Exhibit 10.02

 

On Assignment, Inc.

Deferred Compensation Plan – Effective January 1, 2008

Master Plan Document

 

Effective January 1, 2008

 

For Amounts Deferred On and After January 1, 2005

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1

Definitions

1

 

 

 

ARTICLE 2

Selection, Enrollment, Eligibility

8

 

 

 

2.1

Selection by Committee

8

2.2

Enrollment and Eligibility Requirements; Commencement of Participation

8

 

 

 

ARTICLE 3

Deferral Commitments/Company Contribution Amounts/Company Restoration Matching
Amounts /Vesting/Crediting/Taxes

9

 

 

 

3.1

Maximum Deferral

9

3.2

Timing of Deferral Elections; Effect of Election Form

9

3.3

Withholding and Crediting of Annual Deferral Amounts

11

3.4

Company Contribution Amount

11

3.5

Company Restoration Matching Amount

12

3.6

Vesting

12

3.7

Crediting/Debiting of Account Balances

13

3.8

FICA and Other Taxes

14

 

 

 

ARTICLE 4

Scheduled Distributions

15

 

 

 

4.1

Scheduled Distributions

15

4.2

Postponing Scheduled Distributions

15

4.3

Other Benefits Take Precedence Over Scheduled Distributions

16

4.4

Unforeseeable Emergencies

16

 

 

 

ARTICLE 6

Retirement Benefit

17

 

 

 

5.1

Retirement Benefit

17

5.2

Payment of Retirement Benefit

17

 

 

 

ARTICLE 8

Disability Benefit

18

 

 

 

6.1

Disability Benefit

18

6.2

Payment of Disability Benefit

18

 

 

 

ARTICLE 9

Death Benefit

18

 

 

 

7.1

Death Benefit

18

7.2

Payment of Death Benefit

18

 

 

 

ARTICLE 10

Beneficiary Designation

18

 

 

 

8.1

Beneficiary

18

 

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8.2

Beneficiary Designation; Change; Spousal Consent

19

8.3

Acknowledgement

19

8.4

No Beneficiary Designation

19

8.5

Doubt as to Beneficiary

19

8.6

Discharge of Obligations

19

 

 

 

ARTICLE 11

Leave of Absence

19

 

 

 

9.1

Paid Leave of Absence

19

9.2

Unpaid Leave of Absence

20

 

 

 

ARTICLE 12

Termination of Plan, Amendment or Modification

20

 

 

 

10.1

Termination of Plan

20

10.2

Amendment

20

10.3

Plan Agreement

20

10.4

Effect of Payment

21

 

 

 

ARTICLE 13

Administration

21

 

 

 

11.1

Committee Duties

21

11.2

Administration Upon Change In Control

21

11.3

Agents

21

11.4

Binding Effect of Decisions

21

11.5

Indemnity of Committee

21

11.6

Employer Information

22

 

 

 

ARTICLE 14

Other Benefits and Agreements

22

 

 

 

12.1

Coordination with Other Benefits

22

 

 

 

ARTICLE 15

Claims Procedures

22

 

 

 

13.1

Presentation of Claim

22

13.2

Notification of Decision

22

13.3

Review of a Denied Claim

23

13.4

Decision on Review

23

13.5

Legal Action

24

 

 

 

ARTICLE 16

Trust

24

 

 

 

14.1

Establishment of the Trust

24

14.2

Interrelationship of the Plan and the Trust

24

14.3

Distributions From the Trust

24

 

 

 

ARTICLE 17

Miscellaneous

24

 

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15.1

Status of Plan

24

15.2

Unsecured General Creditor

24

15.3

Employer’s Liability

24

15.4

Nonassignability

25

15.5

Not a Contract of Employment

25

15.6

Furnishing Information

25

15.7

Terms

25

15.8

Captions

25

15.9

Governing Law

25

15.10

Notice

25

15.11

Successors

26

15.12

Spouse’s Interest

26

15.13

Validity

26

15.14

Incompetent

26

15.15

Domestic Relations Orders

26

15.16

Distribution in the Event of Income Inclusion Under Code Section 409A

26

15.17

Deduction Limitation on Benefit Payments

27

 

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ON ASSIGNMENT, INC.

DEFERRED COMPENSATION PLAN

 

Effective January 1, 2008

 

Purpose

 

This Plan applies with respect to deferrals of compensation on and after
January 1, 2005.  There is a separate On Assignment, Inc. Amended and Restated
Deferred Compensation Plan, effective as of February 1, 1999, that applies with
respect to amounts deferred prior to January 1, 2005.  The purpose of this Plan
is to provide specified benefits a select group of management or highly
compensated Employees and Directors who contribute materially to the continued
growth, development and future business success of On Assignment, Inc., a
Delaware corporation, and its subsidiaries, if any, that sponsor this Plan. 
This Plan shall be unfunded for tax purposes and for purposes of Title I of
ERISA.

 

This Plan is intended to comply with all applicable law, including Code
Section 409A and related Treasury guidance and Regulations, and shall be
operated and interpreted in accordance with this intention.  In order to
transition to the requirements of Code Section 409A and related Treasury
Regulations, the Committee may make available to Participants certain transition
relief provided under Notice 2006-79, as described more fully in Appendix A of
this Plan.

 

ARTICLE 1
Definitions

 

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

 

1.1           “Account Balance” shall mean, with respect to a Participant, a
credit on the records of the Employer equal to the sum of the Participant’s
Annual Accounts.  The Account Balance shall be a bookkeeping entry only and
shall be utilized solely as a device for the measurement and determination of
the amounts to be paid to a Participant, or his or her designated Beneficiary,
pursuant to this Plan.

 

If a Participant is both an Employee and a Director and participates in the Plan
in each capacity, then separate Account Balances (and separate Annual Accounts,
if applicable) shall be established for such Participant as a device for the
measurement and determination of the (a) amounts deferred under the Plan that
are attributable to the Participant’s status as an Employee, and (b) amounts
deferred under the Plan that are attributable to the Participant’s status as a
Director.

 

1.2           “Annual Account” shall mean, with respect to a Participant, a
credit on the records of the Employer equal to (a) the sum of the Participant’s
Annual Deferral Amount, Company Contribution Amount and Company Restoration
Matching Amount for any one Plan Year, plus (b) amounts credited or debited to
such amounts pursuant to this Plan, less (c) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to the
Annual Account for such Plan Year.  The Annual Account shall be a bookkeeping
entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.

 

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1.3           “Annual Deferral Amount” shall mean that portion of a
Participant’s Base Salary, Bonus, Commissions and Director Fees that a
Participant defers in accordance with Article 3 for any one Plan Year, without
regard to whether such amounts are withheld and credited during such Plan Year.

 

1.4           “Annual Installment Method” shall mean the method used to
determine the amount of each payment due to a Participant who has elected to
receive a benefit over a period of years in accordance with the applicable
provisions of the Plan.  The amount of each annual payment due to the
Participant shall be calculated by multiplying the balance of the Participant’s
benefit by a fraction, the numerator of which is one and the denominator of
which is the remaining number of annual payments due to the Participant.  The
amount of the first annual payment shall be calculated as of the close of
business on or around the Participant’s Benefit Distribution Date, and the
amount of each subsequent annual payment shall be calculated on or around each
anniversary of such Benefit Distribution Date.  For purposes of this Plan, the
right to receive a benefit payment in annual installments shall be treated as
the entitlement to a single payment.

 

1.5           “Base Salary” shall mean the annual cash compensation relating to
services performed during any calendar year, excluding distributions from
nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe
benefits, stock options, relocation expenses, incentive payments, non-monetary
awards, director fees and other fees, and automobile and other allowances paid
to a Participant for employment services rendered (whether or not such
allowances are included in the Employee’s gross income).  Base Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed
by the Participant pursuant to all qualified or nonqualified plans of any
Employer and shall be calculated to include amounts not otherwise included in
the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or
403(b) pursuant to plans established by any Employer; provided, however, that
all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the
Employee.

 

1.6           “Beneficiary” shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 10, that are entitled to
receive benefits under this Plan upon the death of a Participant.

 

1.7           “Beneficiary Designation Form” shall mean the form established
from time to time by the Committee that a Participant completes, signs and
returns to the Committee to designate one or more Beneficiaries.

 

1.8           “Benefit Distribution Date” shall mean the date upon which all or
an objectively determinable portion of a Participant’s vested benefits will
become eligible for distribution.  Except as otherwise provided in the Plan, a
Participant’s Benefit Distribution Date shall be determined based on the
earliest to occur of an event or scheduled date set forth in Articles 4 through
9, as applicable.

 

1.9           “Board” shall mean the board of directors of the Company.

 

1.10         “Bonus” shall mean any compensation, in addition to Base Salary and
Commissions earned by a Participant under any Employer’s annual bonus and cash
incentive plans.

 

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1.11         “Change in Control” shall mean the occurrence of a “change in the
ownership,” a “change in the effective control” or a “change in the ownership of
a substantial portion of the assets” of a corporation, as determined in
accordance with this Section.

 

In order for an event described below to constitute a Change in Control with
respect to a Participant, except as otherwise provided in part (b)(ii) of this
Section, the applicable event must relate to the corporation for which the
Participant is providing services, the corporation that is liable for payment of
the Participant’s Account Balance (or all corporations liable for payment if
more than one), as identified by the Committee in accordance with Treas. Reg.
§1.409A-3(i)(5)(ii)(A)(2), or such other corporation identified by the Committee
in accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(3).

 

In determining whether an event shall be considered a “change in the ownership,”
a “change in the effective control” or a “change in the ownership of a
substantial portion of the assets” of a corporation, the following provisions
shall apply:

 

(a)           A “change in the ownership” of the applicable corporation shall
occur on the date on which any one person, or more than one person acting as a
group, acquires ownership of stock of such corporation that, together with stock
held by such person or group, constitutes more than 50% of the total fair market
value or total voting power of the stock of such corporation, as determined in
accordance with Treas. Reg. §1.409A-3(i)(5)(v).  If a person or group is
considered either to own more than 50% of the total fair market value or total
voting power of the stock of such corporation, or to have effective control of
such corporation within the meaning of part (b) of this Section, and such person
or group acquires additional stock of such corporation, the acquisition of
additional stock by such person or group shall not be considered to cause a
“change in the ownership” of such corporation.

 

(b)           A “change in the effective control” of the applicable corporation
shall occur on either of the following dates:

 

(i)            The date on which any one person, or more than one person acting
as a group, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) ownership of
stock of such corporation possessing 30% or more of the total voting power of
the stock of such corporation, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi).  If a person or group is considered to possess 30% or more
of the total voting power of the stock of a corporation, and such person or
group acquires additional stock of such corporation, the acquisition of
additional stock by such person or group shall not be considered to cause a
“change in the effective control” of such corporation; or

 

(ii)           The date on which a majority of the members of the applicable
corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of such corporation’s board of directors before the date of the
appointment or election, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi).  In determining whether the event described in the
preceding sentence has occurred, the applicable corporation to which the event
must relate shall only include a corporation

 

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identified in accordance with Treas. Reg. §1.409A-3(i)(5)(ii) for which no other
corporation is a majority shareholder.

 

(c)           A “change in the ownership of a substantial portion of the assets”
of the applicable corporation shall occur on the date on which any one person,
or more than one person acting as a group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) assets from the corporation that have a total gross fair market
value equal to or more than 40% of the total gross fair market value of all of
the assets of the corporation immediately before such acquisition or
acquisitions, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vii).  A transfer of assets shall not be treated as a “change in
the ownership of a substantial portion of the assets” when such transfer is made
to an entity that is controlled by the shareholders of the transferor
corporation, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vii)(B).

 

1.12         “Code” shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.

 

1.13         “Commissions” shall mean the cash commissions earned by a
Participant during a Plan Year, as determined in accordance with Code
Section 409A and related Treasury Regulations.

 

1.14         “Committee” shall mean the committee described in Article 13.

 

1.15         “Company” shall mean On Assignment, Inc., a Delaware corporation,
and any successor to all or substantially all of the Company’s assets or
business.

 

1.16         “Company Contribution Amount” shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.4.

 

1.17         “Company Restoration Matching Amount” shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.5.

 

1.18         “Director” shall mean any member of the board of directors of any
Employer.

 

1.19         “Director Fees” shall mean the annual fees earned by a Director
from any Employer, including retainer fees and meetings fees, as compensation
for serving on the board of directors.

 

1.20         “Disability” or “Disabled” shall mean that a Participant is either
(a) unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (b) by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan covering employees of the Participant’s Employer.  For purposes
of this Plan, a Participant shall be deemed Disabled if determined to be totally
disabled by the Social Security Administration.  A Participant shall also be
deemed Disabled if determined to be disabled in accordance with the applicable
disability insurance program of such Participant’s Employer, provided that the
definition of “disability” applied under such disability insurance program
complies with the requirements of this Section.

 

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1.21         “Election Form” shall mean the form, which may be in electronic
format, established from time to time by the Committee that a Participant
completes, signs and returns to the Committee to make an election under the
Plan.

 

1.22         “Employee” shall mean a person who is an employee of an Employer.

 

1.23         “Employer(s)” shall be defined as follows:

 

(a)           Except as otherwise provided in part (b) of this Section, the term
“Employer” shall mean the Company and/or any of its subsidiaries (now in
existence or hereafter formed or acquired) that have been selected by the Board
to participate in the Plan and have adopted the Plan as a sponsor.

 

(b)           For the purpose of determining whether a Participant has
experienced a Termination of Employment, the term “Employer” shall mean:

 

(i)            The entity for which the Participant performs services and with
respect to which the legally binding right to compensation deferred or
contributed under this Plan arises; and

 

(ii)           All other entities with which the entity described above would be
aggregated and treated as a single employer under Code
Section 414(b) (controlled group of corporations) and Code Section 414(c) (a
group of trades or businesses, whether or not incorporated, under common
control), as applicable.  In order to identify the group of entities described
in the preceding sentence, the Committee shall use an ownership threshold of at
least 50% as a substitute for the 80% minimum ownership threshold that appears
in, and otherwise must be used when applying, the applicable provisions of
(A) Code Section 1563 for determining a controlled group of corporations under
Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2 for determining the trades
or businesses that are under common control under Code Section 414(c).

 

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

 

1.25         “401(k) Plan” shall mean, with respect to an Employer, a plan
qualified under Code Section 401(a) that contains a cash or deferral arrangement
described in Code Section 401(k), adopted by the Employer, as it may be amended
from time to time, or any successor thereto.

 

1.26         “Participant” shall mean any Employee or Director (a) who is
selected to participate in the Plan, (b) whose executed Plan Agreement, Election
Form and Beneficiary Designation Form are accepted by the Committee, and
(c) whose Plan Agreement has not terminated.

 

1.27         “Performance-Based Compensation” shall mean compensation the
entitlement to or amount of which is contingent on the satisfaction of
pre-established organizational or individual performance criteria relating to a
performance period of at least 12 consecutive months, as determined by the
Committee in accordance with Treas. Reg. §1.409A-1(e).

 

1.28         “Plan” shall mean the On Assignment, Inc., Deferred Compensation
Plan, which applies with respect to deferrals of compensation on and after
January 1, 2005, and which shall be evidenced by this instrument, as it may be
amended from time to time, and by any other documents that

 

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together with this instrument define a Participant’s rights to amounts credited
to his or her Account Balance.

 

1.29         “Plan Agreement” shall mean a written agreement in the form
prescribed by or acceptable to the Committee that evidences a Participant’s
agreement to the terms of the Plan and which may establish additional terms or
conditions of Plan participation for a Participant.  Unless otherwise determined
by the Committee, the most recent Plan Agreement accepted with respect to a
Participant shall supersede any prior Plan Agreements for such Participant. 
Plan Agreements may vary among Participants and may provide additional benefits
not set forth in the Plan or limit the benefits otherwise provided under the
Plan.

 

1.30         “Plan Year” shall mean a period beginning on January 1 of each
calendar year and continuing through December 31 of such calendar year.

 

1.31         “Termination of Employment” shall mean a termination of services
provided by a Participant to his or her Employer, whether voluntarily or
involuntarily, other than by reason of death or Disability, as determined by the
Committee in accordance with Treas. Reg. §1.409A-1(h).  In determining whether a
Participant has experienced a Termination of Employment, the following
provisions shall apply:

 

(a)           For a Participant who provides services to an Employer as an
Employee, except as otherwise provided in part (c) of this Section, a
Termination of Employment shall occur when such Participant has experienced a
termination of employment with such Employer.  A Participant shall be considered
to have experienced a termination of employment when the facts and circumstances
indicate that the Participant and his or her Employer reasonably anticipate that
either (i) no further services will be performed for the Employer after a
certain date, or (ii) that the level of bona fide services the Participant will
perform for the Employer after such date (whether as an Employee or as an
independent contractor) will permanently decrease to no more than 20% of the
average level of bona fide services performed by such Participant (whether as an
Employee or an independent contractor) over the immediately preceding 36-month
period (or the full period of services to the Employer if the Participant has
been providing services to the Employer less than 36 months).

 

If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer
shall be treated as continuing intact, provided that the period of such leave
does not exceed 6 months, or if longer, so long as the Participant retains a
right to reemployment with the Employer under an applicable statute or by
contract.  If the period of a military leave, sick leave, or other bona fide
leave of absence exceeds 6 months and the Participant does not retain a right to
reemployment under an applicable statute or by contract, the employment
relationship shall be considered to be terminated for purposes of this Plan as
of the first day immediately following the end of such 6-month period.  In
applying the provisions of this paragraph, a leave of absence shall be
considered a bona fide leave of absence only if there is a reasonable
expectation that the Participant will return to perform services for the
Employer.

 

(b)           For a Participant who provides services to an Employer as an
independent contractor, except as otherwise provided in part (c) of this
Section, a Termination of Employment

 

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shall occur upon the expiration of the contract (or in the case of more than one
contract, all contracts) under which services are performed for such Employer,
provided that the expiration of such contract(s) is determined by the Committee
to constitute a good-faith and complete termination of the contractual
relationship between the Participant and such Employer.

 

(c)           For a Participant who provides services to an Employer as both an
Employee and an independent contractor, a Termination of Employment generally
shall not occur until the Participant has ceased providing services for such
Employer as both as an Employee and as an independent contractor, as determined
in accordance with the provisions set forth in parts (a) and (b) of this
Section, respectively. Similarly, if a Participant either (i) ceases providing
services for an Employer as an independent contractor and begins providing
services for such Employer as an Employee, or (ii) ceases providing services for
an Employer as an Employee and begins providing services for such Employer as an
independent contractor, the Participant will not be considered to have
experienced a Termination of Employment until the Participant has ceased
providing services for such Employer in both capacities, as determined in
accordance with the applicable provisions set forth in parts (a) and (b) of this
Section.

 

Notwithstanding the foregoing provisions in this part (c), if a Participant
provides services for an Employer as both an Employee and as a Director, to the
extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such
Participant as a Director shall not be taken into account in determining whether
the Participant has experienced a Termination of Employment as an Employee, and
the services provided by such Participant as an Employee shall not be taken into
account in determining whether the Participant has experienced a Termination of
Employment as a Director.

 

1.32         “Specified Employee” shall mean any Participant who is determined
to be a “key employee” (as defined under Code Section 416(i) without regard to
paragraph (5) thereof) for the applicable period, as determined annually by the
Committee in accordance with Treas. Reg. §1.409A-1(i).  In determining whether a
Participant is a Specified Employee, the following provisions shall apply:

 

(a)           The Committee’s identification of the individuals who fall within
the definition of “key employee” under Code Section 416(i) (without regard to
paragraph (5) thereof) shall be based upon the 12-month period ending on each
December 31st (referred to below as the “identification date”).  In applying the
applicable provisions of Code Section 416(i) to identify such individuals,
“compensation” shall be determined in accordance with Treas. Reg.
§1.415(c)-2(a) without regard to (i) any safe harbor provided in Treas. Reg.
§1.415(c)-2(d), (ii) any of the special timing rules provided in Treas. Reg.
§1.415(c)-2(e), and (iii) any of the special rules provided in Treas. Reg.
§1.415(c)-2(g); and

 

(b)           Each Participant who is among the individuals identified as a “key
employee” in accordance with part (a) of this Section shall be treated as a
Specified Employee for purposes of this Plan if such Participant experiences a
Termination of Employment during the 12-month period that begins on the
April 1st following the applicable identification date.

 

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1.33         “Trust” shall mean one or more trusts established by the Company in
accordance with Article 16.

 

1.34         “Unforeseeable Emergency” shall mean a severe financial hardship of
the Participant resulting from (a) an illness or accident of the Participant,
the Participant’s spouse, the Participant’s Beneficiary or the Participant’s
dependent (as defined in Code Section 152 without regard to paragraphs (b)(1),
(b)(2) and (d)(1)(b) thereof), (b) a loss of the Participant’s property due to
casualty, or (c) such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined by the Committee based on the relevant facts and
circumstances.

 

1.35         “Years of Service” shall mean the total number of full years in
which a Participant has been employed by one or more Employers.  For purposes of
this definition, a year of employment shall be a 365 day period (or 366 day
period in the case of a leap year) that, for the first year of employment,
commences on the Employee’s date of hiring and that, for any subsequent year,
commences on an anniversary of that hiring date.  A partial year of employment
shall not be treated as a Year of Service.

 

ARTICLE 2

 

Selection, Enrollment, Eligibility

 

2.1           Selection by Committee.  Participation in the Plan shall be
limited to Directors and, as determined by the Committee in its sole discretion,
a select group of management or highly compensated Employees.  From that group,
the Committee shall select, in its sole discretion, those individuals who may
actually participate in this Plan.

 

2.2           Enrollment and Eligibility Requirements; Commencement of
Participation.

 

(a)           As a condition to participation, each Director or selected
Employee shall complete, execute and return to the Committee a Plan Agreement,
an Election Form and a Beneficiary Designation Form by the
deadline(s) established by the Committee in accordance with the applicable
provisions of this Plan.  In addition, the Committee shall establish from time
to time such other enrollment requirements as it determines, in its sole
discretion, are necessary.

 

(b)           Each Director or selected Employee who is eligible to participate
in the Plan shall commence participation in the Plan on the date that the
Committee determines that the Director or Employee has met all enrollment
requirements set forth in this Plan and required by the Committee, including
returning all required documents to the Committee within the specified time
period.

 

(c)           If a Director or an Employee fails to meet all requirements
established by the Committee within the period required, that Director or
Employee shall not be eligible to participate in the Plan during such Plan Year.

 

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ARTICLE 3
Deferral Commitments/Company Contribution Amounts/

Company Restoration Matching Amounts/ Vesting/Crediting/Taxes

 

3.1           Maximum Deferral.

 

(a)           Annual Deferral Amount.  For each Plan Year, a Participant may
elect to defer, as his or her Annual Deferral Amount, Base Salary, Bonus,
Commissions and Director Fees up to the following maximum percentages for each
deferral elected:

 

Deferral

 

Maximum Percentage

 

Base Salary

 

100

%

Bonus

 

100

%

Commissions

 

100

%

Director Fees

 

100

%

 

For purposes of the preceding sentence, however, a Participant’s deferral of
Base Salary shall be limited to 100% of his or her Base Salary net of taxes and
other required withholdings.

 

(b)           Short Plan Year. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year, then to the
extent required by Section 3.2 and Code Section 409A and related Treasury
Regulations, the maximum amount of the Participant’s Base Salary, Bonus,
Commissions or Director Fees that may be deferred by the Participant for the
Plan Year shall be determined by applying the percentages set forth in Section
3.1(a) to the portion of such compensation attributable to services performed
after the date that the Participant’s deferral election is made.

 

3.2           Timing of Deferral Elections; Effect of Election Form.

 

(a)           General Timing Rule for Deferral Elections. Except as otherwise
provided in this Section 3.2, in order for a Participant to make a valid
election to defer Base Salary, Bonus, Commissions and Director Fees, the
Participant must submit an Election Form on or before the deadline established
by the Committee, which in no event shall be later than the December 31st
preceding the Plan Year in which such compensation will be earned.

 

Any deferral election made in accordance with this Section 3.2(a) shall be
irrevocable; provided, however, that if the Committee permits or requires
Participants to make a deferral election by the deadline described above for an
amount that qualifies as Performance-Based Compensation, the Committee may
permit a Participant to subsequently change his or her deferral election for
such compensation by submitting a new Election Form in accordance with Section
3.2(d) below.

 

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(b)           Timing of Deferral Elections for Newly Eligible Plan Participants.
A Director or selected Employee who first becomes eligible to participate in the
Plan on or after the beginning of a Plan Year, as determined in accordance with
Treas. Reg. §1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in
Treas. Reg. §1.409A-1(c)(2), may be permitted to make an election to defer the
portion of Base Salary, Bonus, Commissions and Director Fees attributable to
services to be performed after such election, provided that the Participant
submits an Election Form on or before the deadline established by the Committee,
which in no event shall be later than 30 days after the Participant first
becomes eligible to participate in the Plan.

 

If a deferral election made in accordance with this Section 3.2(b) relates to
compensation earned based upon a specified performance period, the amount
eligible for deferral shall be equal to (i) the total amount of compensation for
the performance period, multiplied by (ii) a fraction, the numerator of which is
the number of days remaining in the service period after the Participant’s
deferral election is made, and the denominator of which is the total number of
days in the performance period.

 

Any deferral election made in accordance with this Section 3.2(b) shall become
irrevocable no later than the 30th day after the date the Director or selected
Employee becomes eligible to participate in the Plan.

 

(c)           Timing of Deferral Elections for Fiscal Year Compensation. In the
event that the fiscal year of an Employer is different than the taxable year of
a Participant, the Committee may determine that a deferral election may be made
for “fiscal year compensation” (as defined below), by submitting an Election
Form on or before the deadline established by the Committee, which in no event
shall be later than the last day of the Employer’s fiscal year immediately
preceding the fiscal year in which the services related to such compensation
will begin to be performed. For purposes of this Section, the term “fiscal year
compensation” shall only include Bonus relating to a service period coextensive
with one or more consecutive fiscal years of the Employer, of which no amount is
paid or payable during the Employer’s fiscal year(s) that constitute the service
period.

 

A deferral election made in accordance with this Section 3.2(c) shall be
irrevocable; provided, however, that if the Committee permits or requires
Participants to make a deferral election by the deadline described in this
Section 3.2(c) for an amount that qualifies as Performance-Based Compensation,
the Committee may permit a Participant to subsequently change his or her
deferral election for such compensation by submitting a new Election Form in
accordance with 3.2(d) below.

 

(d)           Timing of Deferral Elections for Performance-Based Compensation.
Subject to the limitations described below, the Committee may determine that an
irrevocable deferral election for an amount that qualifies as Performance-Based
Compensation may be made by submitting an Election Form on or before the
deadline established by the Committee, which in no event shall be later than 6
months before the end of the performance period.

 

In order for a Participant to be eligible to make a deferral election for
Performance-Based Compensation in accordance with the deadline established
pursuant to this Section 3.2(d),

 

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the Participant must have performed services continuously from the later of (i)
the beginning of the performance period for such compensation, or (ii) the date
upon which the performance criteria for such compensation are established,
through the date upon which the Participant makes the deferral election for such
compensation. In no event shall a deferral election submitted under this Section
3.2(d) be permitted to apply to any amount of Performance-Based Compensation
that has become readily ascertainable.

 

(e)           Timing Rule for Deferral of Compensation Subject to Risk of
Forfeiture. With respect to compensation (i) to which a Participant has a
legally binding right to payment in a subsequent year, and (ii) that is subject
to a forfeiture condition requiring the Participant’s continued services for a
period of at least 12 months from the date the Participant obtains the legally
binding right, the Committee may determine that an irrevocable deferral election
for such compensation may be made by timely delivering an Election Form to the
Committee in accordance with its rules and procedures, no later than the 30th
day after the Participant obtains the legally binding right to the compensation,
provided that the election is made at least 12 months in advance of the earliest
date at which the forfeiture condition could lapse, as determined in accordance
with Treas. Reg. §1.409A-2(a)(5).

 

Any deferral election(s) made in accordance with this Section 3.2(e) shall
become irrevocable no later than the 30th day after the Participant obtains the
legally binding right to the compensation subject to such deferral election(s).

 

3.3           Withholding and Crediting of Annual Deferral Amounts.  For each
Plan Year, the Base Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Salary payroll in equal amounts, as
adjusted from time to time for increases and decreases in Base Salary. The
Bonus, Commissions and Director Fees portion of the Annual Deferral Amount shall
be withheld at the time the Bonus, Commissions or Director Fees are or otherwise
would be paid to the Participant, whether or not this occurs during the Plan
Year itself. Annual Deferral Amounts shall be credited to the Participant’s
Annual Account for such Plan Year at the time such amounts would otherwise have
been paid to the Participant.

 

3.4           Company Contribution Amount.

 

(a)           For each Plan Year, an Employer may be required to credit amounts
to a Participant’s Annual Account in accordance with employment or other
agreements entered into between the Participant and the Employer, which amounts
shall be part of the Participant’s Company Contribution Amount for that Plan
Year. Such amounts shall be credited to the Participant’s Annual Account for the
applicable Plan Year on the date or dates prescribed by such agreements.

 

(b)           For each Plan Year, the Compensation Committee of the Board, in
its sole discretion, may, but is not required to, credit any amount it desires
to any Participant’s Annual Account under this Plan, which amount shall be part
of the Participant’s Company Contribution Amount for that Plan Year. The amount
so credited to a Participant may be smaller or larger than the amount credited
to any other Participant, and the amount credited to any Participant for a Plan
Year may be zero, even though one or more other Participants receive a Company
Contribution Amount for that Plan Year. The Company

 

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Contribution Amount described in this Section 3.4(b), if any, shall be credited
to the Participant’s Annual Account for the applicable Plan Year on a date or
dates to be determined by the Committee.

 

(c)           If not otherwise specified in the Participant’s employment or
other agreement entered into between the Participant and the Employer, the
amount (or the method or formula for determining the amount) of a Participant’s
Company Contribution Amount shall be set forth in writing in one or more
documents, which shall be deemed to be incorporated into this Plan in accordance
with Section 1.28, no later than the date on which such Company Contribution
Amount is credited to the applicable Annual Account of the Participant.

 

3.5           Company Restoration Matching Amount.  For each Plan Year, the
Compensation Committee of the Board, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Annual Account
under this Plan, which amount shall be part of the Participant’s Company
Restoration Matching Amount for that Plan Year. If so credited, a Participant’s
Company Restoration Matching Amount for any Plan Year shall be an amount
determined by the Committee to make up for certain limits applicable to the
401(k) Plan or other qualified plan for such Plan Year, as identified by the
Committee, or for such other purposes as determined by the Committee in its sole
discretion. The amount so credited to a Participant under this Plan for any Plan
Year (a) may be smaller or larger than the amount credited to any other
Participant, and (b) may differ from the amount credited to such Participant in
the preceding Plan Year. The Participant’s Company Restoration Matching Amount,
if any, shall be credited to the Participant’s Annual Account for the applicable
Plan Year on a date or dates to be determined by the Committee. The amount (or
the method or formula for determining the amount) of a Participant’s Company
Restoration Matching Amount shall be set forth in writing in one or more
documents, which shall be deemed to be incorporated into this Plan in accordance
with Section 1.28, no later than the date on which such Company Restoration
Matching Amount is credited to the applicable Annual Account of the Participant.

 

3.6           Vesting.

 

(a)           A Participant shall at all times be 100% vested in the portion of
his or her Account Balance attributable to Annual Deferral Amounts, plus amounts
credited or debited on such amounts pursuant to Section 3.7.

 

(b)           A Participant shall be vested in the portion of his or her Account
Balance attributable to any Company Contribution Amounts and Company Restoration
Matching Amounts, plus amounts credited or debited on such amounts pursuant to
Section 3.7, pursuant to the vesting schedule established by the Compensation
Committee of the Board with respect to such amounts. In the event no such
schedule is established, a Participant shall be vested in such amounts in
accordance with the vesting provisions of the 401(k) Plan in effect on the first
day of the Plan Year for which such amounts are contributed.

 

(c)           Notwithstanding anything to the contrary contained in this Section
3.6, in the event of a Change in Control, or upon a Participant’s Disability,
Termination of Employment on or after age 65, or death prior to Termination of
Employment, any amounts that are not vested in accordance with Sections 3.6
above, shall immediately become 100% vested.

 

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(d)           Notwithstanding subsection 3.6(c) above, the vesting schedules
described in Sections 3.6(c) above shall not be accelerated upon a Change in
Control to the extent that the Committee determines that such acceleration would
cause the deduction limitations of Section 280G of the Code to become effective.
In the event of such a determination, the Participant may request independent
verification of the Committee’s calculations with respect to the application of
Section 280G. In such case, the Committee must provide to the Participant within
90 days of such a request an opinion from a nationally recognized accounting
firm selected by the Participant (the “Accounting Firm”). The opinion shall
state the Accounting Firm’s opinion that any limitation in the vested percentage
hereunder is necessary to avoid the limits of Section 280G and contain
supporting calculations. The cost of such opinion shall be paid for by the
Company.

 

(e)           Section 3.6(d) shall not prevent the acceleration of the vesting
schedules described in Sections 3.6 if such Participant is entitled to a
“gross-up” payment, to eliminate the effect of the Code section 4999 excise tax,
pursuant to his or her employment agreement or other agreement entered into
between such Participant and the Employer.

 

3.7           Crediting/Debiting of Account Balances.  In accordance with, and
subject to, the rules and procedures that are established from time to time by
the Committee, in its sole discretion, amounts shall be credited or debited to a
Participant’s Account Balance in accordance with the following rules:

 

(a)           Measurement Funds. The Participant may elect one or more of the
measurement funds selected by the Committee, in its sole discretion, which are
based on certain mutual funds (the “Measurement Funds”), for the purpose of
crediting or debiting additional amounts to his or her Account Balance. As
necessary, the Committee may, in its sole discretion, discontinue, substitute or
add a Measurement Fund. Each such action will take effect as of the first day of
the first calendar quarter that begins at least 30 days after the day on which
the Committee gives Participants advance written notice of such change.

 

(i)            Election of Measurement Funds. A Participant, in connection with
his or her initial deferral election in accordance with Section 3.2 above, shall
elect, on the Election Form, one or more Measurement Fund(s) (as described in
Section 3.7(a) above) to be used to determine the amounts to be credited or
debited to his or her Account Balance. If a Participant does not elect any of
the Measurement Funds as described in the previous sentence, the Participant’s
Account Balance shall automatically be allocated into the lowest-risk
Measurement Fund, as determined by the Committee, in its sole discretion. The
Participant may (but is not required to) elect, by submitting an Election Form
to the Committee that is accepted by the Committee, to add or delete one or more
Measurement Fund(s) to be used to determine the amounts to be credited or
debited to his or her Account Balance, or to change the portion of his or her
Account Balance allocated to each previously or newly elected Measurement Fund.
If an election is made in accordance with the previous sentence, it shall apply
as of the first business day deemed reasonably practicable by the Committee, in
its sole discretion, and shall continue thereafter for each subsequent day in
which the Participant participates in the Plan, unless changed in accordance
with the previous sentence. Notwithstanding the

 

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foregoing, the Committee, in its sole discretion, may impose limitations on the
frequency with which one or more of the Measurement Funds elected in accordance
with this Section 3.7(i) may be added or deleted by such Participant;
furthermore, the Committee, in its sole discretion, may impose limitations on
the frequency with which the Participant may change the portion of his or her
Account Balance allocated to each previously or newly elected Measurement Fund

 

(b)           Proportionate Allocation. In making any election described in
Section 3.7(i) above, the Participant shall specify on the Election Form, in
increments of one percent (1%), the percentage of his or her Account Balance or
Measurement Fund, as applicable, to be allocated/reallocated.

 

(c)           Crediting or Debiting Method. The performance of each Measurement
Fund (either positive or negative) will be determined on a daily basis based on
the manner in which such Participant’s Account Balance has been hypothetically
allocated among the Measurement Funds by the Participant.

 

(d)           No Actual Investment. Notwithstanding any other provision of this
Plan that may be interpreted to the contrary, the Measurement Funds are to be
used for measurement purposes only, and a Participant’s election of any such
Measurement Fund, the allocation of his or her Account Balance thereto, the
calculation of additional amounts and the crediting or debiting of such amounts
to a Participant’s Account Balance shall not be considered or construed in any
manner as an actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as that term is
defined in the Trust), in its own discretion, decides to invest funds in any or
all of the investments on which the Measurement Funds are based, no Participant
shall have any rights in or to such investments themselves. Without limiting the
foregoing, a Participant’s Account Balance shall at all times be a bookkeeping
entry only and shall not represent any investment made on his or her behalf by
the Company or the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.

 

3.8           FICA and Other Taxes.

 

(a)           Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s
Employer(s) shall withhold from that portion of the Participant’s Base Salary,
Bonus and Commissions that is not being deferred, in a manner determined by the
Employer(s), the Participant’s share of FICA and other employment taxes on such
Annual Deferral Amount. If necessary, the Committee may reduce the Annual
Deferral Amount in order to comply with this Section 3.8.

 

(b)           Company Restoration Matching Amounts and Company Contribution
Amounts. When a Participant becomes vested in a portion of his or her Account
Balance attributable to any Company Restoration Matching Amounts and/or Company
Contribution Amounts, the Participant’s Employer(s) shall withhold from that
portion of the Participant’s Base Salary, Bonus and Commissions that is not
deferred, in a manner determined by the Employer(s), the Participant’s share of
FICA and other employment taxes on such amounts. If necessary, the Committee may
reduce the vested portion of the

 

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Participant’s Company Restoration Matching Amount or Company Contribution
Amount, as applicable, in order to comply with this Section 3.8.

 

(c)           Distributions. The Participant’s Employer(s), or the trustee of
the Trust, shall withhold from any payments made to a Participant under this
Plan all federal, state and local income, employment and other taxes required to
be withheld by the Employer(s), or the trustee of the Trust, in connection with
such payments, in amounts and in a manner to be determined in the sole
discretion of the Employer(s) and the trustee of the Trust.

 

ARTICLE 4
Scheduled Distribution; Unforeseeable Emergencies

 

4.1           Scheduled Distributions.  In connection with each election to
defer an Annual Deferral Amount, a Participant may elect to receive all or a
portion of such Annual Deferral Amount, plus amounts credited or debited on that
amount pursuant to Section 3.7, in the form of a lump sum payment, calculated as
of the close of business on or around the Benefit Distribution Date designated
by the Participant in accordance with this Section (a “Scheduled Distribution”).
The Benefit Distribution Date for the amount subject to a Scheduled Distribution
election shall be the first day of any Plan Year designated by the Participant,
which may be no sooner than 3 Plan Years after the end of the Plan Year to which
the Participant’s deferral election relates, unless otherwise provided on an
Election Form approved by the Committee.

 

Subject to the other terms and conditions of this Plan, each Scheduled
Distribution elected shall be paid out during a 60 day period commencing
immediately after the Benefit Distribution Date. By way of example, if a
Scheduled Distribution is elected for Annual Deferral Amounts that are earned in
the Plan Year commencing January 1, 2008, the earliest Benefit Distribution Date
that may be designated by a Participant would be January 1, 2012, and the
Scheduled Distribution would be paid out during the 60 day period commencing
immediately after such Benefit Distribution Date.

 

4.2           Postponing Scheduled Distributions.  A Participant may elect to
postpone a Scheduled Distribution described in Section 4.1 above, and have such
amount paid out during a 60 day period commencing immediately after an allowable
alternative Benefit Distribution Date designated in accordance with this Section
4.2. In order to make such an election, the Participant must submit an Election
Form to the Committee in accordance with the following criteria:

 

(a)           The election of the new Benefit Distribution Date shall have no
effect until at least 12 months after the date on which the election is made;

 

(b)           The new Benefit Distribution Date selected by the Participant for
such Scheduled Distribution must be the first day of a Plan Year that is no
sooner than 5 years after the previously designated Benefit Distribution Date;
and

 

(c)           The election must be made at least 12 months prior to the
Participant’s previously designated Benefit Distribution Date for such Scheduled
Distribution.

 

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For purposes of applying the provisions of this Section 4.2, a Participant’s
election to postpone a Scheduled Distribution shall not be considered to be made
until the date on which the election becomes irrevocable. Such an election shall
become irrevocable no later than the date that is 12 months prior to the
Participant’s previously designated Benefit Distribution Date for such Scheduled
Distribution.

 

4.3           Other Benefits Take Precedence Over Scheduled Distributions. 
Should an event occur prior to any Benefit Distribution Date designated for a
Scheduled Distribution that would trigger a benefit under Articles 5 through 9,
as applicable, all amounts subject to a Scheduled Distribution election shall be
paid in accordance with the other applicable provisions of the Plan and not in
accordance with this Article 4.

 

4.4           Unforeseeable Emergencies.

 

(a)           If a Participant experiences an Unforeseeable Emergency prior to
the occurrence of a distribution event described in Articles 5 through 9, as
applicable, the Participant may petition the Committee to receive a partial or
full payout from the Plan. The payout, if any, from the Plan shall not exceed
the lesser of (i) the Participant’s vested Account Balance, calculated as of the
close of business on or around the Benefit Distribution Date for such payout, as
determined by the Committee in accordance with provisions set forth below, or
(ii) the amount necessary to satisfy the Unforeseeable Emergency, plus amounts
necessary to pay Federal, state, or local income taxes or penalties reasonably
anticipated as a result of the distribution. A Participant shall not be eligible
to receive a payout from the Plan to the extent that the Unforeseeable Emergency
is or may be relieved (A) through reimbursement or compensation by insurance or
otherwise, (B) by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship or
(C) by cessation of deferrals under this Plan.

 

If the Committee, in its sole discretion, approves a Participant’s petition for
payout from the Plan, the Participant’s Benefit Distribution Date for such
payout shall be the date on which such Committee approval occurs and such payout
shall be distributed to the Participant in a lump sum no later than 60 days
after such Benefit Distribution Date. In addition, in the event of such approval
the Participant’s outstanding deferral elections under the Plan shall be
cancelled.

 

(b)           A Participant’s deferral elections under this Plan shall also be
cancelled to the extent the Committee determines that such action is required
for the Participant to obtain a hardship distribution from an Employer’s 401(k)
Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3).

 

ARTICLE 5
Termination of Employment Benefit

 

5.1           Termination of Employment Benefit.  If a Participant experiences a
Termination of Employment, the Participant shall be eligible to receive his or
her vested Account Balance in either a lump sum or annual installment payments,
as elected by the Participant in accordance with Section 5.2 (the “Termination
of Employment Benefit”). A Participant’s Termination of Employment Benefit shall
be calculated as of the close of business on or around the applicable

 

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Benefit Distribution Date for such benefit, which shall be (i) the first day
after the end of the 6-month period immediately following the date on which the
Participant experiences such Termination of Employment if the Participant is a
Specified Employee, and (ii) for all other Participants, the date on which the
Participant experiences a Termination of Employment; provided, however, if a
Participant changes the form of distribution for the Termination of Employment
Benefit in accordance with Section 5.2(b), the Benefit Distribution Date for the
Termination of Employment Benefit shall be determined in accordance with Section
5.2(b).

 

5.2           Payment of Termination of Employment Benefit.

 

(a)           A Participant, in connection with his or her commencement of
participation in the Plan, shall elect on an Election Form to receive the
Termination of Employment Benefit in a lump sum or pursuant to an Annual
Installment Method of up to 15 years; provided, however, that if the
Participant’s Account Balance at the time of his or her Termination of
Employment is less than the applicable dollar amount specified by Internal
Revenue Code §402(g)(1)(B) in effect for the year in which the payout is to
occur, payment of his or her Termination of Employment Benefit shall be paid in
a lump sum. If a Participant does not make any election with respect to the
payment of the Termination of Employment Benefit, then such Participant shall be
deemed to have elected to receive the Termination of Employment Benefit as a
lump sum.

 

(b)           A Participant may change the form of payment for the Termination
of Employment Benefit by submitting an Election Form to the Committee in
accordance with the following criteria:

 

(i)            The election shall not take effect until at least 12 months after
the date on which the election is made;

 

(ii)           The new Benefit Distribution Date for the Participant’s
Termination of Employment Benefit shall be 5 years after the Benefit
Distribution Date that would otherwise have been applicable to such benefit; and

 

(iii)          The election must be made at least 12 months prior to the Benefit
Distribution Date that would otherwise have been applicable to the Participant’s
Termination of Employment Benefit.

 

For purposes of applying the provisions of this Section 5.2(b), a Participant’s
election to change the form of payment for the Termination of Employment Benefit
shall not be considered to be made until the date on which the election becomes
irrevocable. Such an election shall become irrevocable no later than the date
that is 12 months prior to the Benefit Distribution Date that would otherwise
have been applicable to the Participant’s Termination of Employment Benefit.
Subject to the requirements of this Section 5.2(b), the Election Form most
recently accepted by the Committee that has become effective shall govern the
form of payout of the Participant’s Termination of Employment Benefit.

 

(c)           The lump sum payment shall be made, or installment payments shall
commence, no later than 60 days after the Participant’s Benefit Distribution
Date. Remaining installments, if any, shall be paid no later than 60 days after
each anniversary of the Participant’s Benefit Distribution Date.

 

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ARTICLE 6
Disability Benefit

 

6.1           Disability Benefit. If a Participant becomes Disabled prior to the
occurrence of a distribution event described in Article 5, as applicable, the
Participant shall receive his or her vested Account Balance in the form of a
lump sum payment (the “Disability Benefit”). The Disability Benefit shall be
calculated as of the close of business on or around the Participant’s Benefit
Distribution Date for such benefit, which shall be the date on which the
Participant becomes Disabled.

 

6.2           Payment of Disability Benefit. The Disability Benefit shall be
paid to the Participant no later than 60 days after the Participant’s Benefit
Distribution Date.

 

ARTICLE 7
Death Benefit

 

7.1           Death Benefit.  In the event of a Participant’s death prior to the
complete distribution of his or her vested Account Balance, the Participant’s
Beneficiary(ies) shall receive the Participant’s unpaid vested Account Balance
in a lump sum payment (the “Death Benefit”). The Death Benefit shall be
calculated as of the close of business on or around the Benefit Distribution
Date for such benefit, which shall be the date on which the Committee is
provided with proof that is satisfactory to the Committee of the Participant’s
death.

 

7.2           Payment of Death Benefit.  The Death Benefit shall be paid to the
Participant’s Beneficiary(ies) no later than 60 days after the Participant’s
Benefit Distribution Date.

 

ARTICLE 8
Beneficiary Designation

 

8.1           Beneficiary.  Each Participant shall have the right, at any time,
to designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.

 

8.2           Beneficiary Designation; Change; Spousal Consent.  A Participant
shall designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated agent. A
Participant shall have the right to change a Beneficiary by completing, signing
and otherwise complying with the terms of the Beneficiary Designation Form and
the Committee’s rules and procedures, as in effect from time to time. If the
Participant names someone other than his or her spouse as a Beneficiary, the
Committee may, in its sole discretion, determine that spousal consent is
required to be provided in a form designated by the Committee, executed by such
Participant’s spouse and returned to the Committee. Upon the acceptance by the
Committee of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by
the Committee prior to his or her death.

 

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8.3           Acknowledgment.  No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in writing by the
Committee or its designated agent.

 

8.4           No Beneficiary Designation.  If a Participant fails to designate a
Beneficiary as provided in Sections 8.1, 8.2 and 8.3 above or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then the Participant’s designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant’s estate.

 

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

 

8.6           Discharge of Obligations.  The payment of benefits under the Plan
to a Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant’s Plan Agreement shall terminate upon such
full payment of benefits.

 

ARTICLE 9
Leave of Absence

 

9.1           Paid Leave of Absence.  If a Participant is authorized by the
Participant’s Employer to take a paid leave of absence from the employment of
the Employer, and such leave of absence does not constitute a Termination of
Employment, (a) the Participant shall continue to be considered eligible for the
benefits provided under the Plan, and (b) the Annual Deferral Amount shall
continue to be withheld during such paid leave of absence in accordance with
Section 3.2.

 

9.2           Unpaid Leave of Absence.  If a Participant is authorized by the
Participant’s Employer to take an unpaid leave of absence from the employment of
the Employer for any reason, and such leave of absence does not constitute a
Termination of Employment, such Participant shall continue to be eligible for
the benefits provided under the Plan. During the unpaid leave of absence, the
Participant shall not be allowed to make any additional deferral elections.
However, if the Participant returns to employment, the Participant may elect to
defer an Annual Deferral Amount for the Plan Year following his or her return to
employment and for every Plan Year thereafter while a Participant in the Plan,
provided such deferral elections are otherwise allowed and an Election Form is
delivered to and accepted by the Committee for each such election in accordance
with Section 3.2 above.

 

ARTICLE 10
Termination of Plan, Amendment or Modification

 

10.1         Termination of Plan.  Although each Employer anticipates that it
will continue the Plan for an indefinite period of time, there is no guarantee
that any Employer will continue the Plan or will not terminate the Plan at any
time in the future. Accordingly, each Employer reserves the right to terminate
the Plan with respect to all of its Participants. In the event of a Plan
termination no

 

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new deferral elections shall be permitted for the affected Participants and such
Participants shall no longer be eligible to receive new company contributions.
However, after the Plan termination the Account Balances of such Participants
shall continue to be credited with Annual Deferral Amounts attributable to a
deferral election that was in effect prior to the Plan termination to the extent
deemed necessary to comply with Code Section 409A and related Treasury
Regulations, and additional amounts shall continue to credited or debited to
such Participants’ Account Balances pursuant to Section 3.7. The Measurement
Funds available to Participants following the termination of the Plan shall be
comparable in number and type to those Measurement Funds available to
Participants in the Plan Year preceding the Plan Year in which the Plan
termination is effective. In addition, following a Plan termination, Participant
Account Balances shall remain in the Plan and shall not be distributed until
such amounts become eligible for distribution in accordance with the other
applicable provisions of the Plan. Notwithstanding the preceding sentence, to
the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Employer may
provide that upon termination of the Plan, all Account Balances of the
Participants shall be distributed, subject to and in accordance with any rules
established by such Employer deemed necessary to comply with the applicable
requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

 

10.2         Amendment.  Any Employer may, at any time, amend or modify the Plan
in whole or in part with respect to that Employer. Notwithstanding the
foregoing, no amendment or modification shall be effective to decrease the value
of a Participant’s vested Account Balance in existence at the time the amendment
or modification is made.

 

10.3         Plan Agreement.  Despite the provisions of Sections 10.1, if a
Participant’s Plan Agreement contains benefits or limitations that are not in
this Plan document, the Employer may only amend or terminate such provisions
with the written consent of the Participant.

 

10.4         Effect of Payment.  The full payment of the Participant’s vested
Account Balance in accordance with the applicable provisions of the Plan shall
completely discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan, and the Participant’s Plan Agreement shall
terminate.

 

ARTICLE 11
Administration

 

11.1         Committee Duties.  Except as otherwise provided in this Article 11,
this Plan shall be administered by a Committee, which shall consist of the
Board, or such committee as the Board shall appoint. Members of the Committee
may be Participants under this Plan. The Committee shall also have the
discretion and authority to (a) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan, and
(b) decide or resolve any and all questions, including benefit entitlement
determinations and interpretations of this Plan, as may arise in connection with
the Plan. Any individual serving on the Committee who is a Participant shall not
vote or act on any matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.

 

11.2         Administration Upon Change In Control. Within 120 days following a
Change in Control, the individuals who comprised the Committee immediately prior
to the Change in Control (whether

 

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or not such individuals are members of the Committee following the Change in
Control) may, by written consent of the majority of such individuals, appoint an
independent third party administrator (the “Administrator”) to perform any or
all of the Committee’s duties described in Section 11.1 above, including without
limitation, the power to determine any questions arising in connection with the
administration or interpretation of the Plan, and the power to make benefit
entitlement determinations. Upon and after the effective date of such
appointment, (a) the Company must pay all reasonable administrative expenses and
fees of the Administrator, and (b) the Administrator may only be terminated with
the written consent of the majority of Participants with an Account Balance in
the Plan as of the date of such proposed termination.

 

11.3         Agents. In the administration of this Plan, the Committee or the
Administrator, as applicable, may, from time to time, employ agents and delegate
to them such administrative duties as it sees fit (including acting through a
duly appointed representative) and may from time to time consult with counsel.

 

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

 

11.5         Indemnity of Committee.  All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Plan, except in the case of willful misconduct by the
Committee, any of its members, any such Employee or the Administrator.

 

11.6         Employer Information.  To enable the Committee and/or Administrator
to perform its functions, the Company and each Employer shall supply full and
timely information to the Committee and/or Administrator, as the case may be, on
all matters relating to the Plan, the Trust, the Participants and their
Beneficiaries, the Account Balances of the Participants, the compensation of its
Participants, the date and circumstances of the Termination of Employment,
Disability or death of its Participants, and such other pertinent information as
the Committee or Administrator may reasonably require.

 

ARTICLE 12
Other Benefits and Agreements

 

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

 

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ARTICLE 13
Claims Procedures

 

13.1         Presentation of Claim.  Any Participant or Beneficiary of a
deceased Participant (such Participant or Beneficiary being referred to below as
a “Claimant”) may deliver to the Committee a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan. If
such a claim relates to the contents of a notice received by the Claimant, the
claim must be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of the date on which the
event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.

 

13.2         Notification of Decision.  The Committee shall consider a
Claimant’s claim within a reasonable time, but no later than 90 days after
receiving the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of the
initial 90 day period. In no event shall such extension exceed a period of 90
days from the end of the initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall
notify the Claimant in writing:

 

(a)           that the Claimant’s requested determination has been made, and
that the claim has been allowed in full; or

 

(b)           that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant’s requested determination, and such notice must set
forth in a manner calculated to be understood by the Claimant:

 

(i)            the specific reason(s) for the denial of the claim, or any part
of it;

 

(ii)           specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;

 

(iii)          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;

 

(iv)          an explanation of the claim review procedure set forth in
Section 13.3 below; and

 

(v)           a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

 

13.3         Review of a Denied Claim.  On or before 60 days after receiving a
notice from the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant’s duly authorized representative) may file with the
Committee a written request for a review of the denial of the claim. The
Claimant (or the Claimant’s duly authorized representative):

 

(a)           may, upon request and free of charge, have reasonable access to,
and copies of, all documents, records and other information relevant (as defined
in applicable ERISA regulations) to the claim for benefits;

 

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(b)           may submit written comments or other documents; and/or

 

(c)           may request a hearing, which the Committee, in its sole
discretion, may grant.

 

13.4         Decision on Review.  The Committee shall render its decision on
review promptly, and no later than 60 days after the Committee receives the
Claimant’s written request for a review of the denial of the claim. If the
Committee determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial 60 day period. In no event
shall such extension exceed a period of 60 days from the end of the initial
period. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination. In rendering its decision, the Committee shall take into
account all comments, documents, records and other information submitted by the
Claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination. The decision must
be written in a manner calculated to be understood by the Claimant, and it must
contain:

 

(a)           specific reasons for the decision;

 

(b)           specific reference(s) to the pertinent Plan provisions upon which
the decision was based;

 

(c)           a statement that the Claimant is entitled to receive, upon request
and free of charge, reasonable access to and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to
the Claimant’s claim for benefits; and

 

(d)           a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a).

 

13.5         Legal Action.  A Claimant’s compliance with the foregoing
provisions of this Article 13 is a mandatory prerequisite to a Claimant’s right
to commence any legal action with respect to any claim for benefits under this
Plan.

 

ARTICLE 14
Trust

 

14.1         Establishment of the Trust.  In order to provide assets from which
to fulfill its obligations to the Participants and their Beneficiaries under the
Plan, the Company may establish a trust by a trust agreement with a third party,
the trustee, to which each Employer may, in its discretion, contribute cash or
other property, including securities issued by the Company, to provide for the
benefit payments under the Plan (the “Trust”).

 

14.2         Interrelationship of the Plan and the Trust.  The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the Plan. The provisions of the Trust shall govern the
rights of the Employers, Participants and the creditors of the Employers to the
assets transferred to the Trust. Each Employer shall at all times remain liable
to carry out its obligations under the Plan.

 

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

 

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ARTICLE 15
Miscellaneous

 

15.1         Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that “is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan
shall be administered and interpreted (a) to the extent possible in a manner
consistent with the intent described in the preceding sentence, and (b) in
accordance with Code Section 409A and related Treasury guidance and Regulations.

 

15.2         Unsecured General Creditor.  Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer’s assets shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

 

15.3         Employer’s Liability.  An Employer’s liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as entered
into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Plan Agreement.

 

15.4         Nonassignability.  Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable
and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in the
event of a Participant’s or any other person’s bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise.

 

15.5         Not a Contract of Employment.  The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged to be an
“at will” employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice, unless
expressly provided in a written employment agreement. Nothing in this Plan shall
be deemed to give a Participant the right to be retained in the service of any
Employer, either as an Employee or a Director, or to interfere with the right of
any Employer to discipline or discharge the Participant at any time.

 

15.6         Furnishing Information.  A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary.

 

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15.7         Terms.  Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

 

15.8         Captions.  The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

 

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

 

15.10       Notice.  Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 

On Assignment, Inc.

Attn: Deferred Compensation

Plan Committee

26651 West Agoura Road

Calabasas, CA  91302

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

 

Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.

 

15.11       Successors.  The provisions of this Plan shall bind and inure to the
benefit of the Participant’s Employer and its successors and assigns and the
Participant and the Participant’s designated Beneficiaries.

 

15.12       Spouse’s Interest.  The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse’s will, nor shall such interest
pass under the laws of intestate succession.

 

15.13       Validity.  In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.

 

15.14       Incompetent.  If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person’s property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant and the Participant’s Beneficiary, as

 

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the case may be, and shall be a complete discharge of any liability under the
Plan for such payment amount.

 

15.15       Domestic Relations Orders.  If necessary to comply with a domestic
relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a
court has determined that a spouse or former spouse of a Participant has an
interest in the Participant’s benefits under the Plan, the Committee shall have
the right to immediately distribute the spouse’s or former spouse’s interest in
the Participant’s benefits under the Plan to such spouse or former spouse.

 

15.16       Distribution in the Event of Income Inclusion Under Code Section
409A. If any portion of a Participant’s Account Balance under this Plan is
required to be included in income by the Participant prior to receipt due to a
failure of this Plan to comply with the requirements of Code Section 409A and
related Treasury Regulations, the Committee may determine that such Participant
shall receive a distribution from the Plan in an amount equal to the lesser of
(i) the portion of his or her Account Balance required to be included in income
as a result of the failure of the Plan to comply with the requirements of Code
Section 409A and related Treasury Regulations, or (ii) the unpaid vested Account
Balance.

 

15.17       Deduction Limitation on Benefit Payments. If an Employer reasonably
anticipates that the Employer’s deduction with respect to any distribution from
this Plan would be limited or eliminated by application of Code Section 162(m),
then to the extent permitted by Treas. Reg. §1.409A-2(b)(7)(i), payment shall be
delayed as deemed necessary to ensure that the entire amount of any distribution
from this Plan is deductible. Any amounts for which distribution is delayed
pursuant to this Section shall continue to be credited/debited with additional
amounts in accordance with Section 3.7. The delayed amounts (and any amounts
credited thereon) shall be distributed to the Participant (or his or her
Beneficiary in the event of the Participant’s death) at the earliest date the
Employer reasonably anticipates that the deduction of the payment of the amount
will not be limited or eliminated by application of Code Section 162(m). In the
event that such date is determined to be after a Participant’s Termination of
Employment and the Participant to whom the payment relates is determined to be a
Specified Employee, then to the extent deemed necessary to comply with Treas.
Reg. §1.409A-3(i)(2), the delayed payment shall not made before the end of the
six-month period following such Participant’s Termination of Employment.

 

IN WITNESS WHEREOF, the Company has signed this Plan document as of September 4,
2008.

 

 

“Company”

 

 

 

On Assignment, Inc.

 

a Delaware corporation

 

 

 

 

 

By:

/s/Peter T. Dameris

 

Name: Peter T. Dameris

 

Title:  Chief Executive Officer and President

 

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