EXHIBIT 10.15G

 

PIONEER NATURAL RESOURCES USA, INC.

401(k) AND MATCHING PLAN

(Amended and Restated Effective as of January 1, 2008)

 

 

 

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PIONEER NATURAL RESOURCES USA, INC.

401(k) AND MATCHING PLAN

(Amended and Restated Effective as of January 1, 2008)

TABLE OF CONTENTS

PAGE

ARTICLE I          DEFINITIONS AND CONSTRUCTION

1

 

Section 1.1     Definitions

1

 

Section 1.2     Construction

10

ARTICLE II          ELIGIBILITY AND PARTICIPATION

11

 

Section 2.1     Eligibility

11

 

Section 2.2     Participation

11

ARTICLE III         CONTRIBUTIONS, LIMITATIONS AND FORFEITURES

11

 

Section 3.1     Pre-Tax and Pre-Tax Bonus Contributions.

11

 

Section 3.2     Matching Contributions.

13

 

Section 3.3     Catch-Up Contributions

14

 

Section 3.4     After-Tax Contributions.

14

 

Section 3.5     Payment for Contributions

15

 

Section 3.6     Return of Employer Contributions

15

 

Section 3.7     Nondiscrimination Testing.

15

 

Section 3.8     Application of Forfeitures

20

 

Section 3.9     Rollover Contributions

20

ARTICLE IV         TRUST FUND AND VALUATIONS

21

 

Section 4.1     Trust and Trustee

21

 

Section 4.2     Trust Divestment Options

21

 

Section 4.3     Valuation and Adjustment of Accounts

22

 

Section 4.4     Participant Statements

22

ARTICLE V          VESTING

22

 

Section 5.1     Fully Vested Accounts

22

 

Section 5.2     Vesting of Employer Account.

22

 

Section 5.3     Special Vesting Provisions.

23

ARTICLE VI         VALUATIONS, DISTRIBUTIONS AND WITHDRAWALS

24

 

Section 6.1     Time of Distribution.

25

 

Section 6.2     Distribution of Retirement and Disability Benefits.

26

 

Section 6.3     Distribution of Death Benefit.

27

 

Section 6.4     Distribution of Separation from Employment Benefit.

29

 

Section 6.5     Forfeitures.

30

 

Section 6.6     In-Service Withdrawals.

31

 

Section 6.7     Distributions to Minors and Persons Under Legal Disability

33

 

Section 6.8     Unclaimed or Uncashed Benefits

33

 

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Section 6.9     Plan Loans.

34

 

Section 6.10   Qualified Domestic Relations Orders

35

 

Section 6.11   Transfer of Eligible Rollover Distribution.

36

 

Section 6.12   Automatic Rollovers

37

ARTICLE VII         PLAN ADMINISTRATION

37

 

Section 7.1      401(k) and Matching Plan Committee

38

 

Section 7.2     Powers, Duties and Liabilities of the Committee

38

 

Section 7.3     Rules, Records and Reports

38

 

Section 7.4     Administration Expenses and Taxes

38

ARTICLE VIII        AMENDMENT AND TERMINATION

39

 

Section 8.1     Amendment

39

 

Section 8.2    Termination

39

 

Section 8.3      Benefit Plan Design Committee

39

ARTICLE IX          TOP-HEAVY PROVISIONS

39

 

Section 9.1     Top-Heavy Definitions

40

 

Section 9.2     Minimum Contribution Requirement

41

 

Section 9.3     Minimum Vesting Schedule

41

ARTICLE X           MISCELLANEOUS GENERAL PROVISIONS

42

 

Section 10.1     Spendthrift Provision

42

 

Section 10.2    Claims Procedure

42

 

Section 10.3    Maximum Contribution Limitation

42

 

Section 10.4    Employment Noncontractual

43

 

Section 10.5    Limitations on Responsibility

43

 

Section 10.6    Merger or Consolidation

43

 

Section 10.7    Applicable Law

43

 

Section 10.8    USERRA Compliance

43

 

 

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PIONEER NATURAL RESOURCES USA, INC.

401(k) AND MATCHING PLAN

(Amended and Restated Effective as of January 1, 2008)

THIS 401(k) AND MATCHING PLAN, a profit sharing plan, made and executed by
PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation (the “Company”),

WITNESSETH THAT:

WHEREAS, the Company has heretofore maintained for the benefit of its employees
a qualified profit sharing plan known as the Pioneer Natural Resources USA, Inc.
401(k) and Matching Plan; and

WHEREAS, the Company now desires to restate the Pioneer Natural Resources USA,
Inc. 401(k) and Matching Plan to comply with the final Internal Revenue Code
section 415 regulations, currently effective provisions of the Pension
Protection Act of 2006, and the Heroes Earnings Assistance and Relief Tax
(“HEART”) Act of 2008, to clarify forfeitures, and to make certain other
administrative changes.

NOW, THEREFORE, in consideration of the premises and pursuant to the authority
reserved thereunder, the Pioneer Natural Resources USA, Inc. 401(k) and Matching
Plan is hereby amended by restatement in its entirety, effective as of January
1, 2008, to read as follows:

ARTICLE I

 

DEFINITIONS AND CONSTRUCTION

Section 1.1      Definitions. Unless the context clearly indicates otherwise,
when used in this Plan:

(a)       “Account” means a Participant’s After-Tax Account, Catch-Up
Contribution Account, Employer Account, Matching Plan Account, Mesa After-Tax
Account, Mesa Premium Account, Mesa Profit-Sharing Account, Pre-Tax Account,
Prior Plan Employer Account, Prior Plan Pre-Tax Account, Rollover Account, Roth
Account, Roth Catch-Up Contribution Account and/or Roth Rollover Account, as the
context requires. The Committee may establish and maintain separate subaccounts
within a Participant’s Accounts if it deems such to be necessary for the proper
administration of the Plan.

(b)       “Affiliated Company” means any corporation or organization, other than
an Employer, which is a member of a controlled group of corporations (within the
meaning of Code Section 414(b)) or of an affiliated service group (within the
meaning of Code Section 414(m)) with respect to which an Employer is also a
member, and any other incorporated or unincorporated trade or business which
along with an Employer is under common control (within the meaning of the
regulations from time to time promulgated by the Secretary of the Treasury
pursuant to Code Section 414(c)); provided,

 

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however, that for the purposes of Section 10.3 of the Plan, Code Section 414(b)
and (c) shall be applied as modified by Code Section 415(h).

(c)       “After-Tax Account” means the account established and maintained under
this Plan by the Committee to record a Participant’s interest under this Plan
attributable to After-Tax Contributions.

(d)       “After-Tax Contribution” means a contribution made by a Participant to
this Plan pursuant to Section 3.4.

(e)       “Basic Compensation” means the sum of (i) the base salary or wages and
any overtime payable by an Employer to an Employee for personal services
rendered to the Employer (including sick and vacation pay), but excluding any
amount payable pursuant to an Employer’s salary continuation program, (ii) any
contributions made by an Employer on behalf of the Employee to a qualified cash
or deferred arrangement (within the meaning of Code Section 401(k)) maintained
by such Employer, including any Catch-Up Contributions, Pre-Tax Contributions
and Pre-Tax Bonus Contributions made by an Employer to this Plan on behalf of
such Employee, (iii) any compensation reduction amounts elected by such Employee
for the purchase of benefits pursuant to a cafeteria plan (within the meaning of
Code Section 125(d)) maintained by an Employer, (iv) any elective amounts that
are not includible in the gross income of an Employee by reason of Code Section
132(f)(4), and (v) any military differential wage payments made by the Employer;
provided, however, that the Basic Compensation of an Employee taken into account
under the Plan for any Plan Year shall not exceed $200,000 (as adjusted to take
into account any cost-of-living increases authorized pursuant to Code Section
401(a)(17)(B)).

(f)        “Catch-Up Contribution” means a contribution made by an Employer on
behalf of a Participant pursuant to Section 3.3.

(g)       “Catch-Up Contribution Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s interest
under this Plan attributable to Catch-Up Contributions (other than Catch-Up
Contributions that are treated by an Employer as designated Roth contributions
(within the meaning of Code Section 402A(c)) pursuant to Section 3.3.

 

(h)

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

(i)        “Committee” means the 401(k) and Matching Plan Committee appointed by
the Board of Directors of the Company to administer the Plan.

(j)        “Company” means Pioneer Natural Resources USA, Inc., a Delaware
corporation, and any successor thereto.

(k)       “Compensation” means the sum of (i) wages within the meaning of Code
Section 3401(a) and all other payments of remuneration to an Employee by an
Employer (in the course of the Employer’s trade or business) for which the
Employer is required to furnish the Employee a written statement under Code
Sections 6041(d), 6051(a)(3) and 6052, but determined without regard to any
rules

 

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that limit the remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)), (ii) any contributions made by an Employer on
behalf of the Employee to a qualified cash or deferred arrangement (within the
meaning of Code Section 401(k)) maintained by such Employer, including any
Catch-Up Contributions, Pre-Tax Contributions and Pre-Tax Bonus Contributions
made by an Employer to this Plan on behalf of such Employee, (iii) any
compensation reduction amounts elected by such Employee for the purchase of
benefits pursuant to a cafeteria plan (within the meaning of Code Section 125(d)
maintained by an Employer, (iv) any elective amounts that are not includible in
the gross income of an Employee by reason of Code Section 132(f)(4), and (v)
including any military differential wage payments made by the Employer;
provided, however, that except for purposes of determining whether an Employee
is a Highly Compensated Employee or a Key Employee (within the meaning of
Section 9.1(c)), the Compensation of an Employee taken into account under the
Plan for any Plan Year shall not exceed $200,000 (as adjusted to take into
account any cost-of-living increases authorized pursuant to Code Section
401(a)(17)(B)).

(i)        To be taken into account for a Plan Year, Compensation must actually
be paid or made available to a Participant (or, if earlier, includible in the
gross income of the Participant) within the Plan Year and prior to the
Participant’s severance from employment with the Employer. For purposes of this
rule, amounts representing regular pay after severance from employment including
payment for services during the Employee’s regular working hours, or
compensation for services outside the Employee’s regular working hours (such as
overtime or shift differential), commissions, bonuses, or other similar payments
will not fail to be Compensation merely because they are paid after the
Participant’s severance from employment, provided that such amounts are paid by
the later of two and one half (2½) months after the severance from employment or
the end of the Plan Year that includes the date of the severance from employment
and the amounts would have been included in Compensation if they were paid prior
to the Employee’s severance from employment.

(ii)       Compensation also specifically includes the following: (A) certain
cashouts and deferred compensation are included in Compensation if paid by the
later of two and one half (2½) months following severance from employment or the
end of the Plan Year during which the severance occurred. Cashouts are
includible only if they would have been included in Compensation if paid prior
to the Participant’s severance from employment, are paid for bona fide sick,
vacation and/or other leave, and the Participant would have been able to use
that leave if employment had continued. Deferred compensation is includible in
Compensation only if it would have been includible in Compensation if paid prior
to the Participant’s severance from employment, is received from a nonqualified
unfunded deferred compensation plan, would have been paid at the same time if
the Participant had continued in employment, and would have been included in the
Participant’s gross income; (B) payments to an individual who does not currently
perform services for the Employer by reason of qualified military service (as
that term is used in section 414(u)(1)) to the extent the payments do not

 

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exceed the amounts the individual would have received if the individual had
continued to perform services for the employer rather than entering qualified
military service, and (C) compensation paid to a Participant who is permanently
and totally disabled (as defined in section 22(e)(3)).

(iii)      Compensation will exclude severance pay as provided pursuant to
regulations promulgated under section 415 of the Code. Effective for Plan Years
beginning on and after July 1, 2007, Compensation will specifically exclude (i)
severance pay or parachute payments within the meaning of section 280G(b)(2) of
the Code if paid after severance from employment; and (ii) post-severance
payments made under a nonqualified unfunded deferred compensation plan unless
the payments would have been paid at that time without regard to the severance
from employment.                  

(l)        “Covered Employee” means any Employee other than an individual who is
(i) a member of a collective bargaining unit with which an Employer negotiates
and with respect to whom no coverage under this Plan has been provided by
collective bargaining agreement, (ii) a nonresident alien with respect to the
United States who receives no earned income from an Employer which constitutes
income from sources within the United States, (iii) classified by an Employer as
a student or intern, (iv) not treated by an Employer at the time of the
performance of services as an employee for federal tax purposes, regardless of
any subsequent classification by an Employer, any governmental agency or
account, or (v) treated as a leased employee by an Employer. A leased employee
means any person who is not an employee of the recipient of the services
performed and who provides services to the recipient if (i) such services are
provided pursuant to an agreement between the recipient and any other person,
(ii) such person has performed such services for the recipient (or for the
recipient and related persons) on a substantially full-time basis for a period
of at least one year, and (iii) such services are performed under primary
direction or control by the recipient.

 

(m)

“Employee” means any individual employed by an Employer.

(n)       “Employer” shall include the Company and any other incorporated or
unincorporated trade or business which may subsequently adopt this Plan with the
consent of the Board of Directors of the Company.

(o)       “Employer Account” means the account established and maintained under
this Plan by the Committee to record a Participant’s interest under this Plan
attributable to (i) any amounts credited to his or her Employer Account under
the Superseded Plan as in effect on December 31, 2001, and (ii) any Matching
Contributions made to the Plan for the Participant on or after January 1, 2002.

(p)       “Employment Date” means the date an Employee first performs an Hour of
Service.

 

(q)

“Highly Compensated Employee” means for a Plan Year:

 

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(i)        any Employee who during such Plan Year or during the preceding Plan
Year was at any time a 5% owner (as defined in Code Section 416(i)(l)) of an
Employer or Affiliated Company, or

(ii)       any Employee who during the preceding Plan Year received Compensation
greater than $80,000 (as adjusted to take into account any cost-of living
increases authorized pursuant to Code Section 414(q)(l)) and who is in the group
consisting of the top 20% (when ranked on the basis of Compensation received
during such preceding year) of all Employees, except those excluded pursuant to
Code Section 414(q)(5).

Solely for purposes of this definition, (A) an employee of an Affiliated Company
shall be deemed to be an Employee, (B) compensation received from an Affiliated
Company shall be deemed to be Compensation, and (C) a nonresident alien who
receives no earned income from an Employer or Affiliated Company which
constitutes income from sources within the United States shall not be considered
an Employee.

(r)        “Hour of Service” means an hour for which an Employee is directly or
indirectly compensated or entitled to compensation (including back pay,
regardless of mitigation of damages) by an Employer for the performance of
duties for an Employer or for reasons (such as vacation, sickness or disability)
other than the performance of duties for an Employer. An Employee will be
credited with eight Hours of Service per day for any customary work period
during which such Employee is on leave of absence authorized by his or her
Employer. Leaves of absence shall be granted by an Employer to its Employees on
a uniform, nondiscriminatory basis. In no event shall more than 501 Hours of
Service be credited on account of any single continuous period during which the
individual performs no duties. An Employee’s Hours of Service shall be credited
to the appropriate Plan Years or eligibility computation period determined in
accordance with the provisions of Section 2530.200b-2(b) and (c) of the
Department of Labor Regulations, which are incorporated herein by this
reference. In determining Hours of Service for the purposes of this Plan,
periods of employment by an Affiliated Company and services performed as a
leased employee (within the meaning of Code Section 414(n)) of an Employer or
Affiliated Company shall be deemed to be periods of employment by an Employer.

(s)       “Investment Fund” means any fund authorized for the investment of
Trust assets pursuant to Section 4.2.

(t)        “Matching Contribution” means a contribution made by an Employer to
the Plan for a Participant pursuant to Section 3.2.

(u)       “Matching Plan Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under this
Plan attributable to matching contributions made for such Participant pursuant
to the provisions of the Matching Plan as in effect on December 31, 2001.

 

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(v)       “Matching Plan” means the Pioneer Natural Resources USA, Inc. Matching
Plan, as in effect from time to time prior to January 1, 2002.

(w)      “Mesa After-Tax Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under this
Plan attributable to his or her accrued benefit derived from after-tax
contributions to the Mesa Profit-Sharing Plan as in effect on September 30,
1997.

(x)       “Mesa Premium Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under this
Plan attributable to Employer contributions made for such Participant pursuant
to the provisions of the Mesa Premium Plan as in effect on September 30, 1997.

(y)       “Mesa Premium Plan” means the Mesa Employees Premium Plan and Trust
Agreement as in effect from time to time prior to October 1, 1997.

(z)       “Mesa Profit-Sharing Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s interest
under this Plan attributable to his or her accrued benefit derived from employer
contributions to the Mesa Profit-Sharing Plan as in effect on September 30,
1997.

(aa)     “Mesa Profit-Sharing Plan” means the Mesa Profit-Sharing Plan and Trust
Agreement as in effect from time to time prior to October 1, 1997.

(bb)     “Non-Highly Compensated Employee” means for a Plan Year any Employee
who is not a Highly Compensated Employee for such Plan Year.

(cc)     The “Normal Retirement Date” of a Participant means the day such
Participant attains the age of 65 years.

(dd)     “One Year Break in Service” means a 12-consecutive-month Period of
Severance during which an Employee fails to complete a single Hour of Service.

(ee)     “Participant” means any individual who was a participant in either the
Superseded Plan or the Matching Plan or who has elected to participate in this
Plan pursuant to Section 2.2, and whose Vested Interest under this Plan has not
been fully distributed.

(ff)      “Period of Service” means, for purposes of determining a Participant’s
Vested Interest in his or her Employer Account, the sum, rounded downward, to
the nearest whole year, of each period of time commencing with an Employee’s
Employment Date or Reemployment Date and ending on the first date thereafter a
Period of Severance begins (except as provided in subsection (gg) of this
Section in the case of an Employee’s maternity or paternity leave of absence).
Included in such sum to be credited to an Employee shall be each period of time
during which the Employee is on an authorized leave of absence for reasons of
vacation, sickness, layoff or another occasion designated and applied by an
Employer or Affiliated Company on a nondiscriminatory basis, but in no event
exceeding one year in length. A Period of Service also includes any Period of
Severance of less than 12 consecutive months.

 

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If an Employee who has no vested right to any amount credited to his or her
Account incurs a One Year Break in Service, such Employee shall forfeit his or
her prior Period of Service unless he or she completes an additional one-year
Period of Service before the number of his or her consecutive One Year Breaks in
Service equals five. Solely for the purpose of determining the Period of Service
completed by a Covered Employee who was in the employ of Colorado Interstate Gas
Company on May 1, 2001, periods of employment by Colorado Interstate Gas Company
or a subsidiary thereof prior to May 1, 2001, shall be considered to be periods
of employment by an Employer. Solely for the purpose of determining the Period
of Service completed by a Covered Employee who was in the employ of Evergreen
Resources, Inc. (or a subsidiary thereof) on September 27, 2004, and who became
an employee of an Employer on September 28, 2004 and a Participant in this Plan
on October 1, 2004, service with Evergreen Resources, Inc. or a subsidiary
thereof (or a predecessor of any such entity) prior to September 28, 2004, that
is taken into account for purposes of determining such Employee’s service for
vesting purposes under the Evergreen Resources, Inc. 401(k) Profit Sharing Plan
shall be considered to be service with an Employer.

Any provision of this Plan to the contrary notwithstanding, if a Participant
participated in the Superseded Plan prior to October 1, 1997, the Period of
Service completed by such Participant prior to January 1, 1998, shall be (i)
such Participant’s years of Vesting Service determined under the Retirement
Savings Plan for Employees of Parker & Parsley as of June 27, 1996, (ii) plus
one year for the Plan Year ending December 31, 1996, if during such Plan Year
such Participant completed a Year of Service under the Retirement Savings Plan
for Employees of Parker & Parsley as in effect at the end of such year, (iii)
plus one year for the Plan Year ending December 31, 1997, if such Participant
either (A) completed a year of Vesting Service as of September 30, 1997, under
the Superseded Plan as in effect on such date or (B) completed a one year Period
of Service under the foregoing provisions of this definition during the entire
such Plan Year. For purposes of clause (ii) of the preceding sentence, a
Participant shall be credited with a number of Hours of Service applying the
monthly equivalency method set forth in Labor Reg. § 2530.200b-3(e)(l)(iv) to
any fractional part of a year credited to such Participant as of June 28, 1996.

(gg)     “Period of Severance” means a period of time commencing with the date
an Employee ceases to be employed by an Employer or Affiliated Company for
reasons of Retirement, Permanent Disability, death, being discharged, or
voluntarily ceasing employment, or with the first anniversary of the date of his
or her absence for any other reason, and ending with the date such Employee
resumes employment with an Employer or Affiliated Company, provided, however,
that solely for purposes of determining whether an Employee incurs a One Year
Break in Service, the Period of Severance of an Employee who is absent from work
due to the pregnancy of the Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with the adoption of such
child by such Employee, or caring for such child for a period beginning
immediately following such birth or placement shall not commence until the
second anniversary of the first date of such absence and the period between the
first and second anniversaries of the first date of such absence shall be
considered

 

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neither a Period of Service nor a Period of Severance.

(hh)     “Permanent Disability” means a Participant’s disability that qualifies
the Participant for long-term disability benefits under a plan providing such
benefits sponsored by an Employer or, if a Participant is not eligible for
benefits under such a plan, a disability that, as determined by the Social
Security Administration, entitles the Participant to Social Security disability
benefits.

(ii)       “Pioneer Stock” means the common stock of Pioneer Natural Resources
Company, a Delaware corporation, and any successor thereto.

(jj)       “Plan” means this Pioneer Natural Resources USA, Inc. 401(k) and
Matching Plan (Amended and Restated Effective as of January 1, 2008), as in
effect from time to time.

 

(kk)

“Plan Year” means the calendar year.

(ll)       “Pre-Tax Account” means the account established and maintained under
this Plan by the Committee to record a Participant’s interest under this Plan
attributable to (i) Pre-Tax Contributions and Pre-Tax Bonus Contributions made
by an Employer on behalf of such Participant, other than Pre-Tax Contributions
and Pre-Tax Bonus Contributions that are treated by an Employer as designated
Roth contributions (within the meaning of Code Section 402A(c)) pursuant to
Section 3.1, and (ii) any amounts credited to his or her Employee Pre-Tax
Contribution Account under the Superseded Plan as in effect on September 30,
1997.

(mm)   “Pre-Tax Bonus Contribution” means a contribution made by an Employer to
this Plan on behalf of a Participant pursuant to Section 3.1(b).

(nn)     “Pre-Tax Contribution” means a contribution made by an Employer to this
Plan on behalf of a Participant pursuant to Section 3.1(a).

(oo)     “Prior Plan Employer Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s interest
under this Plan attributable to any amounts credited to his or her BOUSA
Employer Matching Contribution Account under the Retirement Savings Plan for
Employees of Parker & Parsley as in effect on June 27,1996.

(pp)     “Prior Plan Pre-Tax Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s interest
under this Plan attributable to any amounts credited to his or her Plan A Salary
Deferral Contribution Account or his or her BOUSA Plan Salary Deferral
Contribution Account under the Retirement Savings Plan for Employees of Parker &
Parsley as in effect on June 27,1996.

(qq)     “Qualified Joint and Survivor Annuity” means an annuity which is
payable for the life of the Participant with a survivor annuity payable for the
life of his or her spouse equal to 50% of the

 

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amount of the annuity payable during the life of the Participant; provided,
however, that in the case of a Participant who is not married, a Qualified Joint
and Survivor Annuity means an annuity which is payable for the life of the
Participant. “Qualified Optional Survivor Annuity” means an annuity which is
payable for the life of the Participant with a survivor annuity payable for the
life of his or her spouse equal to 75% of the amount of the annuity payable
during the life of the Participant. “Alternate Qualified Joint and Survivor
Annuity” means an annuity which is payable for the life of the Participant with
a survivor annuity payable for the life of his or her spouse equal to 100% of
the amount of the annuity payable during the life of the Participant.

(rr)      “Qualified Preretirement Survivor Annuity” means an annuity which is
payable for the life of the Participant’s surviving spouse.

(ss)      “Reemployment Date” means the date an Employee first performs an Hour
of Service following a Period of Severance.

(tt)       “Retirement” means the termination of a Participant’s employment with
an Employer or Affiliated Company on or after his or her Normal Retirement Date
for any reason other than death or transfer to the employment of another
Employer or Affiliated Company.

(uu)     “Rollover Account” means the account established and maintained under
this Plan by the Committee to record a Participant’s interest under this Plan
attributable to (i) Rollover Contributions made by such Participant to this Plan
pursuant to Section 3.9, (ii) any amounts credited to his or her Rollover
Contribution Account under the Superseded Plan as in effect on September 30,
1997, and (iii) any amounts credited to his or her Rollover Account under the
Mesa Profit-Sharing Plan as in effect on September 30, 1997.

(vv)     “Rollover Contribution” means a contribution made to this Plan pursuant
to Section 3.9.

(ww)   “Rollover Property” means property the value of which would be excluded
from the gross income of the transferor under Code Sections 402(c), 403(a)(4) or
408(d)(3) if transferred to the Plan.

(xx)     “Roth Account” means the account established and maintained under this
Plan by the Committee to record a Participant’s interest under this Plan
attributable to Roth Contributions.

(yy)     “Roth Catch-Up Contribution Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s interest
under this Plan attributable to Catch-Up Contributions designated as Roth
contributions (within the meaning of Section 402A(c) of the Code) pursuant to
Section 3.3.

(zz)     “Roth Contribution” means a Pre-Tax Contribution or Pre-Tax Bonus
Contribution made by an Employer to this Plan on behalf of a Participant and
designated by the Participant as a Roth

 

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contribution (within the meaning of Section 402A(c) of the Code) pursuant to
Section 3.1(e).

(aaa)    “Roth Rollover Account” means the account established and maintained
under this Plan by the Committee to record an individual’s interest under this
Plan attributable to Roth Rollover Property transferred by such individual to
this Plan.

(bbb)   “Roth Rollover Property” means cash the amount of which would be a
rollover contribution described in Section 402A(c)(3) of the Code if transferred
to the Plan.

(ccc)    “Superseded Plan” means the Pioneer Natural Resources USA, Inc. 401(k)
Plan, as in effect from time to time prior to January 1, 2002. Prior to August
7, 1997, the Superseded Plan was known as the Retirement Savings Plan for
Employees of Parker & Parsley.

(ddd)   “Total Tax-Advantaged Contributions” means the sum of the Pre-Tax
Contributions, Pre-Tax Bonus Contributions, and Roth Contributions made on
behalf of a Participant.

 

(eee)

“Trust” means the trust fund established pursuant to Section 4.1.

(fff)     “Trustee” means the individual or corporate trustee or trustees from
time to time appointed and acting as trustee or trustees of the Trust
established pursuant to the Plan.

 

(ggg)

“Valuation Date” means each business day.

(hhh)   “The “Vested Interest” of a Participant means the then vested portion of
the amount credited to the Accounts of such Participant at the particular point
in time in question.

(iii)      “Year of Eligibility Service” means the period of 12 consecutive
months commencing on an Employee’s Employment Date, or any Plan Year commencing
after his or her Employment Date, during which the Employee completes at least
1,000 Hours of Service.

Section 1.2      Construction. The titles to the Articles and the headings of
the Sections in this Plan are placed herein for convenience of reference only
and in case of any conflict the text of this instrument, rather than such titles
or headings, shall control. Whenever a noun or pronoun is used in this Plan in
plural form and there be only one person or entity within the scope of the word
so used, or in singular form and there be more than one person or entity within
the scope of the word so used, such noun or pronoun shall have a plural or
singular meaning as appropriate under the circumstance.

 

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ARTICLE II

 

ELIGIBILITY AND PARTICIPATION

Section 2.1      Eligibility. Each participant in the Plan on December 31, 2007,
shall continue as a Participant in this Plan as of January 1, 2008. Each other
Covered Employee shall be eligible to become a Participant in the Plan as
follows:

(a)       For a Covered Employee classified by his or her Employer as employed
on a temporary or seasonal basis, he or she may become a Participant in the Plan
as of the earlier of (i) the first day of the Plan Year immediately following
his or her completion of a Year of Eligibility Service or (ii) the date six
months after the date the Covered Employee completed a Year of Eligibility
Service unless he or she experiences a separation from service with his or her
Employer before the date referred to in (i) or (ii).

(b)       Any other Covered Employee may become a Participant in the Plan as of
the first payroll date following his or her Employment Date.

If a Participant ceases to be a Covered Employee, such Participant shall remain
a Participant under this Plan but no contributions shall be made to the Plan on
his or her behalf while he or she is not a Covered Employee.

Section 2.2      Participation. Each Covered Employee who is eligible to
participate in the Plan may elect, in the manner prescribed by the Committee, to
participate in this Plan as soon as administratively practicable but no later
than 31 days following the completion and submission of such election. Any
Participant who ceases to be a Covered Employee shall thereupon cease to be
eligible to participate in the Plan; provided, however, that if any such
Participant is thereafter reemployed as a Covered Employee, he or she shall be
eligible to elect to resume participating in the Plan as of the date of such
reemployment.

ARTICLE III

 

CONTRIBUTIONS, LIMITATIONS AND FORFEITURES

 

 

Section 3.1

Pre-Tax and Pre-Tax Bonus Contributions.

(a)       Each Participant may elect to have his or her Employer make a Pre-Tax
Contribution to the Plan on his or her behalf for each pay period in an amount
up to 80% of his or her Basic Compensation for that pay period, subject to any
other deductions from the Participant’s Basic Compensation that are required by
law or authorized by the Participant pursuant to a compensation reduction
agreement. All such contributions shall be made by uniform payroll deductions
pursuant to a compensation reduction agreement which authorizes the Employer to
pay such contributions to the Trustee on behalf of the Participant.

(b)       In addition, each Participant may elect to have his or her Employer
make a Pre-Tax Bonus Contribution to the Plan on his or her behalf in an amount
up to 80% of the bonus payable to such Participant under the Employer’s annual
bonus program.

 

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(c)       The Committee shall establish and maintain for each Participant a
Pre-Tax Account All amounts attributable to Pre-Tax Contributions and Pre-Tax
Bonus Contributions made by an Employer on behalf of such Participant pursuant
to this Section 3.1 (other than those contributions designated as Roth
Contributions) shall be credited to such Participant’s Pre-Tax Account.

(d)       A Participant may change the applicable percentage of such payroll (or
bonus) deductions or suspend his or her election to have Pre-Tax Contributions
and/or Pre-Tax Bonus Contributions made to the Plan at any time. Any such change
or suspension will be effective as soon as administratively practicable but no
later than 31 days following the submission of such change or submission.

(e)       A Participant may irrevocably elect in such manner as the Committee
may require to have his or her Employer designate all or any portion of a
Pre-Tax Contribution or Pre-Tax Bonus Contribution as a designated Roth
Contribution. A Participant may change the applicable amount or percentage or
suspend such election at any time. Any such change or suspension will be
effective as soon as administratively practicable but no later than 31 days
following the submission of such change or suspension. Any amount designated as
a Roth Contribution shall be treated by the Participant’s Employer as not
excludable from the Participant’s gross income.

(f)        The Committee shall establish and maintain for each Participant a
Roth Account. All amounts attributable to Pre-Tax Contributions or Pre-Tax Bonus
Contributions made by an Employer on behalf of such Participant and designated
as Roth Contributions pursuant to Section 3.1(e) shall be credited to such
Participant’s Roth Account.

(g)       Any provision of this Plan to the contrary notwithstanding, the amount
of Total Tax-Advantaged Contributions made to the Plan by an Employer on behalf
of a Participant for a calendar year when added to the amount of any other
elective deferrals within the meaning of Code Section 402(g)(3) made with
respect to such Participant pursuant to any other plan, contract or arrangement
of an Employer or Affiliated Company for such calendar year shall not exceed the
dollar limitation contained in Code Section 402(g) in effect for such calendar
year, except to the extent permitted under Section 3.3 of the Plan and Code
Section 414(v), if applicable. In the event the limitation of this subsection
(g) is exceeded with respect to a Participant for a Plan Year, then if such
Participant notifies the Committee of the amount of Total Tax-Advantaged
Contributions that exceeded such limitation within such reasonable period of
time prior to the first April 15 following such year as the Committee may
prescribe in its absolute discretion, the Participant may elect, in accordance
with procedures established by the Committee, to have an amount of Pre-Tax
Contributions, Pre-Tax Bonus Contributions, and/or Roth Contributions equal to
the excess Total Tax-Advantaged Contributions (along with any income allocable
thereto) distributed to such Participant no later than such April 15. A
Participant will be deemed to have so notified the Committee of excess elective
deferrals for a calendar year if, and only to the extent, such excess arises on
account of Total Tax-Advantaged Contributions made to this Plan and elective
deferrals made to other plans maintained by an Employer or Affiliated Company
for such calendar year. Any such excess deferrals distributed to a Participant
shall be distributed pursuant to the

 

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Participant’s election; provided, however, that if no such election is made,
such excess deferrals shall be distributed first from any Pre-Tax Bonus
Contributions and then, to the extent necessary, from Pre-Tax Bonus
Contributions that are designated as Roth Contributions and then, to the extent
necessary, from Pre-Tax Contributions and then from Pre-Tax Contributions that
are designated as Roth Contributions. The income allocable to any excess Total
Tax-Advantaged Contributions for a Participant for a taxable year shall be the
sum of (i) the income allocable to any excess contributions distributed from his
or her Pre-Tax Account, and (ii) the income allocable to any excess
contributions distributed from his or her Roth Account, where the income
allocable to such contributions distributed from either Account for this purpose
shall be determined by multiplying the amount of income allocable to such
Participant’s Pre-Tax Account or Roth Account for such year by a fraction, the
numerator of which is the amount of excess Total Tax-Advantaged Contributions
for such year and the denominator of which is the sum of the amount credited to
such Participant’s Pre-Tax Account or Roth Account as of the beginning of such
year plus the amount of such Participant’s Total Tax-Advantaged Contributions
for such year. For Plan Years prior to January 1, 2008, where income allocable
to the gap period following the Plan Year but before the date of distribution
must be included in determining the income allocable to excess contributions,
the income allocable to excess Total Tax-Advantaged Contributions for the gap
period following the calendar year will be determined on a date that is no more
than 7 days before the distribution. For Plan Years beginning on or after
January 1, 2008, income allocable to the gap period will not be distributed. If
any portion of a Pre-Tax Contribution, Pre-Tax Bonus Contribution, or Roth
Contribution is distributed pursuant to this subsection, any portion of a
Matching Contribution (along with any income allocable thereto) made to this
Plan for such Participant that matches the distributed Pre-Tax Contribution,
Pre-Tax Bonus Contribution, or Roth Contribution shall be forfeited.

(h)       An Employer may amend or revoke any Participant’s compensation
reduction agreement at any time during a Plan Year if such amendment or
revocation is deemed by such Employer to be necessary or appropriate to ensure
that all applicable limitations, including those set forth in Sections 3.1(g),
3.7 and 10.3 are met for such year.

 

 

Section 3.2

Matching Contributions.

(a)       For each pay period an Employer shall make to the Plan for each
Participant in its employ a Matching Contribution equal to 200% of the Pre-Tax
Contributions and Pre-Tax Contributions designated as Roth Contributions made by
the Employer on such Participant’s behalf during such pay period which are not
in excess of 5% of such Participant’s Basic Compensation for such pay period.

(b)       As of the end of each Plan Year, an Employer shall make to the Plan
for each Participant in its employ on the last day of such Plan Year an
additional Matching Contribution equal to A minus B, where A is equal to 200%
multiplied by the lesser of (i) the Participant’s Total Tax-Advantaged
Contributions for the Plan Year or (ii) 5% of the Participant’s Basic
Compensation for the Plan Year, and B is equal to the total amount of Matching
Contributions made for the Participant for the Plan Year

 

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pursuant to Section 3.2(a); provided, however, that a Participant shall not
receive an allocation of an additional Matching Contribution if the amount of
such contribution is less than $1.

(c)       The Committee shall establish and maintain an Employer Account for
each Participant. All Matching Contributions made for a Participant pursuant to
this Section shall be credited to such Participant’s Employer Account.

Section 3.3      Catch-Up Contributions. All Employees who are eligible to elect
to make Pre-Tax Contributions to this Plan and who have attained age 50 before
the close of the Plan Year shall be eligible to make Catch-Up Contributions
pursuant to a compensation reduction agreement and in accordance with, and
subject to the limitations of, Code Section 414(v) and the regulations
thereunder. Such Catch-Up Contributions shall not be taken into account for
purposes of the provisions of the Plan implementing the required limitations of
Code Sections 402(g) and 415. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of Code
Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by
reason of the making of such Catch-Up Contributions. The Committee may permit a
Covered Employee to elect to have his or her Employer treat any amount or whole
percentage of his or her Catch-Up Contributions as Roth contributions. Catch-Up
Contributions made by an Employer on behalf of a Participant pursuant to this
Section 3.3 shall be credited to such Participant’s Catch-Up Contribution
Account; provided, however, that Catch-Up Contributions that are designated as
Roth contributions shall be credited to such Participant’s Roth Catch-Up
Contribution Account.

 

 

Section 3.4

After-Tax Contributions.

(a)       Each Participant may elect to make an After-Tax Contribution to the
Plan for each pay period in an amount which, when combined with any Pre-Tax
Contributions made to the Plan on behalf of such Participant for that pay
period, shall not exceed 80% of the Basic Compensation of such Participant
during such pay period, subject to any other deductions from the Participant’s
Basic Compensation that are required by law or authorized by the Participant
pursuant to a compensation reduction agreement.

(b)       The Committee shall establish and maintain for each Participant an
After- Tax Account. All amounts attributable to After-Tax Contributions made by
a Participant pursuant to this Section 3.4 shall be credited to such
Participant’s After-Tax Account.

(c)       After-Tax Contributions may be made by uniform payroll deductions
which the Participant authorizes his or her Employer, in the manner prescribed
by the Committee, to withhold and pay over to the Trustee. A Participant may
change the applicable percentage of such payroll deductions or suspend his or
her election to have After-Tax Contributions made to the Plan at any time. Any
such change or suspension will be effective as soon as administratively
practicable but no later than 31 days following the submission of such change or
suspension.

(d)       At any time and from time to time during a Plan Year, the Company may
limit the After-Tax Contributions made by a Participant or suspend the making of
After-Tax Contributions if the

 

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Company, in its absolute discretion, deems such to be necessary or appropriate
to ensure that all applicable limitations, including those set forth in Sections
3.7 and 10.3, are satisfied for such year.

Section 3.5      Payment for Contributions. Pre-Tax Contributions, Catch-Up
Contributions, and After-Tax Contributions made to the Plan by an Employer for
or on behalf of Participants for a pay period shall be paid to the Trustee in
cash as soon as practicable after such pay period ends, but no later than the
15th business day after the end of the month in which such pay period ends.
Pre-Tax Bonus Contributions made to the Plan for or on behalf of Participants
shall be paid to the Trustee in cash as soon as practicable after the bonus
payment is made, but no later than the 15th day of the month after the end of
the month in which such bonus payment is made. Matching Contributions made to
the Plan for a pay period pursuant to Section 3.2(a) shall be paid to the
Trustee as soon as practicable, but no later than 30 days after the end of the
month in which such pay period ends. Matching Contributions made to the Plan for
a Plan Year pursuant to Section 3.2(b) shall be paid to the Trustee no later
than the time prescribed by law, including extensions thereof, for the filing of
such Employer’s federal income tax return for such year.

Section 3.6      Return of Employer Contributions. Contributions made to this
Plan are conditioned upon being currently deductible under Code Section 404. Any
provision of this Plan to the contrary notwithstanding, upon an Employer’s
request, any such contribution or portion thereof made to this Plan by such
Employer which (a) was made under a mistake of fact which is subsequently
discovered, or (b) is disallowed as a deduction under Code Section 404, shall be
returned to such Employer to the extent not previously distributed to
Participants or their beneficiaries; provided, however, that the amounts
returnable to an Employer pursuant to this Section shall be reduced by any Trust
losses allocable thereto and shall be returned to such Employer only if such
return is made within one year after the mistaken payment of the contribution or
the date of the disallowance of the deduction, as the case may be. Except as
provided in this Section, no contribution made by an Employer pursuant to this
Plan shall ever revert to or be recoverable by any Employer.

 

 

Section 3.7

Nondiscrimination Testing.

(a)       Any provision of this Plan to the contrary notwithstanding, if for any
Plan Year the actual deferral percentage for the group of Highly Compensated
Employees eligible to elect to have Pre-Tax Contributions, Pre-Tax Bonus
Contributions, or Roth Contributions made during such Plan Year fails to satisfy
one of the following tests:

(i)        the actual deferral percentage for said group of Highly Compensated
Employees is not more than 1.25 times the actual deferral percentage for the
preceding Plan Year for all Non-Highly Compensated Employees eligible during the
preceding Plan Year to elect to have Pre-Tax Contributions, Pre-Tax Bonus
Contributions, or Roth Contributions made on their behalf, or

(ii)       the excess of the actual deferral percentage for said group of Highly
Compensated Employees over the actual deferral percentage for the preceding Plan
Year for all

 

15

 

 

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Non-Highly Compensated Employees eligible during the preceding Plan Year to
elect to have Pre-Tax Contributions, Pre-Tax Bonus Contributions, or Roth
Contributions made on their behalf is not more than two percentage points, and
the actual deferral percentage for said group of Highly Compensated Employees is
not more than two times the actual deferral percentage for the preceding year
for all Non-Highly Compensated Employees eligible during the preceding Plan Year
to elect to have Pre-Tax Contributions, Pre-Tax Bonus Contributions, or Roth
Contributions made on their behalf,

then the actual deferral percentage of Participants who are members of said
group of Highly Compensated Employees shall be reduced by reducing the actual
deferral percentages of the Highly Compensated Employees with the largest
individual actual deferral percentages to the largest uniform actual deferral
percentage (commencing with the Highly Compensated Employee with the largest
actual deferral percentage and reducing his or her actual deferral percentage to
the extent necessary to satisfy one of the above tests or to lower such actual
deferral percentage to the actual deferral percentage of the Highly Compensated
Employee with the next largest actual deferral percentage, and repeating this
process as necessary) that permits the actual deferral percentage for said group
of Highly Compensated Employees to satisfy one of said tests. For purposes of
this subsection (a), the term “actual deferral percentage” for a specified group
of Employees for a Plan Year means the average of the ratios (calculated
separately for each Employee in such group and after any distributions to Highly
Compensated Employees required to satisfy the limitation imposed by Code Section
402(g)) of (i) the aggregate amount of Total Tax-Advantaged Contributions made
on behalf of each such Employee for that year, to (ii) the amount of such
Employee’s Compensation for that year or, in the Committee’s discretion, only
for such portion of that year during which the Employee was eligible to
participate in the Plan. If two or more plans that include cash or deferred
arrangements are considered as one plan for purposes of Code Sections 401(a)(4)
or 410(b) (other than for purposes of the average benefit percentage test), the
cash or deferred arrangements included in such plans shall be treated as one
arrangement for purposes of this subsection (a). If a Highly Compensated
Employee is a participant in two or more cash or deferred arrangements
maintained by an Employer or Affiliated Company, then for purposes of this
Section, all such cash or deferred arrangements (other than those that may not
be permissively aggregated) shall be treated as one cash or deferred arrangement
in accordance with applicable regulations.

(b)       The aggregate amount of any Total Tax-Advantaged Contributions which
may not be credited to Pre-Tax Accounts and Roth Accounts for a Plan Year
because of the limitation contained in subsection (a) of this Section,
calculated by adding together the dollar amount of excess contributions
determined in subsection (a) of this Section for each affected Highly
Compensated Employee, shall be distributed to Highly Compensated Employees
(along with any income allocable to such excess contributions for the Plan Year)
no later than the last day of the Plan Year immediately following such year
(and, if practicable, within 2½ months after the end of such year). The amount
of Total Tax-Advantaged Contributions to be distributed to a particular Highly
Compensated Employee shall be determined on the basis of the amount of Total
Tax-Advantaged Contributions made for each Highly Compensated Employee
commencing with the Highly Compensated Employee with the largest amount

 

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of Total Tax-Advantaged Contributions for such Plan Year and reducing his or her
Total Tax- Advantaged Contributions to the extent necessary to lower such amount
to the amount of Total Tax-Advantaged Contributions of the Highly Compensated
Employee with the next largest amount of Total Tax-Advantaged Contributions, and
repeating this process as necessary to distribute such aggregate amount;
provided, however, that the amount of Total Tax-Advantaged Contributions to be
distributed shall first be reduced by any excess deferrals to be distributed
pursuant to Code Section 402(g). A Participant may elect, in accordance with
procedures established by the Committee, an amount of Pre-Tax Contributions,
Pre-Tax Bonus Contributions, and/or Roth Contributions equal to the excess
contributions which shall be distributed to such Participant (along with any
income allocable thereto); provided, however, that if a Participant does not
make such an election, any such excess contribution shall be distributed first
from any Pre-Tax Bonus Contributions and then, to the extent necessary, from any
Pre-Tax Bonus Contributions designated as Roth Contributions and then, to the
extent necessary, from any Pre-Tax Contributions and then, to the extent
necessary, from any Pre-Tax Contributions designated as Roth Contributions. The
income allocable to any such excess contributions for a Participant for a Plan
Year shall equal the sum of (i) the income allocable to any excess contributions
distributed from his or her Pre-Tax Account, and (ii) the income allocable to
any excess contributions from his or her Roth Account, where the income
allocable to excess contributions distributed from either such Account for this
purpose shall be determined by multiplying the amount of income allocable to
such Participant’s Pre-Tax Account or Roth Account, whichever is applicable, for
such year by a fraction, the numerator of which is the amount of the excess
contributions for such year and the denominator of which is the sum of the
amount credited to such Participant’s Pre-Tax Account or Roth Account as of the
beginning of such year plus the amount of such Participant’s Total
Tax-Advantaged Contributions for such year. For Plan Years prior to January 1,
2008, where income allocable to the gap period following the Plan Year but
before the date of distribution must be included in determining the income
allocable to excess contributions, the income allocable to excess Total
Tax-Advantaged Contributions for the gap period following the calendar year will
be determined on a date that is no more than 7 days before the distribution. For
Plan Years beginning on or after January 1, 2008, income allocable to the gap
period will not be distributed. Any provision of this Plan to the contrary
notwithstanding, Total Tax-Advantaged Contributions otherwise distributable
pursuant to this subsection (b) to a Participant who is eligible to make
Catch-Up Contributions to the Plan may, to the extent permitted by Code Section
414(v) and the regulations thereunder, be treated by the Committee as a Catch-Up
Contribution. If any portion of a Pre-Tax Contribution, Pre-Tax Bonus
Contribution, or Roth Contribution made by an Employer on behalf of a
Participant is distributed to such Participant or is treated as a Catch-Up
Contribution pursuant to the foregoing provisions of this subsection (b), any
portion of a Matching Contribution (along with any income allocable thereto)
made for such Participant that matches the distributed Pre-Tax Contribution,
Pre-Tax Bonus Contribution, or recharacterized Catch-Up Contribution shall be
forfeited.

(c)       Any provision of this Plan to the contrary notwithstanding, if for any
Plan Year the contribution percentage for the group of Highly Compensated
Employees eligible to receive an

 

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allocation of Matching Contributions or to make After-Tax Contributions to the
Plan for such Plan Year fails to satisfy one of the following tests:

(i)        the contribution percentage for said group of Highly Compensated
Employees is not more than 1.25 times the contribution percentage for the
preceding Plan Year for all Non-Highly Compensated Employees eligible for the
preceding Plan Year to receive an allocation of Matching Contributions or make
After-Tax Contributions, or

(ii)       the excess of the contribution percentage for said group of Highly
Compensated Employees over the contribution percentage for the preceding Plan
Year for all Non-Highly Compensated Employees eligible for the preceding Plan
Year to receive an allocation of Matching Contributions or make After-Tax
Contributions is not more than two percentage points, and the contribution
percentage for said group of Highly Compensated Employees is not more than two
times the contribution percentage for the preceding Plan Year for all Non-Highly
Compensated Employees eligible for the preceding Plan Year to receive an
allocation of Matching Contributions or make After-Tax Contributions,

then the contribution percentage of Participants who are members of said group
of Highly Compensated Employees shall be reduced by reducing the contribution
percentages of the Highly Compensated Employees with the largest individual
contribution percentages to the largest uniform contribution percentage
(commencing with the Highly Compensated Employee with the largest contribution
percentage and reducing his or her contribution percentage to the extent
necessary to satisfy one of the above tests or to lower such contribution
percentage to the contribution percentage of the Highly Compensated Employee
with the next largest contribution percentage, and repeating this process as
necessary) that permits the contribution percentage for said group of Highly
Compensated Employees to satisfy one of said tests. For purposes of this
subsection (c), the term “contribution percentage” for a specified group of
Employees for a Plan Year means the average of the ratios (calculated separately
for each Employee in such group and after application of the reduction
provisions of subsection (a) and the forfeiture provisions of subsection (b) of
this Section) of (i) the aggregate amount of After-Tax Contributions and
Matching Contributions made by or for such Employee (and, at the election of the
Committee, the Total Tax-Advantaged Contributions made on behalf of such
Employee) for that year, to (ii) the amount of such Employee’s Compensation for
that year or, in the Committee’s discretion, only for such portion of that year
during which the Employee was eligible to participate in the Plan. If two or
more plans to which matching contributions or employee after-tax contributions
are made are considered as one plan for purposes of Code Section 410(b) (other
than for purposes of the average benefit percentage test), such plans shall be
treated as one plan for purposes of determining the contribution percentages for
this subsection (c). If a Highly Compensated Employee is a participant in two or
more plans maintained by an Employer or Affiliated Company to which matching
contributions or employee after-tax contributions are made, then for purposes of
this Section, all such plans (other than those that may not be permissively
aggregated) shall be treated as one plan in accordance with applicable
regulations.

 

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(d)       The aggregate amount of any Matching Contributions and After-Tax
Contributions which may not be credited to Participant’s Accounts for a Plan
Year because of the limitation contained in subsection (c) of this Section,
calculated by adding together the dollar amount of excess aggregate
contributions determined in subsection (c) of this Section for each affected
Highly Compensated Employee, shall be forfeited if forfeitable, but if not
forfeitable, distributed to such Highly Compensated Employees (along with any
income allocable to such excess aggregate contributions) no later than the last
day of the Plan Year immediately following such year (and, if practicable,
within 2½ months after the end of such year). The amount to be distributed to a
particular Highly Compensated Employee shall be determined on the basis of the
amount of Matching Contributions and After-Tax Contributions made by or for each
such Highly Compensated Employee commencing with the Highly Compensated Employee
with the largest amount of Matching Contributions and After-Tax Contributions
for such Plan Year and reducing first his or her After-Tax Contributions and
then, if necessary, Matching Contributions to the extent necessary to lower such
total amount to the amount of Matching Contributions and After-Tax Contributions
of the Highly Compensated Employee with the next largest amount of Matching
Contributions and After-Tax Contributions, and repeating this process as
necessary to distribute such aggregate amount. The income allocable to any such
excess aggregate contributions for a Participant for a Plan Year shall be
determined by multiplying the amount of income allocable to such Participant’s
Employer Account or After-Tax Account, whichever is applicable, for such year by
a fraction, the numerator of which is the amount of the excess aggregate
contributions for such year and the denominator of which is the sum of the
amount credited to such Participant’s Employer Account or After-Tax Account,
whichever is applicable, as of the beginning of such year plus the amount of
Matching Contributions or After-Tax Contributions, as applicable, made for such
Participant for such year. For Plan Years prior to January 1, 2008, where income
allocable to the gap period following the Plan Year but before the date of
distribution must be included in determining the income allocable to excess
aggregate contributions, the income allocable to excess aggregate contributions
for the gap period following the calendar year will be determined on a date that
is no more than 7 days before the distribution. For Plan Years beginning on or
after January 1, 2008, income allocable to the gap period will not be
distributed.

(e)       Any provision of this Section to the contrary notwithstanding, the
Company in its discretion may cause the provisions of subsections (a) and (c) of
this Section to be satisfied without use of the corrective provisions set forth
in subsections (b) and (d) of this Section by requiring each Employer to make a
qualified non-elective contribution and/or a qualified matching contribution to
the Plan to be allocated to the Pre-Tax Accounts (with respect to a contribution
intended to be taken into account for purposes of determining the actual
deferral percentage pursuant to subsection (a)) or the Employer Accounts (with
respect to a contribution intended to be taken into account for purposes of
determining the contribution percentage pursuant to subsection (c)) of those
Participants who were Non-Highly Compensated Employees in the employ of (or on
authorized leave of absence from) an Employer on the last day of such Plan Year.
A qualified non-elective contribution shall be allocated to the eligible
Participants in the proportion that the Basic Compensation of each such eligible
Participant while both a Participant and a Covered Employee during that year
bears to the Basic Compensation of

 

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all such eligible Participants while both Participants and Covered Employees
during that year. A qualified matching contribution shall be allocated to the
eligible Participants in the proportion that the Pre-Tax Contributions made with
respect to each such eligible Participant for such Plan Year bears to the
Pre-Tax Contributions made with respect to all such eligible Participants for
such Plan Year. Any qualified non-elective contribution or qualified matching
contribution will be made within the limits specified in applicable regulations.

(f)        Any provision of this Plan to the contrary notwithstanding, the
determination of the actual deferral percentage and the contribution percentage
required by this Section for Non-Highly Compensated Employees for the preceding
Plan Year shall be made in accordance with Code Sections 401(k) and 401(m) and
any regulations or other authorities issued thereunder.

Section 3.8      Application of Forfeitures. As soon as practicable after the
valuation of all Accounts at the end of each Plan Year, all amounts forfeited
during that Plan Year shall first be applied to restore any forfeited Accounts
required to be restored pursuant to Sections 6.5 and 6.8, and any forfeitures in
excess of the amount needed to restore any such Account may be applied to pay
administrative expenses in accordance with Section 7.4. Any remaining
forfeitures for such Plan Year, if any, shall be used to reduce the amount of
the earliest subsequent Matching Contributions an Employer otherwise would be
required to make to the Plan.

Section 3.9      Rollover Contributions. With the consent of and subject to such
reasonable limitations as may be imposed by the Committee or its delegate, a
Covered Employee may make a Rollover Contribution to the Plan as follows:

(a)       a direct rollover of an eligible rollover distribution, including a
distribution consisting of Roth Rollover Property, from: (i) a qualified plan
described in Code Section 401(a) or 403(a), including after tax employee
contributions, (ii) an annuity contract described in Code Section 403(b),
excluding after tax employee contributions, or (iii) an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision of a state,
or any agency or instrumentality of a state or political subdivision of a state;
or

(b)       a contribution by the Covered Employee of an eligible rollover
distribution, excluding any distribution consisting of amounts designated as
Roth contributions, from: (i) a qualified plan described in Code Section 401(a)
or 403(a), (ii) an annuity contract described in Code Section 403(b), or (iii)
an eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state; or

(c)       a contribution by the Covered Employee of the portion of a
distribution from an individual retirement account or annuity described in Code
Section 408(a) or 408(b) that is eligible to be rolled over, excluding any
amounts designated as Roth contributions, and that would otherwise be

 

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includible in gross income of the Covered Employee.

Amounts attributable to Roth Rollover Property shall be credited to a separate
Roth Rollover Account to be established and maintained for the benefit of the
contributing Covered Employee. All other Rollover Contribution amounts shall be
credited to a separate Rollover Account to be established and maintained for the
benefit of the contributing Covered Employee. A Covered Employee who is not a
Participant, but for whom a Rollover Account or Roth Rollover Account is being
maintained, shall be accorded all of the rights and privileges of a Participant
under the Plan except that no contributions shall be made to the Plan by or for
such Employee until he or she meets the eligibility and participation
requirements of Article II.

ARTICLE IV

 

TRUST FUND AND VALUATIONS

Section 4.1      Trust and Trustee. All of the contributions paid to the Trustee
pursuant to this Plan and the Superseded Plan, together with the income
therefrom and the increments thereof, shall be held in trust by the Trustee
under the terms and provisions of the separate trust agreement between the
Trustee and the Company, a copy of which is attached hereto and incorporated
herein by this reference for all purposes, establishing a trust fund known as
the PIONEER NATURAL RESOURCES USA, INC. 401(k) AND MATCHING TRUST for the
exclusive benefit of the Participants and their beneficiaries.

Section 4.2      Trust Divestment Options. For investment purposes the Trust
shall be divided into the Pioneer Stock Investment Fund, which shall be a common
fund invested in Pioneer Stock, and such number and kind of other separate and
distinct Investment Funds as the Committee shall determine in its absolute
discretion. The Trust assets allocated to a particular Investment Fund other
than the Pioneer Stock Investment Fund shall be invested by the Trustee and/or
one or more investment managers duly appointed in accordance with the provisions
of the Trust, as the case may be, in such type of property, whether real,
personal or mixed, as the Trustee is directed to acquire and hold for such
Investment Fund. Dividends and other amounts received with respect to Pioneer
Stock held in the Pioneer Stock Investment Fund shall be invested in Pioneer
Stock. The assets of the Trust allocated to a particular Investment Fund shall
be invested by the Trustee and/or one or more investment managers duly appointed
in accordance with the provisions of the trust agreement establishing the Trust,
as the case may be, in such type of property acceptable to the Trustee as the
Trustee is directed to acquire and hold for such Investment Fund. Upon becoming
a Participant in the Plan, each Participant shall direct, in the manner
prescribed by the Committee, that all amounts credited to his or her Accounts
under the Plan shall be invested, in percentage multiples authorized by the
Committee, in one or more of the Investment Funds. In the absence of such
direction, the Participant will be deemed to have directed that his or her
Accounts under the Plan be invested in life-cycle of targeted-retirement-date
fund or account within the meaning of Department of Labor Regulations Section
2550.404c-5(e)(4)(i). In accordance with final Department of Labor regulations,
the Committee will provide each Participant with a notice, at least 30 days
prior to the beginning of each Plan Year, which explains the Participant’s right
under the Plan to designate how contributions and earnings will be invested and
explaining how in the absence of any investment election by the Participant,
such

 

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contributions and earnings will be invested in a default investment fund.
Subject to such conditions and limitations as the Committee in its absolute
discretion may prescribe from time to time for application to all Participants
on a uniform basis, a Participant may change his or her investment direction
with respect to future contributions or redirect the investment of the amounts
credited to his or her Accounts each business day to be effective as soon as is
administratively practicable.

Section 4.3      Valuation and Adjustment of Accounts. As of each Valuation
Date, the Trustee shall determine the fair market value of all assets of the
Trust with the value of the assets of each Investment Fund being separately
determined. On the basis of such valuations and in accordance with such
procedures as may be specified from time to time by the Committee, the portion
of each Account invested in a particular Investment Fund shall be adjusted by
the Committee to reflect its proportionate share of the income collected and
accrued, realized and unrealized profits and losses, expenses and all other
transactions attributable to that particular Investment Fund for the valuation
period then ended. The amount of any distribution, withdrawal or forfeiture
shall be determined on the basis of the most recent valuation preceding the date
of distribution, withdrawal or forfeiture, as the case may be.

Section 4.4      Participant Statements. The Trustee will distribute to each
Participant, in written or electronic form and at least once every calendar
quarter, a benefit statement setting forth the following information with
respect to a participant’s accounts: (a) the value of the assets credited to
such accounts as of the most recent Valuation Date; (b) an explanation of any
restrictions on investment decisions; (c) an explanation of the importance of a
well-balanced and diversified portfolio, including a statement about the risk of
holding more than twenty percent (20%) of such account in the security of a
single entity; (d) an indication of the Participant’s vesting status (updated
annually); and (e) a notice directing the Participant to the Department of
Labor’s website for information on investing and diversification.

ARTICLE V

 

VESTING

Section 5.1      Fully Vested Accounts. The amounts credited to a Participant’s
After-Tax Account, Catch-Up Contribution Account, Mesa After-Tax Account, Mesa
Premium Account, Mesa Profit-Sharing Account, Pre-Tax Account, Prior Plan
Employer Account, Prior Plan Pre-Tax Account, Rollover Account, Roth Account,
Roth Catch-Up Contribution and Roth Rollover Account shall be fully vested at
all times.

 

 

Section 5.2

Vesting of Employer Account.

(a)       The amounts credited to the Employer Account and Matching Plan Account
of a Participant shall become fully vested upon the occurrence of any of the
following events while the Participant is in the employ of, on authorized leave
of absence from an Employer or Affiliated Company: (i) the completion of an Hour
of Service by the Participant on or after the date he or she attains age 60,
(ii) the Participant’s death, or (iii) the Participant’s Permanent Disability.
Further, the amounts credited to the Employer Account and Matching Plan Account
of a Participant who dies while performing

 

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qualified military service (as defined in Code Section 414(u)) on or after
January 1, 2007 also shall become fully vested as if an Employee. Unless sooner
vested pursuant to the preceding sentence, and except as provided in subsection
(b) of this Section and Section 5.3, the amounts credited to a Participant’s
Employer Account and Matching Plan Account shall vest in accordance with the
following schedule:

Period of Service
Completed by Participant

Percentage Vested

Less than 1 year

None

1 year

25%

2 years

50%

3 years

75%

4 or more years

100%

 

 

 

(b)       If a Participant makes an in-service withdrawal under Section 6.6 from
his or her Employer Account at a time when the Participant is not fully vested,
the Participant’s vested amount in such account on any date thereafter shall be
an amount X determined by the following formula: X = P(AB + D) - D. For purposes
of this formula, P is the Participant’s vested percentage under the Plan’s
vesting schedule on the relevant date, AB is the account balance on the relevant
date and D is the amount of the Participant’s in-service withdrawal.

 

 

Section 5.3

Special Vesting Provisions.

(a)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Employer Account and/or Matching Plan Account of a
Participant who is specifically designated by the Vice President Administration
of the Company as being involuntarily terminated in connection with the
divestiture program and corporate restructuring announced on February 10, 1998,
shall become fully vested and nonforfeitable on the date of such involuntary
termination.

(b)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Employer Account and/or Matching Plan Account of a
Participant who is specifically designated by the Vice President Administration
of the Company as being involuntarily terminated in connection with the
corporate restructuring announced on November 11, 1998, shall become fully
vested and nonforfeitable on the date of such involuntary termination.

(c)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Matching Plan Account of a Participant who is
specifically designated by the Vice President-Administration of the Company as
being involuntarily terminated in connection with the sale by the Company of the
Plum Creek Plant, Leon County, Texas, to a third party shall become fully vested
and nonforfeitable on the date of such involuntary termination.

(d)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Matching Plan Account of a Participant who is
specifically designated by the Vice

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President-Administration and Risk Management of the Company as being
involuntarily terminated in connection with one of the following events shall
become fully vested and nonforfeitable on the date of such involuntary
termination:

(i)        the transfer of operations of the Howard Parker/Joe Parsley Joint
Venture wells to a third party, 1999;

 

(ii)

the sale of Iatan Field properties to a third party;

 

(iii)

the reorganization of Offshore Operations effective September 22,

(iv)      the restructuring and consolidation of the Domestic Reservoir
Engineering Department effective February 15, 2000; or

 

(v)

the sale of NationsBank building, Midland, Texas.

(e)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Matching Plan Account of a Participant who is
specifically designated by the Vice President-Administration and Risk Management
of the Company as being involuntarily terminated in connection with the
implementation of the TOW Production System technology, shall become fully
vested and nonforfeitable on the date of such involuntary termination.

(f)        Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Employer Account of a Participant who is specifically
designated by the Vice President Administration of the Company as being
involuntarily terminated in connection with the closing on or about June 24,
2005 of the Castlegate office located in Price, Utah shall become fully vested
and nonforfeitable on the date of such involuntary termination.

(g)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Employer Account of a Participant who is specifically
designated by the Vice President Administration of the Company as being
involuntarily terminated in connection with the sale of all eases, wells and
equipment associated with the Timbalier Bay and Grand Bay Fields in Louisiana
shall become fully vested and nonforfeitable on the date of such involuntary
termination.

(h)       Any provision of this Plan to the contrary notwithstanding, the
amounts credited to the Employer Account of a Participant who is specifically
designated by the Vice President Administration of the Company as being
involuntarily terminated in connection with the reorganization of the Human
Resources Department establishing a Regional HR Manager position located in
Denver, Colorado shall become fully vested and nonforfeitable on the date of
such involuntary termination.

ARTICLE VI

 

VALUATIONS, DISTRIBUTIONS AND WITHDRAWALS

 

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Section 6.1

Time of Distribution.

(a)       Distribution to a Participant or beneficiary under this Article shall
be made or commence being made no later than 60 days after the close of the Plan
Year in which the latest of the following occurs: (i) the Participant’s Normal
Retirement Date, (ii) the tenth anniversary of the year in which the Participant
commenced participation in the Plan, or (iii) the Participant’s separation from
the employment of an Employer for any reason other than his or her transfer to
the employment of another Employer or Affiliated Company.

(b)       Any provision of this Plan to the contrary notwithstanding, in the
case of a Participant who is a 5% owner (as defined in Code Section 416(i)),
distribution to such Participant under the Plan shall be made or commence being
made no later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70½. Distributions that commence being made
pursuant to the preceding sentence to a Participant who has not separated from
the employment of an Employer or Affiliated Company shall be made pursuant to
Section 6.2 as if the Participant had terminated employment at such time and
shall be made in accordance with the minimum distribution requirements of Code
Section 401(a)(9) and such regulations thereunder as may be applicable from time
to time; provided, however, that if the Participant elects to waive the normal
form of payment in accordance with Section 6.2, the alternative form of
distribution shall be the minimum amounts required to be distributed pursuant to
Code Section 401(a)(9) and such regulations thereunder as may be applicable from
time to time, with any amount remaining upon the termination of the
Participant’s employment or the death of the Participant to be paid in
accordance with Section 6.2 or Section 6.3, whichever is applicable. Further,
any other Participant who attained age 70½ prior to January 1, 1999, and who
elected to continue to receive distributions prior to such Participant’s
termination of employment shall be entitled receive an annual distribution in
accordance with the preceding sentence (or may elect a larger or smaller amount
for such annual distribution) unless and until such Participant revokes such
election. Any provision of this Plan to the contrary notwithstanding, no
distribution shall be made from this Plan that would violate Code Section
401(k). For a Participant who is a 5% owner (as defined in Code Section 416(i)),
the “required beginning date” is April 1 of the calendar year following the
calendar year such Participant attains age 70½. For a Participant who is not a
5% owner (as defined in Code Section 416(i)), the “required beginning date” is
April 1 of the calendar year following the later of the calendar year in which
the Participant attains age 70½ or retires.

(c)       Subject to the provision of this Article requiring that distributions
and withdrawals be made in the form of an annuity contract, distributions and
withdrawals shall be made in cash, except that amounts credited to an Account
that are invested in the Pioneer Stock Investment Fund may, at the election of
the Participant, be distributed in the form of Pioneer Stock with cash in lieu
of fractional shares.

(d)       Any provision of this Plan to the contrary notwithstanding, all
distributions from this Plan are intended to satisfy the statutory rules of Code
Section 401(a)(9), including the incidental death benefit requirement in Code
Section 401(a)(9)(G), as well as Treasury Regulations Sections 1.401(a)(9)-2

 

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through 1.401(a)(9)-9 and other applicable rules related to Code Section
401(a)(9) that are prescribed by the Commissioner of the Internal Revenue
Service in revenue ridings, notices and other guidance published in the Internal
Revenue Bulletin. If any provision of the Plan is not consistent with those
statutory rules, regulations and other guidance, then the statutory rules,
regulations and other guidance related to Code Section 401(a)(9) will override
that provision of the Plan to the extent the provision is not consistent with
Code Section 401(a)(9).

(e)       Any provision of this Plan to the contrary notwithstanding, all
optional forms of benefit under the Plan, the Superseded Plan, the Matching
Plan, the Mesa Premium Plan, and the Mesa Profit-Sharing Plan that are protected
benefits under Code Section 411(d)(6) shall continue to be optional forms of
benefit for Participants to whom such optional forms of benefit apply
notwithstanding any subsequent amendment purporting to revise or delete any such
optional form of benefit, except to the extent that such optional forms of
benefit may be deleted in accordance with applicable law.

(f)        Notwithstanding the other provisions of this Article, 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 TEFRA Section 242(b)(2).

 

 

Section 6.2

Distribution of Retirement and Disability Benefits.

(a)       Except as otherwise provided in this Section, upon the Retirement or
termination of employment on account of Permanent Disability of a Participant,
the Vested Interest of such Participant shall be distributed to such Participant
by the Trustee at the direction of the Committee in a single distribution;
provided, however, that if such Participant’s Vested Interest exceeds $5,000, he
or she may elect to receive his or her Vested Interest in monthly, quarterly or
annual installment distributions over a period of two or more years with the
first such installment to be payable within 90 days after the end of the Plan
Year in which the Participant’s employment terminates. Such installment payments
may be made over a period of years not to exceed one or a combination of the
following periods: (i) the life of the Participant, (ii) the lives of the
Participant and his or her designated beneficiary, (iii) a period certain not
extending beyond the life expectancy of the Participant, and (iv) a period
certain not extending beyond the joint life and last survivor expectancy of the
Participant and his or her designated beneficiary. Any provision of Section 6.3
to the contrary notwithstanding, if a Participant who elected installment
payments dies prior to the distribution of the entire amount of his or her
Vested Interest, the remaining portion thereof shall be distributed to his or
her beneficiary or beneficiaries, as determined in accordance with Section
6.3(a), in a single distribution within 90 days after the end of the Plan Year
during which the Participant died. Notwithstanding the foregoing provisions of
this Section 6.2, no distribution shall be made upon a Participant’s termination
of employment on account of Permanent Disability prior to his or her Normal
Retirement Date unless (i) such Participant elects to receive such distribution
or (ii) such Participant’s Vested Interest does not exceed $5,000. For purposes
of determining whether the value of a Participant’s Vested Interest exceeds or
does not exceed $5,000, the

 

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value of a Participant’s Vested Interest shall be determined without regard to
the value of the Participant’s Rollover Account or Roth Rollover Account.

(b)       Except as otherwise provided in this subsection (b), upon the
Retirement or termination of employment on account of Permanent Disability of a
Participant whose Vested Interest exceeds $5,000, such Participant’s Matching
Plan Account, Mesa Premium Account, Prior Plan Employer Account and Prior Plan
Pre-Tax Account shall be distributed to him or her by the Trustee at the
direction of the Committee in the form of a Qualified Joint and Survivor Annuity
contract to be purchased from a company selected by the Committee and commencing
in payment as soon as practicable. Not more than 180 days prior to the date such
annuity contract is to commence in payment, the Committee shall provide such
Participant with a written explanation of (i) the terms and conditions of the
Qualified Joint and Survivor Annuity and Qualified Optional Survivor Annuity,
(ii) his or her right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity or Qualified Optional Survivor Annuity form
of benefit, (iii) the rights of his or her spouse with respect to the receipt
and waiver of the Qualified Joint and Survivor Annuity and Qualified Optional
Survivor Annuity, and (iv) the right to make, and the effect of, a revocation of
an election to waive the Qualified Joint and Survivor Annuity and Qualified
Optional Survivor Annuity. The written explanation shall be required at least 30
days prior to the date the Qualified Joint and Survivor Annuity contract is to
commence in payment; provided, however, that a Participant may elect (with any
applicable spousal consent) to waive such requirement if the distribution to the
Participant commences no earlier than 8 days after such explanation is provided.
After receiving the written explanation, the Participant may elect at any time
during the 180-day period ending on the date the annuity contract is to commence
in payment to waive the Qualified Joint and Survivor Annuity form of benefit and
also may revoke any such election during such period. Any such election to waive
a Qualified Joint and Survivor Annuity form of benefit by a married Participant
will be effective only if the spouse of such Participant consents in writing
within the 180-day period preceding such date to both the election and the
optional form of benefit selected by the Participant and such consent is
witnessed by a notary public. Any amount payable from the Matching Plan Account,
Mesa Premium Account, Prior Plan Employer Account or Prior Plan Pre-Tax Account
upon the Retirement or Permanent Disability of a Participant who has elected to
waive the Qualified Joint and Survivor Annuity form of benefit as provided above
shall be distributed to such Participant by the Trustee at the direction of the
Committee in accordance with subsection (a) of this Section; provided, however,
that a Participant who has an amount payable from his or her Matching Plan
Account or Mesa Premium Account may, in addition to the optional forms available
under subsection (a), elect to have such amounts paid in the form of an
Alternate Qualified Joint and Survivor Annuity or a Qualified Optional Survivor
Annuity. For purposes of determining whether the value of a Participant’s Vested
Interest exceeds $5,000, the value of a Participant’s Vested Interest shall be
determined without regard to the value of the Participant’s Rollover Account or
Roth Rollover Account.

 

 

Section 6.3

Distribution of Death Benefit.

 

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(a)       Except as otherwise provided in this Section, upon the death of a
Participant, the Vested Interest of such Participant shall be distributed by the
Trustee at the direction of the Committee to such Participant’s beneficiary or
beneficiaries determined in accordance with this subsection (a). Any amount
payable under the Plan upon the death of a married Participant shall be
distributed to the surviving spouse of such Participant unless such Participant
designates otherwise with the written consent of his or her spouse which is
witnessed by a notary public. Any amount payable under the Plan upon the death
of a Participant who is not married or who is married but has designated, as
provided above, a beneficiary other than his or her spouse, shall be distributed
to the beneficiary or beneficiaries designated by such Participant. Such
designation of beneficiary or beneficiaries shall be made in writing on a form
prescribed by the Committee and, when filed with or as directed by the
Committee, shall become effective and remain in effect until changed by the
Participant by the filing of a new beneficiary designation form with the
Committee. If an unmarried Participant fails to so designate a beneficiary, or
in the event all of a Participant’s designated beneficiaries are individuals who
predecease such Participant, then the Committee shall direct the Trustee to
distribute the amount payable under the Plan to such Participant’s surviving
spouse, if any, but if none, to such Participant’s estate. All distributions
under this subsection (a) shall be made in a single distribution as soon as
practicable following a Participant’s death; provided, however, that if the
Participant’s Vested Interest exceeds $5,000, he or she may elect (or if the
Participant does not elect, his or her designated beneficiary may elect) that
distribution be made in monthly, quarterly or annual installments over a period
of two or more years with the first such installment to be payable within 90
days after the end of the Plan Year in which the Participant died. Installment
payments may be made only to an individual over a period of years not to exceed
one or a combination of the following periods: (i) the life of the Participant’s
designated beneficiary or (ii) a period certain not extending beyond the life
expectancy of the Participant’s designated beneficiary. For purposes of
determining whether the value of a Participant’s Vested Interest exceeds $5,000,
the value of a Participant’s Vested Interest shall be determined without regard
to the value of the Participant’s Rollover Account or Roth Rollover Account.

(b)       Any provision of subsection (a) of this Section to the contrary
notwithstanding, except as otherwise provided in this subsection (b), upon the
death of a married Participant whose Vested Interest exceeds $5,000, such
Participant’s Matching Plan Account, Mesa Premium Account, Prior Plan Employer
Account and Prior Plan Pre-Tax Account shall be distributed to his or her
surviving spouse in the form of a Qualified Preretirement Survivor Annuity
contract to be purchased from a company selected by the Committee and commencing
in payment on the date that would have been such Participant’s Normal Retirement
Date if he or she were still living. The Committee shall provide each such
married Participant with a written explanation of the Qualified Preretirement
Survivor Annuity provided above, including the Participant’s right to waive the
distribution of such Qualified Preretirement Survivor Annuity with the consent
of his or her spouse and to revoke any such waiver, within whichever of the
following periods ends last: (i) the period beginning with the first day of the
Plan Year in which the Participant attains the age of 32 and ending with the
close of the Plan Year preceding the Plan Year in which the Participant attains
the age of 35, (ii) the one-year period after the

 

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individual becomes a Participant, or (iii) the one-year period after separation
from employment in the case of a Participant who separates before attaining age
35. Each married Participant may elect at any time prior to such Participant’s
death to waive the Qualified Preretirement Survivor Annuity form of benefit
provided above so that his or her entire benefit may be paid to his or her
designated beneficiary. No election to waive the Qualified Preretirement
Survivor Annuity will be effective upon the Participant’s death unless such
election designates a beneficiary that cannot be changed without spousal
consent, the Participant’s surviving spouse consents in writing to such election
and such consent is witnessed by a notary public. A spousal consent will be
valid only with respect to the spouse who signs the consent and such consent
shall be irrevocable. A married Participant may revoke any such election to
waive the Qualified Preretirement Survivor Annuity at any time prior to his or
her death. The amount payable under the Plan upon the death of a married
Participant who has elected, as provided above, to waive the Qualified
Preretirement Survivor Annuity shall be distributed in accordance with
subsection (a) of this Section. The surviving spouse of any deceased Participant
may elect in writing after the Participant’s death to receive the entire benefit
otherwise payable to such surviving spouse in accordance with this subsection
(a) of this Section. For purposes of determining whether the value of a
Participant’s Vested Interest exceeds $5,000, the value of a Participant’s
Vested Interest shall be determined without regard to the value of the
Participant’s Rollover Account or Roth Rollover Account.

 

 

Section 6.4

Distribution of Separation from Employment Benefit.

(a)       Except as otherwise provided in this Section, if a Participant
separates from the employment of an Employer or Affiliated Company for any
reason other than his or her Retirement, Permanent Disability, death or transfer
to the employment of another Employer or Affiliated Company, the Accounts of
such Participant shall be retained in trust and shall continue to be credited
with applicable earnings as provided in Section 4.3, and the Vested Interest of
such Participant shall be distributed to him or her by the Trustee at the
direction of the Committee in accordance with Section 6.2(a) as soon as
practicable after his or her Normal Retirement Date (or, if the Participant dies
prior to such date, the Vested Interest of such Participant shall be distributed
upon his or her death in accordance with Section 6.3); provided, however, that
(i) each such Participant shall have the right to elect, in the manner
prescribed by the Committee, to receive an early distribution of his or her
Vested Interest as soon as practicable and (ii) the Committee shall require an
early distribution of any such Participant’s Vested Interest which does not
exceed $5,000 in the form of a single distribution. The Vested Interest of a
Participant who elects to receive an early distribution shall be distributed to
him or her in the same manner as provided in Section 6.2(a) for a distribution
upon Retirement or Permanent Disability. Any provision of this Plan to the
contrary notwithstanding, for purposes of this Article a Participant shall not
be treated as having separated from the employment of an Employer or Affiliated
Company prior to such time that a distribution can be made to such Participant
in accordance with Code Section 401(k) and the regulations thereunder. For
purposes of determining whether the value of a Participant’s Vested Interest
exceeds $5,000, the value of a Participant’s Vested Interest shall be determined
without regard to the value of the Participant’s Rollover Account or Roth
Rollover Account.

 

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(b)       Any provision of subsection (a) of this Section to the contrary
notwithstanding, except as otherwise provided in this subsection (b), if a
Participant’s whose Vested Interest exceeds $5,000 separates from the employment
of an Employer or Affiliated Company for any reason other than his or her
Retirement, Permanent Disability, death or transfer to the employment of another
Employer or Affiliated Company, such Participant’s Matching Plan Account, Mesa
Premium Account, Prior Plan Employer Account and/or Prior Plan Pre-Tax Account
shall be distributed to such Participant by the Trustee at the direction of the
Committee upon such Participant’s Normal Retirement Date by payment of the
entire amount in the form of a Qualified Joint and Survivor Annuity contract to
be purchased from a company selected by the Committee and commencing in payment
as soon as practicable thereafter (or, if the Participant dies prior to his or
her Normal Retirement Date, the Vested Interest of such Participant under the
Plan shall be distributed upon his or her death in accordance with Section 6.3);
provided, however, that each such Participant shall have the right to elect, in
the manner prescribed by the Committee, to receive an early distribution of the
amount credited to his or her Matching Plan Account, Mesa Premium Account, Prior
Plan Employer Account and/or Prior Plan Pre-Tax Account as soon as practicable
after such election. If a participant elects under this subsection (b) to
receive an early distribution, such distribution shall be made in the form of
(i) a Qualified Joint and Survivor Annuity contract to be purchased from a
company selected by the Committee and commencing in payment as soon as
practicable following such election or (ii) upon satisfaction of the notice and
waiver requirements of Section 6.2(b) in accordance with subsection (a) of this
Section. For purposes of determining whether the value of a Participant’s Vested
Interest exceeds $5,000, the value of a Participant’s Vested Interest shall be
determined without regard to the value of the Participant’s Rollover Account or
Roth Rollover Account.

 

 

Section 6.5

Forfeitures.

(a)       Unless sooner forfeited as provided below, any unvested portion of the
Accounts of a Participant who separates from the employment of an Employer or
Affiliated Company for any reason other than his or her Retirement, Permanent
Disability, death or transfer to the employment of another Employer or
Affiliated Company shall be forfeited upon the earlier of the date of such
Participant’s death or the date such Participant incurs five consecutive One
Year Breaks in Service unless such Participant is reemployed by an Employer or
Affiliated Company prior to such date.

(b)       If a Participant receives a complete distribution of his or her Vested
Interest under Section 6.4 by the close of the second Plan Year following the
Plan Year in which his or her separation from employment occurred, any portion
of such Participant’s Accounts which is not vested at the time of such
distribution shall be forfeited at such time. If a Participant who separates
from the employment of an Employer or Affiliated Company for any reason other
than his or her Retirement, Permanent Disability, death or transfer to the
employment of another Employer or Affiliated Company, is not entitled to receive
any distribution from the Plan due to the fact that such Participant has no
Vested Interest, such Participant shall be deemed to have received a
distribution from the Plan of his or her entire Vested Interest under the Plan
and any amount credited to such Participant’s Accounts shall be forfeited at the
time of such separation from employment. If a Participant, any portion of whose

 

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Accounts is forfeited pursuant to this subsection (b), is reemployed as a
Covered Employee prior to incurring five consecutive One Year Breaks in Service,
the amount so forfeited shall be restored to such individual’s Accounts, out of
current-year forfeitures or, if such forfeitures are insufficient, by an
additional Employer contribution; provided, however, that no amount shall be
restored to the Accounts of an individual who previously received a distribution
of the vested portion of such Accounts unless he or she repays to the Plan,
while a Covered Employee and within five years of the date of such reemployment,
the full amount previously distributed from such Accounts for crediting to his
or her Accounts.

(c)       If a Participant who has not yet incurred five consecutive One Year
Breaks in Service receives a distribution under Section 6.4 after the end of the
second Plan Year following the year in which his or her separation from
employment occurred, any portion of such Participant’s Accounts which is not
vested at the time of such distribution shall be retained in such Account and
shall be forfeited upon the earlier of the date of such Participant’s death or
the date such Participant incurs five consecutive One Year Breaks in Service
unless such Participant is reemployed by an Employer or Affiliated Company prior
to such date. If a Participant receives a distribution from the Plan after the
end of the second Plan Year following the year in which his or her separation
from employment occurred and is reemployed by an Employer or Affiliated Company
prior to incurring five consecutive One Year Breaks in Service, then the
unvested balance in his or her Accounts shall be transferred to a segregated
account for such Participant and the amount that the Participant is entitled to
receive from such segregated account as of any later date shall be an amount
equal to X, which amount shall be determined in accordance with the following
formula: X = P(AB + D) - D, where P is the Participant’s vested percentage at
such later date, AB is the amount in his or her segregated account at such later
date, and D is the amount distributed to the Participant in connection with his
or her earlier separation from employment.

(d)       All amounts forfeited under the Plan shall be credited to a forfeiture
account and invested by the Trustee at the direction of the Committee in its
discretion until such forfeited amounts and any earnings attributable thereto
are applied in accordance with Section 3.8.

 

 

Section 6.6

In-Service Withdrawals.

 

(a)

A Participant in the employ of an Employer may make

(i)        a withdrawal of all or a portion (in any whole percentage or in whole
dollar amounts) of the total amount credited to his or her After-Tax Account,
Mesa After-Tax Account, Rollover Account, or Roth Rollover Account;

(ii)       if the Participant has attained the age of 59½, a withdrawal of all
or a portion (in any whole percentage or in whole dollar amounts) of the total
vested amount credited to his or her Accounts (other than his or her Matching
Plan Account and Mesa Premium Account); or

 

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(iii)      a hardship withdrawal of such amount as the Committee shall determine
to be necessary to satisfy an immediate and heavy financial need of such
Participant from his or her Catch-Up Contribution Account, Pre-Tax Account,
Prior Plan Pre-Tax Account, Roth Account, or Roth Catch-Up Contribution Account
other than earnings credited to either such Accounts for any period of time
after December 31, 1988, and qualified nonelective contributions allocated to
either such Accounts.

provided, however, that (i) no withdrawal may be made unless notice of such
withdrawal is delivered to or in the manner prescribed by the Committee by the
withdrawing Participant within such period of time prior to the effective date
thereof as the Committee may prescribe in its discretion, (ii) no withdrawal may
be made by a Participant to whom a loan from the Trust is then outstanding
unless the Committee is satisfied that such loan will remain nontaxable and
fully secured by the withdrawing Participant’s Vested Interest following such
withdrawal, and (iii) withdrawals from the Prior Plan Pre-Tax Account and Prior
Plan Employer Account may be made only pursuant to the notice and consent
requirements of Section 6.2(b). The Committee shall direct the Trustee to
distribute any withdrawn amount to such Participant as soon as practicable
following the effective date of the withdrawal. Any withdrawal from an Account
pursuant to this Section shall be taken proportionally from each Investment Fund
in which such Account is invested; provided, however, that a Participant may
elect in the manner prescribed by the Committee to have his or her withdrawal
taken from the portion of such Account that is invested in one or more
Investment Fund(s). The Committee may prescribe uniform and nondiscriminatory
rules and procedures limiting the number of times that a Participant may make
withdrawals during a Plan Year and the minimum amount that a Participant may
withdraw on any single occasion.

(b)       A hardship withdrawal will be considered to be made on account of an
immediate and heavy financial need of a Participant only if the Committee
determines that such withdrawal is on account of (i) expenses for (or necessary
to obtain) medical care that would be deductible under Code Section 213(d)
(determined without regard to whether the expenses exceed 7.5% of adjusted gross
income), (ii) costs directly related to the purchase of a principal residence
for such Participant (excluding mortgage payments), (iii) payment of tuition and
related educational fees for the next 12 months of post-secondary education for
such Participant or his or her spouse, children or dependents (within the
meaning of Code Section 152 without regard to Code Sections 152(b)(l), (b)(2),
and (d)(l)(B)), (iv) payments necessary to prevent the eviction of such
Participant from his or her principal residence or foreclosure on the mortgage
of such residence, (v) payments for burial or funeral expenses for the
Participant’s deceased parent, Spouse, children or dependents (as defined in
Code Section 152 without regard to Code Section 152(d)(l)(B)), or (vi) expenses
for the repair of damage to the Participant’s principal residence mat would
qualify for the casualty deduction under Code Section 165 (determined without
regard to whether the loss exceeds 10% of adjusted gross income).

(c)       A hardship withdrawal will be considered to be necessary to satisfy an
immediate and heavy financial need of a Participant only if the Committee
determines that (i) the amount of such withdrawal is not in excess of the amount
of such need plus any amounts necessary to pay any federal,

 

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state or local income taxes or penalties reasonably anticipated to result from
the withdrawal, and (ii) such Participant has obtained all distributions and
withdrawals, other than hardship withdrawals, and all nontaxable loans currently
available under all plans maintained by the Employers.

(d)       Any provision of this Plan to the contrary notwithstanding, if a
Participant makes a hardship withdrawal, no contributions shall be made to this
Plan on behalf of such Participant for 6 months after receipt of such withdrawal
and no contributions shall be made by or on behalf of such Participant to any
other deferred compensation plan maintained by an Employer or Affiliated Company
for 6 months after receipt of such withdrawal.

(e)       HEART Act Withdrawal. Effective for payments made pursuant to the
Employer’s military differential wage payment program and distributions taken on
or after January 1, 2009, a Participant who is receiving military differential
wage payments will be treated as having severed from employment during any
period during which the individual is performing service in the uniformed
services as described in Code Section 414(u). The Participant is entitled to
take a distribution from his Pre-Tax Account and Roth Account while on qualified
military leave for more than 30 days. The HEART Act withdrawal will be subject
to the 10% early withdrawal penalty, and the Participant will be suspended from
making Pre-Tax Contributions and Roth Contributions for 6 months. Further, the
Participant cannot repay the HEART Act Withdrawal to the Plan.

(f)        Qualified Military Reservist Distribution. Effective September 11,
2001, a Participant who is a reservist or national guardsman (as defined by 37
U.S.C. 101(24)) called to active duty for a period in excess of 179 days or for
an indefinite time after September 11, 2001 may elect to withdraw all or a
portion of his Pre-Tax Contribution Account as a qualified reservist withdrawal.
Any such qualified reservist withdrawal will not be subject to the 10% early
withdrawal penalty. Further, a Participant who receives a qualified reservist
distribution from the Plan may repay to an individual retirement plan of such
Participant (in one or more contributions) the amount of the distribution at any
time during the two-year period after the end of the active duty period.

Section 6.7      Distributions to Minors and Persons Under Legal Disability. If
any distribution under the Plan becomes payable to a minor or other person under
a legal disability, such distribution may be made to the duly appointed guardian
or other legal representative of the estate of such minor or person under legal
disability.

Section 6.8      Unclaimed or Uncashed Benefits. If a Participant or beneficiary
is entitled to a benefit under the Plan, the Participant or beneficiary is
responsible for providing the Committee with his current address. If the
Committee cannot ascertain the whereabouts of any person to whom a benefit
distribution is due under the Plan (either if a benefit distribution is pending
or if a benefit distribution has been made but the distribution check remains
uncashed or is returned undelivered), the Committee will mail a notice regarding
such distribution to the last known address of such person as shown on the
records of the Committee of Employer for a pending benefit distribution or if
the distribution check remains uncashed or will re-send the check to a
forwarding address or conduct an address search and re-send the check where the
check is returned undelivered. If such

 

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person has not made written claim or cashed the distribution check within a
reasonable period after the check void date or notification of a pending benefit
distribution as applicable, the Committee may direct that such distribution
otherwise due such person be forfeited and the amount used to offset Plan
expenses or applied to reduce the contributions of the Employer. Upon the
forfeiture of such unclaimed or uncashed benefit distribution, the Plan will
have no further liability except that, in the event such Participant or
beneficiary later notifies the Committee of his whereabouts and requests the
distribution due to him under the Plan, the amount so forfeited will be paid to
him in accordance with the provisions of the Plan pursuant to Treasury
Regulation 1.411(a)-4(b)(6) (regarding forfeiture and reinstatement of benefits
for lost participants).

 

 

Section 6.9

Plan Loans.

(a)       Subject to such conditions and limitations as the Committee may from
time to time prescribe for application to all Participants and beneficiaries on
a uniform basis, at the request of a Participant or beneficiary of a deceased
Participant who is a party in interest (within the meaning of Section 3(14) of
the Employee Retirement Income Security Act of 1974, as amended) with respect to
the Plan (hereinafter called the “Borrower”), the Committee shall direct the
Trustee to loan to such Borrower from his or her Accounts (other than the
Borrower’s Matching Plan Account and Mesa Premium Account) an amount of money
which, when added to the total outstanding balance of all other loans to such
Borrower from the Plan or from a qualified employer plan (within the meaning of
Code Section 72(p)) maintained by an Employer or Affiliated Company, does not
exceed the lesser of (i) $50,000 (reduced, however, by the excess, if any, of
the highest total outstanding balance of all such other loans during the
one-year period ending on the day before the date such loan is made, over the
outstanding balance of all such other loans on the date such loan is made), or
(ii) one-half of such Participant’s Vested Interest under the Plan (or, in the
case of a loan to a beneficiary, one-half of such beneficiary’s Accounts).

(b)       Any such loan made to a Borrower shall be evidenced by a promissory
note or other evidence of indebtedness payable to the Trustee, shall bear a
reasonable rate of interest, shall be secured by one-half of the Participant’s
vested interest under the Plan (or, in the case of a loan to a beneficiary, by
one-half of such beneficiary’s Accounts), shall be repayable in substantially
equal payments no less frequently than quarterly and shall be repayable within
five years or, in the case of a loan that is to be used to acquire any dwelling
unit which within a reasonable period of time is to be used as the principal
residence of the Participant, within such period greater than five years as
shall be determined by the Committee or its delegate in its absolute discretion.

(c)       Any provision of this Plan to the contrary notwithstanding, (i) the
promissory note or other evidence of indebtedness evidencing any such loan shall
be held by the Trustee as a segregated investment allocated to and made solely
for the benefit of the Account of the Borrower from which such loan was made,
and (ii) no loan shall be made to a married Participant from a Prior Plan
Pre-Tax Account or Prior Plan Employer Account unless the spouse of such
Participant consents in writing thereto within the 180-day period preceding the
date such loan is made and such consent is witnessed

 

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by a notary public.

(d)       Plan loans to directors and executive officers of an Employer may be
denied in the event that the Committee determines that loans may not be made to
such persons under the Sarbanes-Oxley Act of 2002 or other federal law.

Section 6.10    Qualified Domestic Relations Orders. Any provision of this Plan
to the contrary notwithstanding:

(a)       The Committee shall establish and maintain for each alternate payee
named with respect to a Participant under a domestic relations order which is
determined by the Committee to be a qualified domestic relations order (as
defined in Code Section 414(p)) such separate Accounts as the Committee may deem
to be necessary or appropriate to reflect such alternate payee’s interest in the
Accounts of such Participant. Such alternate payee’s Accounts shall be credited
with the alternate payee’s interest in the Participant’s Accounts as determined
under such qualified domestic relations order. The alternate payee may change
investment direction with respect to his or her Account balances in accordance
with Section 4.2 in the same manner as the Participant.

(b)       Except to the extent otherwise provided in the qualified domestic
relations order naming an alternate payee with respect to a Participant, (i) the
alternate payee may designate a beneficiary on a form prescribed by and filed
with or as directed by the Committee, (ii) if no such beneficiary is validly
designated or if the designated beneficiary is a person who predeceases the
alternate payee, the beneficiary of the alternate payee shall be the alternate
payee’s estate, and (iii) the beneficiary of the alternate payee shall be
accorded under the Plan all of the rights and privileges of the beneficiary of a
Participant.

(c)       An alternate payee named with respect to a Participant shall be
entitled to receive a distribution from the Plan in accordance with the
qualified domestic relations order naming such alternate payee. Such
distribution may be made only in a form provided under the Plan and shall
include only such amounts as are vested. If a qualified domestic relations order
so provides, a lump sum distribution of the total vested amount credited to the
alternate payee’s Accounts may be made to the alternate payee at any time prior
to the date the Participant named in such qualified domestic relations order
attains his or her earliest retirement age (as defined in Section Code
414(p)(4)(B)). To the extent provided by a qualified domestic relations order,
the alternate payee named with respect to a Participant may make withdrawals
(other than hardship withdrawals) from his or her Accounts in accordance with
Article VI in the same manner as the Participant with respect to whom such
alternate payee was named under said qualified domestic relations order.

(d)       If a portion of any unvested amount credited to the Employer Account
or Matching Plan Account of a Participant named in the qualified domestic
relations order is credited to the Employer Account or Matching Plan Account,
whichever is applicable, of the alternate payee named in such qualified domestic
relations order, the portion credited to the alternate payee’s Employer Account

 

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or Matching Plan Account shall vest and/or be forfeited at the same time and in
the same manner as the Participant’s Employer Account or Matching Plan Account,
whichever is applicable.

 

 

Section 6.11

Transfer of Eligible Rollover Distribution.

(a)       If a Participant is entitled to receive an eligible rollover
distribution (as defined in Code Section 402(c) and the regulations thereunder,
which exclude, among other distributions, any hardship distribution described in
Code Section 401(k)(2)(B)(i)(IV)) from the Plan, such Participant may elect to
have the Committee direct the Trustee to transfer the entire amount of such
distribution directly to any of the following specified by such Participant: an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b) (other than an endowment
contract), a defined contribution plan qualified under Code Section 401(a) the
terms of which permit rollover contributions or an annuity plan described in
Code Section 403(a); provided, however, than an amount credited to a Roth
Account may be transferred only to a designated Roth account or Roth IRA
described in Code Section 402A.

(b)       If the surviving spouse of a deceased Participant is entitled to
receive an eligible rollover distribution from the Plan, such surviving spouse
may elect to have the Committee direct the Trustee to transfer the entire amount
of such distribution directly to either an individual retirement account
described in Code Section 408(a) or an individual retirement annuity described
in Code Section 408(b) (other than an endowment contract) specified by such
surviving spouse.

(c)       If a designated beneficiary of a deceased Participant other than the
Participant’s surviving spouse is entitled to receive a distribution under this
Plan, and the distribution would be an eligible rollover distribution as defined
in Code Section 402(c) except for the requirement that the distribution be made
to the Participant’s spouse, the designated beneficiary may request to have any
portion of the distribution made to an eligible individual retirement plan, as
defined in Code Section 402(c)(8)(b)(i) or (ii), that has been established for
the purpose of receiving the distribution on behalf of the designated
beneficiary. The Committee will direct the Trustee to make distributions under
this subsection only if the Committee determines that the requested distribution
satisfies the requirements of Code Section 402(c)(11) and any regulations or
other guidance issued under that Section.

(d)       If an alternate payee under a qualified domestic relations order (as
defined in Code Section 414(p)) is the spouse or former spouse of the
Participant specified in the qualified domestic relations order, this Section
shall apply to such alternate payee as if the alternate payee were a
Participant.

(e)       A distributee of an eligible rollover distribution who is entitled to
make an election under this Section may specify that some portion less than the
entire amount of such distribution be transferred in accordance with this
Section.

 

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(f)

The preceding provisions of this Section to the contrary notwithstanding:

(i)        an “eligible retirement plan” shall also mean an annuity contract
described in Code Section 403(b) or an eligible plan under Code Section 457(b)
which is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state which agrees
to separately account for amounts transferred into such plan from this Plan, and
an individual retirement plan described in Code Section 408A (for taxable years
beginning before January 1, 2010, rollover to an individual retirement plan
described in Code Section 408A is not allowed where an individual has modified
adjusted gross income exceeding $100,000 or is married and files a separate
return);

(ii)       the definition of “eligible retirement plan” shall also apply in the
case of a distribution to a surviving spouse, or to a spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p);

(iii)      any amount that is distributed on account of hardship shall not be an
eligible rollover distribution and the distributee may not elect to have any
portion of such a distribution paid directly to an eligible retirement plan; and

(iv)      a portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income, provided that such
portion may be transferred only to an individual retirement account or annuity
described in Code Section 408(a) or (b), or to a qualified defined contribution
plan described in Code Section 401(a) or 403(a) or a qualified defined benefit
plan described in Code Section 401(a) that agrees to separately account for
amounts so transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not so includible.

Section 6.12    Automatic Rollovers. If a single distribution exceeding $1,000
is required to be made to a Participant pursuant to Section 6.2(a) or 6.4(a)
prior to the Participant’s attainment of age 65, and if the Participant does not
elect either to receive the distribution directly or to have the distribution
transferred in a direct rollover pursuant to Section 6.11 to an eligible
retirement plan specified by the Participant, the Committee shall direct the
distribution to be transferred in a direct rollover to an individual retirement
plan designated by the Committee. For purposes of determining whether a
distribution will exceed $1,000, a Participant’s Roth Account together with his
or her Roth Catch-Up Contribution Account and the Participant’s other Accounts
are treated as held under two separate plans.

ARTICLE VII

 

PLAN ADMINISTRATION

 

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Section 7.1      401(k) and Matching Plan Committee. The plan administrator of
the Plan shall be a 401(k) and Matching Plan Committee composed of at least
three individuals appointed by the Board of Directors of the Company. Each
member of the Committee so appointed shall serve in such office until his or her
death, resignation or removal by the Board of Directors of the Company. The
Board of Directors of the Company may remove any member of the Committee at any
time by giving written notice thereof to the members of the Committee. Vacancies
shall likewise be filled from time to time by the Board of Directors of the
Company. The members of the Committee shall receive no remuneration from the
Plan for their services as Committee members.

Section 7.2      Powers, Duties and Liabilities of the Committee. The Committee
shall have discretionary and final authority to interpret and implement the
provisions of the Plan, including without limitation authority to determine
eligibility for benefits under the Plan, and shall perform all of the duties and
exercise all of the powers and discretion granted to it under the terms of the
Plan. The Committee shall act by a majority of its members at the time in office
and such action may be taken either by a vote at a meeting or in writing without
a meeting. The Committee may by such majority action authorize any one or more
of its members to execute any document or documents on behalf of the Committee,
in which event the Committee shall notify the Trustee in writing of such action
and the name or names of its member or members so authorized to act Every
interpretation, choice, determination or other exercise by the Committee of any
discretion given either expressly or by implication to it shall be conclusive
and binding upon all parties directly or indirectly affected, without
restriction, however, on the right of the Committee to reconsider and
redetermine such actions. In performing any duty or exercising any power herein
conferred, the Committee shall in no event perform such duty or exercise such
power in any manner which discriminates in favor of Highly Compensated
Employees. The Employers shall indemnify and hold harmless each member of the
Committee against any claim, cost, expense (including attorneys’ fees), judgment
or liability (including any sum paid in settlement of a claim with the approval
of the Employers) arising out of any act or omission to act as a member of the
Committee appointed under this Plan, except in the case of willful misconduct.

Section 7.3      Rules, Records and Reports. The Committee may adopt such rules
and procedures for the administration of the Plan as are consistent with the
terms hereof, and shall keep adequate records of the Committee’s proceedings and
acts and of the status of the Participants’ Accounts. The Committee may employ
such agents, accountants and legal counsel (who may be agents, accountants or
legal counsel for an Employer) as may be appropriate for the administration of
the Plan. The Committee shall at least annually provide each Participant with a
report reflecting the status of his or her Accounts in the Trust and shall cause
such other information, documents or reports to be prepared, provided and/or
filed as may be necessary to comply with the provisions of the Employee
Retirement Income Security Act of 1974 or any other law.

Section 7.4      Administration Expenses and Taxes. Unless otherwise paid by the
Employers in their absolute discretion, the Committee shall direct the Trustee
to pay all reasonable and necessary expenses (including the fees of agents,
accountants and legal counsel) incurred by the Committee in connection with the
administration of the Plan. Should any tax of any character (including transfer
taxes) be levied upon the Trust

 

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assets or the income therefrom, such tax shall be paid from and charged against
the assets of the Trust.

ARTICLE VIII

 

AMENDMENT AND TERMINATION

Section 8.1      Amendment. The Board of Directors of the Company shall have the
right and power at any time and from time to time to amend this Plan, in whole
or in part, on behalf of all Employers. Any such amendment made by the Board of
Directors of the Company shall be made by or pursuant to a resolution duly
adopted by the Board of Directors of the Company, and shall be evidenced by such
resolution or by a written instrument executed by such person as the Board of
Directors of the Company shall authorize for such purpose. With the consent of
the Board of Directors of the Company and subject to such procedure as it may
prescribe, the Board of Directors of each Employer shall have the right and
power at any time and from time to time to amend this Plan, in whole or in part,
with respect to the Plan’s application to the Participants of the particular
amending Employer and the assets held in the Trust for their benefit, or to
transfer such assets or any portion thereof to a new trust for the benefit of
such Participants. However, in no event shall any amendment or new trust permit
any portion of the trust fund to be used for or diverted to any purpose other
than the exclusive benefit of the Participants and their beneficiaries, nor
shall any amendment or new trust reduce a Participant’s Vested Interest under
the Plan.

Section 8.2      Termination. The Board of Directors of the Company shall have
the right and power at any time to terminate this Plan on behalf of all
Employers, or to terminate this Plan as it applies to the Participants who are
or were employees of any particular Employer, by giving written notice of such
termination to the Committee and Trustee. Any provision of this Plan to the
contrary notwithstanding, upon the termination or partial termination of the
Plan as to any Employer, or in the event any Employer should completely
discontinue making contributions to the Plan without formally terminating it,
all amounts credited to the Accounts of the affected Participants of that
particular Employer shall be fully vested.

Section 8.3      Benefit Plan Design Committee. Any action permitted to be taken
by the Board with respect to the amendment of this Plan may be taken by the
Benefit Plan Design Committee. The Benefit Plan Design Committee shall be
composed of at least two individuals appointed by the Board of Directors of the
Company. Each member of the Benefit Plan Design Committee so appointed shall
serve in such office until his or her death, resignation or removal by the
Board. The Board may remove any member of the Benefit Plan Design Committee at
any time by giving written notice thereof to the members of the Benefit Plan
Design Committee. Vacancies shall likewise be filled from time to time by the
Board. The Benefit Plan Design Committee shall act by a majority of its members
at the time in office and such action may be taken either by a vote at a meeting
or in writing without a meeting.

ARTICLE IX

 

TOP-HEAVY PROVISIONS

 

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Section 9.1      Top-Heavy Definitions. Unless the context clearly indicates
otherwise, when used in this Article:

(a)       “Top-Heavy Plan” means this Plan if, as of the Determination Date, the
aggregate of the Accounts of Key Employees under the Plan exceeds 60% of the
aggregate of the Accounts of all Participants and former Participants under the
Plan. The aggregate of the Accounts of any Participant or former Participant
shall include any distributions (other than related rollovers or transfers from
the Plan within the meaning of regulations under Code Section 416(g)) made from
such individual’s Accounts during the one-year period ending on the
Determination Date, but shall not include any unrelated rollovers or transfers
(within the meaning of regulations under Code Section 416(g)) made to such
individual’s Accounts after December 31, 1983; provided, however, that in the
case of a distribution made for a reason other than severance from employment,
death, or disability, this provision shall be applied by substituting “five-year
period” for “one-year period.” The Account of any Participant or former
Participant who (i) is not a Key Employee for the Plan Year in question but who
was a Key Employee in a prior Plan Year, or (ii) has not completed an Hour of
Service during the one-year period ending on the Determination Date, shall not
be taken into account. The determination of whether the Plan is a Top-Heavy Plan
shall be made after aggregating all other plans of an Employer and any
Affiliated Company qualifying under Code Section 401(a) in which a Key Employee
is a participant or which enables such a plan to meet the requirements of Code
Section 401(a)(4) or 410, and after aggregating any other plan of an Employer or
Affiliated Company, which is not already aggregated, if such aggregation group
would continue to meet the requirements of Code Sections 401(a)(4) and 410 and
if such permissive aggregation thereby eliminates the top-heavy status of any
plan within such permissive aggregation group. For purposes of determining the
aggregate of the Accounts of any Participant or former Participant, the
distributions included, as provided above, shall include distributions under a
terminated plan which, had it not been terminated, would have been aggregated
with the Plan under Code Section 416(g)(2)(A)(i). The determination of whether
this Plan is a Top-Heavy Plan shall be made in accordance with Code Section
416(g).

(b)       “Determination Date” means, for purposes of determining whether the
Plan is a Top-Heavy Plan for a particular Plan Year, the last day of the
preceding Plan Year.

(c)       “Key Employee” means any Employee or former Employee (including a
beneficiary of such Employee or former Employee) who at any time during the Plan
Year that includes the Determination Date is:

(i)        an officer of an Employer having Compensation for such Plan Year
greater than $130,000 (as adjusted under Code Section 416(i)(l) for Plan Years
beginning after December 31, 2002);

 

(ii)

a 5% owner of the Employer; or

 

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(iii)      a 1% owner of the Employer having Compensation for such Plan Year of
more than $150,000.

The determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(l) and the applicable regulations and other guidance of general
applicability issued thereunder.

(d)       “Non-Key Employee” means any Employee or former Employee (including a
beneficiary of such Employee or former Employee) who is not a Key Employee.

Section 9.2      Minimum Contribution Requirement. Any provision of this Plan to
the contrary notwithstanding, if the Plan is a Top-Heavy Plan for any Plan Year,
then the Employers will contribute to the Employer Account of each Non-Key
Employee who is both eligible to participate and in the employ of an Employer on
the last day of such Plan Year, an amount which, when added to the total amount
of Matching Contributions and forfeitures otherwise allocable under the Plan to
such Non-Key Employee for such year, shall equal the lesser of (i) 3% of such
Non-Key Employee’s Compensation for such year or (ii) the amount of
contributions (including Total Tax-Advantaged Contributions) and forfeitures
(expressed as a percentage of Compensation) allocable under the Plan for or on
behalf of the Key Employee for whom such percentage is the highest for the Plan
Year after taking into account contributions under other defined contribution
plans maintained by the Employer in which a Key Employee is a participant (as
well as any other plan of an Employer which enables such a plan to meet the
requirements of Code Section 401(a)(4) or 410); provided, however, that no
minimum contribution shall be made for a Non-Key Employee under tin’s Section
for any Plan Year if the Employer maintains another qualified plan under which a
minimum benefit or contribution is being accrued or made for such Plan Year for
the Non-Key Employee in accordance with Code Section 416(c). A Non-Key Employee
who is not a Participant, but for whom a contribution is made pursuant to this
Section, shall be accorded all of the rights and privileges of a Participant
under the Plan except that no contributions (other than contributions pursuant
to this Section) shall be made for or on behalf of such Non-Key Employee until
he or she meets the eligibility and participation requirements of Article II.

Section 9.3      Minimum Vesting Schedule. Any provision of this Plan to the
contrary notwithstanding, if the Plan is a Top-Heavy Plan for any Plan Year,
then effective as of the first day of such Plan Year with respect to
Participants who complete an Hour of Service on or after such day, the vesting
schedule provided in Section 5.2 shall be applied to that portion of such
Participants’ Employer Account which is attributable to any amounts credited to
his or her Employer Nonelective Contribution Account under the Superseded Plan
as in effect on September 30,1997, as if to read as follows:

Period of Service
Completed by Participant

Percentage Vested

Less than 3 years

None

3 or more years

100%

 

 

 

 

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ARTICLE X

 

MISCELLANEOUS GENERAL PROVISIONS

Section 10.1    Spendthrift Provision. No right or interest of any Participant
or beneficiary under the Plan may be assigned, transferred or alienated, in
whole or in part, either directly or by operation of law, and no such right or
interest shall be liable for or subject to any debt, obligation or liability of
such Participant or beneficiary; provided, however, that nothing herein shall
prevent the payment of amounts from a Participant’s Accounts under the Plan in
accordance with the terms of a court order which the Committee has determined to
be a qualified domestic relations order (as defined in Code Section 414(p)).

Section 10.2    Claims Procedure. If any person (hereinafter called the
“Claimant”) feels that he or she is being denied a benefit to which he or she is
entitled under the Plan, such Claimant may file a written claim for said benefit
with any member of the Committee. Within 60 days of the receipt of such claim
the Committee shall determine and notify the Claimant as to whether he or she is
entitled to such benefit. Such notification shall be in writing and, if denying
the claim for benefit, shall set forth the specific reason or reasons for the
denial, make specific reference to the pertinent provisions of the Plan, and
advise the Claimant that he or she may, within 60 days of the receipt of such
notice, in writing request to appear before the Committee for a hearing to
review such denial. Any such hearing shall be scheduled at the mutual
convenience of the Committee or its designated representative and the Claimant,
and at such hearing the Claimant and/or his or her duly authorized
representative may examine any relevant documents and present evidence and
arguments to support the granting of the benefit being claimed. The final
decision of the Committee with respect to the claim being reviewed shall be made
within 60 days following the hearing thereon and the Committee shall in writing
notify the Claimant of its final decision, again specifying the reasons
therefore and the pertinent provisions of the Plan upon which such decision is
based. The final decision of the Committee shall be conclusive and binding upon
all parties having or claiming to have an interest in the matter being reviewed.

Section 10.3    Maximum Contribution Limitation. Any provision of this Plan to
the contrary notwithstanding (except to the extent permitted under Section 3.3
of the Plan and Code Section 414(v), if applicable), the sum of (i) the Employer
contributions, (ii) the forfeitures, and (iii) the Participant contributions
(excluding rollover contributions and employee contributions to a simplified
employee pension allowable as a deduction, each within the meaning specified in
Code Section 415(c)(2)) (collectively “Maximum Annual Additions”), allocated to
a Participant with respect to a Plan Year shall in no event exceed the lesser of
$40,000 (as adjusted for increases in the cost-of-living under Code Section
415(d)) or 100% of such Participant’s Compensation for that year. For the
purposes of applying the limitation imposed by this Section, each Employer and
its Affiliated Companies shall be considered a single employer, and all defined
contribution plans (meaning plans providing for individual accounts and for
benefits based solely upon the amounts contributed to such accounts and any
forfeitures, income, expenses, gains and losses allocated to such accounts)
described in Code Section 415(c)(2), whether or not terminated, maintained by an
Employer or its Affiliated Companies shall be considered a single plan.
Notwithstanding any provision of the Plan to the contrary, if the Maximum Annual
Additions are exceeded for any Participant, then the Plan may only correct such
excess in accordance with the

 

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Employee Plans Compliance Resolutions System (“EPCRS”) as set forth in Revenue
Procedure 2008-50 or any superseding guidance, including, but not limited to,
the preamble of the final section 415 regulations.

Section 10.4    Employment Noncontractual. The establishment of this Plan shall
not enlarge or otherwise affect the terms of any Employee’s employment with an
Employer and an Employer may terminate the employment of any Employee as freely
and with the same effect as if this Plan had not been adopted.

Section 10.5    Limitations on Responsibility. The Employers do not guarantee or
indemnify the Trust against any loss or depreciation of its assets which may
occur, nor guarantee the payment of any amount which may become payable to a
Participant or his or her beneficiaries pursuant to the provisions of this Plan.
All payments to Participants and their beneficiaries shall be made by the
Trustee at the direction of the Committee solely from the assets of the Trust
and the Employers shall have no legal obligation, responsibility or liability
for any such payments.

Section 10.6    Merger or Consolidation. In no event shall this Plan be merged
or consolidated into or with any other plan, nor shall any of its assets or
liabilities be transferred to any other plan, unless each Participant would be
entitled to receive a benefit if the plan in which he or she then participates
terminated immediately following such merger, consolidation or transfer, which
is equal to or greater than the benefit he or she would have been entitled to
receive if the Plan had been terminated immediately prior to such merger,
consolidation or transfer.

Section 10.7    Applicable Law. This Plan shall be governed and construed in
accordance with the internal laws (and not the principles relating to conflicts
of laws) of the State of Texas except where superseded by federal law.

Section 10.8    USERRA Compliance. Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u).

IN WITNESS WHEREOF, this restatement has been executed as of this ____ day of
December, 2008, to be effective as of January 1, 2008.

 

 

PIONEER NATURAL RESOURCES USA, INC.

 

 

 

 

 

 

 

By:

 

 

 

Larry Paulsen

 

 

Vice President Administration and

 

 

Risk Management

 

 

 

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