Exhibit 10.3

XL GROUP plc
SUPPLEMENTAL DEFERRED COMPENSATION PLAN

          XL Group plc (the “Company”) adopted the XL Group plc Supplemental
Deferred Compensation Plan (the “Plan”), effective as of January 1, 2000. Except
as otherwise provided below, the Plan is hereby amended and restated effective
January 1, 2007, to comply with Code Section 409A, as enacted by the American
Jobs Creation Act of 2004 and applicable regulations thereunder; provided,
however, that any provision required to be effective on and after January 1,
2005 in order for the Plan to comply with Code Section 409A shall become
effective as of January 1, 2005 (or such later date as shall be permitted under
applicable Code Section 409A transition rules).

          The Plan is unfunded and maintained primarily for the purpose of
providing deferred compensation to a select group of management or highly
compensated employees, and is not intended to be qualified under Section 401(a)
of the Internal Revenue Code.

ARTICLE I
DEFINITIONS

          Each word used herein not defined below that begins with a capital
letter and is defined in the Qualified Plan shall have the same definition as
the definition given to that word in the Qualified Plan. Wherever used herein,
the following terms shall have the meanings hereinafter set forth:

          1.1 “Account” or “Deferred Compensation Account” means the separate
account established under the Plan for each Participant, as described in Section
5.1.

          1.2 “Administrator” means the Committee or such person or persons as
may be appointed by the Committee to be responsible for those functions assigned
to the Administrator under the Plan.

          1.3 “Affiliate” means any entity that is a member of a “controlled
group” of corporations with the Company under Code Section 414(b) or a trade or
business under common control with the Company under Code Section 414(c);
provided, however, that solely for purposes of determining whether a Termination
of Employment has occurred, in applying Code Sections 1563(a)(1), (2) and (3)
for purposes of Code Section 414(b), the language “at least 50 percent” will be
used instead of “at least 80 percent” each place it appears, and in applying
Treasury Regulation Section 1.414(c)-2 for purposes of Code Section 414(c), the
language “at least 50 percent” will be used instead of “at least 80 percent”
each place it appears. In addition, to the extent that the Administrator
determines that legitimate business criteria exist to use a reduced ownership
percentage to determine whether an entity is an Affiliate for purposes of
determining whether a Termination of Employment has occurred, the Administrator
may designate an entity that would meet the definition of “Affiliate”
substituting 20 percent in place of 50 percent in the preceding sentence as an
Affiliate in Appendix A hereto. Such designation shall be made by December 31,
2007 or, if later, at the time a 20 percent or more ownership interest in such
entity is acquired.

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          1.4 “Annual Bonus” means any cash compensation to which a Participant
becomes entitled under a written plan or arrangement of a Participating Employer
providing for the calculation and payment of incentive compensation with respect
to a Plan Year after the close of such Plan Year, determined prior to reduction
for elective deferrals to this Plan or to any qualified retirement plan, and for
premium conversion and flexible spending amounts under a cafeteria plan
described in Code Section 125.

          1.5 “Base Salary” means the salary to which a Participant becomes
entitled from a Participating Employer during or with respect to a Plan Year,
including commissions, but not including Annual Bonus or other incentive
Compensation, determined prior to reduction for elective deferrals to this Plan
or to any qualified retirement plan, and for premium conversion and flexible
spending amounts under a cafeteria plan described in Code Section 125; provided,
however, that Annual Salary shall not include expense reimbursements, severance,
or the value of any benefits paid to or on behalf of the Executive under any
fringe benefit, pension or insurance plan or program. Only Annual Salary which
becomes payable while the Executive is a Participant shall be taken into account
for purposes of the Plan.

          1.6 “Beneficiary” means the person, persons or trust designated by a
Participant as direct or contingent beneficiary in the manner prescribed by the
Administrator. The Beneficiary of a Participant who has not effectively
designated a beneficiary shall be the Participant’s estate.

          1.7 “Board of Directors” means the Board of Directors of the Company.

          1.8 “Change in Control” shall mean and shall be deemed to have
occurred as of the date of the first to occur of the following events:

 

 

 

          (a) any Person or Group acquires stock of the Company that, together
with stock held by such Person or Group, constitutes more than 50% of the total
Fair Market Value or total voting power of the stock of the Company, including
but not limited to a transaction pursuant to i) a compromise or arrangement
sanctioned by the Court under section 201 of the Companies Act 1963 of the
Republic of Ireland or ii) section 204 of the Companies Act 1963 of the Republic
of Ireland. However, if any Person or Group is considered to own more than 50%
of the total Fair Market Value or total voting power of the stock of the
Company, the acquisition of additional stock by the same Person or Group is not
considered to cause a Change in Control of the Company. An increase in the
percentage of stock owned by any Person or Group as a result of a transaction in
which the Company acquires its stock in exchange for property will be treated as
an acquisition of stock for purposes of this subsection. This subsection applies
only when there is a transfer of stock of the Company (or issuance of stock of
the Company) and stock in the Company remains outstanding after the transaction;

 

 

 

          (b) any Person or Group acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such Person or
Group) ownership of stock of the Company possessing 30% or more of the total
voting power of the stock of the Company;

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          (c) a majority of members of the Company’s Board is replaced during
any 12-month period by Directors whose appointment or election is not endorsed
by a majority of the members of the Company’s Board prior to the date of the
appointment or election; or

 

 

 

          (d) any Person or Group acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such Person or
Group) assets from the Company that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. However, no Change in Control shall be
deemed to occur under this subsection (d) as a result of a transfer to:

 

 

 

 

 

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

 

 

 

 

 

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

 

 

 

 

 

          (iii) A Person or Group that owns, directly or indirectly, 50% or more
of the total value or voting power of all the outstanding stock of the Company;
or

 

 

 

 

 

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

          For these purposes, the term “Person” shall mean an individual,
corporation, association, joint-stock company, business trust or other similar
organization, partnership, limited liability company, joint venture, trust,
unincorporated organization or government or agency, instrumentality or
political subdivision thereof. The term “Group” shall have the meaning set forth
in Rule 13d-5 of the Securities Exchange Commission (“SEC”), modified to the
extent necessary to comply with Treasury Regulation Section 1.409A-3(i)(5), or
any successor thereto in effect at the time a determination of whether a Change
in Control has occurred is being made. If any one Person, or Persons acting as a
Group, is considered to effectively control the Company as described in
subsections (b) or (c) above, the acquisition of additional control by the same
Person or Persons is not considered to cause a Change in Control.

          1.9 “Committee” means the Compensation Committee, or such other
committee of the Board or Management, which is authorized to administer the Plan
and to perform the functions described in Article VII.

          1.10 “Company” means XL Group plc.

          1.11 “Compensation” means Base Salary and/or Annual Bonus, as
applicable, determined prior to reduction for elective contributions to this
Plan, the Qualified Plan or any other employee benefit plan of the Participating
Employer.

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          1.12 “Deferral Period” means the period described in Section 3.3 of
the Plan.

          1.13 “Disability” means that the Participant (a) is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months; (b) is, by
reason of any medically determinable physical or mental impairment that 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 3 months under an accident and health plan covering employees
of the Company; or (c) has been determined to be totally disabled by the Social
Security Administration.

          1.14 “Effective Date” means January 1, 2007. Any provision of this
amendment and restatement required to be effective on and after January 1, 2005
in order for the Plan to comply with Code Section 409A shall become effective as
of January 1, 2005 (or such later date up to January 1, 2007 as shall be
permitted under applicable Code Section 409A transition rules).

          1.15 “Elective Deferral” means the amount of Compensation a
Participant elects to defer pursuant to Article III of the Plan.

          1.16 “Eligible Executive” or “Executive” means (a) the Chairman of the
Company and each other member of a select group of management or highly
compensated employees of the Participating Employers who has been selected to be
a Participant in the Plan by the Committee; and (b) for periods prior to
January 1, 2008, employees of a Participating Employer who either (i) have
Excess Compensation for the Plan Year, or (ii) have elected to make elective
deferrals to the Qualified Plan that exceed the dollar limitation on pre-tax
contributions set forth in Section 402(g) of the Code. Eligible Executives shall
be selected from among a select group of management or highly compensated
employees, and shall be citizens or residents of the United States.

          1.17 “Excess Compensation” means the Participant’s Compensation
payable during a Plan Year which exceeds the limitation on compensation
applicable to qualified plans under Code Section 401(a)(17), as such limitation
may be adjusted from time to time.

          1.18 “Hardship” means an unforeseeable emergency that is caused by an
event beyond the control of the Participant that would result in severe
financial hardship to the Participant resulting from (a) a sudden and unexpected
illness or accident of the Participant or the spouse or a dependent of the
Participant (as defined in Code Section 152(a)), (b) a loss of the Participant’s
property due to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a result of a
natural disaster), or (c) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Administrator. In
addition, the need to pay for medical expenses, including non-refundable
deductibles, as well as for the costs of prescription drug medication, or the
need to pay for the funeral expenses of a spouse or a dependent may also
constitute a Hardship event. The Administrator shall determine whether the
circumstances presented by the Participant constitute an unanticipated
emergency. Such circumstances and the Administrator’s determination will depend
on the facts of each case,

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but, in any case, payment may not be made to the extent that such hardship is or
may be relieved as described in Sections 6.1.1 through 6.1.4 below.

          1.19 “Key Employee” means a “key employee” as defined for purposes of
Code Section 416(i), without regard to paragraph (5) thereof, of the Company or
any Affiliate, subject to the following modifications. An employee is a Key
Employee if, as of the date of determination, he or she is (a) one of the 50
(or, if less, the greater of three or 10% of all employees) highest-paid
officers of the Company or any Affiliate having annual compensation greater than
$135,000 (as adjusted under Code Section 415(d)); (b) a 5% owner of the Company
or any Affiliate; or (c) a 1% owner of the Company or any Affiliate having
annual compensation of more than $150,000. If an individual is a Key Employee at
any time during the twelve month period ending on December 31 of a Plan Year, he
or she shall be treated as a Key Employee for the 12-month period beginning on
April 1 of the Plan Year following such December 31. For purposes of this
Section 1.19, the term “compensation” will be defined in accordance with
Treasury Regulation Section 1.415(c)-2(d)(2); provided, however, that
compensation paid to or on behalf of an individual who is not a Participant and
who is a non-resident alien of the U.S. will not be taken into account hereunder
to the extent that the compensation is not includable in gross income under the
Code and is not effectively connected to the conduct of a trade or business
within the U.S. Whether an individual is a Key Employee will be determined in
accordance with the requirements of Code Section 409A.

          1.20 “Matching Contribution” means the amounts credited to a
Participant’s Account under Article IV of the Plan with respect to Elective
Deferrals.

          1.21 “Participant” means an Executive or former Executive who elects
to participate in the Plan in accordance with the terms and conditions of the
Plan or who has an Account in the Plan that has not been fully distributed.

          1.22 “Participating Employer” means the Company, XL Capital Ltd, XL
Financial Solutions Ltd, XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Investment
Management Ltd, XL Life Ltd, XL Services (Bermuda) Ltd, XL Re Latin America Ltd,
XL Financial Assurance Ltd, and each other Affiliate that, with the approval of
the Administrator, joins the Plan by executing a declaration of joinder..

          1.23 “Plan” means XL Group plc Supplemental Deferred Compensation
Plan, as set forth herein or as it may be amended or restated from time to time.

          1.24 “Plan Year” means the calendar year.

          1.25 “Qualified Plan” means the XL America, Inc. Employee Savings
Plan, as from time to time amended.

          1.26 “Scheduled Distribution” means a distribution from a
Participant’s Scheduled Distribution Sub-Account in accordance with Section 6.3.

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          1.27 “Scheduled Distribution Sub-Accounts” or “Sub-Accounts” means the
separate bookkeeping accounts established by the Administrator under Section 5.1
to record the portion(s) of a Participant’s Account subject to separate
Scheduled Distribution elections.

          1.28 “Termination of Employment” means, with respect to an Executive,
the severing of employment with the Company and any Affiliates, voluntarily or
involuntarily, for any reason. A Termination of Employment will be deemed to
have occurred if the facts and circumstances indicate that the Company and the
Participant reasonably anticipate that no further services will be performed
after a certain date or that the level of bona fide services the Participant
will perform for the Company and its Affiliates after such date (whether as an
employee or as an independent contractor) will permanently decrease to no more
than 20% of the average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately preceding 36-month
period (or the full period of services to the employer if the Participant has
been providing services to the Company and its Affiliates less than 36 months).
A Participant will not be deemed to have incurred a Termination of Employment
while he or she is on military leave, sick leave, or other bona fide leave of
absence (such as temporary employment by the government) if the period of such
leave does not exceed six months or such longer period as the Participant’s
right to reemployment with the Company is provided either by statute or by
contract. For this purpose, a leave of absence is bona fide only if there is a
reasonable expectation that the Participant will return to employment at the
conclusion of the leave. If the period of leave exceeds six months and the
Participant’s right to reemployment is not provided either by statute or by
contract, the Termination of Employment will be deemed to occur on the first
date immediately following such six-month period. Whether an individual has
incurred a Termination of Employment shall be determined in accordance with the
provisions of Section 409A.

          1.29 “Valuation Date” means the close of business of each business
day, or such other valuation date or dates established by the Administrator.

ARTICLE II
PARTICIPATION

          2.1 Eligibility. Each Executive may become a Participant upon the
effective date of his or her designation as an Executive eligible for
participation in the Plan by the Committee. For Plan Years prior to January 1,
2007, Eligible Executives described in Section 1.16(b) shall automatically be
enrolled in the Plan.

          2.2 Participation in the Plan. An Eligible Executive may elect to
participate in the Plan for any Plan Year by delivering to the Administrator a
properly executed election at the time and in the form provided by the
Administrator, pursuant to which the Eligible Executive elects to defer receipt
of a specified portion of the Compensation that would otherwise be payable to
such Executive for the Plan Year, as described in Article III hereof.

          2.3 Cessation of Participation. An Executive shall cease to be a
Participant in the Plan if (a) he or she incurs a Termination of Employment for
any reason, (b) he or she remains in the service of a Company but ceases to be
an Eligible Executive as described in Section 1.16 due

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to a change in employment status, except to the extent that the Committee
determines otherwise, or (c) the Plan is terminated or otherwise amended so that
the Executive ceases to be eligible for participation; provided, however, that
such individual shall continue to be a Participant solely with respect to his or
her vested Account balance until such Account balance is distributed from the
Plan. Such cessation of participation shall be effective upon the date of the
change in status described in clause (a) or (b) above, or upon the effective
date of an amendment or termination of the Plan described in clause (c) above.

ARTICLE III
DEFERRAL OF COMPENSATION

          3.1 Election to Defer. A Participant may elect to defer receipt of a
portion of his or her Compensation for a Plan Year by delivering a properly
executed election to the Administrator within the time specified in Section 3.2.
The Participant’s election shall be in a written form acceptable to the
Administrator and shall specify:

 

 

 

          3.1.1. the whole percentage of Excess Compensation for the Plan Year
to be deferred to the Plan, which percentage may not exceed 5%;

 

 

 

          3.1.2. the whole percentage of Base Salary, other than Annual Bonus,
for the Plan Year to be deferred to the Plan, which percentage may not exceed
50%;

 

 

 

          3.1.3. the whole percentage of Annual Bonus for the Plan Year to be
deferred to the Plan, which percentage may not exceed 100% (reduced as necessary
to provide for the deferral under Section 3.1.1);

 

 

 

          3.1.4. if applicable, the investment fund or funds in which the
Participant’s Elective Deferrals, and Matching Contributions attributable to
such Elective Deferrals, will be deemed to be invested pursuant to Section 5.2;

 

 

 

          3.1.5. if applicable, the specific Scheduled Distribution Sub-Account
or Sub-Accounts into which all or a portion of such Elective Deferrals and
Matching Contributions will be directed, as described in Section 6.3; and

 

 

 

          3.1.6. to the extent permitted by the Administrator under Section
6.4.1, the payment commencement date and method of distribution to apply to
benefits distributable upon the Participant’s Termination of Employment.

          The deferral percentages under Section 3.1.2 and 3.1.3 shall be
applied without regard to an election to defer under Section 3.1.1. For Plan
Years prior to January 1, 2007, an Eligible Executive described in Section
1.16(b) shall be deemed to have elected to contribute to the Plan (i) 5% of his
or her Excess Compensation for the Plan Year, or (ii) the amount of elective
deferrals the Participant has elected to contribute to the Qualified Plan for
the Plan Year in excess of the dollar limitation on pre-tax contributions set
forth in Section 402(g) of the Code. Such a Participant may elect not to make
such contributions to the Plan by filing an election not to participate
acceptable to the Administrator within the time set forth in Section 3.4.1. A

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Participant described in Section 1.16(b)(ii) shall not be permitted to change
his or her deferral election to the Qualified Plan during the applicable Plan
Year.

          Elective Deferrals to the Plan shall be reduced to the extent
necessary to pay federal, state or local employment taxes, including applicable
FICA and FUTA taxes required to be withheld under Sections 3101 and 3501,
respectively, of the Code, and any other required withholdings as determined by
the Administrator.

          An Executive who elects not to participate in the Plan at the time he
or she first becomes eligible to do so may elect to become a Participant in any
subsequent Plan Year by filing an election to defer Compensation as described
above within the time provided in Section 3.2, provided that he or she is then
eligible to participate in the Plan.

          3.2 Date for Filing Election.

 

 

 

          3.2.1. Except as provided below, an election to defer Compensation to
be earned in a Plan Year shall be filed by the Participant with the
Administrator as of a date established by the Administrator which is no later
than December 31 of the Plan Year preceding the year in which such Compensation
is earned.

 

 

 

          3.2.2. In the case of an individual first employed as an Executive or
first becoming eligible for this Plan (and any similar account-based deferred
compensation plan of the Company) during a Plan Year, an election to defer
Compensation (which may include Annual Bonus) earned subsequent to the initial
date of employment or eligibility and subsequent to the date of such election
may, to the extent permitted by the Plan Administrator, be filed by such
Executive with the Administrator within thirty (30) days of such initial date of
service or eligibility.

 

 

 

          3.2.3. An election to defer Annual Bonus meeting the requirements for
“performance-based” compensation under Treasury Regulation Section 1.409A-1(e)
shall be filed with the Administrator as of a date established by the
Administrator which is at least six months prior to the end of the performance
period in which such Annual Bonus is earned, provided that (a) performance
criteria have been established in writing by not later than 90 days after the
commencement of the applicable performance period and the outcome is
substantially uncertain at the time the criteria are established, (b) the
Participant is in employment with the Company continuously from the later of the
beginning of the performance period or the date such performance criteria are
set, and (c) the election is made before such performance-based compensation has
become readily ascertainable (i.e., is both calculable in amount and
substantially certain to be paid).

          3.3 Deferral Period. The Deferral Period for a Participant’s
Compensation earned during any Plan Year shall begin on the first day of such
Plan Year, provided that the Participant has filed an election to defer
Compensation prior thereto, as described in Section 3.2.1. Notwithstanding the
foregoing, in the case of an individual who is first employed as an Executive or
who first becomes eligible for participation during a Plan Year, the Deferral
Period shall begin as of the first day of the payroll period beginning after the
filing of a timely election

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by the Participant in such Plan Year, as described in Section 3.2.2. In each
case, such Deferral Period shall end on the last day of the Plan Year. The
Deferral Period for Annual Bonus meeting the requirements for
“performance-based” compensation under Treasury Regulation Section 1.409A-1(e)
shall be the performance period (which shall not be shorter than a Plan Year) to
which such Annual Bonus relates.

          3.4 Revocation or Change of Deferral Election.

 

 

 

          3.4.1. A Participant may not voluntarily revoke or amend an election
to defer Compensation under Section 3.1.1 after commencement of the Deferral
Period. Such election shall automatically expire at the conclusion of the
applicable Deferral Period, unless renewed within the time provided in Section
3.2.

 

 

 

          3.4.2. A Participant may not revoke or amend an election to defer
Annual Bonus meeting the requirements for “performance-based” compensation under
Treasury Regulation Section 1.409A-1(e) after a date established by the
Administrator which is not later than six months prior to the end of the
performance period in which such Annual Bonus is earned; except that an election
to defer Annual Bonus under Section 3.2.2 may not be revoked during the Deferral
Period.

 

 

 

          3.4.3. Notwithstanding the above, if a Participant incurs a Hardship,
the Participant’s Elective Deferrals under this Plan may, upon the request of
the Participant and with the consent of the Administrator, be permanently
suspended for a period of six (6) months (the “suspension period”). At the end
of the suspension period, the Participant’s Elective Deferrals shall
automatically resume, provided that the Participant has timely filed a deferral
election under Sections 3.1 and 3.2 with respect to the Deferral Period in
effect when the suspension period ends.

          3.5 Vesting of Elective Deferrals. A Participant shall be 100% vested
in the balance of his or her Deferred Compensation Account attributable to
Elective Deferrals at all times.

ARTICLE IV
COMPANY CONTRIBUTIONS

          4.1 Matching Contributions. For each Plan Year in which a Participant
elects under Section 3.1.1 to defer Excess Compensation, the Company shall make
a Matching Contribution to the Participant’s Deferred Compensation Account equal
to 140% (or such other percentage as the Board of Directors shall determine) of
the amount of such Elective Deferral up to 5% of Excess Compensation.

          4.2 Company Profit Sharing Contributions. The Board of Directors may,
in its sole discretion, make such additional contributions to the Plan for a
Plan Year as it determines from time to time. Such contributions shall be
allocated among Participants in such manner as the Board of Directors shall
determine at the time the contribution is determined.

          4.3 Vesting of Company Contributions. A Participant shall be vested in
the balance of his or her Deferred Compensation Account attributable to Matching
Contributions to the same

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extent that the Participant is vested in matching contributions under the terms
of the Qualified Plan. Unless the Board of Directors determines otherwise, a
Participant shall be vested in the balance of his or her Deferred Compensation
Account attributable to Company contributions under Section 4.2 to the same
extent that the Participant is vested in similar Company contributions under the
terms of the Qualified Plan. All benefits under the Plan shall become 100%
vested upon the occurrence of a Change in Control.

ARTICLE V
INVESTMENT OF DEFERRED COMPENSATION

          5.1 Deferred Compensation Account. The Administrator shall establish a
Deferred Compensation Account on the books of the Plan for each Participant,
reflecting Elective Deferrals, Matching Contributions and other Company
contributions made for the Participant’s benefit, together with any adjustments
for income, gain or loss attributable thereto under Section 5.2, and any
payments, distributions, transfers or forfeitures therefrom. The opening balance
of the Participant’s Deferred Compensation Account as of January 1, 2007 shall
equal the balance of such Account as of the close of the preceding business day.

          5.2 Time for Crediting Contributions. Elective Deferrals to the Plan
with respect to any pay period will normally be credited to the Participant’s
Account within five (5) business days of the date that corresponding
contributions attributable to Compensation earned in such pay period are
credited under the Qualified Plan or would otherwise be paid to the Participant;
provided, however, that no adjustment of earnings or losses shall be made with
respect to Elective Deferrals under Section 5.3 prior to the earlier of (a) the
15th business day of the calendar month following the calendar month in which
the Elective Deferral would otherwise have been paid to the Participant but for
the Participant’s deferral election, or (b) the date such amounts are actually
credited to the Participant’s Account on the books of the Plan. Company
contributions for any Plan Year will be credited to the Plan no later than the
date for filing the Company’s Federal income tax returns for the Company’s
corresponding fiscal year, with extensions.

          5.3 Hypothetical Investment of Accounts. The Deferred Compensation
Account of a Participant, including each Sub-Account thereof, shall be adjusted
as of each Valuation Date to reflect the income, gain or loss that would accrue
to such Account, if assets in the Account were invested as described in this
Section 5.2. Each Participant shall direct the hypothetical investment of the
Elective Deferrals and Matching Contributions credited to the Plan on his or her
behalf among such investment funds as are from time to time made available by
the Committee. A Participant may, as of any Valuation Date, change the
investment allocation of future Elective Deferrals or Matching Contributions,
and may elect to transfer all or a portion of the balance of his or her Account
hypothetically invested in one investment fund to any other investment fund or
funds then available under the Plan, by directing the Administrator in such form
and at such time as the Administrator shall require.

          The hypothetical investment fund options available under the Plan
shall be those designated by the Committee from time to time in its discretion.
The Administrator may promulgate uniform and nondiscriminatory rules and
procedures governing investment elections

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under the Plan, including rules governing how credits or debits to an Account or
Sub-Account shall be allocated among investment funds in the absence of a valid
election.

          5.4 Statement of Account. A statement shall be sent to each
Participant as to the balance of his or her Deferred Compensation Account at
least once each Plan Year. Electronic distribution (including a reminder that
such statement is available electronically) will satisfy this requirement.

ARTICLE VI
PAYMENT OF DEFERRED COMPENSATION

          6.1 Hardship Distributions. A Participant may request that all or a
portion of his or her vested Account balance be distributed at any time by
submitting a written request to the Administrator, provided that the Participant
has incurred a Hardship, and the distribution is necessary to alleviate such
Hardship. In determining whether the Hardship distribution request should be
approved, the Administrator may rely on the Participant’s representation that
the Hardship cannot be alleviated:

 

 

 

          6.1.1. through reimbursement or compensation by insurance or
otherwise;

 

 

 

          6.1.2. by the Participant taking any withdrawals then available to him
or her under the terms of the Qualified Plan;

 

 

 

          6.1.3. by reasonable liquidation of the Participant’s assets,
including amounts available for withdrawal from the Qualified Plan, to the
extent such liquidation would not itself cause a severe financial hardship; or

 

 

 

          6.1.4. by cessation of his or her elective deferrals under Section
3.4.3 of this Plan or a similar deferred compensation plan to the extent
available.

          6.2 Administration of Hardship Distributions. The Administrator shall
deem a distribution to be necessary to alleviate a Hardship if the distribution
does not exceed the amounts necessary to satisfy the Participant’s Hardship,
plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution. The Account balance that is not distributed pursuant to the
Hardship request shall remain in the Plan. Distributions to alleviate a Hardship
will be made as soon as administratively feasible after the Administrator has
reviewed and approved the request. An amount to be distributed for Hardship
shall be debited from the Participant’s Deferred Compensation Account not held
in a Scheduled Distribution Sub-Account, or (if such amount is not sufficient)
from the Sub-Account(s) having the latest scheduled distribution date.

          6.3 Scheduled Distribution. A Participant may elect to receive a
Scheduled Distribution with respect to an Elective Deferral at the time he or
she files the applicable deferral election under Section 3.1. A Participant may
elect in accordance with Section 3.1.5 to direct all or a portion of his or her
Elective Deferrals for the Plan Year into one (or, if permitted by the
Administrator, more than one) Sub-Account(s), provided that any such Sub-Account
has a scheduled distribution date which is not earlier than twelve (12) months
after the end of the

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Deferral Period to which the Elective Deferral relates. The Administrator may
establish uniform and nondiscriminatory rules and procedures governing Scheduled
Distribution Sub-Accounts, including establishing limitations on the number of
Sub-Accounts available to Participants for any Deferral Period or in the
aggregate, and the minimum length of deferral to be provided under any
newly-established Sub-Account, as the Administrator deems appropriate.

          To the extent permitted by the Administrator at the time of election,
such election may designate whether the elected Scheduled Distribution will be
paid as a result of the Participant’s intervening death, Disability or
Termination of Employment, or alternatively will continue to apply
notwithstanding such intervening event. Except as otherwise elected by a
Participant under the preceding sentence, an election of a Scheduled
Distribution shall automatically terminate upon the Participant’s death,
Disability or Termination of Employment prior to age 65, at which time the
provisions of Sections 6.4, 6.5 and 6.6 shall govern distribution of the
Participant’s Account; provided, however, that, unless the Participant elects
otherwise with the consent of the Administrator, (1) a Scheduled Distribution
Sub-Account payable at age 65 shall be paid when the Participant attains age 65,
without regard to the Participant’s intervening Termination of Employment (other
than due to death); and (2) a Participant’s intervening Termination of
Employment (other than due to death) shall not accelerate a Scheduled
Distribution then in pay status.

          A Participant may, with the consent of the Administrator and to the
extent permitted under Code Section 409A and regulations thereunder, elect to
(a) revoke a Scheduled Distribution (provided that the Participant’s Scheduled
Distribution election would otherwise automatically terminate upon the
Participant’s Termination of Employment for any reason), in which case the
balance of the applicable Sub-Account will be restored to the Participant’s
Deferred Compensation Account, or (b) extend to a later date the date permitted
under Section 6.6 on which a Scheduled Distribution will occur, in which case
the applicable Sub-Account will be redesignated (and merged with another
existing Sub-Account having the same designated distribution date). A
Participant may make an election under the preceding sentence by filing a new
election prior to his or her Termination of Employment at such time and in such
form as the Administrator shall designate. Any election to revoke or extend the
date of a Scheduled Distribution shall not take effect until at least twelve
months after the date on which it is made and must provide for a deferred
distribution date not earlier than five years after the date such Scheduled
Distribution was otherwise scheduled to be made and not later than the date set
forth in Section 6.6. A Scheduled Distribution may be made in a single lump sum
payment or in installments over two to eleven years (as described in Section
6.5.1 or 6.5.2, respectively).

          6.4 Death or Other Termination of Employment.

 

 

 

          6.4.1. Initial Distribution Election. A Participant who has incurred a
Termination of Employment, whether by reason of voluntary or involuntary
termination, death or Disability (each a “Distribution Event”), shall receive
distribution of his or her Account (other than a Scheduled Distribution
Sub-Account having a Scheduled Distribution date prior to the date of
Termination of Employment or a Scheduled Distribution Sub-Account subject to a
later Scheduled Distribution date with respect to which the Participant has
elected under Section 6.3 that no intervening Distribution Event

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shall apply) in a single lump sum payment as soon as practicable but in any
event within ninety (90) days following such Termination of Employment.
Notwithstanding the foregoing, the Administrator may permit a Participant to
elect a later payment commencement date permitted under Section 6.6, or an
alternate method of distribution permitted under Section 6.5, by filing a
written request with the Administrator at the time the Participant files an
initial deferral election under Section 3.2. To the extent permitted under rules
established by the Administrator at the time of election, such an election may
separately specify different times or available methods of payment for different
Distribution Events.

 

 

 

          6.4.2. Changes in Distribution Election. The Administrator may permit
a Participant to defer the commencement of his or her distribution to a date
permitted under Section 6.6, or select an alternative method of distribution
permitted under Section 6.5, after the initial deferral election by filing a
written request with the Administrator. Such a change election shall not take
effect until at least twelve months after the date on which it is made and shall
be effective only if (a) the election is filed with the Administrator before the
Participant’s Termination of Employment; (b) the election does not accelerate
the timing or payment schedule of any distribution; (c) the payment commencement
date in the change election is not less than five years after the date the
distribution would otherwise have commenced for the Distribution Event without
regard to such election; and (d) the Administrator approves such election.
Except as otherwise provided in Section 6.7, a Participant’s distribution
election shall become irrevocable upon the Participant’s Termination of
Employment.

 

 

 

          6.4.3. Key Employees. Notwithstanding the foregoing, in the case of a
Key Employee who has a Termination of Employment (other than due to death) while
any stock of the Company or any Affiliate is publicly traded on an established
securities market or otherwise, distribution of the Participant’s Account on
account of such Termination of Employment may not be made earlier than six
months after the date of the Termination of Employment (or if the Participant
dies during such six month period, earlier than the date of the Participant’s
death). Such Participant’s Account will be deemed to continue to be adjusted for
investment gains or losses pending distribution as set forth in Section 5.3.

 

 

 

          6.4.4. Death. If a Participant dies before distribution of his or her
Account has commenced, the Participant’s benefit under the Plan shall be paid to
his or her Beneficiary in a single lump sum payment as soon as practicable
following the Participant’s death.

 

 

 

          6.4.5. Distribution Event. Whether a Participant has incurred a
Distribution Event shall be determined by the Administrator in a manner
consistent with the requirements of Section 409A and regulations thereunder.

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          6.5 Method of Payment.

 

 

 

          6.5.1. Lump Sum Payment. Distribution of a Participant’s Account
pursuant to Section 6.1, 6.3 or 6.4, may be made in a cash lump sum.

 

 

 

          6.5.2. Installment Distribution. A Participant requesting distribution
of an Account pursuant to Section 6.4 may, with the approval of the
Administrator, receive distribution in periodic payments in lieu of a lump sum.
Periodic payments shall be paid on an annual or quarterly basis, as permitted by
the Administrator and elected by the Participant, over a period that does not
exceed eleven (11) years. Each installment payment shall be determined by
dividing the Participant’s then-current Account balance by the number of
payments remaining to be paid; provided, however, that if the Participant’s (or
Beneficiary’s) aggregate vested Account balance is less than $100,000 at the
time distributions commence due to Termination of Employment, the entire vested
account balance shall be paid in a single lump sum payment at the time the
Participant’s (or Beneficiary’s) initial installment distribution would
otherwise be paid. The Administrator may establish uniform and nondiscriminatory
rules and procedures governing the payment of installment distributions,
including the maximum period over which installment distributions shall be made
and the minimum amount which must be distributed in each installment, as the
Administrator deems appropriate.

 

 

 

          6.5.3. Death of Participant or Beneficiary During Installment
Distribution Period. If a Participant who has elected installment payments under
Section 6.5.2 dies after payments have commenced but before all amounts held in
the Account have been distributed, then to the extent permitted by the
Administrator at the time of the Participant’s deferral election, any remaining
Account balance shall be paid to the Beneficiary or Beneficiaries designated by
the Participant over the then remaining installment period, or if the
Participant has so elected, in a single lump sum payment as soon as practicable
following the Participant’s death. If the designated Beneficiary dies after the
Participant but before all amounts held in the Account have been distributed,
the then remaining balance in the Participant’s Account shall be distributed in
a lump sum payment to the Beneficiary’s estate as provided in Section 6.5.1
(except to the extent that the Participant has designated one or more contingent
Beneficiaries) as soon as practicable after the Beneficiary’s death.

 

 

 

          6.5.4. Limit on Distribution Method. Notwithstanding the foregoing, to
the extent permitted under Section 409A, if the Deferred Compensation Account
does not exceed $100,000 at the time distributions commence due to the
Participant’s Termination of Employment, the distribution shall be made in a
single lump-sum payment.

          6.6 Payment Commencement Date. A Participant may not elect a
distribution date later than (a) April 1 of the calendar year after the year in
which the Participant attains age 70½, or (b) five years after the Participant’s
Termination of Employment, if later.

          6.7 Transition Rules. Pursuant to Internal Revenue Service Notice
2005-1, Q&A-19(c), as extended by Notice of Proposed Rulemaking REG-158080-04, a
Participant may, prior to December 31, 2007, modify or make new elections
regarding distribution of his or her Account(s) under Sections 6.3, 6.4 and 6.5,
at such time and in such form as the Administrator

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shall designate; provided, however, that no such distribution election may
affect payments that the Participant would otherwise receive in 2007 or cause
payments to be made in 2007. Notwithstanding any provision of the Plan to the
contrary, if a Participant’s Deferred Compensation Account is attributable
solely to Elective Deferrals described in Section 1.16(b)(ii) (i.e., the amount
of elective deferrals the Participant has elected to contribute to the Qualified
Plan for the Plan Year in excess of the dollar limitation on pre-tax
contributions set forth in Section 402(g) of the Code), the Participant’s
Account shall be distributed to the Participant within the first ninety (90)
days of 2008, notwithstanding any Participant election to the contrary.

          6.8 Acceleration of Payment Date. Notwithstanding the foregoing, the
distribution of benefits hereunder may be accelerated, with the consent of the
Administrator, under the following circumstances:

 

 

 

          6.8.1. Compliance with Domestic Relations Order. To permit payment to
an individual other than the Participant as necessary to comply with the
provisions of a domestic relations order (as defined in Code Section
414(p)(1)(B));

 

 

 

          6.8.2. Conflicts of Interest. To permit payment as necessary to comply
with the provisions of a Federal government ethics agreement or to avoid
violation of an applicable Federal, state, local or foreign ethics law or
conflicts of interest law;

 

 

 

          6.8.3. Payment of Employment Taxes. To permit payment of federal
employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply
with any federal tax withholding provisions or corresponding withholding
provisions of applicable state, local, or foreign tax laws as a result of the
payment of federal employment taxes, and to pay the additional income tax at
source on wages attributable to the pyramiding Code Section 3401 wages and
taxes; or

 

 

 

          6.8.4. Tax Event. Upon a good faith, reasonable determination by the
Administrator, and upon advice of counsel, that the Plan fails to meet the
requirements of Code Section 409A and regulations thereunder. 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 Code Section 409A.

          6.9 Delay of Payments. A payment otherwise required to be made under
the terms of the Plan may be delayed solely to the extent necessary under the
following circumstances, provided that payment is made as soon as possible
within the first calendar year after the reason for delay no longer applies:

 

 

 

          6.9.1. Payments Subject to the Deduction Limitation. The Company
reasonably anticipates that such payment would otherwise violate Code Section
162(m);

 

 

 

          6.9.2. Violation of Law. The Administrator reasonably determines that
making the payment will violate Federal securities or other applicable laws; or

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          6.9.3. Other Permitted Event. Upon such other events and conditions as
the Commissioner of Internal Revenue shall prescribe in generally applicable
guidance

ARTICLE VII
ADMINISTRATION OF THE PLAN

          7.1 Administration by the Company. The Committee shall be responsible
for the general operation and administration of the Plan and for carrying out
the provisions thereof. The Committee may appoint such person or persons as it
deems appropriate to perform all or any of the functions of the Administrator
under the terms of the Plan. To the extent that no such person or persons are
appointed, the Committee shall serve as Administrator.

          7.2 General Powers of Administration. The Committee shall have
authority and discretion to control and manage the operation and administration
of the Plan, including all rights and powers necessary or convenient to the
carrying out of its functions hereunder, whether or not such rights and powers
are specifically enumerated herein. The Committee may, in its discretion,
delegate authority with regard to the administration of the Plan to any
individual, officer or committee in accordance with Section 7.2.7 below.
Notwithstanding any other provision of the Plan, if an action or direction of
any person to whom authority hereunder has been delegated conflicts with an
action or direction of the Committee, then the authority of the Committee shall
supersede that of the delegate with respect to such action or direction.

          Without limiting the generality of the foregoing, and in addition to
the other powers set forth in this Section 7.2, the Committee or its delegate
shall have the following express authorities:

 

 

 

          7.2.1. To construe and interpret the provisions of the Plan; to decide
all questions arising thereunder, including, without limitation, questions of
eligibility for participation, eligibility for benefits, the validity of any
election or designation made under the Plan, and the amount, manner and time of
payment of any benefits hereunder; and to make factual determinations necessary
or appropriate for such decisions or determination;

 

 

 

          7.2.2. To prescribe procedures to be followed by Participants,
Beneficiaries or alternate payees in filing applications for benefits and any
other elections, designations and forms required or permitted under the Plan;

 

 

 

          7.2.3. To prepare and distribute information explaining the Plan;

 

 

 

          7.2.4. To receive from the Company and from Participants,
Beneficiaries and alternate payees such information as shall be necessary for
the proper administration of the Plan;

 

 

 

          7.2.5. To furnish the Company or the Board of Directors, upon request,
such reports with respect to the administration of the Plan as are reasonable
and appropriate;

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          7.2.6. To appoint or employ advisors, including legal and actuarial
counsel (who may also be counsel to the Company) to render advice with regard to
any responsibility of the Committee under the Plan or to assist in the
administration of the Plan;

 

 

 

          7.2.7. To designate in writing other persons to carry out a specified
part or parts of its responsibilities hereunder (including this power to
designate other persons to carry out a part of such designated responsibility).
Any such person may be removed by the Committee at any time with or without
cause;

 

 

 

          7.2.8. To rule on claims, and to determine the validity of domestic
relations orders and comply with such orders; and

 

 

 

          7.2.9. All rules, actions, interpretations and decisions of the
Committee are conclusive and binding on all persons, and shall be given the
maximum possible deference allowed by law.

          7.3 Rules of the Administrator. The Administrator may adopt such rules
as it deems necessary, desirable or appropriate. When making a determination or
calculation, the Administrator shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the Company, the legal counsel of the
Company, or such other person as it deems appropriate, and shall further be
entitled to rely conclusively upon all tables, valuations, certificates,
opinions and reports furnished by any actuary, accountant, controller, counsel
or other person employed or engaged by the Company with respect to the Plan.

          7.4 Claims Procedure. Any person who believes that he or she is then
entitled to receive a benefit under the Plan may file a claim in writing with
the Administrator. Except to the extent the Committee adopts an alternate
procedure for the review of claims, the procedures in this Section 7.4 shall
apply. The Administrator shall, within ninety (90) days of the receipt of a
claim, either allow or deny the claim in writing. A denial of a claim shall be
written in a manner calculated to be understood by the claimant and shall
include: (a) the specific reason or reasons for the denial; (b) specific
references to pertinent Plan provisions on which the denial is based; (c) 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 (d) an explanation of the Plan’s claim review procedure. A
claimant whose claim is denied (or his or her duly authorized representative)
may, within sixty (60) days after receipt of denial of the claim: (1) submit a
written request for review to the Committee; (2) review pertinent documents; and
(3) submit issues and comments in writing. The Administrator shall notify the
claimant of the decision of the Committee on review within sixty (60) days of
receipt of a request. No legal action may be commenced by a Participant or
Beneficiary with respect to a benefit under this Plan without first exhausting
the Plan’s administrative claims procedures, and any legal action with respect
to a claim that has been finally denied must be commenced no later than one year
after the date of the Plan’s final denial of such claim upon appeal.

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ARTICLE VIII
GENERAL PROVISIONS

          8.1 Participant’s Rights Unsecured. The right of any Participant to
receive future payments under the provisions of the Plan shall be an unsecured
claim against the general assets of the Company. The Company shall be under no
obligation to establish any separate fund, purchase any annuity contract, or in
any other way make any special provision or specifically earmark any funds for
the payment of amounts called for under the Plan. If the Company chooses to
establish such a fund, or purchase such an annuity contract or make any other
agreement to provide for such payments, that fund, contract or arrangement shall
remain part of the Company’s general assets and no person claiming payments
under the Plan shall have any right, title or interest in or to any such fund,
contract or arrangement.

          8.2 Non-assignability. None of the benefits, payments, proceeds or
claims of any Participant or Beneficiary shall be subject to any claim of any
creditor of any Participant or Beneficiary and, in particular, the same shall
not be subject to attachment or garnishment or other legal process by any
creditor of such Participant or Beneficiary, nor shall any Participant or
Beneficiary have any right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments or proceeds which he or she may expect to
receive, contingently or otherwise, under the Plan. Notwithstanding the
foregoing, the Company shall comply with the terms of a domestic relations order
applicable to a Participant’s interest in the Plan, provided that such order
does not require the payment of benefits in a manner or amount, or at a time,
inconsistent with the terms of the Plan. The Company shall have no liability to
any Participant or Beneficiary to the extent that his or her benefit is reduced
in accordance with the terms of a domestic relations order that the Company
applies in good faith.

          8.3 Taxes. The Administrator shall withhold all federal, state or
local taxes that it reasonably believes are required to be withheld from any
payments under the Plan.

          8.4 Limitation of Participant’s Rights. Nothing contained in the Plan
shall confer upon any person a right to be employed or to continue in the employ
of the Company, or interfere in any way with the right of the Company to
terminate the employment of a Participant at any time, with or without cause.

          8.5 Receipt and Release. Any payment to any Participant or Beneficiary
in accordance with the provisions of the Plan shall, to the extent thereof, be
in full satisfaction of all claims against the Company or the Plan, and the
Administrator may require such Participant or Beneficiary, as a condition
precedent to such payment, to execute a receipt and release to such effect. If
any Participant or Beneficiary is determined by the Administrator to be
incompetent by reason of physical or mental disability (including minority) to
give a valid receipt and release, the Administrator may cause the payment or
payments becoming due to such person to be made to another person for his or her
benefit without responsibility on the part of the Administrator or the Company
to follow the application of such funds.

          8.6 Governing Law. The Plan shall be construed, administered, and
governed in all respects under and by the laws of the state of New York. If any
provision shall be held by a

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court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.

          8.7 Designation of Beneficiary. A Participant may designate a
Beneficiary by so notifying the Administrator in writing, in a form acceptable
to the Administrator, at any time before the Participant’s death. A Participant
may revoke any Beneficiary designation or designate a new Beneficiary at any
time without the consent of a beneficiary or any other person. If no Beneficiary
is designated or no designated Beneficiary survives the Participant, payment
shall be made in a single lump sum to the Participant’s estate.

          8.8 Successorship. The Plan shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and the Participants, and
the successors, assigns, designees and estates of the Participants. The Plan
shall also be binding upon and inure to the benefit of any successor Company or
organization succeeding to substantially all of the assets and business of the
Company, but nothing in the Plan shall preclude the Company from merging or
consolidating into or with, or transferring all or substantially all of its
assets to, another Company which assumes the Plan and all obligations of the
Company hereunder. The Company agrees that it will make appropriate provision
for the preservation of Participants’ rights under the Plan in any agreement or
plan which it may enter into to effect any such merger, consolidation,
reorganization or transfer of assets. In such a merger, consolidation,
reorganization, or transfer of assets and assumption of Plan obligations of the
Company, the term Company shall refer to such other Company and the Plan shall
continue in full force and effect.

          8.9 Indemnification. No Committee member shall be personally liable by
reason of any instrument executed by him or on his behalf, or action taken by
him, in his capacity as a Committee member nor for any mistake of judgment made
in good faith. The Company shall indemnify and hold harmless the Plan and each
Committee member and each employee, officer or director of the Company or the
Plan, to whom any duty, power, function or action in respect of the Plan may be
delegated or assigned, or from whom any information is requested for Plan
purposes, against any cost or expense (including fees of legal counsel) and
liability (including any sum paid in settlement of a claim or legal action with
the approval of the Company) arising out of anything done or omitted to be done
in connection with the Plan, unless arising out of such person’s fraud or bad
faith.

          8.10 Headings and Subheadings. Headings and subheading in this Plan
are inserted for convenience only and are not to be considered in the
construction of the provisions hereof.

          8.11 Amendment and Termination. The Plan may at any time or from time
to time be amended, modified, or terminated by the Board of Directors. No
amendment, modification, or termination shall, without the consent of a
Participant, adversely affect the Participant’s Deferred Compensation Account at
that time. Upon termination of the Plan, the Board of Directors may elect to (a)
pay benefits hereunder as they become due as if the Plan had not terminated or
(b) to extent permitted by Code Section 409A and regulations thereunder, direct
that all payments remaining to be made under the Plan be made in a single lump
sum to Participants (or their Beneficiaries).

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          IN WITNESS WHEREOF, and pursuant to adoption of this Plan Document by
the Board of Directors of the Company has approved and adopted this Plan
Document this 1st day of July, 2010.

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