EXHIBIT 10.30

 

PENSION PLAN FOR EMPLOYEES

 

OF

 

SM ENERGY COMPANY

 

 

AMENDED AND RESTATED

 

EFFECTIVE AS OF JANUARY 1, 2010

 

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TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS

 

“Accrued Benefit”

 

 

 

2

“Active Participant”

 

 

 

2

“Actuarial Equivalent” or “Actuarially Equivalent”

 

 

 

2

“Actuary”

 

 

 

5

“Administrator”

 

 

 

5

“Affiliated Company”

 

 

 

5

“Age”

 

 

 

5

“Benefit Commencement Date”

 

 

 

5

“Board of Directors”

 

 

 

6

“Break in Service”

 

 

 

6

“Code”

 

 

 

6

“Committee”

 

 

 

7

“Company”

 

 

 

7

“Compensation”

 

 

 

7

“Computation Period”

 

 

 

8

“Covered Compensation”

 

 

 

8

“Covered Employee”

 

 

 

9

“Differential Wage Pay”

 

 

 

10

“Disability Retirement Date”

 

 

 

10

“Disabled Participant”

 

 

 

10

“Early Retirement Date”

 

 

 

10

“Effective Date”

 

 

 

10

“Employee”

 

 

 

11

“Employment Commencement Date”

 

 

 

11

“ERISA”

 

 

 

11

“Final Average Compensation”

 

 

 

11

“Fund”

 

 

 

11

“Hour of Service”

 

 

 

12

“Late Retirement Date”

 

 

 

14

“Leased Employee”

 

 

 

14

“Limitation Year”

 

 

 

14

“Normal Retirement Date”

 

 

 

14

“Participant”

 

 

 

15

“Participating Company”

 

 

 

15

“Plan”

 

 

 

15

“Plan Year”

 

 

 

15

“Predecessor Company”

 

 

 

15

“Qualified Military Service”

 

 

 

15

“Required Beginning Date”

 

 

 

15

 

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“Returning Veteran”

 

 

 

16

“Separation from Service”

 

 

 

16

“Social Security Retirement Age”

 

 

 

16

“Spouse”

 

 

 

16

“Surviving Spouse”

 

 

 

16

“Total Disability”

 

 

 

17

“Trust Agreement”

 

 

 

17

“Trustee”

 

 

 

17

“Uniformed Services”

 

 

 

17

“Year of Credited Service”

 

 

 

17

“Year of Eligibility Service”

 

 

 

17

“Year of Vesting Service”

 

 

 

17

 

 

 

ARTICLE II

 

 

 

 

 

TRANSITION AND ELIGIBILITY TO PARTICIPATE

 

 

 

 

 

2.1

 

Rights Affected and Preservation of Accrued Benefit

 

18

2.2

 

Eligibility to Participate

 

18

2.3

 

Year of Eligibility Service

 

19

 

 

 

ARTICLE III

 

 

 

 

 

VESTING SERVICE AND CREDITED SERVICE

 

 

 

 

 

3.1

 

Years of Vesting Service

 

20

3.2

 

Years of Credited Service

 

20

3.3

 

Service with Other Employer

 

20

3.4

 

Loss of Vesting Service

 

20

3.5

 

Loss of Credited Service

 

20

3.6

 

Restoration of Service

 

21

 

 

 

ARTICLE IV

 

 

 

 

 

ELIGIBILITY FOR BENEFITS

 

 

 

 

 

4.1

 

Normal Retirement

 

22

4.2

 

Late Retirement

 

22

4.3

 

Early Retirement

 

22

4.4

 

Disability Retirement

 

22

4.5

 

Furnishing Data

 

24

 

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ARTICLE V

 

 

 

 

 

CALCULATION OF BENEFITS

 

 

 

 

 

5.1

 

Accrued Benefit

 

25

5.2

 

Normal Retirement

 

27

5.3

 

Late Retirement

 

27

5.4

 

Early Retirement

 

29

5.5

 

Disability Retirement

 

29

5.6

 

Prohibition Against Decrease in Benefits Payable

 

30

5.7

 

Death Before Separation from Service

 

30

5.8

 

Survivor’s Benefit for Surviving Spouse

 

30

5.9

 

Death Benefit After Retirement

 

33

5.10

 

Maximum Benefit

 

33

5.11

 

Funding Based Benefit Limitations

 

37

 

 

 

ARTICLE VI

 

 

 

 

 

VESTING

 

 

 

 

 

6.1

 

Nonforfeitable Amounts

 

42

6.2

 

Treatment of Terminated Vested Participant

 

42

6.3

 

Form and Payment of Benefit

 

43

6.4

 

Termination of Benefit

 

43

6.5

 

Special Rules for Certain Terminated Participants

 

43

 

 

 

ARTICLE VII

 

 

 

 

 

PAYMENT OF BENEFITS

 

 

 

 

 

7.1

 

Minimum Distribution Requirements

 

45

7.2

 

Normal Form of Benefit

 

46

7.3

 

Optional Form of Benefit

 

46

7.4

 

Rules for Election of Optional Form of Benefit

 

49

7.5

 

Explanations to Participants

 

51

7.6

 

Termination of Benefits

 

53

7.7

 

Beneficiary Designation

 

53

7.8

 

Small Benefit Payments

 

54

7.9

 

Direct Rollovers of Single Sum Distributions

 

55

7.10

 

Failure to Apply for Pension

 

57

7.11

 

Mailing Address

 

58

7.12

 

No Reduction for Changes in Social Security

 

58

 

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ARTICLE VIII

 

 

 

 

 

THE FUND AND FUNDING

 

 

 

 

 

8.1

 

Designation of Trustee

 

59

8.2

 

Contributions to the Fund

 

59

8.3

 

Use of Contributions to the Fund

 

59

8.4

 

Trustee

 

60

8.5

 

Forfeitures

 

60

8.6

 

Expenses of Administration

 

60

8.7

 

Sole Source of Benefits

 

60

 

 

 

ARTICLE IX

 

 

 

 

 

ADMINISTRATION

 

 

 

 

 

9.1

 

Committee

 

61

9.2

 

Duties and Powers of Committee

 

61

9.3

 

Functioning of Committee

 

63

9.4

 

Disputes

 

63

9.5

 

Indemnification

 

65

 

 

 

ARTICLE X

 

 

 

 

 

AMENDMENT AND TERMINATION

 

 

 

 

 

10.1

 

Power of Amendment and Termination

 

66

10.2

 

Disposition on Termination

 

66

10.3

 

Limitation on Benefits

 

68

10.4

 

Merger, Consolidation, or Transfer

 

69

 

 

 

ARTICLE XI

 

 

 

 

 

TOP-HEAVY PROVISIONS

 

 

 

 

 

11.1

 

General

 

70

11.2

 

Definitions

 

70

11.3

 

Minimum Benefit for Non-Key Employees

 

74

11.4

 

Vesting

 

74

11.5

 

Adjustment to Maximum Benefit Limitation

 

75

11.6

 

Suspension of Benefits

 

77

 

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ARTICLE XII

 

 

 

 

 

TREATMENT OF RETURNING VETERANS

 

 

 

 

 

12.1

 

Applicability and Effective Date

 

78

12.2

 

Eligibility to Participate

 

78

12.3

 

Service

 

78

12.4

 

Determination of Compensation

 

78

12.5

 

Administrative Rules and Procedures

 

79

 

 

 

ARTICLE XIII

 

 

 

 

 

GENERAL PROVISIONS

 

 

 

 

 

13.1

 

No Employment Rights

 

80

13.2

 

Governing Law

 

80

13.3

 

Severability of Provisions

 

80

13.4

 

No Interest in Fund

 

80

13.5

 

Spendthrift Clause

 

80

13.6

 

Incapacity

 

81

13.7

 

Withholding

 

81

13.8

 

Missing Participants

 

81

 

SCHEDULE A - MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLES
APPENDIX I - SCHEDULE OF MINIMUM DISTRIBUTION REQUIREMENTS

 

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WHEREAS, St. Mary Land & Exploration Company adopted the Pension Plan for
Employees of St. Mary Land & Exploration Company, effective January 1, 1977 for
certain of its employees; and

 

WHEREAS, the Pension Plan for Employees of St. Mary Land & Exploration Company
has been amended from time to time, and was amended in its entirety and
restated, effective January 1, 1997; and

 

WHEREAS, St. Mary Land & Exploration Company changed its name to SM Energy
Company, effective June 1, 2010 (the “Company”); and

 

WHEREAS, the Company desires at this time to rename the Pension Plan for
Employees of St. Mary land & Exploration Company as the Pension Plan for
Employees of SM Energy, effective June 1, 2010 (the “Plan”); and

 

WHEREAS, the Company desires at this time to amend and restate the Plan in its
entirety to incorporate all amendments since the Plan was most recently
restated, and to reflect the 2009 Cumulative List of Changes in Plan
Qualification Requirements, as set forth in Notice 2009-98;

 

NOW, THEREFORE, effective as of January 1, 2010 (except as otherwise set forth
herein), the Plan is continued, amended, and restated as hereinafter set forth:

 

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ARTICLE I

 

DEFINITIONS

 

Except where otherwise clearly indicated by context, the masculine shall include
the feminine and the singular shall include the plural, and vice-versa.  Any
term used herein without an initial capital letter that is used in a provision
of the Code with which this Plan must comply to meet the requirements of section
401(a) of the Code shall be interpreted as having the meaning used in such
provision of the Code, if necessary for the Plan to comply with such provision.

 

“Accrued Benefit” means, for any Participant as of any date, subject to
Section 5.10, the amount of annual benefit earned to such date, payable monthly
as a single life annuity beginning at the Participant’s Normal Retirement Date
(or immediately, if the Participant has passed his Normal Retirement Date and is
still an Employee) calculated in accordance with Section 5.1.

 

“Active Participant” means an Employee who has met the conditions to be an
Active Participant under Section 2.2 and a Participant who is a Covered Employee
as of any date of determination.

 

“Actuarial Equivalent” or “Actuarially Equivalent” shall mean a benefit having
the same present or commuted value as the benefit to which comparison is being
made, computed on the basis of the following assumptions:

 

(a)           Except as provided in Subsection (b) below, the 1971 Group Annuity
Mortality Table and an interest rate assumption of 6.5%.

 

(b)           Notwithstanding Subsection (a) above, the Actuarial Equivalent
value of a single sum payment shall be computed on the basis of:

 

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(1)           For any single sum payment with a Benefit Commencement Date on or
after the GATT Effective Date and before January 1, 2008, the following factors
shall be used to calculate the Actuarial Equivalent value of a single sum
payment:

 

(A)          The single sum amount will be the present value of the normal form
of benefit payable at the Participant’s Normal Retirement Date, as defined in
the Plan.  The value of subsidized early retirement benefits and optional forms
of payment, including the qualified joint and survivor option, will be ignored
in determining the amount of a single sum amount;

 

(B)           The applicable mortality table shall be the mortality table
described in Rev. Rul. 95-6 (1995-1 C.B. 80), or any other table as the Treasury
Secretary may in the future require (the ‘Section 417 Mortality Table’).

 

(C)           The applicable interest rate shall be the annual rate of interest
on 30-year Treasury securities as specified by the Commissioner for the first
calendar month prior to the Plan Year that contains the Benefit Commencement
Date (the ‘Section 417 Interest Rate’), which shall remain stable for such Plan
Year.”

 

(2)           For any single sum payment with a Benefit Commencement Date on or
after January 1, 2008, the following factors shall be used to calculate the
Actuarial Equivalent value of a single sum payment:

 

(A)          the single sum amount will be the present value of the normal form
of benefit payable at the Participant’s Normal Retirement Date, as defined in
the Plan.  The value of subsidized early retirement benefits and optional forms
of payment, including

 

3

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the qualified joint and survivor option, will be ignored in determining the
amount of a single sum amount;

 

(B)           the applicable mortality table shall be the mortality table
prescribed by the Secretary of the Treasury in accordance with Code section
417(e)(3) and the regulations thereunder.  For distributions commencing on or
after January 1, 2008, the applicable mortality table is the table prescribed in
Rev. Rul. 2007-67 or other such mortality table as may subsequently be in
effect; and

 

(C)           the applicable interest rate shall be:

 

(i)            For distributions commencing on or after January 1, 2008, the
adjusted first, second, and third segment rates applied under rules similar to
the rules of section 430(h)(2)(C) of the Code for the first calendar month prior
to the Plan Year that contains the Benefit Commencement Date (or such other time
as the Secretary of the Treasury may prescribe), as described in section
417(e)(3) of the Code and as published from time to time by the Secretary of the
Treasury.

 

(ii)           Notwithstanding the foregoing, for distributions commencing
during the Plan Year beginning January 1, 2008, 2009, 2010 or 2011, the
applicable interest rate shall be the sum of the rate determined under
Subparagraph (1)(C), above, multiplied by the applicable percentage, and the
rate determined under Subparagraph (2)(C)(i), above, multiplied by one hundred
percent (100%) minus the applicable percentage as set forth below:

 

Plan Year

 

Applicable
Percentage

 

100% Minus
Applicable Percentage

 

January 1, 2008

 

80

%

20

%

January 1, 2009

 

60

%

40

%

January 1, 2010

 

40

%

60

%

January 1, 2011

 

20

%

80

%

 

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“Actuary” means the actuarial firm or individual selected by the Committee from
time to time.

 

“Administrator” means the Committee or any successor committee, entity or
individual(s) if any, to whom the Company has delegated administrative
responsibilities under the Plan.

 

“Affiliated Company” means, with respect to any Participating Company, (a) any
corporation that is a member of the same controlled group of corporations
(within the meaning of section 414(b) of the Code) as such Participating
Company; (b) any member of an affiliated service group, as determined under
section 414(m) of the Code, of which such Participating Company is a member;
(c) any trade or business that is under common control with such Participating
Company, as determined under section 414(c) of the Code and (d) any other entity
which is required to be aggregated with a Participating Company under section
414(o) of the Code.  “50% Affiliated Company” means an Affiliated Company, but
determined with “more than 50%” substituted for the phrase “at least 80%” in
section 1563(a) of the Code, when applying sections 414(b) and 414(c) of the
Code.

 

“Age” means, for any individual, his age on last birthday, except that an
individual attains Age 70½ on the corresponding date in the sixth calendar month
following the month in which his 70th birthday falls (or the last day of such
sixth month if there is no such corresponding date therein).

 

“Benefit Commencement Date” means, for any Participant, the date as of which his
first benefit payment is due.  For purposes of Section 5.8 and for purposes of
Paragraph (3) of

 

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Subsection 5.10(a), in calculating the maximum benefit payable to the Surviving
Spouse of a Participant under Section 5.8 or to the beneficiary of a Participant
under Section 5.7, “Benefit Commencement Date” also means, with respect to the
Surviving Spouse or beneficiary, the date on which the survivor’s benefit under
Section 5.8 commences to the Surviving Spouse or the date on which benefits are
paid to the beneficiary under Section 5.7.

 

“Board of Directors” means the board of directors of the Company, or a Committee
of the Board of Directors to which the Board of Directors has delegated some or
all of its responsibilities hereunder.

 

“Break in Service” means, for any Employee or former Employee, any Computation
Period in which he is not credited with more than 500 Hours of Service.

 

(a)           Notwithstanding the foregoing, if an Employee is absent for leave
of absence with the approval of the Committee for a period not in excess of one
year, unless such period is extended by the Committee, then, to the extent he is
not otherwise credited with Hours of Service with respect to such absence, he
shall be credited with an Hour of Service, solely for purposes of this
definition, for each Hour of Service with which he would have been credited if
he had continued to be actively employed during the period of absence.

 

(b)           Notwithstanding the foregoing, if an Employee is absent from work
by reason of pregnancy, childbirth, or placement in connection with adoption, or
for purposes of the care of such Employee’s child immediately after birth or
placement in connection with adoption, such Employee shall not have a Break in
Service during the first Computation Period in which the Employee would
otherwise have a Break in Service pursuant to the rules set forth in Subsection
(a) of this Section.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

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“Committee” means the individuals appointed by the Board of Directors to serve
on the Administrative Committee of the Plan, or any other successor committee or
individual(s), to supervise the administration of the Plan, as provided in
Article IX.

 

“Company” means St. Mary Land & Exploration Company prior to June 1, 2010, and
effective on and after June 1, 2010, SM Energy Company and its successors.

 

“Compensation” means, for any Active Participant, for any Plan Year or 
imitation Year, as the case may be:

 

(a)           For purposes of calculating a Participant’s Accrued Benefit under
Article V, subject to the limitations set forth in Subsection (c) of this
definition, the amount of his total taxable income paid by a Participating
Company in any Plan Year, including Differential Wage Pay, if any, less bonuses,
director’s fee, expense reimbursements, contributions by the Company to this
Plan, payments made by the Company for group insurance, hospitalization and
similar benefits, contributions made by the Company under any other employee
benefit plan it maintains, except Compensation shall include elective deferrals
that are not included in gross income under section 125, 132(f)(4), 402(e)(3),
or 402(h) of the Code, taking into account only amounts earned while he is an
Active Participant.  An Active Participant’s Compensation shall not include
amounts that are taxable to him but are not paid to him in cash.

 

(b)           For all other purposes, subject to the limitations set forth in
Subsection (c) of this definition, his “compensation” as such word is defined in
Treas. Reg. § 1.415(c)-2(d)(2).

 

(c)           The amount otherwise described in Subsections (a) and (b) of this
definition shall not exceed $245,000, as such limit may be adjusted in
accordance with section

 

7

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401(a)(17)(B) of the Code.  In applying the limit of Code section 401(a)(17) to
any Participant who was a Participant at any time prior to January 1, 1994 and
whose Compensation with respect to any Plan Year beginning prior to January 1,
1994 exceeded $150,000, such Participant’s Accrued Benefit shall be calculated
according to the rules set forth in Subsection 5.1(c).

 

“Computation Period” means the 12-consecutive month period that begins on each
January 1st and ends on the next following December 31st.

 

“Covered Compensation” means the amount determined using the following table
based on the amount applicable for the calendar year in which the later of the
Effective Date or the Participant’s 65th birthday occurs:

 

Calendar Year of
65th Birthday

 

Amount

 

 

 

 

 

1985

 

$

13,800

 

1986

 

15,000

 

1987

 

15,600

 

1988

 

16,200

 

1989

 

17,400

 

1990

 

18,000

 

1991

 

18,600

 

1992

 

19,200

 

1993

 

19,800

 

1994

 

20,400

 

1995

 

21,600

 

1996

 

22,200

 

1997

 

23,400

 

1998

 

24,600

 

1999

 

25,200

 

2000

 

26,400

 

2001

 

27,600

 

2002

 

28,200

 

2003

 

29,400

 

2004

 

30,000

 

2005

 

31,200

 

2006

 

31,800

 

2007

 

33,000

 

2008

 

33,600

 

2009

 

34,800

 

2010

 

35,400

 

2011

 

36,000

 

2012

 

36,600

 

2013

 

37,200

 

2014

 

37,800

 

2015

 

38,400

 

2016

 

39,000

 

2017

 

39,000

 

2018

 

39,000

 

2019

 

39,600

 

2020 and later

 

39,600

 

 

The foregoing table is the average wage used to determine benefits under the
Social Security Act in effect for retirements or terminations of employment
during 1983 for a

 

8

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male individual of the same birth year as the Participant receiving compensation
continuously to age 65 at least equal to the maximum amount subject to the
Federal Insurance Contributions Act.  This table shall be updated without
further Plan amendment for each Plan Year after 1983 to reflect the maximum
amount of wages subject to the Federal Insurance Contributions Act in such Plan
Year.

 

“Covered Employee” means each Employee who (a) is classified by a Participating
Company as a common law employee of such a Participating Company, and (b) is not
covered by a collective bargaining agreement, unless such agreement specifically
provides for participation hereunder, and (c) is not covered by another
qualified defined benefit pension plan to which the Participating Company makes
contributions and (d) is not a non-resident alien who receives no compensation
from sources within the United States (within the meaning of section
861(a)(3) of the Code).  An individual who is a member of the Company’s Board of
Directors and is not employed by the Company in any other capacity shall not be
a Covered Employee.  An Individual who is a property agent with respect to the
Company and is not otherwise employed by the Company shall not be a Covered
Employee.  An individual who is not classified by a Participating Company as a
common law employee shall not be a Covered Employee regardless of whether
(1) the individual is considered an Employee by reason of being a leased
employee (whether or not within the meaning of the definition of Leased Employee
in this Article), (2) the individual is classified by a Participating Company as
an independent contractor, or (3) for employment tax or other purposes, the
individual is subsequently determined to be a common law employee, or not to be
a leased employee (whether or not within the meaning of the definition of Leased
Employee in this Article) or independent contractor.  For purposes of
determining eligibility under the Plan, the classification to which an
individual is

 

9

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assigned by a Participating Company shall be final and conclusive, regardless of
whether a court, a governmental agency or any entity subsequently finds that
such individual should have been assigned to a different classification.

 

“Differential Wage Pay” means any payment which:

 

(a)           is made by the Company to a Participant with respect to any period
during which the Participant is performing service in the uniformed services (as
defined in chapter 43 of title 38, United States Code) while on active duty for
a period of more than 30 days, and

 

(b)           represents all or a portion of the wages the Participant would
have received from the Company if the Participant were performing service for
the Company.

 

“Disability Retirement Date” means, for any Participant, the date on which he
(a) is determined by the Committee to have suffered a Total Disability, and
(b) has a Separation from Service due to such Total Disability; provided,
however, that a Participant shall not have a Disability Retirement Date unless,
at the time his Total Disability occurs, he is an Employee, and has to his
credit 10 or more Years of Credited Service.

 

“Disabled Participant” means a Participant who has a Disability Retirement Date
that occurs prior to his Normal Retirement Date and who has not ceased to be a
Disabled Participant pursuant to Section 4.4(c).

 

“Early Retirement Date” means, for any Participant, the first day of the
calendar month coincident with or next following the date on which he has a
Separation from Service after he has attained Age 55 and has to his credit 10 or
more Years of Credited Service.

 

“Effective Date” means (except as otherwise set forth herein) January 1, 2010,
the effective date of this amended and restated Plan.

 

10

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“Employee” means an individual who is a common law employee of a Participating
Company or an Affiliated Company.  An individual who is not a common law
employee of a Participating Company or Affiliated Company shall be deemed to be
employed by such Company if he is a leased employee with respect to whose
services such Participating Company or Affiliated Company is the recipient
within the meaning of Code section 414(n) or 414(o), but to whom Code section
414(n)(5) does not apply.  An individual who is in receipt of Differential Wage
Pay shall be deemed to be an Employee during such period, provided that he was
an Employee immediately prior to such period.

 

“Employment Commencement Date” means, for any Employee, the date on which he is
first entitled to be credited with an “Hour of Service” described in Paragraph
(a)(1) of the definition of Hour of Service in this Article.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Final Average Compensation” means, for any Participant, the average of his
Compensation for the three full consecutive calendar years in the final 10 (or
fewer) full consecutive calendar years of employment as an Active Participant
which yields the highest average.  For this purpose, nonconsecutive calendar
years interrupted by periods in which the Participant is not an Active
Participant shall be treated as consecutive.  If a Participant does not have
three full consecutive calendar years of employment as an Active Participant,
his Final Average Compensation shall be the annual amount determined by dividing
his Compensation during the period in which he is an Active Participant by the
number of years thereof.

 

“Fund” means the fund established for this Plan, administered under the Trust
Agreement, out of which benefits payable under this Plan shall be paid.

 

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“Hour of Service” means, for any Employee, a credit awarded with respect to:

 

(a)           except as provided in (b) or (c),

 

(1)           each hour for which he is directly or indirectly paid or entitled
to payment by a Participating Company or an Affiliated Company for the
performance of employment duties; or

 

(2)           each hour for which he is entitled, either by award or agreement,
to back pay from a Participating Company or an Affiliated Company, irrespective
of mitigation of damages; or

 

(3)           each hour for which he is directly or indirectly paid or entitled
to payment by a Participating Company or an Affiliated Company on account of a
period of time during which no duties are performed due to vacation, holiday,
illness, incapacity (including disability), jury duty, layoff, leave of absence,
or military duty; or

 

(4)           each hour for which a Returning Veteran is absent for Qualified
Military Service.

 

(5)           each hour of otherwise regularly scheduled work missed by reason
of Total Disability during which the Employee is a Disabled Participant.

 

(b)           For any period that includes any hours for which an Hour of
Service would otherwise be credited to an Employee under (a), above, the
Committee may, in accordance with rules applied in a uniform and
non-discriminatory manner, elect instead to credit Hours of Service using one or
more of the following equivalencies:

 

Basis Upon Which Records
Are Maintained

 

Credit Granted to Individual
For Period

Shift

 

actual hours for full shift

Day

 

10 Hours of Service

Week

 

45 Hours of Service

Semi-monthly period

 

95 Hours of Service

Month

 

190 Hours of Service

 

12

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(c)           Anything to the contrary in Subsection (a) or (b) notwithstanding:

 

(1)           No Hours of Service shall be credited to an Employee for any
period during which payments are made or due him under a plan maintained solely
for the purpose of complying with applicable workers’ compensation, unemployment
compensation, or disability insurance laws.

 

(2)           No more than 501 Hours of Service shall be credited to an Employee
under Paragraph (a)(3) of this definition on account of any single continuous
period during which no duties are performed by him, except to the extent
otherwise provided in the Plan.

 

(3)           No Hours of Service shall be credited to an Employee with respect
to payments solely to reimburse for medical or medically related expenses.

 

(4)           No Hours of Service shall be credited twice.

 

(5)           Hours of Service shall be credited at least as liberally as
required by the rules set forth in U.S. Department of Labor Reg.
§2530.200b-2(b) and (c).

 

(6)           In the case of an Employee who is such solely by reason of service
as a leased employee within the meaning of section 414(n) or 414(o) of the Code,
Hours of Service shall be credited as if such Employee were employed and paid
with respect to such service (or with respect to any related absences or
entitlements) by the Participating Company or Affiliated Company that is the
recipient thereof.

 

13

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“Late Retirement Date” means, for any Participant, the first day of the calendar
month coincident with or next following the date on which he has a Separation
from Service, if such Separation from Service occurs after the Participant’s
Normal Retirement Date.

 

“Leased Employee” means any person (other than an Employee of a Participating
Company or Affiliated Company) who pursuant to an agreement between a
Participating Company or Affiliated Company and any other person (“leasing
organization”) has performed services for a Participating Company or Affiliated
Company (or for a Participating Company or Affiliated Company and related
persons determined in accordance with section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year, which services
are performed under primary direction or control of a Participating Company or
Affiliated Company.

 

A Leased Employee shall not be considered an Employee of a Participating Company
or Affiliated Company if (a) such individual is covered by a money purchase
pension plan maintained by the leasing organization and providing (1) a
nonintegrated employer contribution rate of at least 10 percent of compensation,
as defined in section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludable from the
employee’s gross income under section 125, section 132(f)(4), section 402(e)(3),
section 402(h)(1)(B) or section 403(b) of the Code, (2) immediate participation,
and (3) full and immediate vesting; and (b) leased employees do not constitute
more than 20 percent of the recipient’s nonhighly compensated work force.

 

“Limitation Year” means the Plan Year.

 

“Normal Retirement Date” means, for any Participant, the first day of the
calendar month coincident with or next following the date on which he attains
Age 65.

 

14

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“Participant” means an individual who is an Active Participant, a former Active
Participant receiving benefits under the Plan, a former Active Participant who
has a present or future right to receive benefits under the Plan, or an Employee
who was once an Active Participant and has been transferred so that he is no
longer a Covered Employee.

 

“Participating Company” means the Company and each other organization which is
authorized by the Board of Directors to adopt this Plan by action of its board
of directors or other governing body.

 

“Plan” means the Pension Plan for Employees of St. Mary Land & Exploration
Company prior to June 1, 2010, and effective on and after June 1, 2010, the
Pension Plan for Employees of SM Energy Company, as set forth herein (including
any Schedules).

 

“Plan Year” means each 12-consecutive month period that begins on January 1, or
any anniversary thereof and ends on the next following December 31.

 

“Predecessor Company” means, with respect to any Participating Company or
Affiliated Company, any corporation to which such Participating Company or
Affiliated  Company is a successor in interest by merger, consolidation, asset
acquisition, stock acquisition, or reincorporation, and any other corporation
designated as such for purposes of this Plan by the Board of Directors.

 

“Qualified Military Service” means any service (either voluntary or involuntary)
by an individual in the Uniformed Services if such individual is entitled to
reemployment rights with a Participating Company with respect to such service.

 

“Required Beginning Date” means, for any Participant:

 

(a)                                  if he attains Age 70½ on or after
January 1, 2002 and is not a 5-percent owner (within the meaning of section 416
of the Code) of a Participating Company at

 

15

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any time during the five-Plan-Year period ending in the calendar year in which
he attains Age 70½, or thereafter, April 1 of the calendar year following the
later of the calendar year in which he has a Separation from Service or the
calendar year in which he attains Age 70½; and

 

(b)                                 if he attains Age 70½  after December 31,
1987 and was a 5-percent owner (within the meaning of section 416 of the Code)
of a Participating Company at any time during the five-Plan Year period ending
in the calendar year in which he attained Age 70½, or thereafter, April 1 of the
calendar year following the calendar year in which he attains Age 70½;

 

“Returning Veteran” means a former Employee who on or after December 12, 1994,
returns from Qualified Military Service to employment by a Participating Company
within the period of time during which his reemployment rights are protected by
law.

 

“Separation from Service” means, for any Employee, his death, retirement,
resignation, discharge or any absence that causes him to cease to be an
Employee.

 

“Social Security Retirement Age” means (a) for any individual born before
January 1, 1938, Age 65, (b) for any individual born after December 31, 1937,
but before January 1, 1955, Age 66, or (c) for any individual born after
December 31, 1954, Age 67.

 

“Spouse” means, with respect to any Participant, the individual to whom such
Participant is married as of the date of reference.

 

“Surviving Spouse” means, with respect to any Participant:

 

(a)                                  for purposes of the survivor’s benefit
described in Section 5.8, the individual, if any, who has been such
Participant’s Spouse throughout the one-year period that ends on the date of the
Participant’s death; and

 

16

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(b)                                 for purposes of the joint and survivor
annuity described in Section 7.2(b) the individual, if any, who is such
Participant’s Spouse on the Participant’s Benefit Commencement Date.

 

“Total Disability” means, with respect to any Participant, inability 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 which
has lasted or can be expected to last for a continuous period of not less than
12 months.  The permanence and degree of such impairment shall be supported by
medical evidence.

 

“Trust Agreement” means the agreement and declaration of trust executed for
purposes of the Plan.

 

“Trustee” means the corporate trustee or one or more individuals collectively
appointed and acting under the Trust Agreement.

 

“Uniformed Services” means the Armed Forces, the Army National Guard and Air
National Guard (when engaged in active duty for training, inactive duty
training, or full-time National Guard duty), the commissioned corps of the
Public Health Service, and any other category of persons designated by the
President of the United States in time of war or emergency.

 

“Year of Credited Service” means, for any Participant, a credit used to
determine his Accrued Benefit under the Plan, as further described in
Article III.

 

“Year of Eligibility Service” means, for any Employee, a credit used to
determine his eligibility to become an Active Participant, as further described
in Section 2.3.

 

“Year of Vesting Service” means, for any Employee, a credit used to determine
his vested status under the Plan, as further described in Article III.

 

17

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ARTICLE II

 

TRANSITION AND ELIGIBILITY TO PARTICIPATE

 

2.1                                 Rights Affected and Preservation of Accrued
Benefit.  Except as provided to the contrary herein, the provisions of this
amended and restated Plan shall apply only to Employees who complete an Hour of
Service on or after the Effective Date.  The rights of any other individual
shall be governed by the Plan as in effect upon his Separation from Service,
except to the extent expressly provided in any amendment adopted subsequently
thereto.

 

2.2                                 Eligibility to Participate.

 

(a)                                  Each Employee who was an Active Participant
immediately prior to the Effective Date and is a Covered Employee on the
Effective Date shall continue to be an Active Participant as of the Effective
Date.  Each Employee who was not an Active Participant immediately prior to the
Effective Date and who has attained Age 21 and completed one Year of Eligibility
Service as of the Effective Date shall become an Active Participant as of the
Effective Date if he is then a Covered Employee.  Each other Employee shall
become an Active Participant on the first day of the calendar month coincident
with or next following the date on which he attains Age 21 and completes one
Year of Eligibility Service, if he is then a Covered Employee.

 

(b)                                 A Participant (or a former Participant) who
has a Separation from Service and who is later reemployed as a Covered Employee
shall become an Active Participant as of the date on which he first again
completes an Hour of Service as a Covered Employee, but, if he has had a Break
in Service, only if he (1) had any nonforfeitable interest in his Accrued
Benefit as of his prior Separation from Service or (2) again completes one Hour
of Service at a

 

18

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time when his consecutive Breaks in Service do not equal or exceed the greater
of (A) five or (B) the number of Years of Eligibility Service he had to his
credit prior to his Break in Service.

 

(c)                                  If an individual is not a Covered Employee
on the date on which he would become an Active Participant (but for the fact
that he is not then a Covered Employee), he shall become an Active Participant
as of the first date thereafter on which he becomes a Covered Employee; but, if
he has had a Break in Service, only if he (1) had any nonforfeitable interest in
his Accrued Benefit as of his prior Separation from Service or (2) he again
completes one Hour of Service at a time when his consecutive Breaks in Service
do not equal or exceed the greater of (A) five or (B) the number of Years of
Eligibility Service he had to his credit prior to his Break in Service.

 

2.3                                 Year of Eligibility Service.  An Employee
shall be credited with a Year of Eligibility Service as of the close of the
12-consecutive-month period that begins on his Employment Commencement Date if
he is credited with 1,000 or more Hours of Service during such period.  An
Employee who is not credited with 1,000 Hours of Service during such period
shall be credited with a Year of Eligibility Service as of the close of the
first Plan Year in which he is credited with 1,000 or more Hours of Service. 
Notwithstanding the foregoing, an Employee shall be credited with a Year of
Eligibility Service for service with The Five-Twenty Company.

 

19

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ARTICLE III

 

VESTING SERVICE AND CREDITED SERVICE

 

3.1                                 Years of Vesting Service.  Each Employee
shall be credited with a Year of Vesting Service for each Computation Period,
including Computation Periods ended before January 1, 1977, the original
effective date of the Plan, for which he is credited with 1,000 or more Hours of
Service.

 

3.2                                 Years of Credited Service.

 

(a)                                  Except as provided in this Article, a
Participant shall be credited with a Year of Credited Service for each
Computation Period for which he is credited with 1,000 or more Hours of
Service.  For the purpose of calculating a Participant’s Years of Credited
Service, only Hours of Service credited for a period during which he is (or, in
the case of back pay, would have been) a Covered Employee or a Disabled
Participant shall be credited.

 

(b)                                 A Disabled Participant shall be credited
with Years of Credited Service as if he were an Active Participant from his
Disability Retirement Date to the date he ceases to be a Disabled Participant as
set forth in Subsection 4.4(c).

 

3.3                                 Service with Other Employer.  A Participant
shall be credited with Years of Vesting Service for service with The Five-
Twenty Company.

 

3.4                                 Loss of Vesting Service.  An Employee’s
Years of Vesting Service shall be cancelled if he incurs a Break in Service at a
time when his vested percentage under Section 6.1 is zero or his Accrued Benefit
is zero.

 

3.5                                 Loss of Credited Service.  An Employee’s
Years of Credited Service shall be cancelled if, upon his Separation from
Service, he receives a single-sum payment pursuant to

 

20

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Subsection 7.8(a), Subsection 7.3(a)(5), or is deemed to receive a single-sum
payment pursuant to Subsection 7.8(b).

 

3.6                                 Restoration of Service.

 

(a)                                  The Years of Vesting Service and Years of
Credited Service of an Employee whose Years of Vesting Service and Years of
Credited Service have been cancelled pursuant to Section 3.4 and/or Section 3.5
shall be restored to his credit if he thereafter completes a Year of Vesting
Service at a time when the number of his consecutive Breaks in Service is less
than the greater of (a) the number of Years of Vesting Service to his credit
when the first such Break in Service occurred, or (b) five.  Notwithstanding the
foregoing, the Years of Credited Service of a Participant described in
Subsection 7.8(a) shall not be restored except as provided in Subsection (b).

 

(b)                                 If a Participant who receives a single sum
distribution under Subsection 7.8(a) or Subsection 7.3(a)(5) that is less than
the single-sum value of his entire Accrued Benefit again becomes a Covered
Employee, his Years of Credited Service cancelled pursuant to Section 3.5 shall
be restored upon his full repayment of the amount of such distribution, plus
interest from the date of distribution to the date of repayment at the rate
described in section 411(c)(2)(C)(iii)(I) of the Code; provided, however, that
such repayment must be made before the earlier of (1) five years after the date
the Participant again becomes a Covered Employee, or (2) the first date the
Participant incurs five consecutive Breaks in Service following the date of the
single-sum distribution.

 

21

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ARTICLE IV

 

ELIGIBILITY FOR BENEFITS

 

4.1                                 Normal Retirement.  A Participant who has a
Separation from Service on his Normal Retirement Date shall be entitled to a
pension.  Such Participant’s Benefit Commencement Date shall be his Normal
Retirement Date.

 

4.2                                 Late Retirement.  A Participant who has a
Separation from Service after his Normal Retirement Date shall be entitled to a
pension.  Such Participant’s Benefit Commencement Date shall be the earlier of
his Late Retirement Date or his Required Beginning Date; provided, however, that
upon reaching his Normal Retirement Date, the Participant may elect that his
Benefit Commencement Date is his Normal Retirement Date.

 

4.3                                 Early Retirement.  A Participant who has an
Early Retirement Date shall be entitled to a pension.  Such Participant’s
Benefit Commencement Date shall be his Normal Retirement Date; provided, that he
may elect as his Benefit Commencement Date his Early Retirement Date or the
first day of any month after his Early Retirement Date and not after his
Required Beginning Date.  Such election must be made no earlier than 90 days
prior to the Benefit Commencement Date elected by the Participant.

 

4.4                                 Disability Retirement.

 

(a)                                  A Participant who has a Disability
Retirement Date shall continue to be credited with Years of Credited Service as
set forth in Article III while he remains a Disabled Participant.  Such
Participant shall be entitled to a pension.  Such Participant’s Benefit
Commencement Date shall be determined under Section 4.1, 4.2, 4.3 or Article VI,
whichever is applicable, determined as if he had a Separation from Service on
the date he ceases to be a Disabled Participant under Subsection (c) of this
Section.

 

22

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(b)                                 Total Disability shall be determined by the
Committee, which may consult with a medical examiner who shall have the right to
make such physical examinations and other investigations as may be reasonably
required to determine Total Disability.  The Committee may direct that any
former Employee who is being credited with Years of Credited Service by reason
of Total Disability shall be reexamined without expense to him from time to time
prior to the date specified in Subsection (c) of this Section, but not more than
twice in any Plan Year, to determine whether his Total Disability continues to
exist.

 

(c)                                  A Disabled Participant shall cease to be
such if and when:

 

(1)                                  he reaches the later of (A) his Normal
Retirement Date or (B) the date that is “X” years after his Disability
Retirement Date, when “X” is determined under the following table:

 

Age at Disability
Retirement Date

 

“X”

 

 

61 or younger

 

 

Years to Age 65

 

 

62

 

 

3-1/2

 

 

63

 

 

3

 

 

64

 

 

2-1/2

 

 

65

 

 

2

 

 

66

 

 

1-3/4

 

 

67

 

 

1-1/2

 

 

68

 

 

1-1/4

 

 

69 or older

 

 

1

 

 

(2)                                  he ceases to suffer from a Total
Disability;

 

(3)                                  he is eligible for and elects to receive
payment of Plan benefits under any other provision of the Plan;

 

(4)                                  he refuses to submit to reexamination in
accordance with Subsection (b) of this Section; or

 

23

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(5)                                  he dies.

 

When a Disabled Participant ceases to be such, he shall cease to be credited
with Years of Credited Service, and he shall be entitled to a pension (or a
death benefit) under the other provisions of the Plan, applied as if he had a
Separation from Service on the date he ceased to be a Disabled Participant.

 

4.5                                 Furnishing Data.  Each Employee and
beneficiary shall furnish such information as the Committee may consider
necessary for the determination of the Employee’s rights and benefits under the
Plan and shall otherwise cooperate fully with the Committee in the
administration of the Plan.  Payment of benefits shall be deferred until all of
such information is supplied.

 

24

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ARTICLE V

 

CALCULATION OF BENEFITS

 

5.1                                 Accrued Benefit.

 

(a)                                  Subject to Subsection (b) of this Section,
effective on and after January 1, 1989, a Participant’s Accrued Benefit shall be
a monthly retirement benefit equal to one-twelfth (1/12th) of thirty-five
percent (35%) of his Final Average Compensation multiplied by a fraction, the
numerator of which is his Years of Credited Service and the denominator of which
is the greater of 25 or the number of Years of Credited Service the Employee
will have if he remains employed until he attains age 65.

 

(b)                                 Notwithstanding Subsection (a) of this
Section, effective January 1, 1989, a Participant shall be entitled to receive a
minimum benefit calculated in accordance with this Subsection (b) if such
benefit exceeds the benefit calculated under Subsection (a) of this Section. 
Effective solely for Years of Service and Compensation credited for purposes of
benefit accrual prior to January 1, 1989, a Participant’s minimum normal
retirement pension shall be a monthly retirement benefit equal to one-twelfth
(1/12th) of:

 

(1)                                  40% of the Average Annual Compensation;
plus

 

(2)                                  37% of that portion of Average Annual
Compensation which is in excess of Average Social Security Wage Base; multiplied
by

 

(3)                                  a fraction, the numerator of which is his
Years of Credited Service accrued prior to January 1, 1989 and the denominator
of which is his Years of Credited Service the Employee will have if he remains
employed until he attains age 65; and

 

(4)                                  if a participant has completed less than
fifteen (15) Years of Service at Normal Retirement Age (or would have completed
less than fifteen (15) Years of

 

25

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Service if he had remained in employment until Normal Retirement Age), the
Participant’s normal retirement pension computation shall be reduced by a factor
of one-fifteenth (1/15th) for each Year of Service less than 15 the Participant
has completed or would have completed.

 

Notwithstanding any other provision of the Plan to the contrary, defined terms
contained in this Subsection (b) of Section 5.1 shall have the meaning given to
such terms in the Plan as it existed prior to the Effective Date.

 

(c)                                  The Accrued Benefit of any Participant who
was a Participant at any time prior to January 1, 1994 and whose Compensation
with respect to any Plan Year beginning prior to January 1, 1994 exceeded
$150,000, shall be the greater of (1) or (2), where:

 

(1)                                  is the Participant’s Accrued Benefit
calculated on the basis of all of his Years of Credited Service and his Final
Average Compensation, limiting the Participant’s Compensation for Plan Years
beginning prior to January 1, 1994 to $150,000 and for Plan Years beginning on
or after January 1, 1994 to $150,000 or such other amount as in effect under
Code section 401(a)(17) for such Plan Year; and

 

(2)                                  is the sum of (A) plus (B), where:

 

(A)                              is the greater of (i) or (ii), where:

 

(i)                                     is the sum of (I) plus (II), where:

 

(I)                                    is the Participant’s Accrued Benefit
calculated on the basis of his Years of Credited Service and Final Average
Compensation as of December 31, 1988, not limiting his Final Average
Compensation under Code section 401(a)(17), and

 

(II)                                is the Participant’s Accrued Benefit
calculated on the basis of his Years of Credited Service between December 31,
1988 and

 

26

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December 31, 1993, and his Final Average Compensation as of December 31, 1993,
limiting his Compensation for all Plan Years to $235,840, and

 

(ii)                                  is the Participant’s Accrued Benefit
calculated on the basis of his Years of Credited Service and Final Average
Compensation as of December 31, 1993, limiting his Compensation for all Plan
Years to $235,840, and

 

(B)                                is the Participant’s Accrued Benefit
calculated on the basis of his Years of Credited Service after December 31, 1993
and his Final Average Compensation, limiting his Compensation for all Plan Years
to $150,000 or such other amount as is in effect under Code section 401(a)(17)
for Plan Years beginning on or after January 1, 1994.

 

5.2                                 Normal Retirement.  A Participant who is
entitled to a pension under Section 4.1 shall receive an annual pension, payable
monthly.  Subject to Section 5.10, such pension shall be the Actuarial
Equivalent, in the form set forth in Article VII, of the Participant’s Accrued
Benefit as of his Normal Retirement Date.

 

5.3                                 Late Retirement.  A Participant who is
entitled to a pension under Section 4.2 shall receive an annual pension, payable
monthly.  Subject to Section 5.10, such pension shall be the Actuarial
Equivalent, in the form set forth in Article VII, of the Participant’s Accrued
Benefit calculated as follows:

 

(a)                                  If the Participant elects to commence
benefits on his Normal Retirement Date, his Accrued Benefit shall be calculated
as of his Normal Retirement Date.  The amount of the pension payable to the
Participant shall be adjusted annually as of January 1 in each calendar year
following his Benefit Commencement Date, up to and including the January 1
following his Separation from Service.  Such annual adjustment shall include any
increase (but not any decrease) in the Participant’s Accrued Benefit, determined
in accordance with

 

27

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Section 5.1, as a result of additional Years of Credited Service and
Compensation since the Participant’s Benefit Commencement Date or the last such
annual adjustment, whichever applies.  In addition, such annual adjustment shall
be reduced (but not below zero) by the Actuarial Equivalent of any benefits paid
to the Participant since his Benefit Commencement Date, to the extent not
previously taken into account under this Subsection (a).

 

(b)                                 If the Participant elects to defer his
Benefit Commencement Date beyond his Normal Retirement Date:

 

(1)                                  The Participant’s Accrued Benefit shall be
calculated as of the end of the Plan Year in which occurs the Participant’s
Normal Retirement Date, as an amount equal to the greater of :

 

(A)                              his Accrued Benefit as of his Normal Retirement
Date, increased on an Actuarially Equivalent basis to reflect deferral of the
Participant’s Benefit Commencement Date for one year, or

 

(B)                                his Accrued Benefit calculated as under
Section 5.1 based on Years of Credited Service and Compensation through the end
of the such Plan Year.

 

(2)                                  The Participant’s Accrued Benefit shall be
calculated thereafter as of the end of each subsequent Plan Year, as an amount
equal to the greater of:

 

(A)                              his Accrued Benefit as of the last day of the
preceding Plan Year, increased on an Actuarially Equivalent basis to reflect
deferral of the Participant’s Benefit Commencement Date for one year, or

 

(B)                                his Accrued Benefit calculated as under
Section 5.1 based on Years of Credited Service and Compensation through the end
of such Plan Year.

 

28

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(3)                                  If a Participant’s Required Beginning Date,
and therefore his Benefit Commencement Date, precedes his Late Retirement Date,
the amount of the pension payable to the Participant shall be determined as of
his Benefit Commencement Date and shall be adjusted annually as of January 1 in
each calendar year following his Benefit Commencement Date, up to and including
the January 1 next following his Late Retirement Date.  Such annual adjustment
shall include any increase (but not any decrease) in the Participant’s Accrued
Benefit, determined in accordance with Section 5.1, as a result of additional
Years of Credited Service and Compensation since the Participant’s Benefit
Commencement Date or the last such annual adjustment, whichever applies.

 

5.4                                 Early Retirement.  A Participant who is
entitled to a pension under Section 4.3 shall receive an annual pension, payable
monthly.  Subject to Section 5.10, such pension shall be the Actuarial
Equivalent, in the form set forth in Article VII, of the Participant’s Accrued
Benefit as of his Early Retirement Date, reduced by 1/15 for each year from age
60 to his Normal Retirement Date and by 1/30 for each year from age 55 to age 60
by which his Benefit Commencement Date precedes his Normal Retirement Date.

 

5.5                                 Disability Retirement.

 

(a)                                  Subject to Section 5.10, a Participant who
is entitled to a pension under Section 4.4 shall receive the benefit provided
under Section 5.2, 5.3, 5.4 or Article VI, whichever applies.  In addition, such
annual adjustment shall be reduced (but not below zero) by the Actuarial
Equivalent of any benefits paid to the Participant since his Benefit
Commencement Date, to the extent not previously taken into account under this
Subsection.

 

(b)                                 For the purposes of this Section, a
Participant’s Final Average Compensation shall be computed on the assumption
that his Compensation for each Plan Year

 

29

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that ends after his Disability Retirement Date is equal to his Compensation for
the last Plan Year ended on or before his Disability Retirement Date.

 

5.6                                 Prohibition Against Decrease in Benefits
Payable.  A Participant’s Accrued Benefit as of his Normal Retirement Date shall
not be less than his pension, in the form of an immediate single life annuity,
would have been if he had had a Separation from Service on any earlier date.

 

5.7                                 Death Before Separation from Service.

 

(a)                                  Effective January 1, 1994, upon the death
of a Participant who is then an Employee or, effective January 1, 2007, who at
the time of death was performing qualified military service as defined in
section 414(u) of the Code, the Participant’s designated beneficiary shall be
paid a death benefit equal to the Actuarial Equivalent of the Participant’s
fully vested Accrued Benefit as of the date of his death.

 

(b)                                 The death benefit determined in accordance
with Subsection (a) of this Section shall be payable to the Participant’s
designated beneficiary within 60 days following the end of the Plan Year in
which the Participant’s death occurs.  This benefit shall not apply to a
Participant with respect to whom the survivor’s benefit under Section 5.8 is
payable and has not been properly waived.

 

5.8                                 Survivor’s Benefit for Surviving Spouse.

 

(a)                                  Subject to Subsection (b) of this Section,
if a Participant who has any vested interest in his Accrued Benefit under the
Plan, dies before his Benefit Commencement Date and has a Surviving Spouse, such
Surviving Spouse shall receive a survivor’s benefit.  Such benefit shall be a
monthly pension for life and shall begin, as elected in writing by the Surviving
Spouse not more than 180 days prior to the Benefit Commencement

 

30

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Date, on the first day of any month following the earliest date on which the
Participant could have elected to receive immediate retirement benefits, but not
later than the date that would have been the Participant’s Normal Retirement
Date.  If the Participant dies after his Normal Retirement Date, benefits shall
commence on the first day of the month following the month of the Participant’s
death.  Subject to Section 5.10, the survivor’s benefit shall be the benefit
such Surviving Spouse would have received if the Participant (1) had had a
Separation from Service on the date of his death (if he is then an Employee),
(2) had survived to the Benefit Commencement Date elected by the Surviving
Spouse, (3) had then begun to receive an immediate retirement benefit in the
normal form under Subsection 7.2(b), and (4) died on the following day.

 

(b)                                 The survivor’s benefit under this
Section shall not be payable and the death benefit under Section 5.7 shall be
payable instead with respect to a Participant who elects in accordance with the
following rules to waive the survivor’s benefit under this Section and to have
the death benefit under Section 5.7 be payable instead.  Such election may be
made at any time during the period that begins (i) on the first day of the Plan
Year in which the Participant attains Age 35, or (ii) on the date of his
Separation from Service, in the case of a Participant who has a Separation from
Service prior to Age 35, with respect to benefits accrued prior to such
separation, and ends on the date of the Participant’s death; provided that such
election shall be effective only if:

 

(1)                                  (A)                              the
Participant’s Spouse (or the Spouse’s legal guardian if the Spouse is legally
incompetent) executes a written instrument whereby such Spouse either:

 

31

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

 

(i)                                     consents to such election, but only
insofar as such election waives the survivor’s benefit under this Section and,
if applicable, names a specific beneficiary or beneficiaries to receive the
death benefit under Section 5.7; or

 

(ii)                                  consents to such election and consents
prospectively to any subsequent designation of someone other than the Spouse to
receive all or part of the death benefit under Section 5.7 (provided such
instrument acknowledges the Spouse’s right to limit consent to a specific
beneficiary); and

 

(B)                                such instrument acknowledges the effect of
the election to which the Spouse’s consent is being given and is witnessed by a
Plan representative or a notary public; or

 

(2)                                  the Participant establishes to the
satisfaction of the Committee that his Spouse cannot be located or furnishes a
court order to the Committee establishing that the Participant is legally
separated or has been abandoned (within the meaning of local law), unless a
qualified domestic relations order pertaining to such Participant provides that
the Spouse’s consent must be obtained.

 

The consent of a Spouse in accordance with this Subsection (b) shall not be
effective with respect to other Spouses of the Participant, and an election to
which Paragraph (b)(2) of this Section applies shall become void if the
circumstances causing the consent of the Spouse not to be required cease to
exist prior to the Participant’s Benefit Commencement Date.

 

(c)                                  A Participant may revoke his election to
waive the survivor’s benefit.  Such revocation may be made at any time prior to
the Participant’s death.

 

(d)                                 The Committee shall provide to each
Participant a written explanation of:

 

32

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

 

(1)                                  the terms and conditions of the survivor’s
benefit under this Section and the death benefit under Section 5.7;

 

(2)                                  the Participant’s right to waive the
survivor’s benefit and the effect of such waiver;

 

(3)                                  the rights of the Participant’s Spouse with
respect to such waiver; and

 

(4)                                  the Participant’s right to revoke a waiver
of the survivor’s benefit and the effect of such revocation.

 

The written explanation described in this Subsection shall be provided once
during either (A) the three-year period that begins on the first day of the Plan
Year in which the Participant attains Age 32, or (B) the one-year period that
begins on the day he becomes a Participant.  With regard to a Participant who
has a Separation from Service before attaining Age 35, such written notice shall
be provided no earlier than one year before, and no later than one year after,
the Participant’s Separation from Service.

 

5.9                                 Death Benefit After Retirement.  If a
Participant dies after his Benefit Commencement Date, his beneficiary shall be
entitled to receive any amount payable under the form of benefit that is in
effect for such Participant.

 

5.10                           Maximum Benefit.  The provisions of this
Section 5.10 shall be effective for Limitation Years beginning on or after
July 1, 2007 and shall be construed to comply with section 415 of the Code and
the regulations thereunder.  The application of the provisions of this
Section 5.10 shall not cause the maximum annual benefit payable to any
Participant to be less than the Participant’s accrued benefit under this and any
other qualified defined benefit plan of a Participating Company or a 50%
Affiliated Company as of the end of the last Limitation Year

 

33

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

 

beginning before July 1, 2007 under provisions of the plans that were both
adopted and in effect before April 5, 2007.  The aggregation of defined benefit
plans for purposes of this Section 5.10 shall be determined in accordance with
the rules set forth in Section 415(f) of the Code and the regulations issued
thereunder.

 

(a)                                  (1)                                 
Notwithstanding anything in this Article to the contrary, in no event shall the
combined annual benefit  payable with respect to a Participant on a single life
basis, under this and any other qualified defined benefit plan to which a
Participating Company or a 50% Affiliated Company contributes, exceed the lesser
of (A) $185,000 (as adjusted under section 415(d) of the Code) or (B) one
hundred percent (100%) of the Participant’s average Compensation during the
three consecutive calendar years in which such Compensation is the highest,
regardless of whether he was a Participant during such years.  For a Participant
who is employed by a Participating Company for less than three consecutive
years, the period of the Participant’s high-three years of service is the actual
number of consecutive years of service (including fractions of years, but not
less than one year).  In the case of a Participant who has had a Separation from
Service, and who is subsequently rehired by a Participating Company, the period
of the Participant’s high-three years of service is calculated by excluding any
years for which the Participant performs no services for and receives no
Compensation from the Participating Company (the break period), and by treating
the year of service immediately prior to and the year of service immediately
after the break period as if the years were consecutive.

 

(2)                                  (A)                              If the
benefit is payable with respect to a Participant who has been an Active
Participant for fewer than 10 full years at the time that retirement benefits
begin, the dollar limitation described in Subparagraph (a)(1)(A) of this
Section shall be

 

34

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

 

multiplied by a fraction, the numerator of which is the number of the
Participant’s years as an Active Participant and the denominator of which is 10.

 

(B)                                If the benefit is payable with respect to a
Participant who has fewer than 10 Years of Vesting Service, the limitations
described in Subparagraph (a)(1)(B), Paragraph (a)(4) and Paragraph (a)(5) of
this Section shall be multiplied by a fraction, the numerator of which is the
number of the Participant’s Years of Vesting Service and the denominator of
which is 10.

 

(3)                                  (A)                              If the
Participant’s Benefit Commencement Date occurs before the Participant attains
Age 62, the dollar limitation in subparagraph (a)(1)(A) applicable to the
Participant at the earlier Age is an annual benefit payable in the form of a
straight life annuity beginning at the earlier Age that is the Actuarial
Equivalent of the defined benefit dollar limitation applicable to the
Participant at Age 62 (adjusted under Paragraph (2) above, if required). 
Adjustments under this Subparagraph (3)(A) shall be made in accordance with
section 1.415(b)-1(d) of the Treasury Regulations.

 

(B)                                If the Participant’s Benefit Commencement
Date occurs after the Participant attains Age 65, the defined benefit dollar
limitation applicable to the Participant at the later Age is the annual benefit
payable in the form of a straight life annuity beginning at the later Age that
is the Actuarial Equivalent of the defined benefit dollar limitation applicable
to the Participant at Age 65 (adjusted under Paragraph (2) above, if required). 
Adjustments under this Subparagraph (3)(B) shall be made in accordance with
section 1.415(b)-1(e) of the Treasury Regulations.

 

35

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

 

(4)                                  Except as provided in Subparagraph
(C) below, an annual benefit payable in a form other than a straight life
annuity must be adjusted to an Actuarially Equivalent straight life annuity
before applying the limitations of this Section.

 

(A)                              If the Participant’s benefit is paid in a form
that is not subject to section 417(e)(3) of the Code, the Actuarially Equivalent
straight life annuity is the greater of (i) the annual amount of the straight
life annuity (if any) payable to the Participant commencing at the same Benefit
Commencement Date as the form of benefit payable to the Participant; or (ii) the
annual amount of the straight life annuity commencing at the same Benefit
Commencement Date that has the same actuarial present value as the form of
benefit payable to the Participant, computed using a 5% interest rate and the
Section 417 Mortality Table.

 

(B)                                If the Participant’s benefit is paid in a
form that is subject to section 417(e)(3) of the Code, the Actuarially
Equivalent straight life annuity is the greatest of the annual amount of the
straight life annuity commencing at the Benefit Commencement Date that has the
same actuarial present value as the form of benefit payable computed using
(i) the interest rate and mortality table specified in the Plan for Actuarial
Equivalence, (ii) a 5.5% interest assumption and the Section 417 Mortality
Table, or (iii) the Section 417 Interest Rate and the Section 417 Mortality
Table, divided by 1.05.  However, for a distribution with a Benefit Commencement
Date occurring in Plan Years beginning in 2004 or 2005, the Actuarially
Equivalent straight life annuity is the greater of the annual amount of the
straight life annuity that has the same actuarial present value as the form of
benefit payable using (i) the interest rate and mortality table specified in the
Plan for Actuarial Equivalence, or (ii) a 5.5% interest assumption and the
Section 417 Mortality Table.

 

36

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

 

(C)                                No actuarial adjustment to the annual benefit
is required for (i) survivor benefits payable to a surviving spouse under a
qualified joint and survivor annuity to the extent that such benefits would not
be payable if the Participant’s benefit were not paid in the form of a qualified
joint and survivor annuity, (ii) ancillary benefits that are not directly
related to retirement benefits, and (iii) the inclusion in the form of benefit
of an automatic benefit increase, as described in section 1.415(b)-1(c)(5) of
the Treasury Regulations.

 

(5)                                  The annual benefit payable with respect to
a Participant shall be deemed not to exceed the limits set forth in Subsection
(a) if (A) the annual benefit does not exceed $10,000 (as adjusted as set forth
in Paragraph (a)(2)) for the current Plan Year or for any prior Plan Year, and
(B) the Participant has at no time participated in a defined contribution plan
maintained by a Participating Company or a 50% Affiliated Company.

 

5.11                           Funding Based Benefit Limitations.  The following
rules set forth the limitations on benefits imposed as a result of the funding
status of the Plan for a given Plan Year.  The provisions of this Section 5.11
shall be interpreted to comply with the requirements of Section 436 of the Code
and the regulations issued thereunder.

 

(a)                                  No amendment to the Plan which has the
effect of increasing liabilities of the Plan by reason of increases in benefits,
establishment of new benefits, changing the rate of benefit accrual, or changing
the rate at which benefits become nonforfeitable may take effect during any Plan
Year if the Plan’s actuary determines (or is presumed to have determined) that
the adjusted funding target percentage of the Plan for such Plan Year is less
than 80%, or would be less than 80% taking into account such amendment.  This
Section 5.11(b) shall cease to apply with respect to any Plan Year, effective as
of the first day of the Plan Year (or if later, the

 

37

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

 

effective date of the amendment) upon payment by the Company of a contribution
equal to the amount required under Section 436(c)(2) of the Code.

 

(b)                                 In the event that the Plan’s actuary
determines (or is presumed to have determined) that the adjusted funding target
attainment percentage of the Plan is less than 60% for the Plan Year, the
following limits shall apply:

 

(1)                                  A Participant or beneficiary is not
permitted to elect an optional form of benefit that includes a prohibited
payment, and the Plan will not pay any prohibited payment, with an annuity
starting date on or after the applicable Section 436 measurement date.

 

(2)                                  Benefit accruals shall cease as of the
applicable Section 436 measurement date.  This Section 5.11(b)(2) shall cease to
apply with respect to any Plan Year, effective as of the first day of the Plan
Year, upon payment by the Company of a contribution equal to the amount
sufficient to result in an adjusted funding target attainment percentage of 60%.

 

(c)                                  A Participant or beneficiary is not
permitted to elect an optional form of benefit that includes a prohibited
payment, and the Plan will not pay any prohibited payment, with an annuity
starting date that occurs during any period in which the Company is a debtor in
a bankruptcy proceeding, except for payments made within a Plan Year with an
annuity starting date that occurs on or after the date on which the Plan’s
actuary certifies that the Plan’s adjusted funding target attainment percentage
for that Plan Year is not less than 100%.

 

(d)                                 In the event that the Plan’s actuary
determines (or is presumed to have determined) that the adjusted funding target
attainment percentage of the Plan for the Plan Year is 60% or greater, but less
than 80%, a Participant or beneficiary is not permitted to elect

 

38

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

 

the payment of an optional form of benefit that includes a prohibited payment,
and the Plan will not pay any prohibited payment, with an annuity starting date
on or after the applicable Section 436 measurement date unless the present value
of the portion of the benefit that is being paid in a prohibited payment does
not exceed the lesser of :

 

(1)                                  50% of the present value of the benefit
payable in the optional form of benefit that includes the prohibited payment, or

 

(2)                                  100% of the present value of the maximum
guaranteed benefit published by the Pension Benefit Guaranty Corporation with
respect to a Participant for the year in which the annuity starting date occurs.

 

In the case of a Participant with respect to whom a prohibited payment (or a
series of prohibited payments under a single optional form of benefit) is made
pursuant to this Section 5.11.(d), no additional prohibited payment may be made
with respect to the Participant during any period of consecutive Plan Years for
which prohibited payments are limited under Sections 5.11(b), 5.11(c), or
5.11(d).

 

(e)                                  If an optional form of benefit that is
otherwise available under the Plan is not available as of the annuity starting
date because of the restrictions of Section 5.11(d), then the Participant or
beneficiary may elect to:

 

(1)                                  Receive the unrestricted portion of the
optional form of benefit at the annuity starting date,

 

(2)                                  Commence benefits in any other optional
form of benefit available under the Plan at the same annuity starting date, or

 

(3)                                  Defer commencement of benefits to the
extent permitted under the Plan.

 

39

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

 

If the Participant or beneficiary elects payment of the unrestricted portion of
the benefit as described in (1) above, then the Participant or beneficiary may
elect payment of the remainder of his benefit in any optional form of benefit at
that annuity starting date otherwise available under the Plan that would not
have included a prohibited payment if that optional form of benefit applied to
the entire benefit.

 

(f)                                    In the event that a benefit limitation
under Section 5.11(a), 5.11(b), 5.11(c), or 5.11(d) applies for a Plan Year, the
adjusted funding target attainment percentage for such Plan Year shall continue
to apply for subsequent Plan Years until certification by the Plan’s actuary
that the adjusted funding target attainment percentage for the Plan Year is at a
level at which such limits no longer apply.  In the event the Plan’s actuary
does not provide certification of the adjusted funding target attainment
percentage by the end of the ninth month of any Plan Year, the Plan shall be
presumed to have an adjusted funding target attainment percentage for the Plan
Year of less than 60% as of the first day of such Plan Year.

 

(g)                                 The following terms shall apply for purposes
of this Section 5.11:

 

(1)                                  “Adjusted funding target attainment
percentage” means such term as is defined in Section 436(j)(2) of the Code and
Treas. Reg. § 1.436-1(j)(1).

 

(2)                                  “Annuity starting date” means such term as
is defined in Treas. Reg. § 1.436-1(j)(2).

 

(3)                                  “Prohibited payment” means (A) any payment
in excess of the monthly amount paid under a single life annuity to a
Participant or beneficiary whose annuity starting date occurs during a period in
which the benefit limitations set forth in this Section 5.11 are in effect,
(B) any payment for the purchase of an irrevocable commitment from an insurer to
pay benefits, (C) any transfer of assets and liabilities to any other plan
maintained by the

 

40

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

 

Company or an Affiliate that is made in order to avoid or terminate the
application of the limitations of this Section 5.11, and (D) any other payment
specified by the Secretary of the Treasury under Section 436 of the Code.  Such
term shall not include the payment of a benefit which under Section 411(a)(11)
of the Code may be immediately distributed without the consent of the
Participant.

 

(4)                                  “Section 436 measurement date” means such
term as is defined in Treas. Reg. § 1.436-1(j)(8).

 

41

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

 

ARTICLE VI

 

VESTING

 

6.1                                 Nonforfeitable Amounts.

 

(a)                                  A Participant who is credited with one or
more Hours of Service as an Employee on or after January 1, 1989 shall have a
nonforfeitable interest in his Accrued Benefit determined in accordance with the
following schedule:

 

Years of
Vesting Service

 

Nonforfeitable Interest

Less than two years

 

0 percent

two years

 

20 percent

three years

 

40 percent

four years

 

60 percent

five years

 

80 percent

six years

 

100 percent

 

(b)                                 Notwithstanding the foregoing, a Participant
who is an Employee shall have a 100% nonforfeitable interest in his Accrued
benefit upon: (1) the date on which he attains Age 65; (2) the date of his
death; or (3) the date he suffers a Total Disability.

 

6.2                                 Treatment of Terminated Vested Participant.

 

(a)                                  A Participant who has a Separation from
Service at a time when he has a nonforfeitable interest in his Accrued Benefit
pursuant to Section 6.1, other than by death or as provided in Article IV, shall
be entitled to a pension.  His Benefit Commencement Date shall be his Normal
Retirement Date; provided, that he may elect as his Benefit Commencement Date
the first day of any month after his Separation from Service and not after his
Required Beginning Date.  Such election must be made no earlier than 90 days
prior to the Benefit Commencement Date elected by the Participant.  Subject to
Section 5.10, the pension payable under this Section shall be equal to the
Participant’s Accrued Benefit as of the date of his

 

42

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

 

Separation from Service, multiplied by his nonforfeitable interest under
Section 6.1.  The Participant shall forfeit any remainder.

 

(b)                                 If a Participant who is eligible for a
deferred pension under Subsection (a) of this Section has 10 or more Years of
Credited Service to his credit as of the date of his Separation from Service, he
may elect as his Benefit Commencement Date (1) the first day of the calendar
month coincident with or next following his 55th birthday, or (2) the first day
of any month after such birthday and before his Required Beginning Date.  Such
election must be made no earlier than 90 days prior to the Benefit Commencement
Date elected by the Participant.

 

(c)                                  A Participant who elects a Benefit
Commencement Date under Subsection (b) of this Section shall receive the benefit
described in Subsection (a) of this Section in an amount reduced under
Section 5.4.

 

(d)                                 Notwithstanding any other provision in the
Plan, an increase in the Social Security taxable wage base or benefit level
shall not reduce the value of the nonforfeitable benefit payable to a
Participant who has had a Separation from Service with respect to service prior
to his Separation from Service, regardless of whether the Participant returns to
employment as a Covered Employee.

 

6.3                                 Form and Payment of Benefit.  Terminated
vested benefits shall be paid in a form provided for in Article VII.

 

6.4                                 Termination of Benefit.  The last vested
benefit payment hereunder shall be made in accordance with the provisions of
Article VII.

 

6.5                                 Special Rules for Certain Terminated
Participants.

 

(a)                                  Notwithstanding Section 2.1, if a
Participant:

 

43

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

 

(1)                                  is eligible for a deferred vested benefit
under the Plan,

 

(2)                                  has been credited with at least one Hour of
Service on or after September 2, 1974,

 

(3)                                  had a Separation from Service prior to the
first day of the first Plan Year beginning after December 31, 1975,

 

(4)                                  has not thereafter been an Employee, and

 

(5)                                  is alive on August 23, 1984 and has not
begun to receive benefit payments as of that date, such Participant’s retirement
benefits shall be paid in accordance with Article VII.

 

(b)                                 Notwithstanding Section 2.1, if a
Participant:

 

(1)                                  has at least one Hour of Service after the
first day of the Plan Year beginning on or immediately after January 1, 1976,

 

(2)                                  has not been credited with any Hours of
Service after August 22, 1984,

 

(3)                                  has at least 10 Years of Vesting Service
and a vested right to all or a portion of his Accrued Benefit, and

 

(c)                                  is alive on August 23, 1984 and has not
begun to receive benefit payments as of that date, he may elect to be covered by
the survivor’s benefit described in Section 5.8.

 

44

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ARTICLE VII

 

PAYMENT OF BENEFITS

 

7.1                                 Minimum Distribution Requirements.

 

(a)                                  Except as required by Subsection (c) of
this Section, a Participant’s Benefit Commencement Date shall be no earlier than
the date of his Separation from Service.

 

(b)                                 Except as required by Subsection (c) of this
Section, unless a Participant elects otherwise, his Benefit Commencement Date
shall be no later than the 60th day after the close of the Plan Year in which
the Participant attains Age 65 or has a Separation from Service, whichever
occurs last.

 

(c)                                  A Participant’s Benefit Commencement Date
shall be no later than his Required Beginning Date.

 

(d)                                 Notwithstanding anything in the Plan to the
contrary, if a Participant dies before his Benefit Commencement Date, his entire
interest under the Plan, to the extent not forfeited, shall be distributed
either:

 

(1)                                  not later than December 31 of the calendar
year containing the fifth anniversary of the date of the Participant’s death, or

 

(2)                                  over the life or life expectancy of the
Participant’s beneficiary, commencing no later than (A) December 31 of the
calendar year following the year of the Participant’s death, or (B) if the
beneficiary is the Participant’s Spouse, December 31 of the later of (i) the
calendar year following the year of the Participant’s death or (ii) the calendar
year in which the Participant would have attained Age 70½.

 

(e)                                  Notwithstanding anything in the Plan to the
contrary, the form and the timing of all distributions under the Plan shall be
such that the amount of any distribution

 

45

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

 

shall not be less than required under regulations issued by the Department of
the Treasury under section 401(a)(9) of the Code, including the incidental death
benefit requirements of section 401(a)(9)(G) of the Code.

 

(f)                                    This Section shall apply to all
Participants, including Participants who had a Separation from Service or ceased
to be a Covered Employee prior to January 1, 1997.

 

7.2                                 Normal Form of Benefit.

 

(a)                                  Benefits under the Plan shall be paid in
the normal form of benefit described in Subsection (b) or (c), as the case may
be, unless the Participant elects an optional form of benefit under
Section 7.3.  No spousal consent shall be required for payment of benefits in
the normal form.

 

(b)                                 The normal form of benefit for a Participant
who has a Spouse as of his Benefit Commencement Date shall be a joint and
survivor annuity, with monthly installments payable after the death of the
retired Participant to his Surviving Spouse, if he leaves one, for the life of
such Surviving Spouse in an amount equal to fifty percent (50%) of the benefit
paid to the retired Participant.

 

(c)                                  The normal form of benefit for a
Participant who does not have a Spouse as of his Benefit Commencement Date shall
be a single life annuity with equal monthly installments payable to the retired
Participant for his lifetime.

 

7.3                                 Optional Form of Benefit.

 

(a)                                  In lieu of the normal form of benefit as
determined under Section 7.2, the Participant may elect, subject to the rules of
Section 7.4, one of the following optional

 

46

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

 

forms of benefit, each of which shall be the Actuarial Equivalent of the normal
form of benefit under Section 7.2:

 

(1)                                  a single life annuity with equal monthly
installments payable to the retired Participant for his lifetime; or

 

(2)                                  a joint and survivor annuity with any
individual designated beneficiary, payable in monthly installments to the
Participant for his lifetime and with fifty percent (50%) of the amount of such
monthly installment payable after the death of the Participant to the designated
beneficiary of such Participant, if then living, for the life of such designated
beneficiary.  Notwithstanding the foregoing, the percentage payable to the
Participant’s beneficiary (unless the beneficiary is the Participant’s Spouse)
after the Participant’s death may not exceed the applicable percentage from
Table I in Schedule A; or

 

(3)                                  a joint and survivor annuity with any
individual designated beneficiary, payable in monthly installments to the
Participant for his lifetime and with seventy-five percent (75%) of the amount
of such monthly installment payable after the death of the Participant to the
designated beneficiary of such Participant, if then living, for the life of such
designated beneficiary.  Notwithstanding the foregoing, the percentage payable
to the Participant’s beneficiary (unless the beneficiary is the Participant’s
Spouse) after the Participant’s death may not exceed the applicable percentage
from Table I in Schedule A; or

 

(4)                                  a joint and survivor annuity with any
individual designated beneficiary, payable in monthly installments to the
Participant for his lifetime and with one hundred percent (100%) of the amount
of such monthly installment payable after the death of the Participant to the
designated beneficiary of such Participant, if then living, for the life of such
designated beneficiary.  Notwithstanding the foregoing, the percentage payable
to the

 

47

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Participant’s beneficiary (unless the beneficiary is the Participant’s Spouse)
after the Participant’s death may not exceed the applicable percentage from
Table I in Schedule A; or

 

(5)                                  subject to Section 10.3, a single sum
payment in lieu of any other benefits under the Plan in complete discharge of
all obligations to the Participant under the Plan payable as soon as is
practical following termination of the Participant’s active participation in the
Plan; or

 

(6)                                  a joint and survivor annuity, with the
Participant’s Spouse, paid as soon as is practical in monthly installments to
the Participant for his lifetime and with fifty percent (50%) of the amount of
such monthly installment payable after the death of the Participant to the
Surviving Spouse of such Participant, if then living, for the life of such
Surviving Spouse; or

 

(7)                                  if the Participant does not have a Spouse
as of his Benefit Commencement Date, a single life annuity paid as soon as
practical in equal monthly installments to the Participant for his lifetime; or

 

(8)                                  subject to Section 10.3, substantially
equal periodic installment payments made to the Participant or his designated
beneficiary; or

 

(9)                                  a single life annuity payable in equal
monthly installments to the retired Participant for his lifetime, with 120
monthly payments guaranteed.  If the Participant dies before he has received 120
monthly payments, then beginning on the first day of the month in which the
Participant’s death occurs and continuing until the balance of the guaranteed
payments have been made, payments in the amount payable to the Participant shall
be made to the Participant’s beneficiary.  If the Participant’s beneficiary dies
before the full number of guaranteed monthly payments have been made, the
Actuarial Equivalent of any

 

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balance of guaranteed payments shall be paid in a single sum to the estate of
the last to survive of the Participant or the beneficiary.  Notwithstanding the
foregoing, the number of monthly payments guaranteed shall be calculated so that
the number of guaranteed monthly payments remaining as of the beginning of the
calendar year preceding the Participant’s Required Beginning Date does not
exceed the joint life expectancy of the Participant and his beneficiary, or if
less, and the Participant’s beneficiary is not the Participant’s Spouse, the
applicable number from Table II in Schedule A multiplied by 12; or

 

(10)                            a joint and survivor annuity, with the
Participant’s Spouse, paid as soon as is practical in monthly installments to
the Participant for his lifetime and with seventy-five percent (75%) of the
amount of such monthly installment payable after the death of the Participant to
the Surviving Spouse of such Participant, if then living, for the life of such
Surviving Spouse.

 

7.4                                 Rules for Election of Optional Form of
Benefit.  A Participant may elect an optional form of benefit under Section 7.3
by filing a written notice with the Committee in the form and manner prescribed
by the Committee and in no other.  The following rules shall be applied in a
uniform and nondiscriminatory manner with respect to the election of optional
forms of benefit.

 

(a)                                  A Participant may elect an optional form of
benefit at any time not earlier than 180 days prior to his Benefit Commencement
Date.

 

(b)                                 A Participant who does not establish to the
satisfaction of the Committee that he has no Spouse on his Benefit Commencement
Date may elect to receive an optional form of benefit under Section 7.3 only if:

 

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(1)                                  (A)                              his Spouse
(or the Spouse’s legal guardian if the Spouse is legally incompetent) executes a
written instrument whereby such Spouse:

 

(i)                                     consents not to receive the normal form
of benefit described in Subsection (b) of Section 7.2;

 

(ii)                                  consents to the specific optional form
elected by the Participant, or (provided such instrument acknowledges the
Spouse’s right to limit consent to a specific optional form) to the
Participant’s right to choose any optional form without any further consent by
the Spouse; and

 

(iii)                               if applicable, consents in writing to either
the specific beneficiary or beneficiaries designated by the Participant pursuant
to his election or (provided such instrument acknowledges the Spouse’s right to
limit consent to a specific beneficiary) to the Participant’s right to designate
any beneficiary or beneficiaries without any further consent by the Spouse; and

 

(B)                                such instrument acknowledges the effect of
the election to which the Spouse’s consent is being given and is witnessed by a
Plan representative or a notary public; or

 

(2)                                  the Participant (A) establishes to the
satisfaction of the Committee that his Spouse cannot be located or (B) furnishes
a court order to the Committee establishing that the Participant is legally
separated or has been abandoned (within the meaning of local law), unless a
qualified domestic relations order pertaining to such Participant provides that
the Spouse’s consent must be obtained , or (C) asserts that he is a Participant
described in Section 6.5(a).

 

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The consent of a Spouse in accordance with this Subsection (b) shall not be
effective with respect to other Spouses of the Participant, and an election to
which Paragraph (3) of this Subsection applies shall become void if the
circumstances causing the consent of the Spouse not to be required cease to
exist prior to the Participant’s Benefit Commencement Date.

 

(c)                                  A Participant may revoke an election under
Subsection (b) of this Section.  Such revocation may be made at any time prior
to the later of (1) his Benefit Commencement Date, or (2) the expiration of the
seven-day period that begins the day after the Participant receives the Plan’s
explanation described in Section 7.5.  Such revocation shall not void any
prospectively effective consent given by his Spouse in connection with the
revoked election.

 

(d)                                 If a Participant’s Spouse or other
designated beneficiary dies before the Participant’s Benefit Commencement Date,
but after an election of a joint and survivor annuity has been made hereunder,
the election shall be automatically revoked.

 

(e)                                  In the event of the divorce of a
Participant prior to his Benefit Commencement Date, but following the
Participant’s election of a form of benefit, the election shall remain in effect
unless the election is revoked by the Participant, the Participant remarries, or
a qualified domestic relations order provides otherwise.

 

7.5                                 Explanations to Participants.

 

(a)                                  (1)                                  The
Committee shall provide to each Participant whose vested Accrued Benefit has an
Actuarial Equivalent single-sum value in excess of $5,000 a written explanation
of:

 

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(A)                              the terms and conditions of the normal form of
benefit and each optional form of benefit, including information explaining the
relative values of each form of benefit;

 

(B)                                the Participant’s right to waive the normal
form of benefit and the effect of such waiver;

 

(C)                                the rights of the Participant’s Spouse with
respect to such waiver;

 

(D)                               the right to revoke an election to receive an
optional form of benefit and the effect of such revocation; and

 

(E)                                 if the Participant has not attained Age 65,
the Participant’s right to defer commencement of his benefit until his Normal
Retirement Date and the consequences of a failure to so defer.

 

(2)                                  Such explanation shall be provided:

 

(A)                              no more than 180 days before the Participant’s
Benefit Commencement Date; and

 

(B)                                no less than 30 days before the first
distribution to the Participant is actually made, unless

 

(i)                                     the Participant has been provided with
information that indicates that he has at least 30 days to consider his
election, and the Participant elects to waive such 30-day consideration period
before a distribution of benefits begins;

 

(ii)                                  the Participant’s spouse has consented to
the chosen mode of payment, if required under Subsection 7.4(b);

 

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(iii)                               the Participant is permitted to revoke any
affirmative distribution election at least until the expiration of the seven-day
period beginning on the day after the explanation was provided; and

 

(iv)                              the distribution commences more than seven
days after the explanation is provided.

 

7.6                                 Termination of Benefits.  The last benefit
payment hereunder with respect to any Participant shall be:

 

(a)                                  in the case of a single life annuity, the
payment due on the first day of the month in which occurs the death of the
retired Participant;

 

(b)                                 in the case of a surviving Spouse’s benefit
or a joint and survivor benefit, the payment due on the first day of the month
in which occurs the later of the death of the Participant or the death of the
Spouse (or, if applicable, the death of the designated beneficiary of such
Participant); or

 

(c)                                  in the case of a single sum payment, such
benefit payment.

 

(d)                                 in the case of an installment payment, the
last installment payment due to the Participant or his designated beneficiary.

 

(e)                                  in the case of the single life annuity with
120 monthly payments guaranteed, the later of the payment due on the first day
of the month in which the death of the Participant occurs or the 120th monthly
payment.

 

7.7                                 Beneficiary Designation.

 

(a)                                  Except as provided in Subsection 7.4(a), in
the case of a Participant whose election period extends beyond his Benefit
Commencement Date, a

 

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Participant’s designation of a beneficiary under a joint and survivor annuity
may not be changed on or after the Participant’s Benefit Commencement Date.

 

(b)                                 A Participant’s designation of a beneficiary
to receive any remainder of a guaranteed number of payments may be made or
changed until the earlier of the Participant’s death or the expiration of the
guaranteed period.

 

(c)                                  Subject to the provisions of Subsections
(a) and (b) and to the provisions set forth above relating to the rights of
Spouses to survivor benefit payments, each Participant may designate or change
the previous designation of the beneficiary or beneficiaries who shall receive
benefits, if any, after his death.  Such designation or change of designation
shall be made by executing and filing with the Committee a form prescribed by
the Committee and in no other manner.  No designation, revocation, or change of
beneficiaries shall be valid and effective unless and until filed with the
Committee.

 

7.8                                 Small Benefit Payments.

 

(a)                                  Notwithstanding any other provision of the
Plan, if the Actuarially Equivalent single-sum value of (1) a Participant’s
vested Accrued Benefit or (2), if the Participant has died, the Surviving
Spouse’s benefit under Section 5.7 or 5.8, as applicable, does not exceed
$5,000, such benefit shall be paid in a single sum as soon as is practicable
after the Participant’s Separation from Service, or death, if applicable.  In no
event shall a distribution be made under this subsection (a) if there are
remaining payments to be made with respect to a particular distribution option
that has commenced.

 

(b)                                 If the value of the benefit described in
Subsection (a) of this Section is zero, the Participant shall be deemed to have
received a single-sum distribution under this Section of his entire vested
Accrued Benefit as of the date of his Separation from Service.

 

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7.9                                 Direct Rollovers of Single Sum
Distributions.

 

(a)                                  If (1) a Participant (including a
Participant who had a Separation from Service prior to the Effective Date)
entitled to receive a distribution under Section 7.8 or Subsection 7.3(a)(5);
(2) a spouse or former spouse of a Participant who is entitled to receive a
single sum distribution from the Plan pursuant to a qualified domestic relations
order; or (3) a Participant’s surviving spouse who is entitled to receive a
distribution from the Plan upon the Participant’s death, directs the Committee
to have the Trustee transfer all or a portion (not less than $500) of the amount
to be distributed directly to:

 

(A)                              an individual retirement account described in
section 408(a) of the Code,

 

(B)                                an individual retirement annuity described in
section 408(b) of the Code (other than an endowment contract),

 

(C)                                a qualified defined contribution retirement
plan described in section 401(a) of the Code the terms of which permit the
acceptance of rollover contributions, or

 

(D)                               an annuity plan described in section 403(a) of
the Code.

 

(E)                                 an annuity contract described in section
403(b) of the Code,

 

(F)                                 an eligible plan under section 457(b) of the
Code that is maintained by a state, a political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a state that
agrees to separately account for amounts transferred into such plan from this
Plan, or

 

55

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(G)                                a Roth IRA described in section 408(A) of the
Code, all or a portion (not less than $500) of the amount to be distributed
shall be so transferred.

 

(b)                                 A Participant’s non-spouse beneficiary who
is entitled to receive a distribution from the Plan upon the Participant’s death
may direct the Committee to have the Trustee transfer all or a portion (not less
than $500) of the amount to be distributed directly to an individual retirement
account described in section 408(a) of the Code or an individual retirement
annuity described in section 408(b) of the Code that is established on behalf of
the designated beneficiary and that will be treated as an inherited IRA pursuant
to section 402(c)(11) of the Code.

 

(c)                                  The Participant, spouse, former spouse or
beneficiary must specify the name of the plan to which the Participant, spouse,
former spouse or beneficiary wishes to have the amount transferred, on a form
and in a manner prescribed by the Committee, plus such other information as may
be requested by the Committee.

 

(d)                                 Subsections (a) and (b) shall not apply to
the following distributions:

 

(1)                                  any distribution which is one of a series
of substantially equal payments (not less frequently than annually) over either
(1) a period of 10 years or more, or (2) a period equal to the life or life
expectancy of the Participant or the joint lives or joint life expectancy of the
Participant and his beneficiary,

 

(2)                                  any distribution if the total distributions
paid or payable from the Plan to the same individual during the same calendar
year are reasonably expected by the Committee to be less than $200,

 

56

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(3)                                  that portion of any distribution after the
Participant’s Required Beginning Date that is required to be distributed to the
Participant by the minimum distribution rules of section 401(a)(9) of the Code,

 

(4)                                  such other distributions as may be exempted
by applicable statute or regulation from the requirements of section 401(a)(31)
of the Code.

 

(e)                                  In the event of a mandatory distribution
greater than $1,000 in accordance with the provisions of Section 7.8 of the
Plan, if the Participant does not elect to have such distribution paid directly
to an eligible retirement plan specified by the Participant in a direct rollover
in accordance with this Section7.9 or to receive the distribution directly, then
the distribution will be paid in a direct rollover to an individual retirement
plan designated by the Committee.

 

7.10                           Failure to Apply for Pension.  Benefit payments
shall commence when properly written application for same is received by the
Committee.  In the event that a Participant fails to apply to the Committee for
pension benefits by the earlier of (a) his Normal Retirement Date or the date on
which he has a Separation from Service, if later, or (b) the end of the calendar
year in which he attains Age 70½, the Committee shall make diligent efforts to
locate such Participant and obtain such application and, in the case of a
benefit described in Section 7.8, may file an application for him if it has
sufficient information to do so.  In the event the Participant fails to make
application by his Required Beginning Date, the Committee shall commence
distribution as of the Required Beginning Date without such application.  No
payments shall be made for the period in which benefits would have been payable
if the Participant had made timely application therefor; provided, however,
that, if the Participant’s Benefit Commencement Date (or, if the Participant has
died, his Spouse’s Benefit

 

57

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Commencement Date under Section 5.8 has been delayed until after the
Participant’s Normal Retirement Date solely by reason of failure to make
application, the benefit payable (1) to the Participant on and after his Benefit
Commencement Date, or (2) to the Participant’s Spouse pursuant to Section 5.8 on
and after the Spouse’s Benefit Commencement Date, shall be equal to the
Actuarial Equivalent of the benefit the Participant or Spouse would have
received had benefits commenced on the Participant’s Normal Retirement Date, as
determined to reflect the deferral of benefit commencement.

 

7.11                           Mailing Address.  Benefit payments and
notifications hereunder shall be deemed made when mailed to the last address
furnished to the Committee by the Participant or beneficiary to whom they are
due.

 

7.12                           No Reduction for Changes in Social Security. 
Notwithstanding any other provision of the Plan, an increase in the Social
Security taxable wage base or benefit level after a Participant’s Separation
from Service (or his Benefit Commencement Date, if earlier) shall not reduce the
amount of any benefit to which the Participant or his beneficiary was entitled
prior to such increase with respect to service prior to the Participant’s
Separation from Service (or his Benefit Commencement Date, if earlier). 
Furthermore, if the Participant returns to employment as a Covered Employee, the
amount of any benefit payable to such Participant at his subsequent retirement
(or his Required Beginning Date, if earlier) shall not be less than the benefit
that the Participant was receiving prior to his return to employment.

 

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ARTICLE VIII

THE FUND AND FUNDING

 

8.1                                 Designation of Trustee.  The Company, by
appropriate resolution of its Board of Directors, shall name and designate a
Trustee and shall enter into a Trust Agreement with such Trustee.  The Company
shall have the power, by appropriate resolution of its Board of Directors, to
amend the Trust Agreement, remove the Trustee, and designate a successor
Trustee, all as provided in the Trust Agreement.  All of the assets of the Plan
shall be held by the Trustee for use in accordance with the Plan.

 

8.2                                 Contributions to the Fund.  The benefits
provided under the Plan shall be financed exclusively by contributions made from
time to time to the Trustee by the Participating Companies, and by the Fund
created thereby.  Subject to the provisions of applicable law, the liability of
the Participating Companies under the Plan shall be limited to the contributions
determined by the Participating Companies from time to time in accordance with
the advice and counsel of the Actuary.  The funding policy applicable to the
Fund shall be established by the Committee and shall be reviewed from time to
time.  All contributions are conditioned on their deductibility for Federal
income tax purposes in the taxable year that includes the first day of the Plan
Year for which they are made.

 

8.3                                 Use of Contributions to the Fund.  The
contributions deposited under the terms of this Plan shall constitute the Fund
held for the benefit of Participants and their eligible survivors under and in
accordance with this Plan.  No part of the corpus or income of the Fund shall be
used for or diverted to purposes other than exclusively for the benefit of such
Participants and their eligible survivors, and for necessary administrative
costs; provided, however, that in the event of the termination of the Plan, and
after all fixed and contingent

 

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liabilities have been satisfied, and upon compliance with Sections 4041 and 4044
of ERISA, any remaining funds attributable to contributions by the Participating
Companies shall revert to those companies; and further provided that in the case
of a contribution (a) made by a Participating Company as a mistake of fact, or
(b) which is conditioned upon the initial qualification of the Plan under
section 401(a) of the Code, the Participating Company shall be entitled to a
refund of said contribution within one year after payment of a contribution made
as a mistake of fact, or within one year of the date on which the initial
qualification of the Plan is denied by the Internal Revenue Service, as the case
may be.

 

8.4                                 Trustee.  The Trustee shall be the named
fiduciary with respect to management and control of Plan assets held by it and
shall have exclusive and sole responsibility for the custody and investment
thereof in accordance with the Trust Agreement.

 

8.5                                 Forfeitures.  Forfeitures shall not be
applied to increase the benefits of any Participant, but shall reduce the
contributions of the Participating Companies hereunder.

 

8.6                                 Expenses of Administration.  All expenses of
administration of this Plan shall be paid from the Fund unless they are paid
directly by the Participating Companies.

 

8.7                                 Sole Source of Benefits.  The Fund shall be
the sole source for the provision of benefits under the Plan.  Neither the
Participating Companies nor any other person shall be liable therefor.

 

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ARTICLE IX

ADMINISTRATION

 

9.1                                 Committee.  If the Company designates one or
more individuals as the Committee, the powers and duties of the Committee under
the Plan shall be exercised by the Committee; otherwise all such powers and
duties shall be exercised by the Company.  The Committee shall be the named
fiduciary which shall control and manage the operation of the Plan and shall
administer the Plan.  The Committee members may, but need not, be Employees, and
they shall serve at the pleasure of the Company.  They shall be entitled to
reimbursement of expenses, but those members of the Committee who are also
Employees of a Participating Company shall receive no compensation for their
service on the Committee.  Any reimbursement of expenses of the Committee
members shall be paid directly by the Company.  The Committee shall be
responsible for the general administration of the Plan under the policy guidance
of the Company.

 

9.2                                 Duties and Powers of Committee.  In addition
to the duties and powers described elsewhere hereunder, the Committee shall have
the following specific duties and powers:

 

(a)                                  to retain such consultants, accountants,
attorneys, and Actuaries as may be deemed necessary or desirable to render
statements, reports, and advice with respect to the Plan and to assist the
Committee in complying with all applicable rules and regulations affecting the
Plan; any consultants, accountants, attorneys, and Actuaries may be the same as
those retained by the Company;

 

(b)                                 to decide appeals under this Article;

 

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(c)                                  to establish a funding policy consistent
with the objectives of the Plan;

 

(d)                                 to enact uniform and nondiscriminatory
rules and regulations to carry out the provisions of the Plan;

 

(e)                                  to resolve questions or disputes relating
to eligibility for benefits or the amount of benefits under the Plan;

 

(f)                                    to construe and interpret the provisions
of the Plan and supply any omissions in accordance with the intent of the Plan;

 

(g)                                 to decide all questions of eligibility for
benefits under the Plan, to determine the amount, manner and time of payment of
any benefits hereunder, and to authorize the payment of benefits;

 

(h)                                 to determine whether any domestic relations
order received by the Plan is a qualified domestic relations order as provided
in section 414(p) of the Code;

 

(i)                                     to evaluate administrative procedures;
and

 

(j)                                     to delegate such duties and powers as
the Committee shall determine from time to time to any person or persons,
including the Administrator.  To the extent of any such delegation, the delegate
shall have the duties, powers, authority and discretion of the Committee.

 

Any decisions and determinations made by the Committee pursuant to this
Article shall be conclusive and binding on all parties. The Committee shall have
sole discretion in carrying out its responsibilities.

 

The expenses incurred by the Committee in connection with the operation of the
Plan, including, but not limited to, the expenses incurred by reason of the
engagement of

 

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professional assistants and consultants, shall be expenses of the Plan and shall
be payable from the Fund at the direction of the Committee.  The Participating
Companies shall have the option, but not the obligation, to pay any such
expenses, in whole or in part, and, by so doing, to relieve the Fund from the
obligation of bearing such expenses.  Payment of any such expenses by a
Participating Company on one occasion shall not bind that company to pay any
similar expenses on any subsequent occasion.

 

9.3                                 Functioning of Committee.  The Committee and
those persons or entities to whom the Committee has delegated responsibilities
shall keep accurate records and minutes of meetings, interpretations, and
decisions.  The Committee shall act by majority vote of the members, and such
action shall be evidenced by a written document.

 

9.4                                 Disputes.

 

(a)                                  In the event that the Committee denies, in
whole or in part, a claim for benefits by a Participant or his beneficiary, the
Committee shall furnish notice of the denial to the claimant, setting forth:

 

(1)                                  the specific reasons for the denial,

 

(2)                                  reference to the specific Plan provisions
on which the denial is based,

 

(3)                                  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

 

(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.

 

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Such notice shall be forwarded to the claimant within 90 days of the Committee’s
receipt of the claim; provided, however, that in special circumstances the
Committee may extend the response period for up to an additional 90 days, in
which event it shall notify the claimant in writing of the extension, and shall
specify the reason or reasons for the extension.

 

(b)                                 Within 60 days of receipt of a notice of
claim denial, a claimant or his duly authorized representative may petition the
Committee in writing for a full and fair review of the denial.  The claimant or
his duly authorized representative shall be provided, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits and shall have the
opportunity to submit written comments, documents, records, and other
information relating to the claim for benefits to the Committee.  The Committee
shall review the denial and shall communicate its decision and the reasons
therefore to the claimant in writing within 60 days of receipt of the petition,
after taking into account all comments, documents, records, and other pertinent
information submitted by the claimant relating to the claim, without regard to
whether such information was submitted or considered on the initial
determination; provided, however, that in special circumstances the Committee
may extend the response period for up to an additional 60 days, in which event
it shall notify the claimant in writing prior to the commencement of the
extension.  The appeals procedure set forth in this Subsection (b) shall be the
exclusive means for contesting a decision denying benefits under the Plan.

 

(c)                                  It is intended that the claims procedure of
this Plan be administered in accordance with the claims procedure regulations of
the Department of Labor as set forth in 29 C.F.R. § 2560.503-1, or any successor
thereto, and shall be deemed modified to the extent necessary to comply
therewith.

 

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9.5                                 Indemnification.  The Administrator, each
member of the Committee, and any other person who is an Employee or director of
a Participating Company or an Affiliated Company shall be indemnified and held
harmless by the Company against and with respect to all damages, losses,
obligations, liabilities, liens, deficiencies, costs and expenses, including
without limitation, reasonable attorney’s fees and other costs incident to any
suit, action, investigation, claim or proceedings to which he may be a party by
reason of his performance of administrative functions and duties under the
Plan.  The foregoing right to indemnification shall be in addition to such other
rights as the Administrator, Committee member, or other person may enjoy as a
matter of law or by reason of insurance coverage of any kind.  Rights granted
hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Administrator, Committee member, or other person
may be entitled pursuant to the by-laws of the Participating Company.

 

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ARTICLE X

AMENDMENT AND TERMINATION

 

10.1                           Power of Amendment and Termination.

 

(a)                                  It is the intention of each Participating
Company that this Plan will be permanent.  However, subject to any applicable
collective bargaining agreement, each Participating Company reserves the right
to terminate its participation in this Plan at any time by or pursuant to action
of its board of directors or other governing body.  Furthermore, the Company
reserves the power to amend or terminate the Plan at any time by or pursuant to
action of the Board of Directors.

 

(b)                                 Each amendment to the Plan shall be binding
on each Participating Company if such Participating Company, by or pursuant to
action of its board of directors, (1) consents to such amendment at any time, or
(2) fails to object thereto within thirty days after receiving notice thereof.

 

(c)                                  Any amendment or termination of the Plan
shall become effective as of the date designated by the Board of Directors. 
Except as expressly provided elsewhere in the Plan, prior to the satisfaction of
all liabilities with respect to the benefits provided under this Plan, no
amendment or termination shall cause any part of the monies contributed
hereunder to revert to the Participating Companies or to be diverted to any
purpose other than for the exclusive benefit of Participants and their
beneficiaries.

 

10.2                           Disposition on Termination.

 

(a)                                  Upon the termination or partial termination
of the Plan, each Active Participant with respect to whom the Plan is
terminating (including each former Active Participant who has not received a
distribution under Section 7.8 and has fewer than five

 

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consecutive Breaks in Service) who would not have a nonforfeitable right to one
hundred percent (100%) of his Accrued Benefit if his employment terminated on
the date of the termination or partial termination of the Plan shall become
fully vested and shall have a nonforfeitable right to his Accrued Benefit. 
However, in the event of such a termination, each Participant and beneficiary
shall have recourse toward satisfaction of his nonforfeitable right to a pension
only from Plan assets or from the Pension Benefit Guaranty Corporation, to the
extent that it guarantees benefits.

 

(b)                                 The amount of the Fund shall be determined
and, after providing for expenses incident to termination and liquidation, the
remaining assets thereof shall be allocated for the purpose of paying benefits
proportionately among each of the priority groups described below in the
following order of precedence:

 

(1)                                  to provide benefits to retired Participants
and beneficiaries who began receiving benefits at least three years before the
Plan’s termination (including those benefits which would have been received for
at least three years if the Participant had retired that long ago), based on
Plan provisions in effect five years prior to termination during which period
such benefit would be the least, provided that the lowest benefit in pay status
during a three-year period shall be considered the benefit in pay status for
such period;

 

(2)                                  to provide all other Accrued Benefits
guaranteed by Federal law (or which would be so guaranteed but for section
4022(b)(5) or 4022B of ERISA);

 

(3)                                  to provide all other vested Accrued
Benefits (determined before application of Subsection (a) of this Section);

 

(4)                                  to provide all remaining non-vested Accrued
Benefits.

 

67

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(c)                                  If the assets available for allocation
under any priority group (other than as provided in priority groups (3) and
(4) are insufficient to satisfy in full the Accrued Benefits of all Participants
and beneficiaries, the assets shall be allocated pro rata among such
Participants and beneficiaries on the basis of the Actuarial Equivalent
single-sum value of their respective benefits (as of the termination date).  The
foregoing payments, and payments in the event that assets are insufficient to
pay the Accrued Benefits provided in priority groups (3) and (4), will be paid
in accordance with regulations prescribed by the Pension Benefit Guaranty
Corporation.  The allocation of assets upon termination of the Plan will be
carried out in such a manner as to preserve the qualification of the Plan under
section 401(a) of the Code.

 

In the event that all Accrued Benefits described above have been fully funded,
any remaining funds shall revert to the Participating Companies in such
proportion as the Company shall determine.

 

10.3                           Limitation on Benefits.

 

(a)                                  In the event of Plan termination, the
benefit payable to any highly compensated employee or any highly compensated
former employee (as defined in section 414(q) of the Code and regulations
thereunder) shall be limited to a benefit that is nondiscriminatory under
section 401(a)(4) of the Code.  If payment of benefits is restricted in
accordance with this Subsection (a), assets in excess of the amount required to
provide such restricted benefits shall become a part of the assets available
under Section 10.2 for allocation among Participants and their joint annuitants
and beneficiaries whose benefits are not restricted under this Subsection (a).

 

(b)                                 The restrictions of this Subsection
(b) shall apply prior to termination of the Plan to any Participant who is a
highly compensated employee or a highly

 

68

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compensated former employee and who is one of the 25 highest paid employees or
former employees of a Participating Company for any Plan Year.  The annual
payments to any such Participant shall be limited to an amount equal to the
payments that would have been made to the Participant under a single life
annuity that is the Actuarial Equivalent of the sum of the Participant’s Accrued
Benefit and any other benefits under the Plan.

 

(c)                                  The restrictions in Subsection (b) shall
not apply:

 

(1)                                  if, after the payment of benefits to such
Participant, the value of the Plan assets equals or exceeds 110 percent of the
value of the current liabilities (within the meaning of section 412(l)(7) of the
Code); or

 

(2)                                  if the value of the benefit is less than
one percent (1%) of the value of current liabilities.

 

10.4                           Merger, Consolidation, or Transfer.  In case of
any merger or consolidation with, or transfer of assets or liabilities to, any
other plan, as provided in the Code, the benefit of any Participant or
beneficiary immediately after such merger, consolidation, or transfer (if the
Plan had then terminated) shall be at least equal to the benefit such
Participant or beneficiary would have received immediately before such merger,
consolidation, or transfer (if the Plan had then terminated).

 

69

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ARTICLE XI

TOP-HEAVY PROVISIONS

 

11.1                           General.  The following provisions shall apply
automatically to the Plan and shall supersede any contrary provisions for each
Plan Year in which the Plan is a Top-Heavy Plan (as defined below).  It is
intended that this Article shall be construed in accordance with the provisions
of section 416 of the Code.

 

11.2                           Definitions.  The following definitions shall
supplement those set forth in Article I of the Plan:

 

(a)                                  “Aggregation Group” means, for any Plan
Year,

 

(1)                                  each qualified retirement plan of a
Participating Company or an Affiliated Company in which a Key Employee is a
participant,

 

(2)                                  each other qualified retirement plan of a
Participating Company or an Affiliated Company which enables any plan in which a
Key Employee participates to meet the requirements of sections 401(a)(4) or 410
of the Code, and

 

(3)                                  any or all other qualified retirement plans
of a Participating Company or an Affiliated Company if (A) the plans in the
Aggregation Group would be Top-Heavy Plans if each such plan were not included
in the Aggregation Group but are not Top-Heavy Plans when such plan is included
in the Aggregation Group, and (B) the Aggregation Group, including such plan,
meets the requirements of sections 401(a)(4) and 410 of the Code.

 

(b)                                 “Determination Date” means, for any Plan
Year, the last day of the preceding Plan Year.

 

(c)                                  “Key Employee” means, with respect to any
Plan Year:

 

70

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(1)                                  any Employee or former Employee (including
any deceased Employee) who at any time during the Plan Year that includes the
Determination Date was:

 

(A)                              an officer of a Participating Company having
Compensation greater than $160,000 (as adjusted under section 416(i)(1)of the
Code) for the calendar year in which such Plan Year ends; provided, that no more
than 50 Employees (or, if less, the greater of three Employees or ten percent
(10%) of the greatest number of Employees, including leased employees within the
meaning of section 414(n) or 414(o) of the Code, employed by all Participating
Companies and all Affiliated Companies during the Plan Year, but excluding
Employees described in section 414(q)(8) of the Code) shall be treated as
officers; or

 

(B)                                a five-percent (5%) owner of a Participating
Company; or

 

(C)                                a one-percent (1%) owner of a Participating
Company having Compensation for a Plan Year during such period in excess of
$150,000; or

 

(2)                                  a beneficiary of an individual described in
Paragraph (1) of this Subsection.

 

Determinations under this Subsection shall be made in accordance with section
416(i) of the Code and the applicable regulations and other guidance issued
thereunder.

 

(d)                                 “Key Employee Ratio” means, for any
Determination Date, the ratio of the amount described in Paragraph (1) of this
Subsection to the amount described in Paragraph (2) of this Subsection, after
deducting from each such amount any portion thereof described in Paragraph
(3) of this Subsection, where:

 

71

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(1)                                  the amount described in this Paragraph is
the sum of (A) the present value of all accrued benefits of Key Employees under
all qualified defined benefit plans included in the Aggregation Group, (B) the
balances in all of the accounts of Key Employees under all qualified defined
contribution plans included in the Aggregation Group, and (C) the amounts
distributed from all plans in such Aggregation Group to or on behalf of any Key
Employee during the one-year period ending on the Determination Date;

 

(2)                                  the amount described in this Paragraph is
the sum of (A) the present value of all accrued benefits of all participants
under all qualified defined benefit plans included in the Aggregation Group,
(B) the balances in all of the accounts of all participants under all qualified
defined contribution plans included in the Aggregation Group, and (C) the
amounts distributed from all plans in such Aggregation Group to or on behalf of
any participant during the one-year period ending on the Determination Date; and

 

(3)                                  the amount described in this Paragraph is
the sum of (A) all rollover contributions (or fund to fund transfers) to the
Plan by an Employee after December 31, 1983 from a plan sponsored by an employer
which is not a Participating Company or an Affiliated Company; (B) any amount
that is included in Paragraphs (1) and (2) of this Subsection for a person who
is a Non-Key Employee as to the Plan Year of reference but who was a Key
Employee as to any earlier Plan Year; and (C) for Plan Years beginning after
December 31, 1984, any amount that is included in Paragraphs (1) and (2) of this
Subsection for a person who has not performed any services for any Participating
Company during the five-year period ending on the Determination Date.

 

Clauses (d)(1)(C) and (d)(2)(C) also apply to distributions under a terminated
plan which, had it not been terminated, would have been included in the
Aggregation Group.  In the case of a

 

72

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

 

distribution made for a reason other than severance from employment, death or
disability, the term “one-year period” shall be substituted with the term
“five-year period.”

 

The present value of accrued benefits under any defined benefit plan shall be
determined on the basis of the assumptions described in the definition of
Actuarial Equivalent and, effective January 1, 1987, under the method used for
accrual purposes for all plans maintained by all Participating Companies and
Affiliated Companies if a single method is used by all such plans, or,
otherwise, the slowest accrual method permitted under section 411(b)(1)(C) of
the Code.

 

(e)                                  “Non-Key Employee” means, for any Plan
Year, (1) an Employee or former Employee who is not a Key Employee with respect
to such Plan Year; and (2) a beneficiary of an individual described in Paragraph
(1) of this Subsection.

 

(f)                                    “Top-Heavy Compensation” means, for any
Participant for any Plan Year, the average of his annual Compensation over the
period of five consecutive Plan Years (or, if shorter, the longest period of
consecutive Plan Years during which the Participant was in the employ of any
Participating Company) yielding the highest average, disregarding
(1) Compensation for Plan Years ending prior to January 1, 1984 and
(2) Compensation for Plan Years after the close of the last Plan Year in which
the Plan was a Top-Heavy Plan.

 

(g)                                 “Top-Heavy Plan” means, for any Plan Year,
each plan in the Aggregation Group for such Plan Year if, as of the applicable
Determination Date, the Key Employee Ratio exceeds sixty percent (60%).

 

(h)                                 “Year of Top-Heavy Service” means, for any
Participant, a Plan Year in which he completes 1,000 or more Hours of Service,
excluding (1) Plan Years commencing prior to January 1, 1984, (2) Plan Years in
which the Plan is not a Top-Heavy Plan, and (3) Plan Years in which the Plan
benefits no Key Employee or former Key Employee.

 

73

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11.3                           Minimum Benefit for Non-Key Employees.

 

(a)                                  If the Plan is a Top-Heavy Plan in any Plan
Year, each Participant who is a Non-Key Employee in such Plan Year (other than a
Participant who was a Key Employee as to any earlier Plan Year) shall have a
minimum Accrued Benefit.  Such Accrued Benefit shall be the lesser of:

 

(1)                                  two percent (2%) of the Participant’s
Top-Heavy Compensation multiplied by the Participant’s Years of Top-Heavy
Service, or

 

(2)                                  twenty percent (20%) of the Participant’s
Top-Heavy Compensation.

 

(b)                                 If a Non-Key Employee described in
Subsection (a) of this Section participates in both a defined benefit plan and a
defined contribution plan described in Paragraphs (a)(1) and (2) of this
Section, he shall have the minimum Accrued Benefit described in this Section. 
In making the offset calculation for a given Plan Year, the employer-derived
interest of the Employee in the defined contribution plan shall be valued as of
the last valuation date preceding such Plan Year.  This defined contribution
plan interest shall be converted into a defined benefit by use of the
assumptions set forth in the Plan’s definition of “Actuarial Equivalent.”

 

11.4                           Vesting.

 

(a)                                  Change in Schedule.  The vested interest in
his Accrued Benefit of each Participant with one or more Hours of Service in a
Plan Year in which the Plan is a Top-Heavy Plan shall be determined in
accordance with the following schedule unless Section 6.1 provides more rapid
vesting for such Participant:

 

74

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Years of
Vesting Service

 

Percentage Vested

 

 

 

 

less than two years

 

0 percent

 

two years

 

20 percent

 

three years

 

40 percent

 

four years

 

60 percent

 

five years

 

80 percent

 

six years

 

100 percent

 

 

(b)           Shift Out of Top-Heavy Status.  If a Top-Heavy Plan ceases to be a
Top-Heavy Plan, the vesting schedule set forth in Section 6.1 shall again apply
to all Years of  Service.  However, a Participant described in Subsection (a) of
this Section shall maintain the same vested interest in his Accrued Benefit
determined under the schedule in Subsection (a) as of the date on which the Plan
ceases to be a Top-Heavy Plan until the Participant’s vested percentage under
the schedule in Section 6.1 exceeds the percentage maintained under the schedule
in Subsection (a).

 

(c)           Special Continuation of Vesting Schedule.  Each Participant
described in Subsection (a) of this Section with at least three Years of Vesting
Service at the time that the Plan ceases to be a Top-Heavy Plan shall continue
to have his vested percentage computed under the Plan in accordance with the
vesting schedule set forth in Subsection (a).

 

11.5         Adjustment to Maximum Benefit Limitation.

 

(a)           For each Plan Year in which the Plan is (1) a Super Top-Heavy Plan
or (2) a Top-Heavy Plan and the Board of Directors does not make the election to
amend the Plan to provide the minimum benefit described in Subsection (c), the
1.25 factor in the defined benefit and defined contribution fractions described
in Article V shall be reduced to 1.0.  The adjustment described in this
Subsection shall not apply to a Participant during any period in which the
Participant earns no additional accrued benefit under any defined benefit plan
and has

 

75

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

 

no employer contributions, forfeitures, or voluntary nondeductible contributions
allocated to his accounts under any defined contribution plan.

 

(b)           In the case of any Top-Heavy Plan to which Subsection
5.10(d) applies, “$41,500” shall be substituted for “$51,875” in the calculation
of the numerator of the transition fraction therein.

 

(c)           If, in any Plan Year in which the Plan is a Top-Heavy Plan but not
a Super Top-Heavy Plan, the Aggregation Group also includes a defined
contribution plan, the Board of Directors may elect to use a factor of 1.25 in
computing the denominator of the defined benefit and defined contribution
fractions described in Article V.  In the event of such election, the minimum
benefit described in Subsection 11.3(a) for each Non-Key Employee who is not
covered under a defined contribution plan providing the minimum benefit
described in the following sentence shall be increased as follows:

 

(1)           “three percent (3%)” shall be substituted for “two percent (2%)”
in Section 11.3(a)(1), and

 

(2)           Subsection 11.3(a)(2) shall be deemed to read, “the Participant’s
Top-Heavy Compensation multiplied by the sum of (A) twenty percent (20%) and
(B) one percent (1%) for each Year of Top-Heavy Service, up to a maximum of 10
such Years of Top-Heavy Service.”

 

The minimum benefit in the preceding sentence shall not apply to any Non-Key
Employee who is covered under a defined contribution plan (as described in
Subsection 11.3(b)) providing a minimum contribution for such Non-Key Employee
of seven and one-half percent (7½%) of the Non-Key Employee’s annual
compensation.

 

76

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11.6         Suspension of Benefits.  Notwithstanding the other provisions of
the Plan, the payment of a Participant’s benefits shall not be suspended during
the Participant’s reemployment during any period in which the Plan is a
Top-Heavy Plan.

 

77

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ARTICLE XII

 

TREATMENT OF RETURNING VETERANS

 

12.1         Applicability and Effective Date.  The rights of any Returning
Veteran who resumes employment with a Participating Company on or after
December 12, 1994 shall be modified as set forth in this Article.

 

12.2         Eligibility to Participate.  For purposes of Section 2.2:

 

(a)           A Returning Veteran who was an Active Participant immediately
prior to his Qualified Military Service shall be deemed to have remained an
Active Participant throughout his Qualified Military Service.

 

(b)           A Returning Veteran who would have become an Active Participant
during the period of his Qualified Military Service, but for the resulting
absence from employment, shall be deemed to have become an Active Participant as
of the date he would have become an Active Participant if he had not entered
into Qualified Military Service.

 

12.3         Service.  A Returning Veteran shall receive Vesting Service and
Credited Service during his period of Qualified Military Service (provided that
such service shall not duplicate Vesting and/or Credited Service with which he
may be credited under the other provisions of the Plan).

 

12.4         Determination of Compensation.  For purposes of determining the
amount of a Participant’s Accrued Benefit, and for applying the limits of
Section 5.10, a Participant’s Compensation during any period of Qualified
Military Service shall be deemed to equal either:

 

(a)           the Compensation he would have received but for such Qualified
Military Service, based on the rate of pay he would have received from a
Participating Company; or

 

78

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(b)           if the amount described in (a) above is not reasonably certain,
his average Compensation from a Participating Company during the 12-month period
immediately preceding the Qualified Military Service (or, if shorter, the period
of employment immediately preceding the Qualified Military Service).  Such
amount shall be adjusted as necessary to reflect the length of the Participant’s
Qualified Military Service.

 

12.5         Administrative Rules and Procedures.  The Committee shall establish
such rules and procedures as it deems necessary or desirable to implement the
provisions of this Article, provided that they are not in violation of the
Uniformed Services Employment and Reemployment Rights Act of 1994, any
regulations thereunder, or any other applicable law.

 

79

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

 

ARTICLE XIII

 

GENERAL PROVISIONS

 

13.1         No Employment Rights.  Neither the action of the Company in
establishing the Plan, nor of any Participating Company in adopting the Plan,
nor any provisions of the Plan, nor any action taken by the Company, any
Participating Company or the Committee shall be construed as giving to any
Employee the right to be retained in the employ of the Company or any
Participating Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.

 

13.2         Governing Law.  Except to the extent superseded by ERISA, all
questions pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the state in which the
principal place of business of the Company is located.

 

13.3         Severability of Provisions.  If any provision of this Plan is
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.

 

13.4         No Interest in Fund.  No person shall have any interest in, or
right to, any part of the principal or income of the Fund, except as and to the
extent expressly provided in this Plan and in the Trust Agreement.

 

13.5         Spendthrift Clause.  No benefit payable at any time under this Plan
and no interest or expectancy herein shall be anticipated, assigned, or
alienated by any Participant or beneficiary, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process, except for
(1) a Federal tax levy made pursuant to section 6331 of the Code, (2) any

 

80

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

 

benefit payable pursuant to a domestic relations order which is determined to be
a qualified domestic relations order as defined in the Code, or (3) an offset of
a Participant’s benefits for certain judgments or settlements described in
section 401(a)(13)(C) of the Code.  Any attempt to alienate or assign a benefit
hereunder, whether currently or hereafter payable, shall be void.

 

13.6         Incapacity.  If the Committee deems any Participant or beneficiary
who is entitled to receive payments hereunder incapable of receiving or
disbursing the same by reason of Age, illness, infirmity, or incapacity of any
kind, the Committee may direct the Trustee to apply such payments directly for
the comfort, support, and maintenance of such Participant or beneficiary, or to
pay the same to any responsible person caring for the Participant or beneficiary
who is determined by the Committee to be qualified to receive and disburse such
payments for the Participant’s or beneficiary’s benefit; and the receipt of such
person shall be a complete acquittance for the payment of the benefit.  Payments
pursuant to this Section shall be complete discharge to the extent thereof of
any and all liability of the Participating Companies, the Committee, the
Administrator, the Trustee, and the Fund.

 

13.7         Withholding.  The Committee and the Trustee shall have the right to
withhold any and all state, local, and Federal taxes which may be withheld in
accordance with applicable law.

 

13.8         Missing Participants.  In the event that all, or any portion, of
the distribution payable to a Participant or his beneficiary hereunder shall, at
the expiration of five (5) years after it shall become payable, remain unpaid
solely by reason of the inability of the Committee, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or his
beneficiary, the amount so distributable shall be forfeited and shall be used to
reduce the cost of

 

81

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the Plan.  In the event a Participant or beneficiary is located after his
benefit has been forfeited, such benefit shall be restored.

 

Executed this 9th day of November, 2010.

 

 

SM ENERGY COMPANY

 

 

 

By:

/s/ JOHN R. MONARK

 

Title: Vice President - Human Resources

 

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SCHEDULE A

 

MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLES

 

TABLE I

 

Excess of Age of employee
over Age of beneficiary

 

Applicable
percentage

 

 

 

 

 

10 years or less

 

100

%

11

 

96

%

12

 

93

%

13

 

90

%

14

 

87

%

15

 

84

%

16

 

82

%

17

 

79

%

18

 

77

%

19

 

75

%

20

 

73

%

21

 

72

%

22

 

70

%

23

 

68

%

23

 

67

%

25

 

66

%

26

 

64

%

27

 

63

%

28

 

62

%

29

 

61

%

30

 

60

%

31

 

59

%

32

 

59

%

33

 

58

%

34

 

57

%

35

 

56

%

36

 

56

%

37

 

55

%

38

 

55

%

39

 

54

%

40

 

54

%

41

 

53

%

42

 

53

%

43

 

53

%

44 and greater

 

52

%

 

Sch. A-1

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

 

TABLE II

 

Age of Participant in
calendar year preceding
Required Beginning Date

 

Maximum Guaranteed
Payments Remaining

 

 

 

70

 

26.2

71

 

25.3

73

 

24.4

74

 

23.5

75

 

22.7

76

 

21.8

77

 

20.9

78

 

20.1

79

 

19.2

80

 

18.4

81

 

17.6

82

 

16.8

83

 

16.0

84

 

15.3

85

 

14.5

86

 

13.8

87

 

13.1

88

 

12.4

89

 

11.8

90

 

11.1

91

 

10.5

92

 

9.9

93

 

9.4

94

 

8.8

95

 

7.8

96

 

7.3

97

 

6.9

98

 

6.5

99

 

6.1

100

 

5.7

101

 

5.3

102

 

5.0

103

 

4.7

104

 

4.4

105

 

4.1

106

 

3.8

107

 

3.6

108

 

3.4

109

 

3.2

 

Sch. A-2

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

 

110

 

2.8

111

 

2.6

112

 

2.4

113

 

2.0

114

 

2.0

115 and older

 

1.8

 

Sch. A-3

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

 

Appendix I
Schedule of Minimum Distribution Requirements

 

Section 1.               General Rules.

 

1.1           Effective Date.  The provisions of this Schedule will apply for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.

 

1.2           Precedence.  The requirements of this Schedule will take
precedence over any inconsistent provisions of the Plan.

 

1.3           Requirements of Treasury Regulations Incorporated.  All
distributions required under this Schedule will be determined and made in
accordance with the Treasury regulations under section 401(a)(9) of the Code.

 

1.4           TEFRA Section 242(b)(2) Elections.  Notwithstanding the other
provisions of this Schedule, other than Section 1.3, distributions may be made
under a designation made before January 1, 1984, in accordance with section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the Plan that relate to section 242(b)(2) of TEFRA.

 

Section 2.               Time and Manner of Distribution.

 

2.1           Required Beginning Date.  The Participant’s entire interest will
be distributed, or begin to be distributed, to the Participant no later than the
Participant’s required beginning date.

 

2.2           Death of Participant Before Distributions Begin.  If the
Participant dies before distributions begin, the Participant’s entire interest
will be distributed, or begin to be distributed, no later than as follows:

 

(a)           If the Participant’s surviving spouse is the Participant’s sole
designated beneficiary, then distributions to the surviving spouse will begin by
December 31 of the calendar year immediately following the calendar year in
which the Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70 1/2, if later.

 

(b)           If the Participant’s surviving spouse is not the Participant’s
sole designated beneficiary, then distributions to the designated beneficiary
will begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died.

 

(c)           If there is no designated beneficiary as of September 30 of the
year following the year of the Participant’s death, the Participant’s entire
interest will be distributed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death.

 

(d)           If the Participant’s surviving spouse is the Participant’s sole
designated beneficiary and the surviving spouse dies after the Participant but
before distributions to the

 

1

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surviving spouse begin, this Section 2.2, other than Section 2.2(a), will apply
as if the surviving spouse were the Participant.

 

For purposes of this Section 2.2 and Section 5, distributions are considered to
begin on the Participant’s required beginning date (or, if
Section 2.2(d) applies, the date distributions are required to begin to the
surviving spouse under Section 2.2(a)).  If annuity payments irrevocably
commence to the Participant before the Participant’s required beginning date (or
to the Participant’s surviving spouse before the date distributions are required
to begin to the surviving spouse under Section 2.2(a)), the date distributions
are considered to begin is the date distributions actually commence.

 

2.3           Form of Distribution.  Unless the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the required beginning date, as of the first
distribution calendar year distributions will be made in accordance with
Sections 3, 4 and 5 of this Appendix II.  If the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of
section 401(a)(9) of the Code and the Treasury regulations.  Any part of the
Participant’s interest which is in the form of an individual account described
in section 414(k) of the Code will be distributed in a manner satisfying the
requirements of section 401(a)(9) of the Code and the Treasury regulations that
apply to individual accounts.

 

Section 3.               Determination of Amount to be Distributed Each Year.

 

3.1           General Annuity Requirements.  If the Participant’s interest is
paid in the form of annuity distributions under the Plan, payments under the
annuity will satisfy the following requirements:

 

(a)           the annuity distributions will be paid in periodic payments made
at intervals not longer than one year;

 

(b)           the distribution period will be over a life (or lives) or over a
period certain not longer than the period described in Section 4 or 5;

 

(c)           once payments have begun over a period certain, the period certain
will not be changed even if the period certain is shorter than the maximum
permitted;

 

(d)           payments will either be nonincreasing or increase only as follows:

 

(1)           by an annual percentage increase that does not exceed the annual
percentage increase in a cost-of-living index that is based on prices of all
items and issued by the Bureau of Labor Statistics;

 

(2)           to the extent of the reduction in the amount of the Participant’s
payments to provide for a survivor benefit upon death, but only if the
beneficiary whose life was being used to determine the distribution period
described in Section 4 dies or is no longer the Participant’s beneficiary
pursuant to a qualified domestic relations order within the meaning of section
414(p);

 

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(3)           to provide cash refunds of employee contributions upon the
Participant’s death; or

 

(4)           to pay increased benefits that result from a Plan amendment.

 

3.2           Amount Required to be Distributed by Required Beginning Date.  The
amount that must be distributed on or before the Participant’s required
beginning date (or, if the Participant dies before distributions begin, the date
distributions are required to begin under Section 2.2(a) or (b)) is the payment
that is required for one payment interval.  The second payment need not be made
until the end of the next payment interval even if that payment interval ends in
the next calendar year.  Payment intervals are the periods for which payments
are received, e.g., bi-monthly, monthly, semi-annually, or annually.  All of the
Participant’s benefit accruals as of the last day of the first distribution
calendar year will be included in the calculation of the amount of the annuity
payments for payment intervals ending on or after the Participant’s required
beginning date.

 

3.3           Additional Accruals After First Distribution Calendar Year.  Any
additional benefits accruing to the Participant in a calendar year after the
first distribution calendar year will be distributed beginning with the first
payment interval ending in the calendar year immediately following the calendar
year in which such amount accrues.

 

Section 4.               Requirements For Annuity Distributions That Commence
During Participant’s Lifetime.

 

4.1           Joint Life Annuities Where the Beneficiary Is Not the
Participant’s Spouse.  If the Participant’s interest is being distributed in the
form of a joint and survivor annuity for the joint lives of the Participant and
a nonspouse beneficiary, annuity payments to be made on or after the
Participant’s required beginning date to the designated beneficiary after the
Participant’s death must not at any time exceed the applicable percentage of the
annuity payment for such period that would have been payable to the Participant
using the table set forth in Q&A-2 of section 1.401(a)(9)-6T of the Treasury
regulations.  If the form of distribution combines a joint and survivor annuity
for the joint lives of the Participant and a nonspouse beneficiary and a period
certain annuity, the requirement in the preceding sentence will apply to annuity
payments to be made to the designated beneficiary after the expiration of the
period certain.

 

4.2           Period Certain Annuities.  Unless the Participant’s spouse is the
sole designated beneficiary and the form of distribution is a period certain and
no life annuity, the period certain for an annuity distribution commencing
during the Participant’s lifetime may not exceed the applicable distribution
period for the Participant under the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains
the annuity starting date.  If the annuity starting date precedes the year in
which the Participant reaches age 70, the applicable distribution period for the
Participant is the distribution period for age 70 under the Uniform Lifetime
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the
excess of 70 over the age of the Participant as of the Participant’s birthday in
the year that contains the annuity starting date.  If the Participant’s spouse
is the Participant’s sole designated beneficiary and the form of distribution is
a period certain and no life annuity, the period certain may not exceed the
longer of the Participant’s applicable distribution period, as

 

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determined under this Section 4.2, or the joint life and last survivor
expectancy of the Participant and the Participant’s spouse as determined under
the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the
Treasury regulations, using the Participant’s and spouse’s attained ages as of
the Participant’s and spouse’s birthdays in the calendar year that contains the
annuity starting date.

 

Section 5.               Requirements For Minimum Distributions Where
Participant Dies Before Date Distributions Begin.

 

5.1           Participant Survived by Designated Beneficiary.  If the
Participant dies before the date distribution of his or her interest begins and
there is a designated beneficiary, the Participant’s entire interest will be
distributed, beginning no later than the time described in Section 2.2(a) or
(b), over the life of the designated beneficiary or over a period certain not
exceeding:

 

(a)           unless the annuity starting date is before the first distribution
calendar year, the life expectancy of the designated beneficiary determined
using the beneficiary’s age as of the beneficiary’s birthday in the calendar
year immediately following the calendar year of the Participant’s death; or

 

(b)           if the annuity starting date is before the first distribution
calendar year, the life expectancy of the designated beneficiary determined
using the beneficiary’s age as of the beneficiary’s birthday in the calendar
year that contains the annuity starting date.

 

5.2           No Designated Beneficiary.  If the Participant dies before the
date distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the Participant’s death,
distribution of the Participant’s entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.

 

5.3           Death of Surviving Spouse Before Distributions to Surviving Spouse
Begin.  If the Participant dies before the date distribution of his or her
interest begins, the Participant’s surviving spouse is the Participant’s sole
designated beneficiary, and the surviving spouse dies before distributions to
the surviving spouse begin, this Section 5 will apply as if the surviving spouse
were the Participant, except that the time by which distributions must begin
will be determined without regard to Section 2.2(a).

 

Section 6.               Definitions.

 

6.1           Designated beneficiary.  The individual who is designated as the
beneficiary under the Plan and is the designated beneficiary under section
401(a)(9) of the Code and section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.

 

6.2           Distribution calendar year.  A calendar year for which a minimum
distribution is required.  For distributions beginning before the Participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant’s required beginning
date.  For distributions beginning after the Participant’s death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to Section 2.2.

 

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6.3           Life expectancy.  Life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury regulations.

 

6.4           Required beginning date.  The date specified in the definition of
“Required Beginning Date” set forth in Article I of the Plan.

 

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