Exhibit 10.42

POGO PRODUCING COMPANY

CHANGE OF CONTROL

SEVERANCE AND RETENTION PROGRAM

(Effective January 1, 2007)

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Table of Contents

 

 

 

 

 

 

 

SECTION 1  GENERAL

 

 

 

 

 

 

 

Section 1.1

Purpose and Term.

 

 

 

 

 

 

Section 1.2

Plan Administration.

 

 

 

 

 

 

Section 1.3

Source of Payments.

 

 

 

 

 

 

Section 1.4

Notices.

 

 

 

 

 

 

Section 1.5

Action by Company.

 

 

 

 

 

 

Section 1.6

Gender and Number.

 

 

 

 

 

 

Section 1.7

Plan Not Guarantee of Employment.

 

 

 

 

 

 

Section 1.8

Covered Affiliates.

 

 

 

 

 

 

SECTION 2  DEFINITIONS

 

 

 

 

 

 

 

Section 2.1

Administrative Committee

 

 

 

 

 

 

 

 

Section 2.2

Affiliate

 

 

 

 

 

 

Section 2.3

Change of Control

 

 

 

 

 

 

Section 2.4

Claimant

 

 

 

 

 

 

Section 2.5

COBRA

 

 

 

 

 

 

Section 2.6

Code

 

 

 

 

 

 

Section 2.7

Company

 

 

 

 

 

 

Section 2.8

Compensation

 

 

 

 

 

 

Section 2.9

Effective Date

 

 

 

 

 

 

Section 2.10

Employee

 

 

 

 

 

 

Section 2.11

Employment Termination Date

 

 

 

 

 

 

Section 2.12

ERISA

 

 

 

 

 

 

Section 2.13

General Release of Claims or Release

 

 

 

 

 

 

Section 2.14

Participant

 

 

 

 

 

 

Section 2.15

Plan

 

 

 

 

 

 

Section 2.16

Plan Administrator

 

 

 

 

 

 

Section 2.17

Plan Year

 

 

 

 

 

 

Section 2.18

Qualified Employment

 

 

 

 

 

 

Section 2.19

Retention Benefits

 

 

 

 

 

 

Section 2.20

Retirement Plan or 401(k) Plan

 

 

 

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Section 2.21

Severance Benefits

 

 

 

 

 

 

Section 2.22

Specified Employee

 

 

 

 

 

 

Section 2.23

Years of Service

 

 

 

 

 

 

SECTION 3  ELIGIBILITY AND PARTICIPATION

 

 

 

 

 

 

Section 3.1

Eligibility for Severance Benefits.

 

 

 

 

 

 

Section 3.2

Eligibility for Retention Benefits.

 

 

 

 

 

 

Section 3.3

General Release of Claims.

 

 

 

 

 

 

SECTION 4  SEVERANCE BENEFITS

 

 

 

 

 

 

Section 4.1

Entitlement to Severance Benefits.

 

 

 

 

 

 

Section 4.2

Amount of Severance Benefits.

 

 

 

 

 

 

Section 4.3

Form and Timing of Severance Benefits.

 

 

 

 

 

 

Section 4.4

Coordination With Other Benefits.

 

 

 

 

 

 

Section 4.5

Nonalienation.

 

 

 

 

 

 

Section 4.6

Withholding.

 

 

 

 

 

 

Section 4.7

Benefits on Death.

 

 

 

 

 

 

SECTION 5  RETENTION BENEFITS

 

 

 

 

 

 

Section 5.1

Entitlement to Retention Benefits.

 

 

 

 

 

 

Section 5.2

Amount of Retention Benefits.

 

 

 

 

 

 

Section 5.3

Form and Timing of Retention Benefits.

 

 

 

 

 

 

Section 5.4

Withholding.

 

 

 

 

 

 

Section 5.5

Benefits on Death.

 

 

 

 

 

 

Section 5.6

Miscellaneous.

 

 

 

 

 

 

SECTION 6  PLAN ADMINISTRATOR

 

 

 

 

 

 

Section 6.1

Duties and Authority of Plan Administrator.

 

 

 

 

 

 

Section 6.2

Plan Administrator Decision Final.

 

 

 

 

 

 

Section 6.3

Exercise of Plan Administrator Duties.

 

 

 

 

 

 

SECTION 7  CLAIMS PROCEDURES

 

 

 

 

 

 

Section 7.1

Explanation of Benefits.

 

 

 

 

 

 

Section 7.2

Claims for Benefits.

 

 

 

 

 

 

Section 7.3

Review of Claims.

 

 

 

 

 

 

Section 7.4

Compliance With Regulations.

 

 

 

 

 

 

Section 7.5

Claims for Benefits Under Other Plans.

 

 

 

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SECTION 8  AMENDMENT OR TERMINATION

 

 

 

 

 

 

Section 8.1

Amendment and Termination.

 

 

 

 

 

 

SCHEDULE A

Affiliates Excluded From Coverage

 

 

 

 

 

 

SCHEDULE B

Outplacement Services

 

 

 

 

 

 

 

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POGO PRODUCING COMPANY

CHANGE OF CONTROL

SEVERANCE AND RETENTION PROGRAM

SECTION 1

GENERAL

Section 1.1            Purpose and Term.  Pogo Producing Company (“Pogo”) has
established the Pogo Producing Company Change of Control Severance and Retention
Program (the “Plan”) effective as of January 1, 2007.  The Plan is intended to
provide severance benefits and/or a retention incentive for Employees under the
circumstances described herein, and will apply to Employees who are designated
by the Plan Administrator as eligible for benefits under the Plan.  With respect
to Pogo and its subsidiaries, the Plan replaces all severance programs or
policies maintained prior to the Effective Date except individual written
employment agreements.

Section 1.2            Plan Administration.  The authority to control and manage
the operation and administration of the Plan will be vested in a Plan
Administrator.  The Plan Administrator will be the “named fiduciary” as
described in Section 402 of ERISA, with respect to its authority under the
Plan.  The duties and responsibilities of the Plan Administrator are set forth
in Section 6 of the Plan.

Section 1.3            Source of Payments.  The obligations of the Company under
the Plan are solely contractual.  Any amount payable under the terms of the Plan
will be paid from the general assets of the Company, and no trust or other
separate fund will be established for this purpose.  Other payments or benefits
referenced in the Plan will be paid in accordance with the terms of those plans
and are not payable under the Plan.

Section 1.4            Notices.  Any notice or document required to be filed
under the Plan will be considered to be properly filed if delivered or mailed
via certified mail, postage prepaid, to Pogo’s corporate office, Attn:  John O.
McCoy, Jr., Executive Vice President and Chief Administrative Officer, 5
Greenway Plaza, Suite 3000, Houston, Texas 77046.  Any notice required under the
Plan may be waived by the person entitled thereto.

Section 1.5            Action by Company.  Any action required or permitted to
be taken by the Company under the Plan will be by resolution of its Board of
Directors, or by a duly authorized officer of the Company, or by such other
person as may be designated by the Board of Directors of the Company; provided,
however, that until otherwise provided by the Board of Directors of the Company,
any action required or permitted to be taken by the Company under the Plan may
be taken by any authorized officer of the Company.

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Section 1.6            Gender and Number.  Where the context admits, words in
any gender will include any other gender, words in the singular will include the
plural, and the plural will include the singular.

Section 1.7            Plan Not Guarantee of Employment.  The Plan does not
constitute a guarantee of employment by the Company, and eligibility for or
participation in the Plan will not give any individual the right to be retained
in the employ of the Company.  The Company reserves the right to discharge
employees at-will or to amend or modify any of the terms and conditions of their
employment.

Section 1.8            Covered Affiliates.  The Plan covers the Company and any
Affiliate of the Company; provided, however, that the Affiliates designated by
the Company from time to time, as set forth on Schedule A attached hereto, shall
be excluded from coverage under the Plan.  The Employees of other entities that
become Affiliates after the Effective Date will be covered by the Plan only to
the extent that the Company and such Affiliate expressly agree in writing to
participation in the Plan.

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SECTION 2

DEFINITIONS

Section 2.1            Administrative Committee means the committee appointed by
the Board of Directors of Pogo.

Section 2.2            Affiliate means (i) any corporation other than the
Company that is either a subsidiary corporation or an affiliated or associated
corporation of the Company which together with the Company is a member of a
“controlled group” of corporations, (ii) any organization which together with
the Company is under “common control”, or (iii) any organization which together
with the Company is an “affiliated service group”, as those terms are defined in
Sections 414(b), 414(c) and 414(m) of the Code.

Section 2.3            Change of Control means:

A.            The acquisition by any Person of beneficial ownership of
Outstanding Company Voting Securities (including any such acquisition of
beneficial ownership deemed to have occurred pursuant to Rule 13d-5 under the
Exchange Act) if, immediately thereafter, such Person is the beneficial owner of
20% or more of either (i) the then Outstanding Company Common Stock or (ii) the
then Outstanding Company Voting Securities, unless such acquisition is made (a)
directly from the Company in a transaction approved by a majority of the members
of the Incumbent Board, (b) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (c) by a parent corporation resulting from a Business Corporation
(other than the Company) pursuant to a Business Combination if, following such
Business Combination, the conditions specified in clauses (i), (ii) and (iii) of
subsection (c) of this Section 2.7 are satisfied;

B.            Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, except that any such individual
shall not be considered a member of the Incumbent Board if his or her initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such term is used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board;

C.            Approval by the shareholders of the Company of a Business
Combination (or if there is no such approval by shareholders, consummation of
such Business Combination) unless, immediately following such Business
Combination, (i) more than 60% of, respectively, the then outstanding shares of
common stock of the parent corporation resulting from such Business Combination
and the combined voting power of the then outstanding voting securities of such
parent corporation entitled to vote generally in the election of directors will
be (or is) then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common

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Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (other than any employee benefit plan (or related trust) of the Company
or any parent corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more, respectively, of the then outstanding
shares of common stock of the parent corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the board of directors
of the parent corporation resulting from such Business Combination were members
of the Incumbent Board immediately prior to the consummation of such Business
Combination; or

D.            Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a Major Asset Disposition
unless, immediately following such Major Asset Disposition, (A) individuals and
entities that were beneficial owners of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such Major Asset
Disposition beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding shares of voting stock of the Company (if
it continues to exist) and of the Acquiring Entity; (B) no Person, other than
any employee benefit plan (or related trust) of the Company or such entity
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities of the Company (if it continues to exist) and
of the Acquiring Entity and (C) at least a majority of the members of the board
of directors of the Company (if it continues to exist) and of the Acquiring
Entity were members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such Major Asset
Disposition.

For purposes of the foregoing definition,

1.             THE TERM “PERSON” MEANS AN INDIVIDUAL, ENTITY OR GROUP;

2.             THE TERM “GROUP” IS USED AS IT IS DEFINED FOR PURPOSES OF SECTION
13(D)(3) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”);

3.             THE TERMS “BENEFICIAL OWNER”, “BENEFICIAL OWNERSHIP” AND
“BENEFICIALLY OWN” ARE USED AS DEFINED FOR PURPOSES OF RULE 13D-3 UNDER THE
EXCHANGE ACT;

4.             THE TERM “BUSINESS COMBINATION” MEANS (A) A MERGER OR
CONSOLIDATION INVOLVING THE COMPANY OR ITS STOCK OR (B) AN ACQUISITION BY THE
COMPANY, DIRECTLY OR THROUGH ONE OR MORE SUBSIDIARIES, OF ANOTHER ENTITY OR ITS
STOCK OR ASSETS;

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5.             THE TERM “OUTSTANDING COMPANY COMMON STOCK” SHALL MEAN THE
OUTSTANDING SHARES OF COMMON STOCK, PAR VALUE $1 PER SHARE, OF THE COMPANY;

6.             THE TERM “OUTSTANDING COMPANY VOTING SECURITIES” MEANS
OUTSTANDING VOTING SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE
ELECTION OF DIRECTORS; AND ANY SPECIFIED PERCENTAGE OR PORTION OF THE
OUTSTANDING COMPANY VOTING SECURITIES (OR OF OTHER VOTING STOCK OR VOTING
SECURITIES) SHALL BE DETERMINED BASED ON THE RELATIVE COMBINED VOTING POWER OF
SUCH SECURITIES;

7.             THE TERM “PARENT CORPORATION RESULTING FROM A BUSINESS
COMBINATION” MEANS THE COMPANY IF ITS STOCK IS NOT ACQUIRED OR CONVERTED IN THE
BUSINESS COMBINATION AND OTHERWISE MEANS THE ENTITY WHICH AS A RESULT OF SUCH
BUSINESS COMBINATION OWNS THE COMPANY OR ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS EITHER DIRECTLY OR THROUGH ONE OR MORE SUBSIDIARIES;

8.             THE TERM “MAJOR ASSET DISPOSITION” MEANS THE SALE OR OTHER
DISPOSITION IN ONE TRANSACTION OR A SERIES OF RELATED TRANSACTIONS OF 60% OR
MORE OF THE ASSETS OF THE COMPANY AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS;
AND ANY SPECIFIED PERCENTAGE OR PORTION OF THE ASSETS OF THE COMPANY SHALL BE
BASED ON FAIR MARKET VALUE, AS DETERMINED BY A MAJORITY OF THE MEMBERS OF THE
INCUMBENT BOARD; AND

9.             “ACQUIRING ENTITY” MEANS THE ENTITY THAT ACQUIRES THE LARGEST
PORTION OF THE ASSETS SOLD OR OTHERWISE DISPOSED OF IN A MAJOR ASSET DISPOSITION
(OR THE ENTITY, IF ANY, THAT OWNS A MAJORITY OF THE OUTSTANDING VOTING STOCK OF
SUCH ACQUIRING ENTITY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OR
MEMBERS OF A COMPARABLE GOVERNING BODY).

Section 2.4            Claimant means an individual who submits a claim to the
Plan Administrator seeking to obtain benefits, a different amount of benefits or
other rights under the Plan.

Section 2.5            COBRA means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended at any relevant time.

Section 2.6            Code means the Internal Revenue Code of 1986, as amended
at any relevant time.

Section 2.7            Company means Pogo Producing Company and/or any Affiliate
as defined herein, as applicable.

Section 2.8            Compensation means the Employee’s regular base wages or
salary for payroll purposes as in effect on his Employment Termination Date. 
For the purpose of calculating the amount of Severance Benefits under Section
4.2 or Retention Benefits under Section 5.2, the term Compensation does not
include overtime, incentive pay or bonuses or

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supplemental payments, including but not limited to the geographical supplement
or a parking supplement.

Section 2.9            Effective Date means January 1, 2007.

Section 2.10         Employee means an individual who renders personal services
to the Company or an Affiliate on a full-time basis and who is subject to the
control of the Company.  An individual who is in an employer-employee
relationship with the Company as determined for Federal Insurance Contribution
Act purposes and Federal Employment Tax purposes, including Code section
3401(c), automatically satisfies the preceding sentence’s requirements for
determinations of whether that individual renders personal services and is
subject to the control of the Company.  All employees who are working outside
the United States will be excluded from coverage regardless of which Company
payroll covers such employees.  Further, all executives of the Company or a
participating Affiliate or employees who have an individual written employment
contract with the Company or an Affiliate or any agreement with the Company or
an Affiliate that provides for the payment of severance benefits after
termination of employment or Change of Control, including, without limitation, a
salary continuation or incentive agreement, will not be considered an “Employee”
for purposes of the Plan.

Section 2.11         Employment Termination Date means the last day of a
Participant’s employment.

Section 2.12         ERISA means the Employee Retirement Income Security Act of
1974, as amended at any relevant time.

Section 2.13         General Release of Claims or Release means a release, in a
form satisfactory to the Company and the Plan Administrator, that waives all
claims that the Participant has or may have against the Company or any
Affiliate, including claims for other severance benefits, retention benefits or
compensation, other employee benefits under plans or programs provided by the
Company, workforce reduction or exit incentive programs now in effect or
implemented in the future by the Company and any other claims that the
Participant has or may have that may be legally waived in connection with the
Participant’s employment and termination of employment.  The Release may also
require the Employee to maintain the confidentiality of any information that is
considered by the Company to be a trade secret, confidential or proprietary to
the Company.

Section 2.14         Participant means an Employee who has satisfied the
eligibility requirements provided in Section 3 of the Plan.

Section 2.15         Plan means the Pogo Producing Company Change of Control
Severance and Retention Program, as set forth in this document.

Section 2.16         Plan Administrator means an administrative committee
appointed by the Board of Directors of the Company, or such other person or
committee as may be duly designated by Pogo.

Section 2.17         Plan Year means the calendar year.

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Section 2.18          Qualified Employment means continued employment following
a Change of Control (i) with total remuneration including benefits and
Compensation being substantially the same value as the Employee’s total
remuneration immediately before a Change of Control and with a base salary for
the first year following a Change of Control in an amount equal to at least
ninety-five percent (95%) of the Employee’s Compensation from the Company
immediately before the effective date of a Change of Control; (ii) that does not
require relocation more than 25 miles from the Employee’s normal working
location immediately prior to a Change of Control; (iii) that provides immediate
eligibility under an active employees’ medical benefits plan, with medical
benefits comparable to benefits provided under the Company’s plans; (iv) that
provides some form of paid time off for vacation and illness; (v) that is in a
position with duties and responsibilities substantially the same as those
applicable to the individual immediately prior to a Change of Control; and (vi)
that provides that if the Employee is terminated (other than by reason of death
or disability) within eighteen (18) months of a Change of Control through no
fault of the Employee, the Employee will be eligible for Severance Benefits
under the Plan taking into account the Employee’s prior service with the
Company.

In no event will a continuation of employment constitute Qualified Employment if
the employment fails to provide an Employee with total compensation and benefits
that, in the aggregate, are comparable to the Employee’s compensation and
benefits immediately prior to a Change of Control.

Section 2.19          Retention Benefits means the benefits a Participant is
entitled to receive under the Plan in accordance with Section 5.2, upon
satisfying the requirements set forth under Section 3.2 and Section 3.3.

Section 2.20          Retirement Plan or 401(k) Plan means with respect to any
Participant, the Employees Retirement Plan for Pogo Producing Company (the
“Retirement Plan”) or the Tax-Advantaged Savings Plan of Pogo Producing Company
(the “401(k) Plan”) (collectively the “Plans”), or both, as applicable, in which
such Participant was a participant on his Employment Termination Date.

Section 2.21          Severance Benefits means the benefits a Participant is
entitled to receive under the Plan in accordance with Section 4.2, upon
satisfying the requirements set forth under Section 3.1 and Section 3.3.

Section 2.22          Specified Employee means any Employee who is a “specified
employee” as defined in Code Section 409A(2)(B)(i).

Section 2.23          Years of Service means a Participant’s number of full
years of service with the Company ending on his Employment Termination Date,
with each partial year of six (6) or more months counting as a full year.  If a
Participant has been rehired by the Company after receiving full benefits from
the Plan, the Participant’s service at his subsequent Employment Termination
Date will be calculated based upon the Participant’s most recent rehire date.

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SECTION 3

ELIGIBILITY AND PARTICIPATION

An Employee will become a Participant in the Plan and be eligible to receive
Severance Benefits and/or Retention Benefits in accordance with the terms and
conditions set forth in Section 3.  In no event will an individual covered by a
written employment contract or other agreement be eligible to participate in or
receive benefits under the Plan.

Section 3.1            Eligibility for Severance Benefits.  The following terms
and conditions govern an Employee’s eligibility to receive Severance Benefits:

A.            AN EMPLOYEE WILL BE ELIGIBLE TO RECEIVE SEVERANCE BENEFITS UNDER
THE PLAN WHEN:

1.             THE PLAN ADMINISTRATOR HAS SELECTED THE EMPLOYEE TO PARTICIPATE
IN THE PLAN;

2.             A CHANGE OF CONTROL HAS OCCURRED;

3.             SUCH EMPLOYEE’S

A.             EMPLOYMENT IS NOT, OR CEASES TO BE, A CONTINUATION OF EMPLOYMENT
THAT CONSTITUTES QUALIFIED EMPLOYMENT,

B.             EMPLOYMENT IS INVOLUNTARILY TERMINATED BY THE COMPANY, OTHER THAN
FOR CAUSE, OR

C.             DUTIES AND RESPONSIBILITIES ARE CHANGED, OTHER THAN AN
INSIGNIFICANT CHANGE IN HIS DUTIES AND RESPONSIBILITIES, AS APPLICABLE, FROM
THOSE IN EFFECT IMMEDIATELY PRIOR TO A CHANGE OF CONTROL.

AN EMPLOYEE MAY BECOME ELIGIBLE TO RECEIVE SEVERANCE BENEFITS UNDER THE PLAN
NOTWITHSTANDING THE FACT THAT HE IS ELIGIBLE TO RETIRE OR HAS RETIRED FROM THE
COMPANY, PROVIDED SUCH EMPLOYEE OTHERWISE SATISFIES THE ELIGIBILITY REQUIREMENTS
OF THIS SECTION 3.1.

B.            THE COMPANY, IN ITS SOLE DISCRETION, WILL MAKE DECISIONS REGARDING
THE STAFFING NEEDS AND EMPLOYMENT LEVELS AS A PART OF ITS BUSINESS FUNCTION AND
IN ACCORDANCE WITH THE COMPANY’S PLANS IN ANTICIPATION OF OR FOLLOWING A CHANGE
OF CONTROL.  ACTIONS TAKEN BY THE COMPANY IN MAKING THESE BUSINESS DECISIONS
REGARDING STAFFING, REASSIGNMENT, AND JOB ELIMINATION WILL NOT BE CONSTRUED AS
ACTIONS OF THE PLAN ADMINISTRATOR ACTING IN ITS CAPACITY AS FIDUCIARY UNDER THE
PLAN.  THE PLAN ADMINISTRATOR, IN ITS SOLE DISCRETION, WILL DETERMINE WHETHER
AND WHEN AN EMPLOYEE IS ELIGIBLE TO PARTICIPATE IN THE PLAN.

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C.            NOTWITHSTANDING THE FOREGOING, AN EMPLOYEE WILL NOT BE ELIGIBLE
FOR PARTICIPATION IN THE PLAN IF THE EMPLOYEE RECEIVES AN OFFER OF QUALIFIED
EMPLOYMENT, REGARDLESS OF WHETHER THE EMPLOYEE ACCEPTS SUCH OFFER OF QUALIFIED
EMPLOYMENT.

Section 3.2            Eligibility for Retention Benefits.  The following terms
and conditions govern an Employee’s eligibility to receive Retention Benefits. 
An Employee will be eligible to receive Retention Benefits under the Plan when:

A.            the Plan Administrator has selected the Employee to participate in
the Plan; and

B.            the Employee continues his employment with the Company until the
earlier of

1.             his involuntary termination of employment by the Company, other
than for cause,

2.             a Change of Control, or

3.             December 31, 2007.

Section 3.3            General Release of Claims.  To be eligible for Severance
Benefits under the Plan, each Participant must sign and not revoke a General
Release of Claims in a form satisfactory to the Company and the Plan
Administrator.  Any Participant who signs a Release and later revokes such
Release (in accordance with its terms and applicable law) will not be eligible
to receive Severance Benefits.  The General Release of Claims will affect a
Participant’s rights when it becomes effective, and each Participant will be
advised to consult an attorney at his own expense prior to executing the General
Release of Claims.  Unless otherwise determined by the Plan Administrator, the
General Release of Claims will give each Participant at least forty-five (45)
days to consider whether to sign it, and each Participant will have seven (7)
days to revoke the General Release of Claims after it is signed.  If an employee
who has been notified of his eligibility to participate in the Plan does not
sign and submit the General Release of Claims within the time specified by the
Plan Administrator, his employment nonetheless will end on his scheduled
Employment Termination Date.

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SECTION 4

SEVERANCE BENEFITS

Section 4.1            Entitlement to Severance Benefits.  Subject to the terms
and conditions of the Plan, the Plan Administrator shall grant Severance
Benefits to a Participant in an amount determined in accordance with the
provisions of the Plan.  Participants who receive Severance Benefits under the
Plan will not be entitled to receive severance benefits under any other plan or
program of the Company or an Affiliate.

Section 4.2            Amount of Severance Benefits.  Subject to the terms and
conditions of the Plan, a Participant who is eligible for Severance Benefits
under the Plan will be entitled to an amount determined in accordance with the
following:

A.            SEVERANCE BENEFIT CALCULATION: THE SEVERANCE BENEFITS OF A
PARTICIPANT WILL BE AN AMOUNT EQUAL TO THREE (3) WEEKS OF THE PARTICIPANT’S
COMPENSATION FOR EACH YEAR OF SERVICE, SUBJECT TO THE PROVISIONS OF SECTION
4.2.B.  FOR PURPOSES OF THE PLAN, ANY PRIOR PERIOD OF PART-TIME SERVICE WILL BE
TREATED AS IF IT HAD BEEN A PERIOD OF FULL-TIME EMPLOYMENT IN MAKING THE
CALCULATION.

B.            MINIMUM AND MAXIMUM SEVERANCE BENEFITS:  EACH PARTICIPANT WILL
RECEIVE SEVERANCE BENEFITS FOR A MINIMUM OF FOUR (4) MONTHS AND A MAXIMUM OF
EIGHTEEN (18) MONTHS.

C.            COORDINATION WITH DEFERRED COMPENSATION RULES:  THE PLAN IS
INTENDED TO BE A WELFARE BENEFIT PLAN GOVERNED BY ERISA THAT PROVIDES FOR
SEVERANCE BENEFITS TO DESIGNATED EMPLOYEES IN THE EVENT OF INVOLUNTARY
TERMINATION OF EMPLOYMENT FROM THE COMPANY.  THE PLAN IS NOT INTENDED TO BE
SUBJECT TO SECTION 409A OF THE CODE.  THE PLAN WILL BE ADMINISTERED IN
COMPLIANCE WITH THE REGULATIONS ISSUED PURSUANT TO SECTION 409A UNDER WHICH
SEVERANCE ARRANGEMENTS MAY BE EXEMPT FROM THOSE RULES.  FURTHER, TO THE EXTENT
THAT AN EMPLOYEE IS A SPECIFIED EMPLOYEE, SEVERANCE BENEFITS TO SUCH SPECIFIED
EMPLOYEE WILL BEGIN WITH THE FIRST PAYROLL PERIOD FOLLOWING THE DATE THAT IS SIX
MONTHS AFTER SUCH PARTICIPANT’S EMPLOYMENT TERMINATION DATE.  THE INITIAL
PAYMENT TO A SPECIFIED EMPLOYEE WILL INCLUDE ALL INSTALLMENT PAYMENTS WHICH
OTHERWISE WOULD HAVE BEEN MADE TO THE SPECIFIED EMPLOYEE DURING THE SIX MONTHS
FOLLOWING THE EMPLOYMENT TERMINATION DATE.  IF THE SPECIFIED EMPLOYEE IS
ENTITLED TO ADDITIONAL SEVERANCE BENEFITS, THE REMAINING SEVERANCE BENEFITS WILL
BE PAYABLE IN INSTALLMENTS ACCORDING TO THE NORMAL PAYROLL SCHEDULE FOR THE
SPECIFIED EMPLOYEE.

Section 4.3            Form and Timing of Severance Benefits.  Severance
Benefits will be payable in installments according to the normal payroll payment
schedules in effect for each Participant immediately prior to the Participant’s
Employment Termination Date.  Severance Benefits will begin with the first
payroll period immediately following the Participant’s Employment Termination
Date.

Section 4.4            Coordination With Other Benefits.  A Participant
receiving Severance Benefits under the Plan will cease to be considered an
employee of the Company for

10

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purposes of eligibility and participation in other benefit plans sponsored by
the Company as of his Employment Termination Date.  Except as otherwise
provided, each Participant who has signed and not revoked the applicable General
Release of Claims under Section 3.3 will be entitled to the following benefits:

A.            MEDICAL AND PRESCRIPTION DRUG COVERAGE.  EACH PARTICIPANT WHO HAS
MEDICAL AND PRESCRIPTION DRUG COVERAGE UNDER THE COMPANY’S HEALTH PLAN OPTIONS
AS OF HIS EMPLOYMENT TERMINATION DATE AND HAS SIGNED THE APPLICABLE GENERAL
RELEASE OF CLAIMS WILL BE ELIGIBLE TO CONTINUE COVERAGE UNDER THE ACTIVE
EMPLOYEES’ MEDICAL AND PRESCRIPTION DRUG PLAN FOR UP TO ONE (1) YEAR FOLLOWING
HIS EMPLOYMENT TERMINATION DATE.  THE COBRA COVERAGE PERIOD WILL BEGIN ON THE
FIRST OF THE MONTH COINCIDENT WITH OR FOLLOWING THE END OF THE PARTICIPANT’S
COVERAGE UNDER THE ACTIVE PLAN.  IN NO EVENT WILL AN INDIVIDUAL BE ELIGIBLE FOR
MEDICAL AND PRESCRIPTION DRUG COVERAGE UNDER THE COMPANY’S PLAN ONCE HE IS
ELIGIBLE FOR COVERAGE UNDER ANY OTHER MEDICAL PLAN, INCLUDING ANOTHER EMPLOYER’S
MEDICAL PLAN.

B.            DENTAL AND VISION COVERAGE.  ANY PARTICIPANT WHO IS PARTICIPATING
IN THE DENTAL PLAN OR THE VISION PLAN AS OF HIS EMPLOYMENT TERMINATION DATE MAY
ELECT TO CONTINUE EITHER OR BOTH OF SUCH COVERAGES UNDER COBRA BY TIMELY
SUBMITTING A WRITTEN APPLICATION AND PAYING THE REQUIRED COBRA PREMIUMS IN
ACCORDANCE WITH THE PROVISIONS UNDER THE APPLICABLE PLANS.

C.            OTHER INSURANCE.  COVERAGE UNDER THE LIFE INSURANCE, LONG TERM
DISABILITY AND ACCIDENTAL DEATH AND DISMEMBERMENT PLANS ENDS ON A PARTICIPANT’S
EMPLOYMENT TERMINATION DATE.  CONVERSION RIGHTS ARE NOT AVAILABLE FOR EXTENDED
COVERAGE UNDER THESE PLANS.

D.            OUTPLACEMENT SERVICES.  A PARTICIPANT WILL BE ELIGIBLE FOR
OUTPLACEMENT SERVICES COMMENSURATE WITH HIS POSITION, WHICH WILL BE PROVIDED AT
COMPANY EXPENSE THROUGH AN INDEPENDENT FIRM UNDER CONTRACT WITH THE COMPANY. 
OUTPLACEMENT SERVICES MUST BEGIN WITHIN SIX (6) MONTHS FROM THE DATE AN EMPLOYEE
IS NOTIFIED OF HIS ELIGIBILITY TO PARTICIPATE IN THE PLAN.  THE MAXIMUM AMOUNT
PROVIDED TO A PARTICIPANT AS OUTPLACEMENT SERVICES SHALL BE AS SET FORTH IN
SCHEDULE B, AND IN NO EVENT SHALL EXCEED $7,500 FOR ANY PARTICIPANT.  AN
EMPLOYEE IS NOT REQUIRED TO EXECUTE THE GENERAL RELEASE OF CLAIMS PROVIDED IN
SECTION 3.3 TO BE ELIGIBLE FOR OUTPLACEMENT SERVICES.

E.             SPECIFIED EMPLOYEES.  TO THE EXTENT NECESSARY TO MAKE ANY BENEFIT
OR PAYMENT PROVIDED UNDER THIS SECTION 4.4 TO A PARTICIPANT WHO IS A SPECIFIED
EMPLOYEE NOT SUBJECT TO TAX UNDER CODE SECTION 409A, THE BENEFIT OR PAYMENT
SHALL BE PROVIDED OR MADE SIX MONTHS AFTER SUCH PARTICIPANT’S EMPLOYMENT
TERMINATION DATE.

Section 4.5            Nonalienation.  Participants will not have any right to
pledge, hypothecate, anticipate, or in any way create a lien upon any benefits
provided under the Plan, and no benefits payable hereunder will be assignable in
anticipation of payment, either by voluntary or involuntary acts, or by
operation of law. Nothing in this Section 4.5 will limit a Participant’s rights
or powers to dispose of his property by will, limit any rights or powers which
his executor or administrator would otherwise have with regard to benefits to
which a Participant

11

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is entitled hereunder, or restrict any right of set-off, counterclaim or
recoupment which the Company may otherwise have against any Participant.

Section 4.6            Withholding.  All Severance Benefits paid under the Plan
will be subject to applicable withholding of federal, state and local taxes and
other applicable deductions.  Notwithstanding the foregoing, payments made under
the Plan after a Participant’s Employment Termination Date will not be
considered “earnings” or “compensation” with respect to salary deferral
arrangements, including, without limitation, the 401(k) Plan.

Section 4.7            Benefits on Death.  In the event of the death of a
Participant after becoming entitled to Severance Benefits under the Plan but
before complete payment of his benefits hereunder, any unpaid Severance Benefits
will be paid to his surviving spouse or, if he has no surviving spouse at the
time of his death, to his estate.

12

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SECTION 5

RETENTION BENEFITS

Section 5.1            Entitlement to Retention Benefits.  Subject to the terms
and conditions of the Plan, the Plan Administrator shall grant Retention
Benefits under the Plan to a Participant in an amount determined in accordance
with the provisions of the Plan.  Participants who receive Retention Benefits
under the Plan will not be eligible to receive retention benefits under any
other plan or program of the Company or an Affiliate.  Further, an Employee who
receives retention benefits during the term of the Plan from any other retention
program, plan or arrangement maintained by the Company or an Affiliate will not
be entitled to receive benefits from the Plan.

Section 5.2            Amount of Retention Benefits.  Subject to the terms and
conditions of the Plan, a Participant who satisfies the eligibility requirements
set forth in Section 3.2 is entitled to a Retention Benefit under the Plan equal
to four (4) months salary.

Section 5.3            Form and Timing of Retention Benefits.  Retention
Benefits will be payable in a lump-sum on the earlier of (i) the Participant’s
involuntary termination of employment by the Company, other than for cause, (ii)
the occurrence of a Change of Control, or (iii) December 31, 2007.

Section 5.4            Withholding.  All Retention Benefits paid under the Plan
will be subject to applicable withholding of federal, state and local taxes. 
Notwithstanding the foregoing, Retention Benefits made under the Plan after a
Participant’s Employment Termination Date will not be considered “earnings” or
“compensation” as that term is used with respect to salary deferral
arrangements, including, without limitation, the 401(k) Plan.

Section 5.5            Benefits on Death.  In the event of the death of a
Participant after becoming entitled to Retention Benefits under the Plan but
before complete payment of his benefits hereunder, any unpaid Retention Benefits
will be paid to his surviving spouse or, if he has no surviving spouse at the
time of his death, to his estate.

Section 5.6            Miscellaneous.

A.            SPECIFIED EMPLOYEES.  TO THE EXTENT NECESSARY TO MAKE ANY BENEFIT
OR PAYMENT PROVIDED UNDER THIS SECTION 5 NOT SUBJECT TO TAX UNDER CODE SECTION
409A TO A PARTICIPANT WHO IS A SPECIFIED EMPLOYEE, THE BENEFIT OR PAYMENT SHALL
BE PROVIDED OR MADE SIX MONTHS AFTER SUCH PARTICIPANT’S EMPLOYMENT TERMINATION
DATE.

B.            NONALIENATION.  PARTICIPANTS WILL NOT HAVE ANY RIGHT TO PLEDGE,
HYPOTHECATE, ANTICIPATE, OR IN ANY WAY CREATE A LIEN UPON ANY BENEFITS PROVIDED
UNDER THE PLAN, AND NO BENEFITS PAYABLE HEREUNDER WILL BE ASSIGNABLE IN
ANTICIPATION OF PAYMENT, EITHER BY VOLUNTARY OR INVOLUNTARY ACTS, OR BY
OPERATION OF LAW. NOTHING IN THIS SECTION 5 WILL LIMIT A PARTICIPANT’S RIGHTS OR
POWERS TO DISPOSE OF HIS PROPERTY BY WILL, LIMIT ANY RIGHTS OR POWERS WHICH HIS
EXECUTOR OR ADMINISTRATOR WOULD OTHERWISE HAVE WITH REGARD TO BENEFITS TO WHICH
A PARTICIPANT IS ENTITLED HEREUNDER, OR RESTRICT ANY RIGHT OF SET-OFF,
COUNTERCLAIM OR RECOUPMENT WHICH THE COMPANY MAY OTHERWISE HAVE AGAINST ANY
PARTICIPANT.

13

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SECTION 6

PLAN ADMINISTRATOR

Section 6.1            Duties and Authority of Plan Administrator.  Except as
otherwise specifically provided in this Section 6, in controlling and managing
the operation and administration of the Plan, the Plan Administrator will have
the following discretionary authority, powers, rights and duties in addition to
those vested in it elsewhere in the Plan:

A.            TO ENFORCE THE PLAN IN ACCORDANCE WITH ITS TERMS AND WITH SUCH
APPLICABLE RULES OF PROCEDURE AND REGULATIONS AS MAY BE ADOPTED BY THE PLAN
ADMINISTRATOR;

B.            TO DETERMINE CONCLUSIVELY ALL QUESTIONS ARISING UNDER THE PLAN,
INCLUDING THE POWER TO DETERMINE THE ELIGIBILITY OF EMPLOYEES OR CLAIMANTS AND
THE RIGHTS OF PARTICIPANTS OR CLAIMANTS TO BENEFITS UNDER THE PLAN, TO INTERPRET
AND CONSTRUE THE PROVISIONS OF THE PLAN, AND TO REMEDY ANY AMBIGUITIES,
INCONSISTENCIES OR OMISSIONS OF WHATEVER KIND; AND

C.            TO EMPLOY OR UTILIZE AGENTS, ATTORNEYS, ACCOUNTANTS OR OTHER
PERSONS (WHO MAY ALSO BE EMPLOYED BY OR REPRESENT THE COMPANY) FOR SUCH PURPOSES
AS THE PLAN ADMINISTRATOR CONSIDERS NECESSARY OR DESIRABLE TO DISCHARGE ITS
DUTIES.

Section 6.2            Plan Administrator Decision Final.  To the extent
permitted by law, any interpretation of the Plan and any decision on any matter
within the discretion of the Plan Administrator made by it in good faith will be
binding on all persons. A misstatement or other mistake of fact will be
corrected when it becomes known, and the Plan Administrator will make such
adjustment on account thereof as it considers equitable and practicable.

Section 6.3            Exercise of Plan Administrator Duties.  In exercising its
authority under the Plan, the Plan Administrator may allocate all or any part of
its responsibilities and powers to any one or more of the committees of the
Company and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it, including designated officers or employees
of the Company.

14

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SECTION 7

CLAIMS PROCEDURES

Section 7.1            Explanation of Benefits.  Although a Participant does
have to sign, submit and not revoke a General Release of Claims, as described in
Section 3.3, a Participant does not have to file a claim in order to receive
Severance Benefits and other related benefits or Retention Benefits under the
Plan. Any Claimant who has questions about the Plan, including questions about
his eligibility for benefits, the amount of his Severance Benefits or Retention
Benefits, how benefits are calculated or other issues relating to Plan
interpretations is encouraged to submit such questions in writing to the Plan
Administrator. The Plan Administrator will provide a written response to all
such inquiries. If a Claimant believes, after reviewing the Plan Administrator’s
explanation of benefits, that he is eligible for benefits under the Plan or that
the Severance Benefits to which he is entitled under the Plan have been
calculated incorrectly, the Participant may submit a written claim for Plan
benefits in accordance with Section 7.2 of the Plan.

Section 7.2            Claims for Benefits.  A Claimant may submit a written
claim for benefits under the Plan in accordance with the terms and conditions
set forth in this Section 7.2.

A.            FILING OF CLAIMS. A CLAIM FOR BENEFITS SHALL BE MADE BY FILING A
WRITTEN REQUEST WITH THE PLAN ADMINISTRATOR, WHICH SHALL BE DELIVERED TO THE
PLAN ADMINISTRATOR AND ACCOMPANIED BY SUCH SUBSTANTIATION OF THE CLAIM AS THE
PLAN ADMINISTRATOR CONSIDERS NECESSARY AND REASONABLE FOR THE TYPE OF CLAIM
BEING FILED.

B.            DENIAL OF CLAIMS. IF A CLAIM IS DENIED IN WHOLE OR IN PART, THE
CLAIMANT SHALL RECEIVE A WRITTEN OR ELECTRONIC NOTICE EXPLAINING THE DENIAL OF
THE CLAIM WITHIN NINETY (90) DAYS AFTER THE PLAN ADMINISTRATOR’S RECEIPT OF THE
CLAIM, UNLESS SPECIAL CIRCUMSTANCES EXIST THAT REQUIRE AN EXTENSION OF THE TIME
FOR PROCESSING SUCH CLAIM. IF AN EXTENSION OF TIME IS NECESSARY, THE CLAIMANT
SHALL BE NOTIFIED IN WRITING OF THE EXTENSION AND REASON FOR THE EXTENSION
WITHIN NINETY (90) DAYS AFTER THE PLAN ADMINISTRATOR’S RECEIPT OF THE CLAIM. THE
WRITTEN EXTENSION NOTIFICATION SHALL ALSO INDICATE THE DATE BY WHICH THE PLAN
ADMINISTRATOR EXPECTS TO RENDER A FINAL DECISION. A NOTICE OF DENIAL OF CLAIM
SHALL CONTAIN THE FOLLOWING:

1.             THE SPECIFIC REASON OR REASONS FOR THE DENIAL;

2.             REFERENCE TO THE SPECIFIC PLAN PROVISIONS ON WHICH THE DENIAL IS
BASED;

3.             A DESCRIPTION OF ANY ADDITIONAL MATERIALS OR INFORMATION
NECESSARY FOR SUCH CLAIMANT TO PERFECT THE CLAIM AND AN EXPLANATION OF WHY SUCH
MATERIAL OR INFORMATION IS NECESSARY; AND

4.             A DESCRIPTION OF THE PLAN’S REVIEW PROCEDURES AND THE TIME LIMITS
APPLICABLE TO SUCH PROCEDURES, INCLUDING A STATEMENT OF THE CLAIMANT’S RIGHT TO
BRING A CIVIL ACTION UNDER SECTION 502(A) OF ERISA FOLLOWING AN ADVERSE BENEFIT
DETERMINATION ON REVIEW.

15

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C.            PAYMENT OF CLAIMS. THE FULL VALUE OF A PAYMENT MADE ACCORDING TO
THE PROVISIONS OF THE PLAN SATISFIES THAT MUCH OF THE CLAIM AND ALL RELATED
CLAIMS UNDER THE PLAN AGAINST THE PLAN ADMINISTRATOR AND THE COMPANY, EACH OF
WHOM, AS A CONDITION TO A PAYMENT FROM IT OR DIRECTED BY IT, MAY REQUIRE THE
PARTICIPANT, BENEFICIARY, OR LEGAL REPRESENTATIVE TO EXECUTE A RECEIPT AND
RELEASE OF THE CLAIM IN A FORM DETERMINED BY THE PERSON REQUESTING THE RECEIPT
AND RELEASE.

Section 7.3            Review of Claims.  A Claimant whose claim for benefits
has been denied by the Plan Administrator may request a review of such denial in
accordance with the terms and conditions of this Section 7.3.

A.            REQUEST FOR REVIEW OF DENIED CLAIMS. A CLAIMANT MAY FILE A WRITTEN
REQUEST FOR A REVIEW OF THE DENIAL OF A CLAIM WITHIN SIXTY (60) DAYS AFTER
RECEIVING WRITTEN NOTICE OF THE DENIAL. THE WRITTEN REQUEST SHOULD BE SENT TO
THE PLAN ADMINISTRATOR, WHO WILL FORWARD IT TO THE ADMINISTRATIVE COMMITTEE FOR
REVIEW. THE CLAIMANT MAY SUBMIT WRITTEN COMMENTS, DOCUMENTS, RECORDS AND OTHER
RELEVANT INFORMATION IN SUPPORT OF THE CLAIM. A CLAIMANT SHALL BE PROVIDED, UPON
REQUEST TO THE PLAN ADMINISTRATOR AND WITHOUT CHARGE, REASONABLE ACCESS TO, AND
COPIES OF, ALL DOCUMENTS, RECORDS, AND OTHER INFORMATION RELEVANT TO THE
CLAIMANT’S CLAIM FOR BENEFITS. A DOCUMENT, RECORD, OR OTHER INFORMATION SHALL BE
CONSIDERED RELEVANT IF IT:

1.             WAS RELIED UPON IN DENYING THE CLAIM;

2.             WAS SUBMITTED, CONSIDERED OR GENERATED IN THE COURSE OF
PROCESSING THE CLAIM, REGARDLESS OF WHETHER IT WAS RELIED UPON;

3.             DEMONSTRATES COMPLIANCE WITH THE CLAIMS PROCEDURES PROCESS; OR

4.             CONSTITUTES A STATEMENT OF PLAN POLICY OR GUIDANCE CONCERNING THE
DENIED BENEFIT, REGARDLESS OF WHETHER IT WAS RELIED UPON.

Relevant information shall not include any documents or records (or portions
thereof) that would, through their release, violate any other applicable law or
compromise the confidentiality of certain employee data or business records,
including, but not limited to, any documents subject to attorney-client
privilege.

B.            REVIEW PROCEDURES. IN REVIEWING A DENIED CLAIM, THE ADMINISTRATIVE
COMMITTEE SHALL TAKE INTO CONSIDERATION ALL COMMENTS, DOCUMENTS, RECORDS, AND
OTHER INFORMATION SUBMITTED BY THE CLAIMANT IN SUPPORT OF THE CLAIM, WITHOUT
REGARD TO WHETHER SUCH INFORMATION WAS SUBMITTED OR CONSIDERED IN THE INITIAL
BENEFIT DETERMINATION.

C.            DECISIONS ON REVIEWED CLAIMS. THE ADMINISTRATIVE COMMITTEE WILL
NOTIFY THE CLAIMANT IN WRITING OF ITS DECISION ON THE APPEAL. SUCH NOTIFICATION
WILL BE IN WRITING IN A FORM DESIGNED TO BE UNDERSTOOD BY THE CLAIMANT. IF THE
CLAIM IS DENIED IN WHOLE OR IN PART ON APPEAL, THE NOTIFICATION WILL ALSO
CONTAIN:

16

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1.             THE SPECIFIC REASON OR REASONS FOR THE DENIAL;

2.             REFERENCE TO THE SPECIFIC PLAN PROVISIONS ON WHICH THE
DETERMINATION IS BASED;

3.             A STATEMENT THAT THE CLAIMANT IS ENTITLED TO RECEIVE, UPON
REQUEST TO THE PLAN ADMINISTRATOR AND FREE OF CHARGE, REASONABLE ACCESS TO, AND
COPIES OF, ALL DOCUMENTS, RECORDS, AND OTHER INFORMATION RELEVANT TO THE
CLAIMANT’S CLAIM FOR BENEFITS. A DOCUMENT, RECORD, OR OTHER INFORMATION SHALL BE
CONSIDERED RELEVANT IF IT:

A.             WAS RELIED UPON IN DENYING THE CLAIM;

B.                                      WAS SUBMITTED, CONSIDERED OR GENERATED
IN THE COURSE OF PROCESSING THE CLAIM, REGARDLESS OF WHETHER IT WAS RELIED UPON;

C.                                       DEMONSTRATES COMPLIANCE WITH THE CLAIMS
PROCEDURES PROCESS; OR

D.                                      CONSTITUTES A STATEMENT OF PLAN POLICY
OR GUIDANCE CONCERNING THE DENIED BENEFIT, REGARDLESS OF WHETHER IT WAS RELIED
UPON; AND

4.             A STATEMENT THAT THE CLAIMANT HAS A RIGHT TO BRING AN ACTION
UNDER SECTION 502(A) OF ERISA.

Relevant information shall not include any documents or records (or portions
thereof) that would, through their release, violate any other applicable law or
compromise the confidentiality of certain employee data or business records,
including, but not limited to, any documents subject to attorney-client
privilege.

Such notification will be given by the Administrative Committee within sixty
(60) days after the complete appeal is received by the Administrative Committee
(or within one hundred twenty (120) days if the Administrative Committee
determines special circumstances require an extension of time for considering
the appeal, and if written notice of such extension and circumstances is given
to the Claimant within the initial sixty (60) day period). Such written
extension notice shall also indicate the date by which the Administrative
Committee expects to render a decision.

If the Claimant’s written request for review is received by the Plan
Administrator more than thirty (30) days before an Administrative Committee
meeting, the Administrative Committee’s decision must be rendered at the next
meeting after the request for review is received. If special circumstances
require an extension of time for processing, the Administrative Committee’s
decision must be rendered not later than the Administrative Committee’s third
meeting after the request for review is received, and written notice of the
extension must be furnished to the

17

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Claimant before the extension begins. In the case of such regularly scheduled
meetings, the Claimant shall be notified of the review determination as soon as
possible, but no later than five days after the review determination has been
made. If notice that a claim has been denied on review is not received by the
Claimant within the time required in this paragraph, the claim is deemed denied
on review.

Section 7.4            Compliance With Regulations.  Notwithstanding anything in
this Section 7 to the contrary, the Plan Administrator and the Administrative
Committee shall make all determinations regarding claims for benefits of
Participants or Claimants filed on or after the Effective Date in accordance
with Section 2560.503-1 of the Department of Labor Regulations.

Section 7.5            Claims for Benefits Under Other Plans.  Claims for
benefits under any of the other plans described in Section 4.4, including claims
for eligibility or participation in such other plan or plans based upon
participation in the Plan, shall be made pursuant to and governed by the claims
procedures of such other plans.

18

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SECTION 8

AMENDMENT OR TERMINATION

Section 8.1            Amendment and Termination.  For purposes of amending or
terminating the Plan, the Company may act through an authorized officer. 
Subject to the limitations set forth below in paragraphs A and B, the Company
may amend or terminate the Plan at any time after December 31, 2007.

A.            Severance Benefits.  No amendment or termination of the Plan will
adversely affect the Severance Benefits, if any, payable under the Plan with
respect to Participants whose employment with the Company terminated prior to
such amendment or termination of the Plan; and provided further, that no
amendment or termination of the Plan within two years following a Change of
Control can adversely affect an Employee who has become eligible for Severance
Benefits within the two-year period following a Change of Control, or would
become eligible for Severance Benefits absent such amendment or termination.

B.            Retention Benefits.  No amendment or termination of the Plan will
adversely affect the Retention Benefits, if any, payable under the Plan with
respect to a Participant who has been notified of his eligibility to receive
Retention Benefits under the Plan.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed this 29th day
of December, 2006.

 

 

 

 

 

 

 

 

By:

 /s/ John O. McCoy, Jr.

 

 

John O. McCoy, Jr.

 

 

 

 

 

Its:

 

Executive Vice President and

 

 

 

Chief Administrative Officer

 

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

 

SCHEDULE A

Affiliates Excluded from Coverage

 

Northrock Resources Ltd.

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

SCHEDULE B

Outplacement Services

Employment Category

 

Maximum Outplacement Services Benefit

 

  Nonexempt field and technical support staff

 

$2,500

 

  Exempt professionals

 

$5,000

 

  Officers and managers

 

$7,500

 

 

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