribution Election Changes. The following restrictions shall apply to a
Participant’s election to change the time and/or form of payment with respect to
amounts that have been credited to a Participant’s Account. In addition, such
election changes shall be made in accordance with any rules established by the
Administrative Committee, and shall comply with all applicable requirements of
Section 409A.

(a) Except as provided in Section 7.7, a Participant may not elect to accelerate
a distribution.

(b) 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 In-Service Distribution, the new election delays payment for a period
of at least five (5) years from the date that payment would otherwise have been
paid (or, in the case of installment payments, five (5) years from the date the
first installment was scheduled to be paid), absent the new election; and

(3) in the case of payments made according to a Scheduled In-Service
Distribution, the new election is made not less than twelve (12) months before
the date on which payment is scheduled to be paid (or, in the case of
installment payments, twelve (12) months before the date the first installment
payment was scheduled to be paid), absent the new election.

(c) For purposes of application of the above election change limitations, the
entitlement to installment payments shall be treated as the entitlement to a
single payment.

7.6 Valuation of Distributions.

(a) Lump Sum Distributions. Any lump sum distribution of the Participant’s
Account pursuant to Sections 7.1, 7.2 or 7.3 shall be the value of the
Participant’s Account as of

 

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the last day of the month preceding the date of distribution. In the case of a
Scheduled In-Service Distribution, any lump sum distribution of the applicable
Scheduled In-Service Account shall be the value of such Scheduled In-Service
Account as of the last day of the month preceding the date of distribution.

(b) Installment Distributions. An installment payment payable pursuant to
Section 7.1 shall be determined by dividing the value of the Participant’s
Account, determined as of the last day of the month preceding the date of
distribution of the installment, by the number of installments remaining. In the
case of a Scheduled In-Service Distribution, an installment payment shall be
determined by dividing the value of the applicable Scheduled In-Service Account,
determined as of the last day of the month preceding the date of distribution of
the installment, by the number of installments remaining.

7.7 Emergency Distribution. Upon a finding that the Participant has suffered an
Unforeseeable Emergency, subject to compliance with Section 409A, the
Administrative Committee may, at the request of the Participant, accelerate
distribution of benefits in the amount reasonably necessary to alleviate such
Unforeseeable Emergency subject to the following conditions:

(a) Form of Request. The request to take an Emergency Distribution shall be made
by filing a form provided by and filed with the Administrative Committee.

(b) Amount of Distribution. The amount distributed with respect to an
Unforeseeable Emergency shall not exceed the amount necessary to satisfy such
financial emergency plus amounts necessary to pay taxes or penalties reasonably
anticipated to result from 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) or by cessation of deferrals under the Plan.

(c) Source of Distribution. Any Emergency Distribution shall first be made on a
pro rata basis from the Participant’s Scheduled In-Service Accounts with respect
to amounts allocated to such Accounts for the same Plan Year as the Emergency
Distribution, and then on a pro rata basis from the Participant’s Scheduled
In-Service Accounts, and then from the Participant’s Retirement Account.

(d) Timing of Distribution. The amount determined by the Administrative
Committee as an Emergency Distribution shall be paid in a single lump sum
payment of cash as soon as practicable after the end of the calendar month in
which the Emergency Distribution election is made and approved by the
Administrative Committee.

7.8 No Acceleration of AIP Bonus. The time of payment of any AIP bonus that a
Participant has elected to defer but that has not yet been credited to the
Participant’s Deferral Account because it is not yet payable without regard to
the deferral shall not be accelerated as a result of the provisions of this
Article. If, pursuant to the provisions of this Article, distribution has
already occurred at the time such AIP bonus becomes payable, such AIP bonus
shall be paid to the Participant on the date it would have been payable had the
Participant not made a deferral election.

 

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ARTICLE VIII

BENEFICIARY DESIGNATIONS

8.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
whom payment under the Plan shall be made in the event of the Participant’s
death.

8.2 Beneficiary Designation; Change of Beneficiary Designation. A Participant
shall designate his or her Beneficiary by executing and submitting a beneficiary
designation form (which may be electronic) to the Administrative Committee in
the manner prescribed by the Administrative Committee. A Participant shall have
the right to change a Beneficiary by executing and submitting a new beneficiary
designation form in the manner prescribed by the Administrative Committee. Upon
the acceptance by the Administrative Committee or its designee of a new
beneficiary designation form, all beneficiary designations previously filed
shall be cancelled. The Employer and the Administrative Committee or its
designee shall be entitled to rely on the last beneficiary designation form
filed by the Participant and acknowledged by the Administrative Committee or its
designee prior to his or her death.

8.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received and acknowledged by the Administrative
Committee or its designee during the Participant’s lifetime.

8.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in this Article VIII or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant’s benefits, then the Administrative Committee shall direct the
distribution of such benefits to the Participant’s estate unless the Participant
is survived by a spouse, in which event such distribution shall be made to the
surviving spouse.

8.5 Divorce. Prior to the Participant’s death and upon the entry of a decree of
divorce respecting a married Participant and his or her spouse, any designation
of such spouse as Beneficiary of such Participant shall be revoked automatically
and become ineffective on and after the date the decree is entered. The
automatic revocation of such Beneficiary designation shall cause the
Participant’s benefit to be distributed under the provisions of the Plan as if
such spouse had predeceased the Participant. However, a Participant may
designate a former spouse as a Beneficiary under the Plan, provided a properly
completed Beneficiary designation form is submitted to and acknowledged by the
Administrative Committee or its designee subsequent to entry of a decree of
divorce respecting the Participant and such former spouse.

8.6 Doubt as to Beneficiary. If the Administrative Committee has any doubt as to
the proper Beneficiary to receive payments pursuant to the Plan, the
Administrative Committee shall have the right, exercisable in its discretion, to
withhold such payments until this matter is resolved to the Administrative
Committee’s satisfaction.

8.7 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge the Employer and all Affiliates
from all further obligations under the Plan with respect to the Participant.

 

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ARTICLE IX

ADMINISTRATION

9.1 Administrative Committee.

(a) Membership and Voting. The Administrative Committee shall consist of not
less than one (1) member. The Administrative Committee may remove any of its
members at any time, with or without cause, by written notice to such member.
Any member may resign by delivering a written resignation to the Administrative
Committee. Vacancies in the Administrative Committee arising by death,
resignation or removal shall be filled by the Administrative Committee. The
Administrative Committee shall act by a majority of its members at the time in
office, and such action may be taken by a vote at a meeting, in writing without
a meeting, or by telephonic communications. Attendance at a meeting shall
constitute waiver of notice thereof. A member of the Administrative Committee
who is a Participant of the Plan shall not vote on any question relating
specifically to such Participant. Any such action shall be voted or decided by a
majority of the remaining members of the Administrative Committee. The
Administrative Committee shall designate one (1) of the members as the chairman
and shall appoint a secretary who may, but need not, be a member. The
Administrative Committee may appoint from its members such subcommittees with
such powers as the Administrative Committee shall determine.

(b) Duties of Administrative Committee. The Administrative Committee shall
administer the Plan in accordance with its terms and shall have all the powers
and discretionary authority necessary to carry out such terms. The
Administrative Committee shall execute any certificate, instrument or other
written direction on behalf of the Plan and may direct the Employer to make any
payment on behalf of the Plan. All interpretations of this Plan, and questions
concerning its administration and application, shall be determined by the
Administrative Committee in its discretion, and such determination shall be
binding on all persons, except as otherwise expressly provided herein. The
Administrative Committee may appoint such accountants, counsel, specialists, and
other persons as the Administrative Committee deems necessary or desirable in
connection with the administration of this Plan. Such accountants and counsel
may, but need not, be accountants and counsel for the Employer or an Affiliate.

(c) Establishment of Rules and Procedures. The Administrative Committee may
establish such rules and procedures as are necessary for the proper
administration of the Plan. All Participant elections, including but not limited
to elections with respect to: (i) deferrals of Base Salary and/or AIP bonuses;
(ii) the Funds which shall act as the basis for crediting of earnings or losses
on Account balances; (iii) the form and timing of distributions; and
(iv) Beneficiary designations, must be made in a form provided by the
Administrative Committee and must be made in accordance with the procedures,
requirements and deadlines established by the Administrative Committee.

9.2 Benefits Committee.

(a) Membership and Voting. The Benefits Committee shall consist of not less than
one (1) member and not more than five (5) members and vacancies of the Benefits
Committee shall be filled by the remaining members of the Benefits Committee.
The Benefits Committee may remove any of its members at any time, with or
without cause, by written notice to such member. Any member may resign by
delivering a written resignation to the Benefits Committee. The Benefits
Committee shall act by a majority of its members at the time in office, and such

 

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action may be taken by a vote at a meeting, in writing without a meeting, or by
telephonic communications. Attendance at a meeting shall constitute waiver of
notice thereof. A member of the Benefits Committee who is a Participant of the
Plan shall not vote on any question relating specifically to such Participant.
Any such action shall be voted or decided by a majority of the remaining members
of the Benefits Committee. The Benefits Committee shall designate one (1) of the
members as the chairman and shall appoint a secretary who may, but need not, be
a member.

(b) Authority of Benefits Committee. The Benefits Committee’s sole
responsibility with respect to the Plan shall be the authority to approve
certain amendments to the Plan as described in Section 11.1. The Benefits
Committee shall have no discretionary authority under the Plan. In the
performance of its settlor responsibilities, the Benefits Committee may appoint
such accountants, counsel, specialists, and other persons, as it deems necessary
or desirable in connection with its duties under this Plan. Such accountants and
counsel may, but need not, be accountants and counsel for the Employer or an
Affiliate.

ARTICLE X

CLAIMS AND REVIEW PROCEDURE

10.1 Claims Procedure. Any Participant or Beneficiary may file a written claim
with the Administrative Committee setting forth the nature of the benefit
claimed, the amount thereof, and the basis for claiming entitlement to such
benefit. A claim under this Plan shall be adjudicated by the Administrative
Committee in accordance with this Article X.

(a) Initial Claim. The claimant initiates a claim by submitting to the
Administrative Committee a written claim for benefits.

(b) Timing of Administrative Committee Response. The Administrative Committee
shall respond to such claimant within ninety (90) days after receiving the
claim. If the Administrative Committee determines that special circumstances
require additional time for processing the claim, the Administrative Committee
can extend the response period by an additional ninety (90) days by notifying
the claimant in writing, prior to the end of the initial ninety (90) day period,
that an additional period is required. Such notice shall indicate the special
circumstances requiring the additional time and the date by which the
Administrative Committee expects to respond. If the period of time is extended
because the claimant has failed to provide necessary information to decide the
claim, the period for the Administrative Committee to respond shall be tolled
from the date on which the notification of the additional period is sent to the
claimant, until the date on which the claimant provides the information. If the
claimant fails to provide necessary information to decide the claim within the
time period specified by the Administrative Committee, the claim shall be
denied.

(c) Notice of Decision. If the Administrative Committee denies part or all of
the claim, the Administrative Committee shall notify the claimant in writing of
such denial. Such notice shall include the specific reason or reasons for the
denial; specific references to the Plan provisions on which the denial is based;
a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and a description of the Agreement’s review procedure
including a statement of the claimant’s rights to bring a civil action under
Section 502 of the ERISA following an adverse determination on review.

 

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(d) Deadline to File Claim. To be considered timely under the Plan’s claim and
review procedure, a claim for payment must be filed with the Administrative
Committee on or before the last day of the 12th month beginning after the due
date for the requested payment or benefit.

10.2 Review Procedure. If the Administrative Committee denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review by the
Administrative Committee of the denial, as follows:

(a) Review Request. To initiate the review, the claimant, within sixty (60) days
after receiving the Administrative Committee’s notice of denial, must file with
the Administrative Committee a written request for review.

(b) Additional Submissions. The claimant shall have the opportunity to submit
written comments, documents, records and other information relating to the
claim. The claimant shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits. The review of the claim shall
take into account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

(c) Timing of Administrative Committee Response. The Administrative Committee
shall respond in writing to such claimant within sixty (60) days after receiving
the request for review. If the Administrative Committee determines that special
circumstances require additional time for processing the claim, the
Administrative Committee can extend the response period by an additional sixty
(60) days by notifying the claimant in writing, prior to the end of the initial
sixty (60) day period, that an additional period is required. Such notice shall
indicate the special circumstances requiring the additional time and the date by
which the Administrative Committee expects to respond. If the period of time is
extended because the claimant has failed to provide necessary information to
decide the claim, the period for the Administrative Committee to respond shall
be tolled from the date on which the notification of the additional period is
sent to the claimant, until the date on which the claimant provides the
information. If the claimant fails to provide necessary information to decide
the claim within the time period specified by the Administrative Committee, the
claim shall be denied.

(d) Notice of Decision. The Administrative Committee shall notify the claimant
in writing of its decision on review. In the case of denial, such notice shall
include the specific reason or reasons for the denial; specific references to
the Plan provisions on which the denial is based; a statement that the claimant
is entitled to receive, upon request and free of charge, reasonable access to,
and copies of, all documents, records and other information relevant to the
claimant’s claim for benefits; and a statement of the claimant’s right to bring
an action under Section 502(a) of ERISA.

10.3 Disability Claims. In the event a Participant’s or Beneficiary’s claim
relates to a determination of disability, the claim and review procedures
described in Sections 10.1 and 10.2 shall be modified as necessary to comply
with the requirements applicable to disability claims under 29 C.F.R. §
2560.503-1.

10.4 Exhaustion of Administrative Remedies. No claimant may commence any legal
action to recover a benefit under this Agreement or to enforce or clarify rights
under this Plan until the claim and review procedure set forth herein has been
exhausted in its entirety. In any such legal action, all explicit

 

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and all implicit determinations by the Administrative Committee (including, but
not limited to, determinations as to whether the claim, or a request for a
review of a denied claim, was timely filed) shall be afforded the maximum
deference permitted by law.

10.5 Deadline to File Legal Action. No legal action to recover benefits under
this Plan or to enforce or clarify rights under this Plan may be brought by any
claimant on any matter pertaining to this Plan unless the legal action is
commenced in the proper forum on or before the last day of the twelfth
(12th) month beginning after the date the claimant has received a denial on
review following exhaustion of the claim and review procedure.

ARTICLE XI

AMENDMENT AND TERMINATION OF THE PLAN

11.1 Amendments.

(a) Right to Amend. The Compensation Committee shall have the right at any time
and from time to time, and retroactively if deemed necessary or appropriate, to
modify or amend in whole or in part any or all of the provisions of the Plan.
The Benefits Committee shall have the right at any time and from time to time,
and retroactively if deemed necessary or appropriate, to modify or amend in
whole or in part any or all of the provisions of the Plan, provided such
modification or amendment constitutes a non-material amendment. Any change that
would in any way increase the monetary benefit to participants would be
considered material and require approval by the Compensation Committee.
Non-material amendments consist of: (i) changes required by applicable law,
(ii) modifications of the administrative provisions of the Plan to cause the
Plan to operate more efficiently, (iii) changes required as part of the
collective bargaining process, and (iv) modifications or amendments to
incorporate changes provided that such modification or amendment does not
materially increase Employer contributions. Any amendment or modification to the
Plan shall be effective at such date as the Compensation Committee may determine
with respect to any amendment adopted by the Compensation Committee and as the
Benefits Committee may determine with respect to any non-material amendment
adopted by the Benefits Committee.

(b) Effect of Amendment. The right to amend described in Section 11.1(a) may be
exercised at any time, without the consent of any Participant or Beneficiary;
provided, however, that no amendment shall divest any Participant or Beneficiary
of rights to which he or she would have been entitled if the Plan had been
terminated on the effective date of such amendment except: (i) to the extent
that a termination of the Plan pursuant to Section 11.2 would result in an
accelerated distribution of the Participant’s benefits under the Plan; and
(ii) to the extent necessary to comply with any applicable law, rule or
regulation, including, but not limited to, Code Section 409A. Notwithstanding
the foregoing, the Plan and any payment hereunder may be amended unilaterally by
the Compensation Committee or the Benefits Committee, subject to the
restrictions described in Section 11.1(a), at any time to make such changes as
may be required to comply with Section 409A.

11.2 Termination of the Plan. The Compensation Committee shall have the right to
terminate the Plan at any time. Upon termination of the Plan, distributions in
respect of amounts credited to a Participant’s Account as of the date of the
termination shall be made in the manner and at the time heretofore prescribed.
If the Plan is terminated and a trust has been established (as described in
Section 12.3), the trust will pay benefits as provided under the amended or
terminated Plan. Notwithstanding the foregoing, the Compensation Committee may,
in its sole discretion, terminate the Plan and accelerate the time and form of
payment of benefits under the Plan, only under the following circumstances:

 

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(a) The Compensation Committee may terminate and liquidate the Plan 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. §
503(b)(1)(A), provided that the remaining unpaid benefits under the Plan are
included in the Participants’ respective gross incomes in the latest of: (i) the
calendar year in which the Plan termination and liquidation occurs; (ii) the
first calendar year in which such benefits are no longer subject to a
substantial risk of forfeiture; or (iii) the first calendar year in which the
payment is administratively practicable.

(b) The Compensation Committee may terminate and liquidate the Plan in
connection with the occurrence of a “change in control event” (within the
meaning of Section 1.409A-3(i)(5) of the Treasury Regulations) (a “Section 409A
Change in Control”), provided that the following requirements are satisfied:

(1) The Compensation Committee takes irrevocable action to terminate and
liquidate the Plan during the period beginning thirty (30) days preceding the
Section 409A Change in Control and ending twelve (12) months following such
Section 409A Change in Control;

(2) The benefits of each Participant under the Plan and all other plans and
other arrangements that are treated as single plan with this Plan under Sections
1.409A-1(c) and 1.409A-3(j)(4)(ix) Treasury Regulation (collectively, the “Other
Arrangements”) are distributed within twelve (12) months following the date that
all necessary action to terminate and liquidate the Plan and the Other
Arrangements is irrevocably taken; and

(3) All Other Arrangements are terminated and liquidated with respect to each
Participant who experienced such Section 409A Change in Control. For purposes of
any Section 409A Change in Control that results from an asset purchase
transaction, the applicable “service recipient” (within the meaning of Code
Section 409A) with the discretion to liquidate and terminate the Plan, the Plan
and the Other Arrangements shall be the “service recipient” that is primarily
liable immediately after the transaction for the payment of the Plan benefits.

(c) The Compensation Committee may terminate and liquidate the Plan for any
other reason, provided that:

(1) The termination and liquidation of the Plan does not occur proximate to a
downturn in the financial health of the Company and its Affiliates;

(2) The Company and all of its Affiliates terminate and liquidate all Other
Arrangements;

(3) No payments in liquidation of the Plan are made within twelve (12) months of
the date that the Compensation Committee takes all necessary action to
irrevocably terminate and liquidate the Plan, other than payments that would be
payable under the terms of the Plan if the action to terminate and liquidate the
Plan had not occurred;

(4) All payments are made within twenty-four (24) months of the date that the
Compensation Committee takes all necessary action to irrevocably terminate and
liquidate the Plan; and

 

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(5) The Company and all Affiliates do not adopt any Other Arrangement at any
time during the three (3) year period following the date the Company takes all
necessary action to irrevocably terminate and liquidate the Plan.

(d) The Compensation Committee may terminate and liquidate the Plan upon such
other events and conditions as permitted under Section 409A.

This Section 11.2 shall be construed and administered in a manner consistent
with Section 409A and Section 1.409A-3(j)(4)(ix) of the Treasury Regulations.

ARTICLE XII

MISCELLANEOUS

12.1 Unfunded and Unsecured. The Plan shall at all times be considered entirely
unfunded both for tax purposes and for purposes of Title I of ERISA and no
provision shall at any time be made with respect to segregating assets of an
Employer for payment of any amounts under the Plan. No Participant or any other
person shall have any interest in any particular assets of an Employer by reason
of the right to receive a benefit under the Plan. To the extent the Participant
or any other person acquires a right to receive benefits under the Plan, the
Participant or such other person shall have the status of a general unsecured
creditor of the applicable Employer. The Plan constitutes a mere unsecured,
unfunded promise by the applicable Employer for the payment of benefits payable
under the Plan to the Participants in the future. Nothing contained in the Plan
shall constitute a guaranty by an Employer or any other person or entity that
any funds in any trust or the assets of the Employer will be sufficient to pay
any benefit under the Plan. No Participant shall have any right to a benefit
under the Plan except in accordance with the terms of the Plan.

12.2 Restriction Against Assignment. The Employer shall pay all amounts payable
hereunder only to the person or persons designated by the Plan and not to any
other person or entity. The right of any Participant to receive any benefits
under the Plan shall not be alienable or transferable by the Participant or the
Participant’s Beneficiary by assignment or any other method, and shall not be
subject to any right, claim, lien, judgment, execution, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment by any
creditors of any Participant or a Participant’s Beneficiary. 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 Employer or any other party, under any arrangement other than under the
terms of this Plan.

12.3 Trust.

(a) Discretionary Establishment of Trust. Notwithstanding anything to the
contrary, an Employer may establish one or more accounts, funds or grantor
trusts (the “Trust”) to reflect obligations under the Plan and may make such
investments as it may deem desirable to assist in meeting such obligations. An
Employer may transfer money or other property to any such Trust, and the Trust
shall pay Plan benefits to Participants and their Beneficiaries out of the Trust
Fund. Such trust or trusts may be irrevocable, but shall provide that in the
event of the insolvency of the Employer, the assets of the trust or trusts shall
be subject to the claims of the Employer’s creditors. No Participant or
Beneficiary shall have any preferred claim to, or any beneficial ownership
interest in, any assets of the Trust, and Participants shall have the status of
general unsecured creditors of the Employer.

(b) Interrelationship of the Plan and the Trust. The provisions of the Plan
shall govern the rights of a Participant to receive distribution of benefits
under the Plan. The

 

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provisions of the Trust shall govern the rights of the Employer and any delegate
thereof, Participants and the creditors of the Employer to the assets
transferred to the Trust. The Employer shall at all times remain liable to carry
out its obligations under the Plan.

(c) Distributions From the Trust. An Employer’s obligations under the Plan may
be satisfied with Trust assets distributed pursuant to the terms of the Trust,
and any such distribution shall reduce the Employer’s obligations under the
Plan.

12.4 Withholding. The Participant shall make appropriate arrangements with the
Employer 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 which are
required to be withheld by the Employer in respect to such payment or this Plan.
The Employer shall have the right to reduce any payment (or other compensation)
by the amount of cash sufficient to provide the amount of said taxes.

12.5 Payment in Event of Incapacity. If any individual entitled to receive any
payment under the Plan is, in the judgment of the Administrative Committee,
physically, mentally or legally incapable of receiving or acknowledging receipt
of the payment, and no legal representative has been appointed for the
individual, the Administrative Committee may (but is not required to) cause the
payment to be made to any one or more of the following as may be chosen by the
Administrative Committee: the Beneficiary; the institution maintaining the
individual; a custodian for the individual under the Uniform Transfers to Minors
Act of any state; or the individual’s spouse, child, parent, or other relative
by blood or marriage. The Administrative Committee is not required to see to the
proper application of any such payment, and the payment completely discharges
all claims under the Plan against the Employer, and the Plan to the extent of
the payment.

12.6 Protective Provisions. The Participant shall cooperate with the Employer by
furnishing any and all information requested by the Administrative Committee to
facilitate the administration of the Plan and the payment of benefits hereunder,
taking such physical examinations as the Administrative Committee may deem
necessary with respect to a determination of Disability and taking such other
actions as may be requested by the Administrative Committee. If any fact
relating to a Participant or a Beneficiary has been misstated, the correct fact
may be used to determine the amount of benefit payable to such Participant or
Beneficiary.

12.7 Compliance with Section 409A. The Employer intends that the Plan and all
deferrals under the Plan be structured so as to comply with, or, as applicable,
be excepted from, Section 409A, such that there are no adverse tax consequences,
interest or penalties incurred as a result of such deferrals. Notwithstanding
the Employer’s intention, if a deferral under the Plan, including any payment,
distribution, deferral election, transaction or any other action or arrangement
contemplated by the provisions of the Plan would violate Section 409A or, if
intended to be excepted from 409A, would become subject to 409A, unless the
Employer expressly determines otherwise, the Compensation Committee, or the
Benefits Committee as deemed appropriate, may adopt such policies, procedures
and/or amendments to the Plan, and take such other actions as it deems
reasonably necessary or appropriate, without the consent of any Participant, to
(a) cause the Plan and the respective payment, distribution, deferral election,
transaction or other action or arrangement to comply with 409A and/or, as
applicable, to be excepted from 409A and (b) preserve the intended tax treatment
of any such payment, distribution, deferral election, transaction or other
action or arrangement. In such case, the related provisions of the Plan will be
deemed modified, or, if necessary, rescinded, including retroactively, in order
to comply with the requirements of Section 409A to the extent determined by the
Compensation Committee, or the Benefits Committee as deemed appropriate. This
Plan will be construed and

 

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administered to the fullest extent possible in accordance with the Employer’s
intentions as set forth in this Section 12.7.

12.8 Recovery of Overpayments. In the event any payments under the Plan are made
on account of a mistake of fact or law, the recipient shall return such payment
or overpayment to the Employer as requested by the Employer.

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

12.10 Participants Should Consult Advisors. The Employers, the Administrative
Committee and the Benefits Committee make no representation or warranty with
respect to the tax, financial, estate planning or other legal implications of
participation in the Plan. Participants should consult with their own tax,
financial and legal advisors with respect to their participation in the Plan.

12.11 Successors. Except as otherwise expressly provided in the Plan, all
obligations of an Employer under the Plan are binding on any successor to the
Employer whether the successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise of all of the business and/or assets of the
Employer.

12.12 Indemnification. To the extent provided for in the Company bylaws or
similar governing document, the Company shall indemnify and hold harmless each
member of the Board, each member of the Benefits Committee, each member of the
Administrative Committee, and each officer and employee of the Company or an
Affiliate to whom are delegated duties, responsibilities, and authority with
respect to this Plan against all claims, liabilities, fines and penalties, and
all expenses reasonably incurred by or imposed upon him or her (including but
not limited to reasonable attorney fees) which arise as a result of his or her
actions or failure to act in connection with the operation and administration of
this Plan to the extent lawfully allowable and to the extent that such claim,
liability, fine, penalty, or expense is not paid for by liability insurance
purchased or paid for by the Company or an Affiliate. Notwithstanding the
foregoing, the Company shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Company
consents in writing to such settlement or compromise.

12.13 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.

12.14 Construction of Provisions. If any misunderstanding or ambiguity arises
concerning the meaning of any of the provisions of the Plan, the Administrative
Committee has the sole right to construe such provisions. The Administrative
Committee’s decision is final. 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. Any reference in this Plan to
a statute or regulation shall be considered also to mean and refer to any
subsequent amendment or replacement of that statute or regulation.

12.15 Governing Law. This Plan shall be subject to and construed in accordance
with the laws of the State of Oklahoma to the extent not preempted by federal
law.

[Signature on following page.]

 

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IN WITNESS WHEREOF, the Company has adopted this Plan as of the Effective Date
and has caused the Plan to be executed by its duly authorized representative
this 31 day of December, 2012.

 

WPX ENERGY SERVICES COMPANY, LLC By:  

/s/ Ralph A. Hill

Name:  

Ralph A. Hill

Title:  

President & CEO

 

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