Exhibit 10.20

 

CABOT OIL & GAS CORPORATION

 

SAVINGS INVESTMENT PLAN

 

(As Amended and Restated Effective January 1, 2001)

 

I N D E X

 

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ARTICLE I DEFINITIONS

   2

1.1

    

Account

   2

1.2

    

Affiliate

   2

1.3

    

After-Tax Contribution Account

   2

1.4

    

After-Tax Contributions

   2

1.5

    

Authorized Leave of Absence

   2

1.6

    

Beneficiary

   2

1.7

    

Board of Directors

   2

1.8

    

Code

   2

1.9

    

Committee

   2

1.10

    

Company

   2

1.11

    

Compensation

   2

1.12

    

Contribution

   3

1.13

    

ERISA

   3

1.14

    

Effective Date

   3

1.15

    

Employee

   3

1.16

    

Employer

   3

1.17

    

Employer Contribution Account

   4

1.18

    

Employment Year

   4

1.19

    

Entry Date

   4

1.20

    

ESOP

   4

1.21

    

ESOP Account

   4

1.22

    

Forfeiture

   4

1.23

    

Hour(s) of Service

   4

1.24

    

Income of the Trust Fund

   5

1.25

    

Investment Fund(s)

   5

1.26

    

Leased Employee

   5

1.27

    

Member

   5

1.28

    

Plan

   5

1.29

    

Plan Quarter

   5

1.30

    

Plan Year

   5

1.31

    

Pre-Tax Contribution Account

   5

1.32

    

Prior Plan

   6

1.33

    

Profit Sharing Plan

   6

1.34  

    

Profit Sharing Plan Account

   6

 

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1.35

    

Retirement Date

   6

1.36

    

Rollover Account

   6

1.37

    

Rollover Amount

   6

1.38

    

Service

   6

1.39

    

Total and Permanent Disability

   6

1.40

    

Trust

   6

1.41

    

Trust Agreement

   7

1.42

    

Trust Fund

   7

1.43

    

Trustee

   7

1.44

    

Valuation Date

   7

1.45

    

Vesting Service

   7

1.46

    

Year of Service

   7

ARTICLE II ADMINISTRATION OF THE PLAN

   8

2.1

    

Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration

   8

2.2

    

Appointment of Committee

   8

2.3

    

Records and Reports

   8

2.4

    

Other Committee Powers and Duties

   9

2.5

    

Rules and Decisions

   9

2.6

    

Committee Procedure

   10

2.7

    

Authorization of Benefit Payments

   10

2.8

    

Payment of Expenses

   10

2.9

    

Application and Forms for Benefits

   10

2.10

    

Committee Liability

   10

2.11

    

Statements

   11

2.12

    

Annual Audit

   11

2.13

    

Funding Policy

   11

2.14

    

Allocation and Delegation of Committee Responsibilities

   12

2.15

    

Presenting Claims for Benefits

   12

2.16

    

Claims Review Procedure

   12

ARTICLE III PARTICIPATION AND SERVICE

   13

3.1

    

Eligibility for Participation

   13

3.2

    

Notification of Eligible Employees

   13

3.3

    

Applications by Employees

   13

3.4

    

Authorized Absences

   13

3.5

    

Break In Service

   14

3.6

    

Participation and Vesting Service Upon Re-employment Before a Break In Service

   14

3.7

    

Participation and Vesting Service Upon Re-employment After a Break In Service

   14

3.8

    

Vesting Service

   15

3.9

    

Transferred Members

   15

3.10

    

Special Eligibility and Vesting for Certain Employees

   16

3.11

    

Automatic Vesting Service

   16

3.12  

    

Qualified Military Service

   16

 

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ARTICLE IV CONTRIBUTIONS AND FORFEITURES

   17

4.1

    

Savings Contributions

   17

4.2

    

Employer Contributions

   18

4.3

    

Employer Contributions and Pre-Tax Contributions to be Tax Deductible

   19

4.4

    

Suspension of Contributions

   19

4.5

    

Delivery to Trustee

   19

4.6

    

Application of Funds

   19

4.7

    

Rollover Amounts

   19

4.8

    

Disposition of Forfeitures

   19

4.9

    

Contributions Generally Irrevocable

   20

ARTICLE V MEMBER ACCOUNTS

   21

5.1

    

Individual Accounts

   21

5.2

    

Account Adjustments

   21

5.3

    

Recognition of Different Investment Funds

   22

5.4

    

Valuation of Trust Fund

   22

ARTICLE VI WITHDRAWALS AND LOANS

   23

6.1

    

Withdrawals from Profit Sharing Plan Account

   23

6.2

    

Withdrawals of Amounts From After-Tax Contribution Account

   25

6.3

    

Withdrawals of Amounts From Pre-Tax Account

   25

6.4

    

Withdrawals from Employer Contribution, ESOP and Rollover Accounts

   25

6.5

    

Loans to Members

   25

ARTICLE VII MEMBERS’ BENEFITS

   27

7.1

    

Retirement of Members on or after Retirement Date

   27

7.2

    

Disability of Members

   27

7.3

    

Death of Members

   27

7.4

    

Other Termination of Service

   27

7.5

    

Valuation Dates Determinative of Member’s Rights

   28

7.6

    

Vesting for Certain Employees

   28

ARTICLE VIII PAYMENT OF BENEFITS

   29

8.1

    

Payment of Benefits

   29

8.2

    

Distribution Upon Death

   30

8.3

    

Required Minimum Distributions

   31

8.4

    

Disputed Benefits

   31

8.5

    

Member’s Right to Transfer Eligible Rollover Distribution

   31

ARTICLE IX TRUST AGREEMENT; INVESTMENT FUNDS; INVESTMENT DIRECTIONS

   33

9.1

    

Trust Agreement

   33

9.2

    

Investment Funds

   33

9.3  

    

Investment Directions of Members

   33

 

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9.4

    

Change of Investment Directions

   33

9.5

    

Benefits Paid Solely from Trust Fund

   34

9.6

    

Committee Directions to Trustee

   34

9.7

    

Authority to Designate Investment Manager

   34

9.8

    

Liquidation of Cabot MicroElectronics Stock

   34

ARTICLE X ADOPTION OF PLAN BY OTHER ORGANIZATIONS; SEPARATION OF THE TRUST FUND;
AMENDMENT AND TERMINATION OF THE PLAN; DISCONTINUANCE OF CONTRIBUTIONS TO THE
TRUST FUND

   35

10.1

    

Adoptive Instrument

   35

10.2

    

Separation of the Trust Fund

   35

10.3

    

Voluntary Separation

   35

10.4

    

Amendment of the Plan

   36

10.5

    

Acceptance or Rejection of Amendment by Employers

   36

10.6

    

Termination of the Plan

   36

10.7

    

Liquidation and Distribution of Trust Fund Upon Termination

   37

10.8

    

Effect of Termination or Discontinuance of Contributions

   37

10.9

    

Merger of Plan with Another Plan

   37

10.10

    

Consolidation or Merger with Another Employer

   38

ARTICLE XI MISCELLANEOUS PROVISIONS

   39

11.1

    

Terms of Employment

   39

11.2

    

Controlling Law

   39

11.3

    

Invalidity of Particular Provisions

   39

11.4

    

Non-Alienation of Benefits

   39

11.5

    

Payments in Satisfaction of Claims of Members

   39

11.6

    

Payments Due Minors and Incompetents

   40

11.7

    

Impossibility of Diversion of Trust Fund

   40

11.8

    

Evidence Furnished Conclusive

   40

11.9

    

Copy Available to Members

   40

11.10

    

Unclaimed Benefits

   40

11.11

    

Headings for Convenience Only

   40

11.12

    

Successors and Assigns

   40

ARTICLE XII LIMITATION ON BENEFITS

   41

I.

    

Single Defined Contribution Plan

   41

II.

    

Two or More Defined Contribution Plans

   42

ARTICLE XIII TOP-HEAVY PLAN REQUIREMENTS

   45

13.1

    

General Rule

   45

13.2

    

Vesting Provisions

   45

13.3

    

Minimum Contribution Provisions

   45

13.4

    

Limitation on Compensation

   46

13.5

    

Coordination with Other Plans

   46

13.6

    

Distributions to Certain Key Employees

   46

13.7

    

Determination of Top-Heavy Status

   46

 

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ARTICLE XIV TESTING OF CONTRIBUTIONS

   51

14.1

    

Definitions

   51

14.2

    

Actual Deferral Percentage

   52

14.3

    

Actual Deferral Percentage Limits

   52

14.4

    

Reduction of Pre-Tax Contribution Rates by Leveling Method

   52

14.5

    

Increase in Pre-Tax Contribution Rates

   53

14.6

    

Excess Pre-Tax Contributions

   53

14.7

    

Contribution Percentage

   54

14.8

    

Contribution Percentage Limits

   54

14.9

    

Treatment of Excess Aggregate Contributions

   55

14.10

    

Application of Participation and Discrimination Standards

   56

 

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CABOT OIL & GAS CORPORATION SAVINGS INVESTMENT PLAN

 

(As Amended and Restated Effective January 1, 2001)

 

Recitals

 

Cabot Oil and Gas Corporation, a Delaware corporation (the “Company”), adopted
the Cabot Corporation Profit Sharing and Savings Plan and its related trust for
the benefit of its eligible employees and the eligible employees of certain of
its subsidiaries who might adopt said Plan, effective October 1, 1976 (the “1976
Plan”).

 

Effective January 1, 1991, the Board of Directors of the Company authorized the
establishment of the Cabot Oil and Gas Corporation Savings Investment Plan (the
“Prior Plan”) to replace the 1976 Plan, and each Company employee’s accounts in
the 1976 Plan and the Cabot Corporation Employee Stock Ownership Plan were
transferred to the Prior Plan at such time. The Prior Plan was subsequently
amended by the First through Eleventh Amendments thereto.

 

Effective January 1, 2001, the Board of Directors of the Company authorized the
amendment and restatement of the Prior Plan in the form set forth herein (the
“Plan”) to incorporate the prior amendments, to incorporate changes required by
certain legislative acts, and to make certain other changes. There shall be no
termination and no gap or lapse in time or effect between the Prior Plan as in
effect on December 31, 2000, and this Plan.

 

The Plan and the Trust, which is intended to form a part of the Plan, are
intended to meet the requirements of Sections 401(a), 401(k) and 501(a) of the
Internal Revenue Code of 1986, and the Employee Retirement Income Security Act
of 1974, as either may be amended from time to time.

 

The provisions of this Plan shall apply to a Member who terminates Service on or
after January 1, 2001. The rights and benefits, if any, of a former employee
shall be determined in accordance with the provisions of the Prior Plan in
effect on the date his employment terminated.

 

NOW, THEREFORE, Cabot Oil and Gas Corporation hereby amends, restates in its
entirety, and continues the Cabot Oil & Gas Corporation Savings Investment Plan,
effective January 1, 2001, a profit-sharing plan within the meaning of Code
Section 401(a)(27), as follows:

 

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ARTICLE I

 

DEFINITIONS

 

As used in this Plan, the following words and phrases shall have the following
meanings unless the context clearly requires a different meaning:

 

1.1 Account: Collectively, the accounts maintained for each Member pursuant to
Section 5.1, and shall include accounts provided for in the Profit Sharing Plan.

 

1.2 Affiliate: A corporation or other trade or business that is not an Employer
under this Plan but which together with the Company is “under common control”
within the meaning of Section 414(b) or (c), as modified by Section 415(h) of
the Code; any organization (whether or not incorporated) which, together with
the Company, is a member of an “affiliated service group” within the meaning of
Section 414(m) of the Code; and any other entity required to be aggregated with
the Company pursuant to regulations under Section 414(o) of the Code.

 

1.3 After-Tax Contribution Account: The separate account maintained for a Member
to record his After-Tax Contributions to the Plan and adjustments relating
thereto.

 

1.4 After-Tax Contributions: The amount contributed by a Member pursuant to
Section 4.1B.

 

1.5 Authorized Leave of Absence: Any absence authorized by the Employer or
Affiliate under the Employer’s or Affiliate’s standard personnel practices
provided that all persons under similar circumstances must be treated alike in
the granting of such Authorized Leaves of Absence and provided further that the
Member returns within the period of authorized absence.

 

1.6 Beneficiary: A Member’s spouse, or such other natural person or persons, or
the trustee of an inter vivos trust for the benefit of natural persons, entitled
to benefits hereunder following a Member’s death.

 

1.7 Board of Directors: The Board of Directors of the Company.

 

1.8 Code: The Internal Revenue Code of 1986, as now in effect or hereafter
amended.

 

1.9 Committee: The Administrative Committee appointed by the Company to act as
administrator of the Plan and to perform the duties described in Article II.

 

1.10 Company: Cabot Oil and Gas Corporation, a Delaware corporation, its
predecessors and successors.

 

1.11 Compensation: The total non-deferred remuneration actually paid to a Member
by the Employer for personal services rendered as an Employee, as reported on
the Member’s Federal Income Tax Withholding Statement (Form W-2 or its
subsequent equivalent) during the

 

2

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applicable Plan Year and any amounts by which a Member’s normal remuneration is
reduced pursuant to a voluntary salary reduction plan qualified under
Section 125 of the Code, a qualified transportation fringe under Section 132(f)
of the Code or a cash-or-deferred plan qualified under Section 401(k) of the
Code, including salary, wages, overtime payments, and annual, discretionary and
sign-on bonuses, but excluding any amounts contributed by or on behalf of an
Employer to this Plan or any other employee benefit plan sponsored by the
Company, non-deductible moving expenses, disability pay (both short-term and
long-term), any income arising from the exercise of a stock option or from the
receipt of a restricted stock award, reimbursements, expense allowances,
severance pay (whether periodic or in a lump sum), taxable fringe benefits,
waiver benefits, deductible payments under Section 105(h) of the Code, taxable
group-term life insurance benefits, and retention and relocation bonuses. The
Compensation of a Member as reflected on the books and records of the Employer
shall be conclusive.

 

Notwithstanding anything herein to the contrary, in no event shall the
Compensation taken into account under the Plan for any Employee exceed $170,000
or such other dollar amount as may be prescribed by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the Compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12. If Compensation for
any prior determination period is taken into account in determining an
Employee’s benefits accruing in the current Plan Year, the Compensation for that
prior determination period is subject to the Compensation limit in effect for
that prior determination period.

 

1.12 Contribution: Any amount contributed to the Trust Fund pursuant to the
provisions of this Plan, by an Employer or by a Member out of his Compensation.
Contributions by the Employer shall sometimes be referred to as “Employer
Contributions” and “Pre-Tax Contributions,” as specified under Sections 4.1 and
4.2 hereof.

 

1.13 ERISA: Public Law No. 93-406, the Employee Retirement Income Security Act
of 1974, as amended from time to time.

 

1.14 Effective Date: January 1, 1991, the date as of which the provisions of the
Prior Plan first became effective.

 

1.15 Employee: Any person who, on or after the Effective Date, is receiving
remuneration for personal services (or would be receiving such remuneration
except for an authorized leave of absence) as an employee of an Employer or who
is a Leased Employee.

 

1.16 Employer: The Company, its successors, and any eligible organization which
shall adopt this Plan pursuant to the provisions of Article X, and the
successors, if any, to such organization.

 

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1.17 Employer Contribution Account: The account maintained for a Member to
record his share of the Contributions of his Employer and adjustments relating
thereto.

 

1.18 Employment Year: The twelve consecutive month period determined from the
Employee’s first performance of an Hour of Service and subsequent twelve-month
periods beginning on the first anniversary of such Employee’s performance of
such Hour of Service; provided, however, that in the case of any Employee who
incurs a Break In Service, upon such Employee’s re-employment his Employment
Year shall be deemed to commence on the date he first performs an Hour of
Service after such Break In Service.

 

1.19 Entry Date: The first day of each calendar month and any such other date as
determined by the Committee, communicated to the Employees and applied in a
uniform and non-discriminatory manner thereafter.

 

1.20 ESOP: The Cabot Corporation Employee Stock Ownership Plan, as effective
December 31, 1990.

 

1.21 ESOP Account: The account maintained for a Member who participated in the
ESOP to record his contributions transferred from the ESOP to this Plan and
adjustments relating thereto. Effective October 16, 2000, a Member shall be
eligible to transfer the assets held in the Member’s ESOP Account to other
Investment Funds provided under the Plan or to borrow assets from such account
as provided under Section 6.5 of the Plan.

 

1.22 Forfeiture: The portion of a Member’s Employer Contribution Account which
is forfeited because of termination of Service before full vesting pursuant to
Section 7.4 and which occurs on the earlier of (a) the distribution of the
entire vested portion of the Member’s Account or (b) the last day of the Plan
Year in which the Member incurs five (5) consecutive one-year Breaks In Service.

 

1.23 Hour(s) of Service: An Hour of Service is each hour during an applicable
computation period for which an Employee is directly or indirectly paid, or
entitled to payment, by an Employer or an Affiliate for the performance of
duties or for any period of Authorized Leave of Absence. Moreover, an Hour of
Service is each hour, not in excess of forty hours per week, during any period
of unpaid Authorized Leave of Absence with an Employer or an Affiliate. Such
Hours of Service shall be credited to the Employee for the computation period in
which such duties were performed or in which such Authorized Leave of Absence
occurred. An Hour of Service also includes each hour, not credited above, for
which back pay, irrespective of mitigation of damages, has been either awarded
or agreed to by an Employer or an Affiliate. These Hours of Service shall be
credited to the Employee for the computation period to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made. In determining an Employee’s total Hours of
Service during a computation period, a fraction of an hour shall be deemed a
full Hour of Service.

 

Instead of counting and crediting actual hours worked, for purposes of
determining the number of Hours of Service to be credited to an Employee, an
Employee may be credited with 190 Hours of Service for each calendar month
during which he has earned one

 

4

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Hour of Service. For purposes of determining the number of Hours of Service to
be credited for reasons other than the performance of duties and for purposes of
determining to which computation period Hours of Service earned under any
provision of this Plan are to be credited, the provisions of Department of Labor
Regulation Section 2520.200(b)-2(b) and (c) are hereby incorporated by reference
as if fully set forth herein.

 

Hours of Service will be credited for employment with other members of an
affiliated service group (under Code Section 414(m)), a controlled group of
corporations (under Code Section 414(b)), or a group of trades or businesses
under common control (under Code Section 414(c)), of which the Company is a
member. However, Hours of Service shall not be credited for employment with such
an affiliated service group, a controlled group, or a group of trades or
businesses prior to its becoming a member of or after its cessation of
membership in the Company’s affiliated service group, controlled group, or group
of trades or businesses. Hours of Service will be credited for any individual
considered an employee under Code Section 414(n).

 

1.24 Income of the Trust Fund: The net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities and other investment transactions and
expenses paid from the Trust Fund.

 

1.25 Investment Fund(s): Any of the investment funds comprising the Trust Fund,
as described in Section 9.2.

 

1.26 Leased Employee: Each person who is not an employee of an Employer but who
performs services for an Employer pursuant to a leasing agreement (oral or
written) between an Employer and any leasing organization, provided that such
person has performed such services for an Employer or for related persons
(within the meaning of Code Section 144(a)(3)) on a substantially full-time
basis for a period of at least one year and such services are performed under
primary direction or control by an Employer. Notwithstanding the preceding
sentence, the term “Leased Employee” shall not include any individual who is
deemed to be an employee of an Employer under Code Section 414(n)(5).

 

1.27 Member: An Employee who, pursuant to the provisions of Article III, has met
the eligibility requirements for participation in this Plan and is participating
in the Plan.

 

1.28 Plan: The Cabot Oil & Gas Corporation Savings Investment Plan, as amended
and restated effective January 1, 2001, set forth herein, and as hereafter
amended from time to time.

 

1.29 Plan Quarter: Each calendar quarter of the Plan Year.

 

1.30 Plan Year: The fiscal year of the Plan beginning on January 1 of each
calendar year and ending on December 31.

 

1.31 Pre-Tax Contribution Account: The account maintained for a Member to record
his Pre-Tax Contributions and adjustments relating thereto.

 

5

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1.32 Prior Plan: The Cabot Oil and Gas Corporation Savings Investment Plan, as
established effective January 1, 1991, as thereafter amended and in effect on
December 31, 2000.

 

1.33 Profit Sharing Plan: The Cabot Corporation Profit Sharing and Savings Plan
as in effect on December 31, 1990.

 

1.34 Profit Sharing Plan Account: The account maintained for a Member who
participated in the Profit Sharing Plan prior to January 1, 1991 to record his
contributions from the Prior Plan and adjustments relating thereto.

 

1.35 Retirement Date: The sixty-fifth (65th) birthday of a Member or, if
earlier, the date on which a Member who is a participant in the Cabot Oil and
Gas Pension Plan satisfies the age and service requirements for Early Retirement
under said pension plan.

 

1.36 Rollover Account: The account maintained for a Member to record his
Rollover Amount and adjustments relating thereto.

 

1.37 Rollover Amount: For purposes of the Plan, one or more distributions
(i) within one (1) taxable year of the employee on account of a termination of
the plan of which the trust is a part, or in the case of a profit-sharing or
stock bonus plan, a complete discontinuance of contributions under such plan or
(ii) which constitute a lump-sum distribution within the meaning of
subsection 402(e)(4)(A) of the Code (determined without reference to
subparagraphs (B) and (H) of subsection 402(e)(4)). “Rollover Amount” may also
include a transfer of assets from another qualified plan described in Code
Section 401(a) which are attributable to the Member’s interests in such other
plan if (i) such other plan does not permit distributions to be made in the form
of life annuities, (ii) such other plan is a defined contribution plan which is
not subject to the minimum funding standards of Code Section 412 and which
satisfies all the conditions for exclusion from the requirements of Code
Section 401(a)(11) set forth in Treasury Regulations Section 1.401(a)-20, Q&A
3(a), or (iii) such other plan provides for distributions in the form of life
annuities but the transfer meets all the requirements of Treasury Regulations
Section 1.411(d)-4, Q&A 3(b), as conclusively determined by the Committee, in
order that this Plan, upon acceptance of such transfer, shall not thereafter be
required to provide for distributions in the form of life annuities.

 

1.38 Service: A Member’s period of employment or deemed employment with
Employers or Affiliates determined in accordance with Section 1.21 and
Article III.

 

1.39 Total and Permanent Disability: A Member shall be considered totally and
permanently disabled if (a) such disability is so certified by the Committee, on
the basis of evidence satisfactory to the Committee, that such Member will be
permanently incapable of performing a meaningful job for physical or mental
reasons and such disability has lasted for at least six (6) months and (b) such
Member is eligible for and receiving disability benefits under the Federal
Social Security Act with respect to such condition. The Committee shall
determine whether a Member has become totally and permanently disabled and shall
so notify such Member within sixty (60) days thereafter.

 

1.40 Trust: The Trust created by and under the Trust Agreement.

 

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1.41 Trust Agreement: The Trust Agreement provided for in Article IX, as amended
from time to time.

 

1.42 Trust Fund: The Investment Funds held by the Trustee under the Trust
Agreement, together with all income, profits or increments thereon.

 

1.43 Trustee: The trustee under the Trust Agreement.

 

1.44 Valuation Date: The last business day of each calendar quarter during the
Plan Year and any other date on which the value of the assets of the Trust Fund
is determined by the Trustee pursuant to Section 5.4; and the last business day
of December of each Plan Year shall be the “Annual Valuation Date.”

 

1.45 Vesting Service: The period of a Member’s employment considered in the
determination of his eligibility for benefits under the Plan. A year of Vesting
Service shall be granted for each Plan Year during which an Employee completes
at least 1,000 Hours of Service.

 

1.46 Year of Service: An Employment Year during which the Employee performs at
least 1,000 Hours of Service.

 

Words used in this Plan and in the Trust Agreement in the singular shall include
the plural and in the plural the singular, and the gender of words used shall be
construed to include whichever may be appropriate under any particular
circumstances.

 

7

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ARTICLE II

 

ADMINISTRATION OF THE PLAN

 

2.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration: Each Employer, the Board of Directors of the Company, the
Committee and the Trustee (hereinafter collectively referred to as the
“Fiduciaries”) shall have only those specific powers, duties, responsibilities
and obligations as are specifically given them under this Plan or the Trust
Agreement. In general, each Employer shall have the sole responsibility for
making the contributions provided for under Sections 4.1A and 4.2. The Board of
Directors of the Company shall have the sole authority to appoint and remove the
Trustee and the members of the Committee, and to amend or terminate, in whole or
in part, this Plan or the Trust Agreement. The Committee shall have the sole
responsibility for the administration of this Plan and the sole authority to
appoint or remove any Investment Manager which may be provided for under the
Trust Agreement. The Trustee shall have the sole responsibility for the
administration of the Trust and shall have exclusive authority and discretion to
manage and control the Trust Fund, except to the extent that the authority to
manage, acquire and dispose of assets of the Trust Fund is delegated to an
Investment Manager, all as more specifically provided in the Trust Agreement.
Each Fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the Plan or the
Trust Agreement, as the case may be, authorizing or providing for such
direction, information or action. Furthermore, each Fiduciary may rely upon any
such direction, information or action of another Fiduciary as being proper under
this Plan or the Trust Agreement, and is not required under this Plan or the
Trust Agreement to inquire into the propriety of any such direction, information
or action. It is intended under this Plan and the Trust Agreement that each
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and the Trust Agreement
and shall not be responsible for any act or failure to act of another Fiduciary.
No Fiduciary guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value.

 

2.2 Appointment of Committee: The Plan shall be administered by an
Administrative Committee consisting of at least three (3) persons who shall be
appointed by and serve at the pleasure of the Board of Directors of the Company.
All usual and reasonable expenses of the Committee may be paid in whole or in
part by the Company, and any expenses not paid by the Company shall be paid by
the Trustee out of the Trust Fund. The members of the Committee shall not
receive compensation with respect to their services for the Committee. The
Company shall pay the premiums on any bond secured for the performance of the
duties of the Committee members described hereunder and shall be entitled to
reimbursement by other Employers for their proportionate shares thereof.

 

2.3 Records and Reports: The Committee shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and any
governmental regulations issued thereunder relating to records of Members’
Service, Account balances and the percentage of such Account balances which are
non-forfeitable under the Plan, and notifications to Members. The Committee
shall file or cause to be filed with the appropriate offices of the Internal
Revenue Service and the Department of Labor all reports, returns, notices and
other

 

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information required of plan administrators under ERISA, including, but not
limited to, the summary plan description, annual reports and amendments thereto.
The Committee shall make available to Members and their Beneficiaries for
examination, during business hours, such records of the Plan as pertain to the
examining person and such documents relating to the Plan as are required by
ERISA.

 

2.4 Other Committee Powers and Duties: The Committee shall have such powers as
may be necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties:

 

(a) To construe and interpret the Plan, reconcile any inconsistency or supply
any omitted detail consistent with the general terms of the Plan, decide all
questions of eligibility and determine the amount, manner and time of payment of
any benefits hereunder;

 

(b) To prescribe procedures to be followed by Members or Beneficiaries filing
applications for benefits;

 

(c) To receive from the Employers and from Employees such information as shall
be necessary for the proper administration of the Plan;

 

(d) To prepare and distribute, in such manner as the Committee determines to be
appropriate, information explaining the Plan;

 

(e) To furnish the Employers, upon request, such annual reports with respect to
the administration of the Plan as are reasonable and appropriate;

 

(f) To give written directions to the Trustee, on behalf of Members, as to the
investment and reinvestment of the Trust Fund;

 

(g) To receive and review reports of the financial condition, and of the
receipts and disbursements, of the Trust Fund from the Trustee and any
Investment Manager, and to transmit such reports, along with its findings and
recommendations surrounding the investment performance of the Trust Fund, to the
Board of Directors; and

 

(h) To appoint or employ individuals to assist in the administration of the Plan
and any other agents it deems advisable, including legal and actuarial counsel.

 

2.5 Rules and Decisions: The Committee may adopt such rules for the
administration of the Plan as it deems necessary, desirable or appropriate. All
rules and decisions of the Committee shall be uniformly and consistently applied
to all Employees in similar circumstances. The judgment of the Committee and
each member thereof on any question arising hereunder shall be binding, final
and conclusive on all parties concerned. When making a determination or
calculation, the Committee shall be entitled to rely upon information furnished
by a Member or Beneficiary, an Employer, the legal counsel of an Employer or the
Trustee.

 

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2.6 Committee Procedure: The Committee may act at a meeting or in writing
without a meeting. The Committee shall elect one (1) of its members as chairman,
appoint a secretary, who may or may not be a member of the Committee, and shall
advise the Trustee of such actions in writing. The secretary of the Committee
shall keep a record of all meetings and forward all necessary communications to
the Employers or the Trustee. The Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All decisions
of the Committee shall be made by the vote of the majority including actions in
writing taken without a meeting. A dissenting Committee member who, within a
reasonable time after he has knowledge of any action or failure to act by the
majority, registers his dissent in writing delivered to the other Committee
members, the Employer and the Trustee shall not be responsible for any such
action or failure to act. The Committee shall designate one of its members as
agent of the Plan and of the Committee for service of legal process at the
principal office of the Committee at 15375 Memorial Drive, Houston, Texas 77079.

 

2.7 Authorization of Benefit Payments: The Committee shall issue directions to
the Trustee concerning all benefits which are to be paid from the Trust Fund
pursuant to the provisions of the Plan, and warrants that all such directions
are in accordance with this Plan. The Committee shall keep on file, in such
manner as it may deem convenient or proper, all reports from the Trustee.

 

2.8 Payment of Expenses: All reasonable and necessary expenses incident to the
administration, termination or protection of the Plan and Trust, including, but
not limited to, legal, accounting, Investment Manager and Trustee fees, shall be
paid from the Trust Fund to the extent permitted by ERISA.

 

2.9 Application and Forms for Benefits: The Committee may require an Employee or
Member to complete and file with the Committee an application for a benefit and
all other forms approved by the Committee, and to furnish all pertinent
information requested by the Committee. The Committee may rely on such
information so furnished it, including the Employee’s or Member’s current
mailing address.

 

2.10 Committee Liability: Except to the extent that such liability is created by
ERISA, no member of the Committee shall be liable for any act or omission of any
other member of the Committee, nor for any act or omission on his own part
except for his own gross negligence or wilful misconduct, nor for the exercise
of any power or discretion in the performance of any duty assumed by him
hereunder. The Company shall indemnify and hold harmless each member of the
Committee from any and all claims, losses, damages, expenses (including counsel
fees approved by the Committee), and liabilities (including any amounts paid in
settlement with the Committee’s approval but excluding any excise tax assessed
against any member or members of the Committee pursuant to the provisions of
Section 4975 of the Code) arising from any act or omission of such member in
connection with duties and responsibilities under the Plan, except when the same
is judicially determined to be due to the gross negligence or wilful misconduct
of such member.

 

10

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2.11 Statements: As soon as practicable after each Valuation Date, the Committee
shall prepare and deliver to each Member a written statement showing as of that
Valuation Date:

 

(a) The balance in his Account in the Trust Fund as of the preceding Valuation
Date;

 

(b) The amount of Employer Contributions allocated to his Employer Contribution
Account and the amount of his Contributions for the Plan Year ending on such
Valuation Date;

 

(c) The adjustments to his Account to reflect his share of income and expenses
of the Trust Fund and appreciation or depreciation in Trust Fund assets during
the Plan Year ending on such Valuation Date;

 

(d) The new balance in his Account as of that Valuation Date; and

 

(e) Such information as the Committee deems appropriate to advise him of his
relative interests in each Investment Fund as of the preceding Valuation Date
and the current Valuation Date.

 

2.12 Annual Audit: If required by ERISA, the Committee shall engage, on behalf
of all Members, an independent Certified Public Accountant who shall conduct an
annual examination of any financial statements of this Plan and Trust and of
other books and records of this Plan and Trust as the Certified Public
Accountant may deem necessary to enable him to form and provide a written
opinion as to whether the financial statements and related schedules required to
be filed with the Department of Labor or furnished to each Member are presented
fairly and in conformity with generally accepted accounting principles applied
on a basis consistent with that of the preceding Plan Year. If, however, the
statements required to be submitted as part of the reports to the Department of
Labor are prepared by a bank or similar institution or insurance carrier
regulated and supervised and subject to periodic examination by a state or
federal agency and if such statements are certified by the preparer as accurate
and if such statements are, in fact, made a part of the annual report to the
Department of Labor and no such audit is required by ERISA, then the audit
required by the foregoing provisions of this Section shall be optional with the
Committee.

 

2.13 Funding Policy: The Committee shall, at a meeting duly called for such
purpose, establish a funding policy and method consistent with the objectives of
the Plan and the requirements of Title I of ERISA. The Committee shall meet at
least annually to review such funding policy and method. In establishing and
reviewing such funding policy and method, the Committee shall endeavor to
determine the Plan’s short-term and long-term objectives and financial needs,
taking into account the need for liquidity to pay benefits and the need for
investment growth. All actions of the Committee taken pursuant to this Section
and the reasons therefor shall be recorded in the minutes of meetings of the
Committee and shall be communicated to the Trustee, any Investment Manager who
may be managing a portion or all of the Trust Fund in accordance with the
provisions of the Trust Agreement, and to the Board of Directors.

 

11

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2.14 Allocation and Delegation of Committee Responsibilities: Upon the approval
of a majority of the members of the Committee, the Committee may (i) allocate
among any of the members of the Committee any of the responsibilities of the
Committee under the Plan and Trust Agreement and/or (ii) designate any person,
firm or corporation that is not a member of the Committee to carry out any of
the responsibilities of the Committee under the Plan and/or Trust Agreement. Any
such allocation or designation shall be made pursuant to a written instrument
executed by a majority of the members of the Committee.

 

2.15 Presenting Claims for Benefits: Any Member or the Beneficiary of any
deceased Member may submit written application to the Committee for any benefit
asserted to be due him under the Plan. Such application shall set forth the
nature of the claim and such other information as the Committee may reasonably
request. Promptly upon the receipt of any application required by this Section,
the Committee shall determine whether or not the Member or Beneficiary involved
is entitled to a benefit hereunder and, if so, the amount thereof and shall
notify the claimant of its findings. Benefits under the Plan will be paid only
if the Committee decides in its discretion that the applicant is entitled to
them.

 

If a claim is wholly or partially denied, the Committee shall so notify the
claimant within ninety (90) days after receipt of the claim by the Committee,
unless special circumstances require an extension of time for processing the
claim. If such an extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to the end of the
initial ninety-day period. In no event shall such extension exceed a period of
ninety (90) days from the end of such initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Committee expects to render its final decision. Notice of the
Committee’s decision to deny a claim in whole or in part shall be set forth in a
manner calculated to be understood by the claimant and shall contain the
following:

 

(i) the specific reason or reasons for the denial,

 

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

 

(iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary, and

 

(iv) an explanation of the claims review procedure set forth in Section 2.16
hereof.

 

If notice of denial is not furnished, and if the claim is not granted within the
period of time set forth above, the claim shall be deemed denied for purposes of
proceeding to the review stage described in Section 2.16.

 

2.16 Claims Review Procedure: If an application filed by a Member or Beneficiary
under Section 2.15 above shall result in a denial by the Committee of the
benefit applied for, either in whole or in part, such applicant shall have the
right, to be exercised by written application filed with the Committee within
sixty (60) days after receipt of notice of the denial of his application or, if
no such notice has been given, within sixty (60) days after the application is
deemed denied under Section 8.4, to request the review of his application and of
his entitlement to the benefit applied for. Such request for review may contain
such additional information and comments as the applicant may wish to present.
Within sixty (60) days after receipt of any such request for review, the
Committee shall reconsider the application for the benefit in light of such
additional information and comments as the applicant may have presented, and if
the applicant shall have so requested, shall afford the applicant or his
designated representative a hearing before the Committee. The Committee shall
also permit the applicant or his designated representative to review pertinent
documents in its possession, including copies of the Plan document and
information provided by the Company relating to the applicant’s entitlement to
such benefit. The Committee shall make a final determination with respect to the
applicant’s application for review as soon as practicable, and in any event not
later than sixty (60) days after receipt of the aforesaid request for review,
except that under special circumstances, such as the necessity for holding a
hearing, such sixty-day period may be extended to the extent necessary, but in
no event beyond the expiration of one hundred twenty (120) days after receipt by
the Committee of such request for review. If such an extension of time for
review is required because of special circumstances, written notice of the
extension shall be furnished to the applicant prior to the commencement of the
extension. Notice of such final determination of the Committee shall be
furnished to the applicant in writing, in a manner calculated to be understood
by him, and shall set forth the specific reasons for the decision and specific
references to the pertinent provisions of the Plan upon which the decision is
based. If the decision on review is not furnished within the time period set
forth above, the claim shall be deemed denied on review.

 

12

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ARTICLE III

 

PARTICIPATION AND SERVICE

 

3.1 Eligibility for Participation: An Employee participating under the Prior
Plan immediately preceding January 1, 2001 shall continue to participate in
accordance with the provisions of this Plan. Each other Employee shall be
eligible to commence participation in this Plan on the Entry Date coincident
with or next following his commencement of Service, provided he is otherwise
eligible hereunder. An Employee who does not participate in the Plan when he
first becomes eligible may commence participation on any Entry Date thereafter,
provided he is otherwise eligible hereunder.

 

Notwithstanding anything to the contrary in this Plan, the following Employees
shall not be eligible to participate in the Plan: (i) Leased Employees,
(ii) employees covered by a collective bargaining agreement between employee
representatives and the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such employee representatives
and the Employer and such collective bargaining agreement does not expressly
provide for coverage of such employees hereunder, (iii) persons who are
non-resident aliens and who receive no earned income (within the meaning of Code
Section 911) from the Employer which constitutes income from sources within the
United States (within the meaning of Code Section 861), and (iv) persons who are
utility employees (as herein defined). For purposes of this Plan, a utility
employee is an employee who is hired in a utility position. A utility position
is (i) a position which is expected by the respective Employer or Affiliate to
be of limited duration or (ii) for a particular project upon the conclusion of
which the employee is expected by the respective Employer or Affiliate to be
terminated.

 

3.2 Notification of Eligible Employees: The Committee, which shall be the sole
judge of the eligibility of an Employee to participate under the Plan, shall
notify each Employee of his initial eligibility to participate in the Plan.

 

3.3 Applications by Employees: Each Employee who shall become eligible to become
a Member under the Plan, and who shall desire to become a Member, shall execute
and file with the Committee an application to become a Member in such form and
manner as may be prescribed by the Committee. In each such application, the
applicant shall (i) designate the amount of his Contributions to the Plan,
(ii) agree to be bound by the terms and conditions of the Plan, (iii) designate
a Beneficiary in accordance with Section 8.2, (iv) authorize payroll deductions
for his Contributions, and (v) direct the investment of his Contributions among
the Investment Funds in accordance with Sections 9.3 and 9.4.

 

3.4 Authorized Absences: An Employee’s or Member’s period of Service shall
include the following Authorized Leaves of Absence:

 

(a) Absence due to accident or sickness so long as the person is continued on
the employment rolls of the Employer or Affiliate and remains eligible to return
to work upon his recovery;

 

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(b) Absence due to membership in the service of the Armed Forces of the United
States (but if such absence is not pursuant to orders issued by the Armed Forces
of the United States, only if with the consent of the Employer or Affiliate) but
only if, and then only to the extent that, applicable federal law requires such
military service to be counted as Service hereunder and only if the person has
complied with all prerequisites of such federal law; and

 

(c) Absence due to an authorized leave of absence granted by the Employer or
Affiliate for any other purpose approved by the Board of Directors in accordance
with established practices of the Employer or Affiliate, consistently applied in
a non-discriminatory manner in order that all employees under similar
circumstances shall be treated alike, provided that each such person shall,
immediately upon the expiration of such leave, apply for reinstatement in the
employment of the Employer or Affiliate.

 

3.5 Break In Service: For purposes of the Plan, a “Break In Service” shall mean
a Plan Year within which a Member completes less than 501 Hours of Service.
Solely for purposes of determining whether a Member has a Break In Service for
eligibility or vesting purposes an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of Service
which would have otherwise been credited to such an individual but for such
absence, or in any case in which such hours cannot be determined, eight hours of
service per day of such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (a) by reason of the
pregnancy of the individual, (b) by reason of the birth of a child of the
individual, (c) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this paragraph
shall be credited (i) in the computation period in which the absence begins if
the crediting is necessary to prevent a Break In Service in that period or
(ii) in all other cases, in the following computation period. No more than 501
Hours of Service shall be credited for any single such absence.

 

3.6 Participation and Vesting Service Upon Re-employment Before a Break In
Service: Upon the re-employment before a Break In Service of any person who had
previously been employed by an Employer or Affiliate on or after the Effective
Date, the following rules shall apply. If the re-employed person was not a
Member during his prior period of Service, he shall be eligible to commence
participation in the Plan on the first Entry Date after his re-employment upon
meeting the requirements of Section 3.1. If the re-employed person was a Member
in the Plan during his prior period of Service, he shall be entitled to
recommence participation as of the date of his re-employment if eligible under
Section 3.1. All years of Vesting Service attributable to a re-employed person’s
prior period of Service shall be reinstated as of the date of his re-employment
for purposes of Section 7.4.

 

3.7 Participation and Vesting Service Upon Re-employment After a Break In
Service: Upon the re-employment after a Break In Service of any person who had
previously been employed by an Employer or Affiliate on or after the Effective
Date, the following rules shall apply in determining his eligibility for
participation and his Vesting Service:

 

14

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(a) Participation: If an Employee (whether or not previously a Member) is
rehired after cancellation of pre-break Service as determined in accordance with
subparagraph (b) below, he must meet the requirements of Section 3.1 for
participation in the Plan as if he were a new Employee. If an Employee is
rehired prior to cancellation of his pre-break Service as determined in
accordance with subparagraph (b) below, he shall be eligible to commence or
recommence participation as of the date of his re-employment, if he previously
was a Member and he meets the requirements under Section 3.1, or on the first
Entry Date after his re-employment as of which he has completed the requirements
of Section 3.1.

 

(b) Vesting Service: If the re-employed person was a Member whose prior Service
terminated without entitlement to a distribution from his Employer Contribution
Account under Article VII, any Vesting Service attributable to his prior period
of employment shall be reinstated as of the date of his recommencement of
participation only if the number of consecutive one-year Breaks In Service is
less than the greater of five (5) or the aggregate number of his years of
pre-break Vesting Service. If the re-employed person was a Member whose prior
Service terminated with entitlement to a distribution from his Employer
Contribution Account under Article VII, all years of Vesting Service
attributable to his prior period of employment shall be reinstated upon his
recommencing participation in the Plan.

 

3.8 Vesting Service: An Employee shall be credited with one and only one year of
Vesting Service for each Plan Year in which such Employee completes at least
1,000 Hours of Service for an Employer or Affiliate. An Employee will not be
credited with a year of Vesting Service with respect to a Plan Year if the
Employee completes less than 1,000 Hours of Service for the Employer or an
Affiliate during such Plan Year. An Employee’s service with Cabot Corporation
prior to the Effective Date shall count as Vesting Service under this Plan to
the extent and in the same manner as computed under the Profit Sharing Plan.

 

3.9 Transferred Members: If a Member is transferred to an Affiliate, or to an
employment classification with an Employer which is not covered by this Plan,
his participation shall be suspended until he is subsequently re-employed by an
Employer in an employment classification covered by the Plan; provided, however,
that during such suspension period (i) such Member shall be credited with
Service in accordance with Section 3.4, (ii) he shall not be entitled or
required to make Savings Contributions under Section 4.1, (iii) his Employer
Contribution Account shall receive no Employer Contribution except to the extent
provided in Section 4.2, and (iv) his Account shall continue to share
proportionately in Income of the Trust Fund as provided in Section 5.2. If an
individual is transferred from an employment classification with an Employer
that is not covered by the Plan to an employment classification that is so
covered, or from an Affiliate to an employment classification with an Employer
that is so covered, his period of Service prior to the date of transfer shall be
considered for purposes of determining his eligibility to become a Member under
Section 3.1 and for purposes of vesting under Section 7.4.

 

15

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3.10 Special Eligibility and Vesting for Certain Employees:

 

(a) Doran Employees. Effective March 1, 1989, all Employees who became Employees
of an Employer as a result of the acquisition of certain assets of Doran &
Associates, Inc. (“Doran”) shall become Members of the Plan subject to the
eligibility requirements under Section 3.1. Any period of employment with Doran
or an affiliate of Doran shall be considered for purposes of determining such
Employees’ Service under the Plan to the extent such employment otherwise
qualified under the relevant provisions of the Plan.

 

(b) Emax Employees. Effective October 1, 1993, all Employees who became
Employees of an Employer as a result of the acquisition of certain assets of
Emax Oil Company (“Emax”), shall become Members of the Plan subject to the
eligibility requirements under Section 3.1. Any period of employment with Emax
or an affiliate of Emax shall be considered for purposes of determining such
Employees’ Service under the Plan to the extent such employment otherwise
qualifies under the relevant provisions of the Plan.

 

(c) WERCO Employees. Effective May 3, 1994, all Employees who became Employees
of an Employer as a result of the merger with Washington Energy Resources
Company (“WERCO”), shall become Active Participants of the Plan subject to the
eligibility requirements under Section 3.1. Any period of employment with WERCO
or an affiliate of WERCO shall be considered for purposes of determining such
Employees’ Service under the Plan to the extent such employment otherwise
qualifies under the relevant provisions of the Plan.

 

(d) Castle Gas Employees. Effective April 13, 1998, all Employees who became
Employees of an Employer as a result of the acquisition of certain assets of
Castle Gas Company, Inc. (“Castle Gas”) shall become Active Participants of the
Plan subject to the eligibility requirements under Section 3.1. Any period of
employment with Castle Gas or an affiliate of Castle Gas shall be considered for
purposes of determining such Employees’ Service under the Plan to the extent
such employment otherwise qualifies under the relevant provisions of the Plan.

 

(e) Oryx Employees. Effective December 30, 1998, all Employees who became
Employees of an Employer as a result of the acquisition of certain properties of
Oryx Energy Company (“Oryx”), shall become Active Participants of the Plan
subject to the eligibility requirements under Section 3.1. Any period of
employment with Oryx or an affiliate of Oryx shall be considered for purposes of
determining such Employees’ Service under the Plan to the extent such employment
otherwise qualifies under the relevant provisions of the Plan.

 

3.11 Automatic Vesting Service: All Employees who become employed by the Company
as a result of an acquisition of or merger with an employer not affiliated with
the Company (“Acquired Company”) shall be credited with service with the
Acquired Company immediately prior to the acquisition for purposes of
eligibility and vesting hereunder.

 

3.12 Qualified Military Service: Notwithstanding any provisions of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code.

 

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ARTICLE IV

 

CONTRIBUTIONS AND FORFEITURES

 

4.1 Savings Contributions: Each Member may designate up to fifteen percent
(15%) of his Compensation as Pre-Tax and/or After-Tax Contributions as described
herein.

 

A. Pre-Tax Contributions: Each Member who elects to make Pre-Tax Contributions
for a Plan Year shall initially elect to defer a portion of his Compensation in
whole percentages of not less than one percent (1%) and not more than fifteen
percent (15%) (to the nearest whole dollar) of his Compensation; provided,
however, that Pre-Tax Contributions and After-Tax Contributions under this
Section 4.1 shall not total, in the aggregate, more than fifteen percent
(15%) (to the nearest whole dollar) of the Member’s Compensation. Such deferred
percentage shall be applied against a Member’s Compensation as such Compensation
becomes payable. Each such election shall continue in effect during subsequent
Plan Years unless the Member notifies the Committee, in writing and in such form
and manner prescribed by the Committee, of his election to change or discontinue
his Pre-Tax Contribution. A Member may change the percentage of his Compensation
designated by him as his Pre-Tax Contribution, but not retroactively and not
more frequently than four (4) times each Plan Year. A Member’s Pre-Tax
Contributions shall not exceed a maximum of $10,500 as adjusted by the Secretary
of the Treasury to account for cost-of-living increases. In the event a Member’s
Pre-Tax Contributions exceed the applicable $10,500 limit, or in the event the
Member submits a written claim to the Committee, at the time and in the manner
prescribed by the Committee, specifying an amount of Pre-Tax Contributions that
will exceed the applicable limit of Section 402(g) of the Code when added to
amounts deferred by the Member in other plans or arrangements, such excess (the
“Excess Deferrals”), plus any income and minus any loss attributable thereto,
shall be returned to the Member by April 15 of the following year. Such income
shall include the allocable gain or loss for (i) the Plan Year in which the
Excess Deferral occurred and (ii) the period from the end of that Plan Year to
the date of distribution. The amount of any Excess Deferrals to be distributed
to a Member for a taxable year shall be reduced by excess Pre-Tax Contributions
previously distributed pursuant to Article XIV for the Plan Year beginning in
such taxable year. The income or loss attributable to the Member’s Excess
Deferral for the Plan Year shall be determined by multiplying the income or loss
attributable to the Member’s Pre-Tax Contribution Account balance for the Plan
Year (or relevant portion thereof) by a fraction, the numerator of which is the
Excess Deferral and the denominator of which is the Member’s total Pre-Tax
Contribution Account balance as of the Valuation Date next preceding the date of
return of the Excess Deferral. Unless the Committee elects otherwise, the income
or loss attributable to the Member’s Excess Deferral for the period between the
end of the Plan Year and the date of distribution shall be determined using the
safe-harbor method set forth in Treasury Regulations to Section 402(g) of the
Code, and shall be equal to ten percent (10%) of the allocable income or loss
for the Plan Year, calculated as set forth immediately above, multiplied by the
number of calendar months that have elapsed since the end of the Plan Year. For
these purposes, distribution of an Excess Deferral on or before the fifteenth
(15th) day of a calendar month shall be treated as having been made on the last
day of the preceding month, and a distribution made thereafter shall be treated
as having been made on the first day of the next month. Any Excess Deferrals
which have not been returned to the Member by April 15 of the following year
shall be

 

17

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treated as Annual Additions under Article XII of the Plan. Each Member’s Pre-Tax
Contribution shall be contributed to the Trust Fund by the Employer. A Member
shall always be fully vested in and have a non-forfeitable right to his Pre-Tax
Contributions.

 

B. After-Tax Contributions: Any Member regardless of whether he has elected to
defer any whole percentage of his Compensation in the form of a Pre-Tax
Contribution to the Plan may elect to make an After-Tax Contribution of up to
fifteen percent (15%) (to the nearest whole dollar) of his Compensation;
provided, however, that Pre-Tax Contributions and After-Tax Contributions under
this Section 4.1 shall not total, in the aggregate, more than fifteen percent
(15%) (to the nearest whole dollar) of the Member’s Compensation. Such a
deferred percentage shall be applied against a Member’s Compensation as such
Compensation becomes payable. Any After-Tax Contribution election shall be made
pursuant to the provisions of Section 3.3, and shall continue in effect during
subsequent Plan Years unless the Member notifies the Committee, in writing and
in such form and manner prescribed by the Committee, of his election to change
or discontinue his After-Tax Contribution. A Member may change the percentage of
his Compensation designated by him as his After-Tax Contribution; provided,
however, that he may not change his Pre-Tax and After-Tax Contribution elections
in the aggregate more than four (4) times each Plan Year and that such changes
shall not be retroactive. A Member shall always be fully vested in and have a
non-forfeitable right to his After-Tax Contributions.

 

4.2 Employer Contributions: Each Employer shall make an Employer Contribution to
the Trust Fund for a Plan Year on behalf of its Members in an amount equal to
one hundred percent (100%) of such Member’s Basic Savings Contributions for the
Plan Year. “Basic Savings Contributions” means each Member’s first six percent
(6%) of Pre-Tax Contributions. An Employer Contribution shall be deemed to be
made on account of a Plan Year if (i) the Employer claims such amount as a
deduction on its federal income tax return for such Plan Year or (ii) the
Employer designates such amount in writing to the Trustee as payment on account
of such Plan Year. All Employer Contributions shall be paid to the Trustee, and
payment shall be made not later than the time prescribed by law for filing the
federal income tax return of the Employer, including any extension which has
been granted for the filing of such tax return. The Trustee shall hold all such
Employer Contributions subject to the provisions of this Plan and Trust, and no
part of such Contributions shall be used for, or diverted to, any other purpose.
The foregoing not withstanding, with respect to a Member who defers his
Compensation at a rate of 6% or more and who, prior to the end of the Plan Year,
ceases his contributions because of the limits imposed by Code Section 402(g),
Employer Contributions to his Employer Contribution Account shall be made each
pay period for such Plan Year in such an amount that the aggregate of such
contributions for such Plan Year is equal to the amount provided by the Employer
pursuant to this Section.

 

In the case of the reinstatement of any amounts forfeited pursuant to the
unclaimed benefit provisions of Section 11.10, the Employer shall also
contribute, within a reasonable time after a claim is filed under Section 11.10,
an amount sufficient to reinstate such amount. All such “Employer Minimum
Contributions” shall be transmitted to the Trustee as soon as practicable after
such contributions are made.

 

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4.3 Employer Contributions and Pre-Tax Contributions to be Tax Deductible:
Employer Contributions and Pre-Tax Contributions shall not be made in excess of
the amount deductible under applicable federal law now or hereafter in effect
limiting the allowable deduction for contributions to profit-sharing plans. The
Employer Contributions and Pre-Tax Contributions to this Plan, when taken
together with all other contributions made by the Employer to other qualified
retirement plans, shall not exceed the maximum amount deductible under
Section 404 of the Code.

 

4.4 Suspension of Contributions: Any Member may, by written direction to his
Employer, suspend his Pre-Tax Contributions and/or After-Tax Contributions at
any time by giving at least twenty-one (21) days’ notice. In the case of any
suspension of Pre-Tax Contributions and/or After-Tax Contributions, the Employer
Contributions will automatically cease. Pre-Tax Contributions and/or After-Tax
Contributions which are not made during a period of suspension shall not be made
up retroactively.

 

4.5 Delivery to Trustee: Each Employer shall, not less frequently than monthly,
pay the Contributions to the Trustee.

 

4.6 Application of Funds: The Trustee shall hold or apply the Contributions so
received by it subject to the provisions of the Plan; and no part thereof
(except as otherwise provided in the Trust Agreement) shall be used for any
purpose other than the exclusive use of the Members or their Beneficiaries.

 

4.7 Rollover Amounts: Any Member may file with the Committee a written request
that the Trustee accept a Rollover Amount from such Member. The Committee, in
its sole and absolute discretion, shall determine whether such Member shall be
permitted to contribute a Rollover Amount to the Trust Fund. The Committee shall
develop such procedures and may require such information from the Employee or
Member desiring to make such a transfer as it deems necessary or desirable to
determine that the proposed transfer will meet the requirements of this Section.
Upon approval by the Committee, the amount transferred shall be deposited in the
Trust Fund and shall be credited to a separate Rollover Account. Such account
shall at all times be one hundred percent (100%) vested in the Employee or
Member and shall share in the Income of the Trust Fund in accordance with
Section 5.2. Upon termination of employment, the total amount of the Rollover
Account shall be distributed in accordance with Article VIII.

 

Upon such a transfer by an Employee who is otherwise eligible to participate in
the Plan but who has not yet completed the participation requirements of
Section 3.1, his Rollover Account shall represent his sole interest in the Plan
until he becomes a Member. In all respects, the Rollover Account shall be
treated as a regular account under this Plan and shall be subject to the
investment directions of the Member and the change thereof as otherwise
permitted herein.

 

4.8 Disposition of Forfeitures: If a Member terminates Service without being
entitled to receive a distribution from his Employer Contribution Account, he
shall be deemed to have received a distribution from that Account as of the date
of his termination of Service. Upon termination of Service, a Member’s
Forfeiture (as defined in Section 1.21), if any, shall first be

 

19

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credited to the Employer Contribution Account of a re-employed Member for whom a
reinstatement of prior Forfeitures is required pursuant to Section 7.4 hereof,
and second shall be applied toward the Account of a former Member pursuant to
the unclaimed benefit provisions of Section 11.10 hereof. To the extent that
Forfeitures for any Plan Year exceed the amounts required to reinstate the
Accounts noted above, they will be applied against the next succeeding Employer
Contribution.

 

4.9 Contributions Generally Irrevocable: All Employer contributions to the Trust
Fund shall be irrevocable and shall be used to pay benefits or to pay expenses
of the Plan and Trust Fund; provided, however, that upon the Employer’s request,
a contribution which was made by a mistake of fact or conditioned upon initial
qualification of the Plan and Trust Fund under Sections 401(a) and 501(a) of the
Code, or upon the deductibility of the contribution under Section 404 of the
Code, shall be returned to the Employer within one (1) year after the payment of
the contribution, the denial of initial qualification or the disallowance of the
deduction (to the extent disallowed), whichever is applicable.

 

20

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ARTICLE V

 

MEMBER ACCOUNTS

 

5.1 Individual Accounts: The Committee shall create and maintain adequate
records to disclose the interest in the Trust Fund and in its component
Investment Funds of each Member, former Member and Beneficiary. Such records
shall be in the form of individual accounts and credits and charges shall be
made to such accounts in the manner herein described. A Member may have up to
nine (9) separate accounts, including but not limited to, an Employer
Contribution Account, a Pre-Tax Contribution Account, an After-Tax Contribution
Account, a Profit Sharing Plan Account, an ESOP Account and a Rollover Account.
Any Member who transfers from one Employer to another Employer, or who is
simultaneously employed by two or more Employers, may have individual accounts
with each such Employer. The maintenance of individual Accounts is only for
accounting purposes, and a segregation of the assets of the Trust Fund to each
Account shall not be required. Distribution and withdrawals made from an Account
shall be charged to the Account as of the date paid.

 

5.2 Account Adjustments: The Accounts of Members, former Members and
Beneficiaries shall be adjusted each Plan Year in accordance with the following:

 

(a) Income of the Trust Fund: Each Valuation Date, the Trustee shall value the
Trust Fund at its then market value to determine the amount of Income of the
Trust Fund. The Income of the Trust Fund since the preceding Valuation Date
(including the appreciation or depreciation in value of the assets of the
Investment Fund) shall be allocated to the Accounts of Members in proportion to
the balances in such Accounts on the preceding Valuation Date, but after first
reducing each such Account balance by any distribution from such Account since
the preceding Valuation Date and increasing such Account balance by any
Contributions and loan payments since the preceding Valuation Date.

 

(b) Savings Contributions: As of each Valuation Date during the Plan Year, the
Trustee shall allocate to each respective Member’s Pre-Tax Contribution Account
his Pre-Tax Contributions to the Plan made since the preceding Valuation Date.
As of each Valuation Date during the Plan Year, the Trustee shall also allocate
to each respective Member’s After-Tax Contribution Account his After-Tax
Contributions made since the preceding Valuation Date.

 

(c) Employer Contributions: No less frequently than the Annual Valuation Date
and more frequently as may be specified by the Committee, the Employer
Contribution for such Plan Year shall be allocated among its Members during such
Plan Year or partial Plan Year in the ratio that each Member’s unwithdrawn Basic
Savings Contributions for the Plan Year or partial Plan Year bears to the total
unwithdrawn Basic Savings Contributions of all such Members for the Plan Year or
partial Plan Year.

 

21

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(d) Forfeitures: Forfeitures which have become available for reallocation during
such Plan Year shall be applied pursuant to Section 4.8.

 

(e) Employer Minimum Contributions: Employer Minimum Contributions shall be used
solely to reinstate Accounts in accordance with Section 7.4 and to restore
Accounts pursuant to Section 11.10 whenever the Forfeitures available for such
reinstatement or restoration are insufficient.

 

5.3 Recognition of Different Investment Funds: As provided in Article IX,
Investment Funds shall be established and each Member shall direct, within the
limitations set forth in Sections 9.3 and 9.4, what portion of the balance in
his Accounts on a pro rata basis, if any, shall be deposited in each Investment
Fund. Consequently, when appropriate, a Member shall have an Employer
Contribution Account, Pre-Tax Contribution Account, After-Tax Contribution
Account, Profit Sharing Plan Account and Rollover Account in each such
Investment Fund and the allocations described in Section 5.2 shall be adjusted
in such manner as is appropriate to recognize the existence of the Investment
Funds. Because Members have a choice of Investment Funds, any reference in this
Plan to an Employer Contribution Account, Pre-Tax Contribution Account,
After-Tax Contribution Account, Profit Sharing Plan Account or Rollover Account
shall be deemed to mean and include all accounts of a like nature which are
maintained for the Member under each Investment Fund.

 

5.4 Valuation of Trust Fund: A valuation of the Trust Fund shall be made as of
each Valuation Date and on any other date during the Plan Year that the
Committee deems a valuation to be advisable. Any such interim valuation shall be
exercised on a uniform and non-discriminatory basis. For the purposes of each
valuation, the assets of each Investment Fund shall be valued at the respective
current market values, and the amount of any obligations for which the
Investment Fund may be liable, as shown on the books of the Trustee, shall be
deducted from the total value of the assets. For the purposes of maintenance of
books of account in respect of properties comprising the Trust Fund, and of
making any such valuation, the Trustee shall account for the transactions of the
Trust Fund on a modified cash basis. The current market value shall, for the
purposes hereof, be determined as follows:

 

(a) Where the properties are securities which are listed on a securities
exchange, or which are actively traded over the counter, the value shall be the
last recorded bid and asked prices, whichever shall be the later. In the event
transactions regarding such property are recorded over more than one such
exchange, the Trustee may select the exchange to be used for purposes hereof.
Recorded information regarding any such securities published in The Wall Street
Journal or any other publication deemed appropriate may be relied upon by the
Trustee. If no transactions involving any such securities have been recorded
within ten (10) days prior to the particular Valuation Date, such securities
shall be valued as provided in paragraph (b) below.

 

(b) Where paragraph (a) hereof shall be inapplicable in the valuation of any
properties, the Trustee shall obtain from at least two (2) qualified persons an
opinion as to the value of such properties as of the close of business on the
particular Valuation Date. The average of such estimates shall be used.

 

22

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ARTICLE VI

 

WITHDRAWALS AND LOANS

 

6.1 Withdrawals from Profit Sharing Plan Account: Each Member with a Profit
Sharing Plan Account shall be entitled to withdraw such amounts that were
transferred to this Plan. The following withdrawals are permitted only from a
Member’s Profit Sharing Plan Account:

 

A. Voluntary Withdrawals: Each Member of the Plan, upon giving written notice to
the Committee (in such form and in such manner as prescribed by the Committee)
shall be entitled to withdraw from his Profit Sharing Plan Account (valued as of
the Valuation Date preceding the actual date of the withdrawal) any amount, not
to exceed the balance of such Account, as of such date. Voluntary withdrawals
shall be limited to two such withdrawals per year and further limited to only
one such withdrawal in any given three-month period. Voluntary withdrawals shall
be deducted from a Member’s Profit Sharing Plan Account in the following order:

 

4. Profit Sharing Plan after-tax contributions made before January 1, 1987.

 

5. Profit Sharing Plan after-tax contributions including investment earnings
made after December 31, 1986.

 

6. Profit Sharing Plan investment earnings on after-tax contributions made
before January 1, 1987.

 

7. Profit Sharing Plan vested employer contributions including investment
earnings.

 

Notwithstanding any of the foregoing, the vested portion of employer
contributions may only be withdrawn from the Profit Sharing Plan Account 24
months after such amounts were contributed to the Profit Sharing Plan.

 

B. Hardship Withdrawals: The following hardship withdrawals shall be allowed:

 

1. A Member may make a hardship withdrawal from his Profit Sharing Plan Account
if the Member has already made two voluntary withdrawals or if three (3) months
have not elapsed since the previous voluntary withdrawal.

 

2. A Member may at any time file with the Committee an appropriate written
request for a hardship withdrawal of an amount from the pre-tax contribution
account in his Profit Sharing Plan Account. Notwithstanding the foregoing, a
Member may not withdraw any Income of the Trust Fund allocated to his pre-tax
contribution account in his Profit Sharing Plan Account on or after January 1,
1989. The approval or disapproval of such request shall be made

 

23

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within the sole discretion of the Committee except that the Committee shall not
approve any such request for a withdrawal unless it has been presented a
certification by the Member that he is facing a hardship creating an immediate
and substantial financial need and that the resources necessary to satisfy that
financial need are not reasonably available from other sources of the Member. A
Member must first withdraw any available amount credited to the after-tax
account and the vested portion of his employer contribution account in his
Profit Sharing Plan Account in order to be permitted to make a hardship
withdrawal from the pre-tax contribution account in his Profit Sharing Plan
Account, and must also have taken all distributions and loans otherwise
available under this Plan and all employee plans maintained by the Member’s
Employer. The amount of the hardship withdrawal shall be limited to that amount
which the Committee determines to be required to meet the immediate financial
need created by the hardship. The hardship withdrawal shall be made in cash as
soon as practicable after the Member submits the hardship request and the dollar
amount withdrawn shall be determined by reference to the value of the pre-tax
contribution account in his Profit Sharing Plan Account as of the Valuation Date
immediately preceding the date of withdrawal. A Member who receives such a
hardship withdrawal shall be prohibited from making Pre-Tax Contributions under
the Plan or pre-tax contributions under any other cash or deferred arrangement
for the twelve (12) consecutive months following the date of distribution and in
addition, the dollar limitation on the Pre-Tax Contributions described in
Section 4.1 shall be reduced in the year following the hardship withdrawal by
the amount of Pre-Tax Contributions made by the Member in the Plan Year during
which the withdrawal was made. The following standards (or such other standards
as may be acceptable under Treasury Regulations issued pursuant to
Section 401(k) of the Code) shall be applied on a uniform and non-discriminatory
basis in determining the existence of such a hardship:

 

(a) A financial need shall be considered immediate if it must be satisfied in
substantial part within a period of twelve (12) months from the date on which
the Member certifies his eligibility for a hardship withdrawal. A financial need
shall be considered substantial if it exceeds ten percent (10%) of the Member’s
annual Compensation.

 

(b) Subject to the provisions of Section 6.1(a) above, a distribution will be
deemed by the Committee to be on account of an immediate and substantial
financial need if it results from:

 

(i) medical expenses incurred by the Member, or the Member’s spouse or
dependents (as defined in Section 152 of the Code),

 

(ii) purchase (excluding mortgage payments) of a principal residence for the
Member,

 

24

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(iii) payment for tuition for the next semester or quarter of post-secondary
education for the Member or the Member’s spouse, children or dependents, or

 

(iv) the need to prevent the eviction of the Member from his principal residence
or foreclosure on the mortgage of the Member’s principal residence.

 

6.2 Withdrawals of Amounts From After-Tax Contribution Account: Each Member of
the Plan, upon giving written notice to the Committee (in such form and in such
manner as prescribed by the Committee), may elect to withdraw from his After-Tax
Contribution Account those contributions which are made on or after January 1,
1991. The minimum amount of such withdrawal shall be $500. If a withdrawal is
made to a Member before he attains age 59- 1/2, the Member shall be advised by
the Committee that in addition to taxes payable on investment earnings, an
income tax may be imposed equal to ten percent (10%) of the amount so received
which is included in his gross income for such taxable year.

 

6.3 Withdrawals of Amounts From Pre-Tax Account: A Member may not withdraw any
amount from his Pre-Tax Account, except a Member who has attained age 59- 1/2
may elect, by giving sixty (60) days’ written notice to the Committee (or within
any other period of time as prescribed by the Committee) and by following such
other rules and procedures as may be prescribed from time to time by the
Committee on a uniform and non-discriminatory basis, to withdraw the entire
amount or any portion of his Pre-Tax Contribution Account.

 

6.4 Withdrawals from Employer Contribution, ESOP and Rollover Accounts: A Member
may not withdraw any amount from his Employer Contribution, ESOP or Rollover
Accounts.

 

6.5 Loans to Members: Except as provided below, the availability of loans are
limited to Members who are Employees (hereinafter “Borrowers”), who may make
application to the Committee to borrow from the Accounts maintained by or for
the Borrower in the Trust Fund. Additionally, in order for the exemption set
forth in 29 C.F.R. 2550.408b-1 to apply to the Plan, a Borrower may also
include, but only to the extent not resulting in discrimination prohibited by
Section 401(a)(4) of the Code, any other Member or Beneficiary who is a “party
in interest” with respect to the Plan within the meaning of ERISA Section 3(14).
It is within the sole discretion of the Committee whether or not to permit such
a loan. Loans shall be granted in a uniform and non-discriminatory manner on
terms and conditions determined by the Committee which shall not result in more
favorable treatment of highly compensated employees and shall be set forth in
written procedures promulgated by the Committee in accordance with applicable
governmental regulations. All such loans shall also be subject to the following
terms and conditions:

 

(a) The amount of the loan, when added to the amount of any outstanding loan or
loans to the Borrower from any other plan of the Employer or an Affiliate which
is qualified under Section 401(a) of the Code, shall not exceed the lesser of
(i) $50,000, reduced by the excess, if any, of the highest outstanding

 

25

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balance of loans from all such plans during the one-year period ending on the
day before the date on which such loan was made over the outstanding balance of
loans from the Plan on the date on which such loan was made or (ii) fifty
percent (50%) of the present value of the Borrower’s vested Account balance
under the Plan. In no event shall a loan of less than $1,000 be made to a
Borrower. A Borrower may not have more than one (1) loan outstanding at a time
under this Plan, and a Borrower will be limited to a maximum of one (1) loan per
year from this Plan.

 

(b) The loan shall be for a term not to exceed five (5) years, and shall be
evidenced by a note signed by the Borrower. The loan shall be payable in
periodic installments and shall bear interest at a reasonable rate which shall
be determined by the Committee on a uniform and consistent basis and set forth
in the procedures in accordance with applicable governmental regulations.
Payments by a Borrower who is an Employee will be made by means of payroll
deduction from the Borrower’s compensation. If a Borrower is not receiving
compensation from the Employer, the loan repayment shall be made in accordance
with the terms and procedures established by the Committee. A Borrower may repay
an outstanding loan in full at any time.

 

(c) In the event an installment payment is not paid within seven (7) days
following the monthly due date, the Committee shall give written notice to the
Borrower sent to his last known address. If such installment payment is not made
within thirty (30) days thereafter, the Committee shall proceed with foreclosure
in order to collect the full remaining loan balance or shall make such other
arrangements with the Borrower as the Committee deems appropriate. Foreclosure
need not be effected until occurrence of a distributable event under the terms
of the Plan and no rights against the Borrower or the security shall be deemed
waived by the Plan as a result of such delay.

 

(d) The unpaid balance of the loan, together with interest thereon, shall become
due and payable upon the date of distribution of the Account and the Trustee
shall first satisfy the indebtedness from the amount payable to the Borrower or
to the Borrower’s Beneficiary before making any payments to the Borrower or to
the Borrower’s Beneficiary.

 

(e) Any loan to a Borrower under the Plan shall be adequately secured. Such
security may include a pledge of a portion of the Borrower’s right, title and
interest in the Trust Fund which shall not exceed fifty percent (50%) of the
present value of the Borrower’s vested Account balance under the Plan as
determined immediately after the loan is extended. Such pledge shall be
evidenced by the execution of a promissory note by the Borrower which shall
grant the security interest and provide that, in the event of any default by the
Borrower on a loan repayment, the Committee shall be authorized to take any and
all appropriate lawful actions necessary to enforce collection of the unpaid
loan.

 

(f) A request by a Borrower for a loan shall be made in writing to the Committee
and shall specify the amount of the loan. If a Borrower’s request for a loan is
approved by the Committee, the Committee shall furnish the Trustee with written
instructions directing the Trustee to make the loan in a lump-sum payment of
cash to the Borrower. The cash for such payment shall be obtained by redeeming
proportionately as of the date of payment the Investment Fund or Investment
Funds, or portions thereof, that are credited to the particular Account of such
Borrower.

 

(g) A loan to a Borrower shall be considered an investment of the separate
Account(s) of the Borrower from which the loan is made. All loan repayments
shall be credited pro rata to such separate Account(s) and reinvested
exclusively in shares of one or more of the Investment Funds in accordance with
the Borrower’s most recent investment direction made in accordance with
Section 9.3.

 

26

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ARTICLE VII

 

MEMBERS’ BENEFITS

 

7.1 Retirement of Members on or after Retirement Date: Any Member who terminates
his Service on or after his Retirement Date shall have a fully vested and
non-forfeitable right to receive the entire amount of his Account. The “entire
amount” in such Member’s Account shall include any Savings Contributions,
Rollover Amounts, amounts in the Profit Sharing Plan Account, ESOP Account and
Employer Contributions to be made as of the Valuation Date preceding his
termination of Service. Payment of benefits due under this Section shall be made
in accordance with Section 8.1. Notwithstanding any provision of this Plan to
the contrary, a Member’s right to the amounts credited to his Accounts hereunder
shall become fully vested and non-forfeitable in the event of his attainment of
age sixty-five (65) prior to termination of Service.

 

7.2 Disability of Members: If the Committee shall find and advise the Trustee
that Service of a Member has been terminated because of Total and Permanent
Disability, which in the judgment of the Committee, based upon advice of
competent physicians of their selection, will prevent such Member from resuming
his Service with an Employer, such Member shall become entitled to receive the
entire amount of his Account. The “entire amount” in such Member’s Account shall
include any Savings Contributions, Rollover Amounts, amounts in the Profit
Sharing Plan Account, ESOP Account and Employer Contributions to be made as of
the Valuation Date preceding his termination of Service. Payment of benefits due
under this Section shall be made in accordance with Section 8.1.

 

7.3 Death of Members: In the event of the termination of Service of any Member
by death, and after receipt by the Committee of acceptable proof of death, his
Beneficiary shall be entitled to receive the entire amount in the deceased
Member’s Account. The “entire amount” in such Member’s Account shall include any
Savings Contributions, Rollover Amounts, amounts in the Profit Sharing Plan
Account, ESOP Account and Employer Contributions to be made as of the Valuation
Date preceding his termination of Service. Payment of benefits due under this
Section shall be made in accordance with Section 8.2.

 

7.4 Other Termination of Service: In the event of termination of Service of any
Member for any reason other than retirement on or after his Retirement Date,
disability or death, a Member shall, subject to the further provisions of this
Plan, be entitled to receive the entire amount credited to his Pre-Tax
Contribution Account, After-Tax Contribution Account, amounts in the Profit
Sharing Plan Account, ESOP Account, Rollover Account, plus any of his Savings
Contributions made as of the Valuation Date preceding his termination of
Service, plus an amount equal to the vested percentage of his Employer
Contribution Account, determined in accordance with the following schedule:

 

27

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Years of Vesting Service

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

   Vested
Percentage

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

 

Less than 1 year

   0 %

1 year but less than 2

   20 %

2 years but less than 3

   40 %

3 years but less than 4

   60 %

4 years but less than 5

   80 %

5 or more years

   100 %

 

Any portion of the Employer Contribution Account of a terminated Member in
excess of the vested percentage specified above shall be a Forfeiture, which
shall be disposed of as provided in Section 4.8. Payment of benefits due under
this Section shall be made in accordance with Section 8.1.

 

In addition, any amounts forfeited from the prior Employer Contribution Account
of such Member upon his earlier termination of Service shall be reinstated to
his new Employer Contribution Account. Upon the re-employment of any individual
who had previously been a Member and who has incurred five consecutive Breaks In
Service, such re-employed individual shall not be entitled to a reinstatement of
any Forfeiture incurred by reason of his prior termination of employment.

 

If a distribution is made at a time when a Member is not fully vested in his
Employer Contribution Account balance, and if the Member is re-employed prior to
a Forfeiture of the balance of his Employer Contribution Account, the Member’s
non-forfeitable portion of the balance of the undistributed Employer
Contribution Account shall be reinstated to his new Employer Account (as
provided in Section 4.8) within a reasonable time after repayment by the Member
of the amount of his previous distribution, if any.

 

Notwithstanding anything herein to the contrary, if a Member (i) terminates
Service prior to having completed five years of Vesting Service; (ii) meets the
eligibility requirements for a severance plan approved by the Chief Executive
Officer of the Company and the Committee and listed on Appendix A attached
hereto; and (iii) if required by the applicable severance plan, signs a waiver
and release, such Member shall be entitled to receive the entire amount credited
to such Member’s Employer Contribution Account.

 

7.5 Valuation Dates Determinative of Member’s Rights: The amount to which a
Member is entitled upon his retirement, disability, death or other termination
of Service shall be valued as of the Valuation Date determined as follows:

 

(a) In the case of any Member whose Service is terminated due to his retirement
on or after his Retirement Date, disability or death, the amount to which such
Member or his Beneficiary is entitled upon such termination of Service shall be
determined as of the last Valuation Date preceding his termination of Service.

 

(b) In the case of any Member whose Service is terminated for any reason other
than retirement on or after his Retirement Date, disability or death, the amount
to which such Member is entitled upon such termination of Service shall be
valued as of the last Valuation Date preceding the Distribution Date as defined
in Section 8.1.

 

7.6 Vesting for Certain Employees: Each Member who is eligible to participate in
the 1992 Cabot Oil & Gas Corporation Severance Benefit Plan No. 506 and whose
Service is terminated involuntarily between January 9, 1992 and January 21, 1992
shall be fully vested in and have a non-forfeitable right to his entire Account
balance in the Plan as of the date of the termination of his Service with the
Company.

 

28

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ARTICLE VIII

 

PAYMENT OF BENEFITS

 

8.1 Payment of Benefits: Upon a Member’s entitlement to payment of benefits
under Section 7.1, 7.2 or 7.4, he shall file with the Committee his written
election on such forms or forms, and subject to such conditions, as the
Committee shall provide. Such benefit may be made in two distributions, the
first such distribution consisting of the entire amount in such Member’s Account
as of the Valuation Date preceding his termination of Service plus any Pre-Tax
or After-Tax Contributions made by the Member subsequent to such Valuation Date,
and the second distribution consisting of the Employer Contribution allocated to
such Member’s Account as of the Valuation Date of the Plan Year in which such
Member terminated Service. The Committee shall direct the Trustee to distribute
the Member’s benefits according to the Member’s election.

 

The day following the date of the Member’s termination of Service is the
earliest date that payment of his benefits may commence and is herein referred
to as such Member’s “Distribution Date.” Payment of a Member’s benefits shall be
made or commence as soon as practicable after his Distribution Date, subject to
the Member’s election to defer receipt thereof, but in any event must be made or
commence prior to the expiration of 60 days after the Valuation Date of the Plan
Year within which such Member’s Retirement Date occurs or the date of his death,
if earlier. A member who withholds consent to an immediate distribution may at
any time, subsequently elect, in the form and manner prescribed by the
Committee, to receive payment of benefits. If a benefit distribution under the
Plan is made to a Member before he attains age 59- 1/2, the Member shall be
advised by the Committee that an additional income tax may be imposed equal to
ten percent (10%) of the portion of the amount so received which is included in
his gross income for such taxable year and which is attributable to benefits
accrued while he was a Member. Members who terminate Service after attainment of
age fifty-five (55) shall be notified of their exemption from said additional
tax.

 

The amount which a Member, former Member or Beneficiary is entitled to receive
at any time and from time to time shall be paid in cash as a lump sum, except
amounts payable to or on behalf of Members who have shares of Cabot Corporation
stock or shares of Cabot Oil and Gas Corporation stock in their Profit Sharing
Plan Account or their ESOP Account may have their stock balance paid in cash or
as stock certificates adjusted to reflect commission fees. The Profit Sharing
Plan Account and the ESOP Account shall retain the payment options provided
under the Profit Sharing Plan and the ESOP.

 

If the amount to which a terminated Member is entitled is not more than $5,000,
such amount shall be paid to the Member as soon as practicable after his
Distribution Date; if such amount is in excess of $5,000, the distribution shall
be made only if the Member so consents. If such consent is withheld,
distribution of the amount to which the terminated Member is entitled shall be
made to such Member within 60 days after the end of the Plan Year in which
occurs the earlier of the Member’s death or his Retirement Date. If a Member’s
termination of Service occurs after his Retirement Date, distribution shall be
made within 60 days after the end of the Plan Year in which termination occurs.
If a Member dies before

 

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distribution of his interest commences, the Member’s entire interest will be
distributed no later than five years after the Member’s death. If distribution
has commenced before the Member’s death, any remaining amount in the Member’s
Account shall be distributed at least as rapidly as under the method of
distribution being used as of the date of the Member’s death.

 

Notwithstanding anything herein to the contrary, if a distribution is one to
which Code Sections 401(a)(11) and 417 do not apply, such distribution may
commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that
(a) the Committee clearly informs the Member that the Member has a right to a
period of at least 30 days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if applicable, a particular
distribution option), and (b) the Member, after receiving the notice,
affirmatively elects a distribution. If a distribution is one to which Sections
401(a)(11) and 417 of the Code does apply, the Member may elect, with the
consent of the Member’s spouse to waive any requirement that the written
explanation required under Code Section 417 be provided at least 30 days before
the annuity starting date (or to waive the 30-day requirement with respect to an
explanation provided after the annuity starting date) if the distribution
commences more than 7 days after such explanation is provided.

 

8.2 Distribution Upon Death: In the event of the death of any Member, the amount
in his Account shall be distributable as follows:

 

(a) A Member shall file with the Committee a written designation, in the form
prescribed by the Committee, of the Beneficiary or Beneficiaries to receive the
amount in his Account upon his death, and the Member may at any time change or
cancel any such designation by filing a written request in the form prescribed
by the Committee. No such designation of Beneficiary shall be effective if the
Member has a spouse, unless the spouse is designated as the Beneficiary or
unless the spouse consents to the designation of another person as Beneficiary
or the absence of the spouse’s consent is permitted herein. The Member’s spouse
may waive the right to be the Member’s sole Beneficiary and consent to the
Beneficiary designation made by the Member. The waiver must (i) be in writing;
(ii) designate a specific alternate Beneficiary and a form of benefit which may
not be changed without spousal consent (or must expressly permit designation by
the Member without further consent of the spouse); (iii) acknowledge the effect
of the waiver; and (iv) be witnessed by a Plan representative or a notary
public. The spouse’s consent to a Beneficiary designation shall not be required
if it is established to the satisfaction of the Committee that such written
consent may not be obtained because there is no spouse or the spouse cannot be
located. Any consent under this Section 8.2(a) will be valid only with respect
to the spouse who signs the consent. Additionally, a revocation of a prior
spousal consent may be made by a Member without the consent of the spouse at any
time before the distribution of the benefit under the Plan. The number of
revocations shall not be limited.

 

(b) In the event of the death of any Member, the entire amount in the Account of
such Member shall be distributed to the Member’s spouse, or if there

 

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is no spouse, or the spouse has consented pursuant to Section 8.2(a), then to
the Beneficiary designated by him as provided in the preceding paragraph (a);
or, in the absence of an effective designation or if no designated Beneficiary
survives the Member, then to the duly appointed and qualified executor or
administrator of the Member’s estate; or, if no administration of the estate of
such decedent is necessary, then to the Beneficiary entitled thereto under the
last will and testament of such deceased Member; or, if such decedent left no
will, to the legal heirs of such decedent determined in accordance with the laws
of intestate succession of the state of the decedent’s domicile.

 

(c) If the Committee shall be in doubt as to the right of any Beneficiary
designated by a deceased Member to take the interest of such decedent, the
Committee may direct the Trustee to distribute the amount in the Account in
question to the estate of such Member, in which event the Trustee, the Employer,
the Committee, and any other person in any manner connected with the Plan, shall
have no further liability in respect of the assets.

 

8.3 Required Minimum Distributions: Except as provided below, if a Member is
employed by the Company on the April 1 following the calendar year in which the
Member attains age 70- 1/2 such Member may choose to commence distribution of
any benefits to which the Member is entitled either on the April 1 of the
calendar year following the calendar year in which (i) the Member attains age
70- 1/2 or (ii) the Member retires from the Company. Notwithstanding any
provision of the Plan to the contrary, any benefits to which a member who is a
5% owner of the Company is entitled shall commence not later than April 1 of the
calendar year following the calendar year in which the Member attains age
70- 1/2, whether or not his employment has terminated in such year. Such
distribution shall be at least equal to the required minimum distributions under
Section 401(a)(9) of the Code and the regulations thereunder. With respect to
distributions under the Plan made for calendar years beginning on or after
January 1, 2001, the Plan will apply the minimum distribution requirements of
Section 401(a)(9) of the Code in accordance with the regulations under
Section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any
provision of the Plan to the contrary. This amendment shall continue in effect
until the end of the last calendar year beginning before the effective date of
final regulations under Section 401(a)(9) or such other date as may be specified
in guidance published by the Internal Revenue Service.

 

8.4 Disputed Benefits: If any dispute still exists between a Member or a
Beneficiary and the Committee after a review of the claim or in the event any
uncertainty shall develop as to the person to whom payment of any benefit
hereunder shall be made, the Trustee may withhold the payment of all or any part
of the benefits payable hereunder to the Member or Beneficiary until such
dispute has been resolved by a court of competent jurisdiction or settled by the
parties involved.

 

8.5 Member’s Right to Transfer Eligible Rollover Distribution:

 

A. Rule: Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee’s election under this Section, a distributee may
elect, at the

 

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time and in the manner prescribed by the plan administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.

 

B. Definitions:

 

(a) Eligible Rollover Distribution: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee’s designated beneficiary, or for a specified
period of ten (10) years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; any hardship
withdrawal described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion
of any distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).

 

(b) Eligible Retirement Plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee’s eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.

 

(c) Distributee: A distributee includes an Employee or former Employee. In
addition, the Employee’s or former Employee’s surviving spouse and the
Employee’s or former Employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.

 

(d) Direct Rollover: A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.

 

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ARTICLE IX

 

TRUST AGREEMENT; INVESTMENT

FUNDS; INVESTMENT DIRECTIONS

 

9.1 Trust Agreement: The Company has adopted a Trust Agreement governing the
administration of the Trust, established effective as of January 1, 1991 (the
provisions of which are herein incorporated by reference to the extent not
inconsistent herewith). Subject to the provisions of Section 9.2, and, not by
way of limitation, the provisions of the Trust Agreement, the Trustee may invest
a portion of the Trust Fund in common stock of the Company, or in any other
“qualifying employer security” within the meaning of Section 407(d)(5) of ERISA.

 

9.2 Investment Funds: The Trustee shall divide the Trust Fund into the Cabot
Corporation Common Stock Fund; the Cabot Oil & Gas Corporation Stock Fund and
such additional Investment Funds which shall be selected and reviewed from time
to time by the Committee.

 

Contributions shall be paid into the Investment Funds pursuant to the directions
of the Members given in accordance with the provisions of Sections 9.3 and 9.4
as certified to the Trustee by the Committee. Except as otherwise provided
herein, interest, dividends and other income and all profits and gains produced
by each such Investment Fund shall be paid into such Investment Fund, and such
interest, dividends and other income or profits and gains, without distinction
between principal and income, may be invested and reinvested but only in the
property hereinabove specified for the particular Investment Fund.
Notwithstanding any provision in this Section to the contrary, the Committee may
direct the Trustee (i) to invest Savings or Employer Contributions in short-term
fixed income investments which are acceptable to the Trustee or in the suspense
account to be maintained in each Investment Fund during the period from the date
of any such Contribution until the next Valuation Date or (ii) to invest all or
any portion of the Trust Fund attributable to any terminated or retired Member
or attributable to any Member who is expected to retire or to terminate his
Service within one (1) year, in one or more fixed income investments which are
acceptable to the Trustee. The fixed income investments authorized by this
Section shall include, but not be limited to, certificates of deposit, savings
accounts, or U.S. Treasury bills or notes.

 

9.3 Investment Directions of Members: Each Member may, in a form and manner
prescribed by the Committee, direct that the total of the Contributions
allocable to his Pre-Tax and After-Tax Contribution Accounts, Employer
Contribution Account, Profit Sharing Plan Account and Rollover Account, if any,
and the earnings and accretions thereon, be invested in such percentages (in
increments of ten percent (10%) of the total of all Accounts) as he may
designate among the Investment Funds. In the event a Member fails to direct the
manner of investing his Accounts as provided herein, his Accounts shall be
invested only in the Money Market Fund.

 

9.4 Change of Investment Directions: Each Member may, in the manner prescribed
by the Committee and subject to any restrictions or conditions which may be
established by the Committee, authorize the transfer of existing account
balances twelve (12) times each Plan Year

 

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among the available Investment Funds (in ten percent (10%) increments).
Notwithstanding the foregoing, a Member may authorize the transfer of his
existing account balances to the Money Market Fund at any time, in a manner
prescribed by the Committee and subject to the Committee’s consent and any other
restrictions or conditions which may be established by the Committee.

 

Each Member may, in a form and manner prescribed by the Committee and subject to
any restrictions or conditions which may be established by the Committee, direct
that the investment of his future Pre-Tax Contributions, After-Tax Contributions
and Employer Contributions be changed from one Investment Fund to another.

 

9.5 Benefits Paid Solely from Trust Fund: All of the benefits provided to be
paid under Article VIII shall be paid by the Trustee out of the Trust Fund to be
administered under such Trust Agreement. No Fiduciary shall be responsible or
liable in any manner for payment of any such benefits, and all Members hereunder
shall look solely to such Trust Fund and to the adequacy thereof for the payment
of any such benefits of any nature or kind which may at any time be payable
hereunder.

 

9.6 Committee Directions to Trustee: The Trustee shall make only such
distributions and payments out of the Trust Fund as may be directed by the
Committee. The Trustee shall not be required to determine or make any
investigation to determine the identity or mailing address of any person
entitled to any distributions and payments out of the Trust Fund and shall have
discharged its obligation in that respect when it shall have sent certificates
and checks or other papers by ordinary mail to such persons and addresses as may
be certified to it by the Committee.

 

9.7 Authority to Designate Investment Manager: The Committee may appoint an
investment manager or managers to manage (including the power to acquire and
dispose of) any assets of the Trust Fund in accordance with the terms of the
Trust Agreement and ERISA.

 

9.8 Liquidation of Cabot MicroElectronics Stock: Any Cabot MicroElectronics
Stock received by the Plan on behalf of a Member shall be liquidated as soon as
practicable as directed by the Committee, and such proceeds shall be invested
proportionately according to the existing investment elections of the Members at
the time of the liquidation.

 

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ARTICLE X

 

ADOPTION OF PLAN BY OTHER ORGANIZATIONS;

SEPARATION OF THE TRUST FUND; AMENDMENT

AND TERMINATION OF THE PLAN;

DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND

 

10.1 Adoptive Instrument: Any corporation or other organization with employees,
now in existence or hereafter formed or acquired which is not already an
Employer under this Plan and which is otherwise legally eligible, may, with the
approval of the Company by action of the Board of Directors, adopt and become an
Employer under this Plan by executing and delivering to the Company and the
Trustee an adoptive instrument specifying the classification of its Employees
who are to be eligible to participate in the Plan and by agreeing to be bound as
an Employer by all the terms of the Plan with respect to its eligible Employees.
The adoptive instrument may contain such changes and variations in the terms of
the Plan as may be acceptable to the Company. Any such approved organizations
which shall adopt this Plan shall designate the Company as its agent to act for
it in all transactions affecting the administration of the Plan and shall
designate the Committee to act for such Employer and its Members in the same
manner in which the Committee may act for the Company and its Members hereunder.
The adoptive instrument shall specify the effective date of such adoption of the
Plan and shall become, as to such adopting Employer and its Employees, a part of
this Plan. Such Employer shall also forthwith obtain a favorable determination
letter from the appropriate District Director of the Internal Revenue with
respect to its participation in the Plan. The Company may, in its absolute
discretion, terminate an adopting Employer’s participation at any time when in
its judgment such adopting Employer fails or refuses to discharge its
obligations under the Plan. Unless otherwise specifically provided, in the event
a corporation or organization that has adopted the Plan ceases to be an
Affiliate of the Company its participation in the Plan shall terminate.

 

10.2 Separation of the Trust Fund: A separation of the Trust Fund as to the
interest therein of the Members of any particular Employer may be made by an
Employer at any time. In such event, the Trustee shall set apart that portion of
the Trust Fund which shall be allocated to such Members pursuant to a valuation
and allocation of the Trust Fund made in accordance with the procedures set
forth in Sections 5.2 and 5.4, but as of the date when such separation of the
Trust Fund shall be effective. Such portion may in the Trustee’s discretion be
set apart in cash or in kind out of the properties of the Trust Fund. That
portion of the Trust Fund so set apart shall continue to be held by the Trustee
as though such Employer had entered into the Trust Agreement as a separate trust
agreement with the Trustee. Such Employer may in such event designate a new
trustee of its selection to act as trustee under such separate trust agreement.
Such Employer shall thereupon be deemed to have adopted the Plan as its own
separate plan, and shall subsequently have all such powers of amendment or
modification of such plan as are reserved herein to the Company.

 

10.3 Voluntary Separation: If any Employer shall desire to separate its interest
in the Trust Fund, it may request such a separation in a notice in writing to
the Company and the Trustee. Such separation shall then be made as of any
specified date after service of such notice, and such separation shall be
accomplished in the manner set forth in Section 10.2.

 

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10.4 Amendment of the Plan: The Company shall have the right to amend or modify
this Plan and (with the consent of the Trustee) the Trust Agreement at any time
and from time to time to any extent that it may deem advisable. Any such
amendment or modification shall be set out in an instrument in writing duly
authorized by the Board of Directors and executed by the Company. No such
amendment or modification shall, however, increase the duties or
responsibilities of the Trustee without its consent thereto in writing, or have
the effect of transferring to or vesting in any Employer any interest or
ownership in any properties of the Trust Fund, or of permitting the same to be
used for or diverted to purposes other than for the exclusive benefit of the
Members and their Beneficiaries. No such amendment shall decrease the Account of
any Member or shall decrease any Member’s vested interest in his Account.
Notwithstanding anything herein to the contrary, the Plan or the Trust Agreement
may be amended in such manner as may be required at any time to make it conform
to the requirements of the Internal Revenue Code or of any United States
statutes with respect to employees’ trusts, or of any amendment thereto, or of
any regulations or rulings issued pursuant thereto, and no such amendment shall
be considered prejudicial to any then existing rights of any Member or his
Beneficiary under the Plan.

 

10.5 Acceptance or Rejection of Amendment by Employers: The Company shall
promptly deliver to each other Employer any amendment to this Plan or the Trust
Agreement. Each such Employer will be deemed to have consented to such amendment
unless it notifies the Company and the Trustee in writing within thirty
(30) days after receipt of the amendment that it does not consent thereto, and
requests a separation of its interest in the Trust Fund in accordance with the
provisions of Section 10.2, as of the first day of the month following such
written notification to the Company and the Trustee.

 

10.6 Termination of the Plan: In accordance with the procedures set forth in
this Section 10.6, the Company or any other Employer may effect a termination of
the Plan as to such particular Employer under the following circumstances:

 

(a) The Plan may be terminated by the delivery to the Trustee of an instrument
in writing approved and authorized by the board of directors of such Employer.
In such event, termination of the Plan shall be effective as of any subsequent
date specified in such instrument.

 

(b) Except as otherwise provided in Section 10.10, the Plan shall terminate
effective at the expiration of sixty (60) days following the merger into another
corporation or dissolution of any Employer, or following any final legal
adjudication of any Employer as a bankrupt or an insolvent, unless within such
time a successor organization approved by the Company shall deliver to the
Trustee a written instrument certifying that such organization (i) has become
the Employer of more than fifty percent (50%) of those Employees of such
Employer who are then Members under this Plan and (ii) has adopted the Plan as
to its Employees. In any such event the interest in the Plan of any Member whose
employment may not be continued by the successor shall be fully vested as of the
date of termination of his Service, and shall be payable in cash or in kind
within six (6) months from the date of termination of his Service.

 

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10.7 Liquidation and Distribution of Trust Fund Upon Termination: In the event a
complete termination of the Plan in respect of any Employer shall occur, a
separation of the Trust Fund in respect of the affected Members of such Employer
shall be made as of the effective date of such termination of the Plan in
accordance with the procedure set forth in Section 10.2. Following separation of
the Trust Fund in respect of the Members of any Employer as to whom the Plan has
been terminated, the assets and properties of the Trust Fund, so set apart,
shall be reduced to cash as soon as may be expeditious under the circumstances.
Any administrative costs or expenses incurred incident to the final liquidation
of such separate trust funds shall be paid by the Employer, except that in the
case of bankruptcy or insolvency of such Employer any such costs shall be
charged against the Trust Fund. Following such partial reduction of such Trust
Fund to cash, the Accounts of the Members shall then be valued as provided in
Sections 5.2 and 5.4 and shall be fully vested, whereupon each such Member shall
become entitled to receive the entire amount in his Account in cash as directed
by the Committee. The terminating Employer shall promptly advise the appropriate
District Director of Internal Revenue of such complete or partial termination
and shall direct the Trustee to delay the final distribution to its affected
Members until the District Director shall advise in writing that such
termination does not adversely affect the previously qualified status of the
Plan or the exemption from tax of the Trust under Section 401(a) or 501(a) of
the Code.

 

10.8 Effect of Termination or Discontinuance of Contributions: If any Employer
shall terminate the Plan as to its Employees, then all amounts credited to the
Accounts of the Members of such Employer with respect to whom the Plan has
terminated shall become fully vested and non-forfeitable. If any Employer shall
completely discontinue its Contributions to the Trust Fund or suspend its
Contributions to the Trust Fund under such circumstances as to constitute a
complete discontinuance of Contributions within the meaning of
Section 1.401-6(c) of the regulations under the Code, then all amounts credited
to the Accounts of the Members of such Employer shall become fully vested and
non-forfeitable, and throughout any such period of discontinuance of
Contributions by an Employer all other provisions of the Plan shall continue in
full force and effect with respect to such Employer other than the provisions
for Contributions by such Employer.

 

10.9 Merger of Plan with Another Plan: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under, any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Members of this Plan, the assets of the Trust Fund applicable
to such Members shall be transferred to the other trust fund only if:

 

(a) Each Member would (if either this Plan or the other plan then terminated)
receive a benefit immediately after the merger, consolidation or transfer which
is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan had then
terminated);

 

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(b) Resolutions of the board of directors of the Employer under this Plan, or of
any new or successor employer of the affected Members, shall authorize such
transfer of assets, and, in the case of the new or successor employer of the
affected Members, its resolutions shall include an assumption of liabilities
with respect to such Members’ inclusion in the new employer’s plan; and

 

(c) Such other plan and trust are qualified under Sections 401(a) and 501(a) of
the Code.

 

10.10 Consolidation or Merger with Another Employer: Notwithstanding any
provision of this Article X to the contrary, upon the consolidation or merger of
two or more Employers under this Plan with each other, the surviving Employer or
organization shall automatically succeed to all the rights and duties under the
Plan and Trust of the Employers involved, and their shares of the Trust Fund
shall, subject to the provisions of Section 10.9, be merged and thereafter be
allocable to the surviving Employer or organization for its Employees and their
Beneficiaries.

 

38

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ARTICLE XI

 

MISCELLANEOUS PROVISIONS

 

11.1 Terms of Employment: The adoption and maintenance of the provisions of this
Plan shall not be deemed to constitute a contract between any Employer and
Employee, or to be a consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed to give to
any Employee the right to be retained in the employ of an Employer or to
interfere with the right of an Employer to discharge an Employee at any time,
nor shall it be deemed to give to an Employer the right to require any Employee
to remain in its employ, nor shall it interfere with any Employee’s right to
terminate his employment at any time.

 

11.2 Controlling Law: Subject to the provisions of ERISA, this Plan shall be
construed, regulated and administered under the laws of the State of Texas.

 

11.3 Invalidity of Particular Provisions: In the event any provision of this
Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.

 

11.4 Non-Alienation of Benefits: Except as otherwise provided below and with
respect to certain judgments and settlements pursuant to Section 401(a)(13) of
the Code, no benefit which shall be payable out of the Trust Fund to any person
(including a Member or Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the death, contracts, liabilities,
engagements or torts of any person, and the same shall not be recognized by the
Trustee, except to the extent as may be required by law.

 

This provision shall not apply to a “qualified domestic relations order” defined
in Code Section 414(p), and those other domestic relations orders permitted to
be so treated by the Administrator under the provisions of the Retirement Equity
Act of 1984. To the extent provided under a “qualified domestic relations
order,” a former spouse of a Member shall be treated as the spouse or surviving
spouse for all purposes of the Plan. If the Committee receives a qualified
domestic relations order with respect to a Member, the Committee may authorize
the immediate distribution of the amount assigned to the Member’s former spouse,
to the extent permitted by law, from the Member’s Accounts.

 

11.5 Payments in Satisfaction of Claims of Members: Any payment or distribution
to any Member or his legal representative or any Beneficiary in accordance with
the provisions of this Plan shall be in full satisfaction of all claims under
the Plan against the Trust Fund, the Trustee and the Employer. The Trustee may
require that any distributee execute and deliver to the Trustee a receipt and a
full and complete release as a condition precedent to any payment or
distribution under the Plan.

 

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11.6 Payments Due Minors and Incompetents: If the Committee determines that any
person to whom a payment is due hereunder is a minor or is incompetent by reason
of physical or mental disability, the Committee shall have the power to cause
the payments becoming due such person to be made to another for the benefit of
such minor or incompetent, without the Committee or the Trustee being
responsible to see to the application of such payment. To the extent permitted
by ERISA, payments made pursuant to such power shall operate as a complete
discharge of the Committee, the Trustee and the Employer.

 

11.7 Impossibility of Diversion of Trust Fund: Notwithstanding any provision
herein to the contrary, no part of the corpus or the income of the Trust Fund
shall ever be used for or diverted to purposes other than for the exclusive
benefit of the Member or their Beneficiaries or for the payment of expenses of
the Plan. No part of the Trust Fund shall ever directly or indirectly revert to
any Employer.

 

11.8 Evidence Furnished Conclusive: The Employer, the Committee and any person
involved in the administration of the Plan or management of the Trust Fund shall
be entitled to rely upon any certification, statement, or representation made or
evidence furnished by a Member or Beneficiary with respect to facts required to
be determined under any of the provisions of the Plan, and shall not be liable
on account of the payment of any monies or the doing of any act or failure to
act in reliance thereon. Any such certification, statement, representation, or
evidence, upon being duly made or furnished, shall be conclusively binding upon
such Member or Beneficiary but not upon the Employer, the Member or any other
person involved in the administration of the Plan or management of the Trust
Fund. Nothing herein contained shall be construed to prevent any of such parties
from contesting any such certification, statement, representation, or evidence
or to relieve the Member or Beneficiary from the duty of submitting satisfactory
proof of such fact.

 

11.9 Copy Available to Members: A copy of the Plan, and of any and all future
amendments thereto, shall be provided to the Committee and shall be available to
Members and, in the event of the death of a Member, to his Beneficiary, for
inspection at the offices of his Employer during the regular office hours of the
Employer.

 

11.10 Unclaimed Benefits: If at, after or during the time when a benefit
hereunder is payable to any Member, Beneficiary or other distributee, the
Committee, upon request of the Trustee, or at its own instance, shall mail by
registered or certified mail to such Member, Beneficiary or other distributee at
his last known address a written demand for his then address or for satisfactory
evidence of his continued life, or both, and if such Member, Beneficiary or
distributee shall fail to furnish the same to the Committee within two (2) years
from the mailing of such demand, then the Committee may, in its sole discretion,
determine that such Member, Beneficiary or other distributee has forfeited his
right to such benefit and may declare such benefit, or any unpaid portion
thereof, terminated as if the death of the distributee (with no surviving
Beneficiary) had occurred on the date of the last payment made thereon, or on
the date such Member, Beneficiary or distributee first became entitled to
receive benefit payments, whichever is later; provided, however, that such
forfeited benefit shall be reinstated if a claim for the same is made by the
Member, Beneficiary or other distributee at any time thereafter. Such
reinstatement shall be made out of the funds otherwise available for allocation
as Forfeitures for the Plan Year during which such claim was filed with the
Committee (as provided in Section 4.8); and, if Forfeitures for the Plan Year
are insufficient to reinstate such amounts, the Employer shall make the Employer
Minimum Contribution required under Section 4.2 hereof.

 

11.11 Headings for Convenience Only: The headings and subheadings herein are
inserted for convenience of reference only and are not to be used in construing
this instrument or any provision thereof.

 

11.12 Successors and Assigns: This agreement shall bind and inure to the benefit
of the successors and assigns of the Employers.

 

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ARTICLE XII

 

LIMITATION ON BENEFITS

 

Notwithstanding any provision of this Plan to the contrary, the total Annual
Additions made to the Account of a Member for any Plan Year shall be subject to
the following limitations:

 

I. Single Defined Contribution Plan

 

1. If an Employer does not maintain any other qualified plan, the amount of
Annual Additions which may be allocated under this Plan on a Member’s behalf for
a Limitation Year shall not exceed the lesser of the Maximum Permissible Amount
or any other limitation contained in this Plan.

 

2. Prior to the determination of the Member’s actual Compensation for a
Limitation Year, the Maximum Permissible Amount may be determined on the basis
of the Member’s estimated annual Compensation for such Limitation Year. Such
estimated annual Compensation shall be determined on a reasonable basis and
shall be uniformly determined for all Members similarly situated. Any Employer
contributions (including allocation of forfeitures) based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over from prior
years.

 

3. As soon as is administratively feasible after the end of the Limitation Year,
the Maximum Permissible Amount for such Limitation Year shall be determined on
the basis of the Member’s actual Compensation for such Limitation Year.

 

4. If there is an Excess Amount with respect to a Member for the Limitation
Year, any non-deductible voluntary employee contributions, to the extent they
would reduce the Excess Amount, will be returned to the Member. Then, Excess
Amounts will be treated as a Forfeiture and shall be applied as a credit to
subsequent Employer Contributions or reallocated to other Members to the extent
such allocations do not exceed the Maximum Permissible Amount all as provided in
Section 12(III)(4). Any Excess Amounts that cannot be allocated will be held in
a suspense account. All amounts in the suspense account must be allocated and
reallocated to the Member’s accounts (subject to the limitations of Section 415)
in succeeding Limitation Years before any Employer contribution and
non-deductible Employee contribution which would constitute Annual Additions may
be made to the Plan.

 

If a suspense account is in existence at any time during the Limitation Year
pursuant to this Section, it will not participate in the allocation of the
Trust’s investment gains and losses.

 

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II. Two or More Defined Contribution Plans

 

1. If, in addition to this Plan, the Employer maintains any other qualified
defined contribution plan, the amount of Annual Additions which may be allocated
under this Plan on a Member’s behalf for a Limitation Year, shall not exceed the
lesser of:

 

A. the Maximum Permissible Amount, reduced by the sum of any Annual Additions
allocated to the Member’s accounts for the same Limitation Year under such other
defined contribution plan or plans; or

 

B. any other limitation contained in this Plan.

 

2. Prior to the determination of the Member’s actual Compensation for the
Limitation Year, the amount referred to in Section 1(A) above, may be determined
on the basis of the Member’s estimated annual Compensation for such Limitation
Year. Such estimated annual Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Members similarly situated. Any
Employer contribution (including allocation of forfeitures) based on estimated
annual Compensation shall be reduced by any Excess Amounts carried over from
prior years.

 

3. As soon as is administratively feasible after the end of the Limitation Year,
the amounts referred to in Section 1(A) above shall be determined on the basis
of the Member’s actual Compensation for such Limitation Year.

 

4. If a Member’s Annual Additions under this Plan and all such other defined
contribution plans result in an Excess Amount, such Excess Amount shall be
deemed to consist of the amounts last allocated.

 

5. If an Excess Amount was allocated to a Member on an allocation date of this
Plan which coincides with an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of:

 

A. the total Excess Amount allocated as of such date (including any amount which
would have been allocated but for the limitations of Section 415 of the Code);
times

 

B. the ratio of (1) the amount allocated to the Member as of such date under
this Plan, divided by (2) the total amount allocated as of such date under all
qualified defined contribution plans (determined without regard to the
limitations of Section 415 of the Code).

 

6. Any Excess Amounts attributed to this Plan shall be disposed of as provided
in Section 12(I)(4).

 

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III. Definitions

 

1. Employer: The Company and any other Employer that adopts this Plan. In the
case of a group of employers which constitutes a controlled group of
corporations (as defined in Code Section 414(b) as modified by Section 415(h))
or which constitutes trades and businesses (whether or not incorporated) which
are under common control (as defined in Code Section 414(c) as modified by
Section 415(h)) or an affiliated service group (as defined in Code
Section 414(m)), all such employers shall be considered a single Employer for
purposes of applying the limitations of these sections.

 

2. Excess Amount: The excess of the Member’s Annual Additions for the Limitation
Year over the Maximum Permissible Amount.

 

3. Limitation Year: The Plan Year.

 

4. Maximum Permissible Amount: For a Limitation Year, the Maximum Permissible
Amount with respect to any Member shall be the lesser of:

 

A. $35,000 as adjusted by the Secretary of the Treasury or his delegate, or

 

B. 25% of the Member’s Compensation for the Limitation Year.

 

5. Compensation: For purposes of determining compliance with the limitations of
Code Section 415, Compensation shall mean a Member’s earned income, wages,
salaries, fees for professional services and other amounts received for personal
services actually rendered in the course of employment with an Employer
maintaining the Plan, including, but not limited to, commissions paid salesmen,
compensation for services based on a percentage of profits, commissions on
insurance premiums, tips and bonuses and excluding the following:

 

(a) Employer contributions to a plan of a deferred compensation to the extent
contributions are not included in gross income of the Employee for the taxable
year in which contributed, or on behalf of an employee to a simplified employee
pension plan to the extent such contributions are deductible under Code
Section 219(b)(2), and any distributions from a plan of deferred compensation
whether or not includable in the gross income of the Employee when distributed
(however, any amounts received by an Employee pursuant to an unfunded
non-qualified plan may be considered as compensation in the year such amounts
are included in the gross income of the Employee);

 

43

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(b) amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by an employee becomes freely transferable
or is no longer subject to a substantial risk of forfeiture;

 

(c) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and

 

(d) other amounts which receive special tax benefits, or contributions made by
an Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code Section 403(b) (whether or not
the contributions are excludable from the gross income of the Employee).

 

For purposes of applying the limitations in this Article, amounts included as
compensation are those actually paid or made available to a Member within the
Limitation Year. For Limitation Years beginning after December 31, 1994,
Compensation shall be limited to $170,000 (unless adjusted in the same manner as
permitted under Code Section 415(d)). Notwithstanding anything to the contrary
in this definition, Compensation shall include any and all items which may be
included in Compensation under Code Section 415(c)(3), including (i) any
elective deferral (as defined in Code Section 402(g)(3) and (ii) any amount
which is contributed or deferred by the Employer at the election of the Employee
and which is not includible in the gross income of the Employee by reason of
Code Section 125, 132(f)(4) or 457.

 

6. Average Compensation: The average Compensation during a Member’s high three
(3) years of service, which period is the three (3) consecutive calendar years
(or, the actual number of consecutive years of employment for those employees
who are employed for less than three (3) consecutive years with the Employer)
during which the Employee had the greatest aggregate Compensation from the
Employer.

 

7. Annual Benefit: A benefit payable annually in the form of a straight life
annuity (with no ancillary benefits) under a plan to which Employees do not
contribute and under which no rollover contributions are made.

 

8. Annual Additions: With respect to each Limitation Year, the total of the
Employer Contributions, Pre-Tax Contributions, After-Tax Contributions,
Forfeitures, and amounts described in Code Sections 415(l) and 419A(d)(2) which
are allocated to a Member’s Account.

 

44

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ARTICLE XIII

 

TOP-HEAVY PLAN REQUIREMENTS

 

13.1 General Rule: For any Plan Year for which this Plan is a Top-Heavy Plan, as
defined in Section 13.7, despite any other provisions of this Plan to the
contrary, this Plan shall be subject to the provisions of this Article XIII.

 

13.2 Vesting Provisions: Each Member who has completed an Hour of Service after
the Plan becomes top-heavy and while the Plan is top-heavy and who has completed
the Vesting Service specified in the following table shall be vested in his
account under this Plan at least as rapidly as is provided in the following
schedule:

 

Vesting Service

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

   Vested
Percentage

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

 

Less than 2 years

   0 %

2 but less than 3 years

   20 %

3 but less than 4 years

   40 %

4 but less than 5 years

   60 %

5 but less than 6 years

   80 %

6 years or more

   100 %

 

If an account becomes vested by reason of the application of the preceding
schedule, it may not thereafter be forfeited by reason of re-employment after
retirement pursuant to a suspension of benefits provision, by reason of
withdrawal of any mandatory employee contributions to which employer
contributions were keyed, or for any other reason. If the Plan subsequently
ceases to be top-heavy, the preceding schedule shall continue to apply with
respect to any Member who had at least three (3) years of service (as defined in
Treasury Regulation Section 1.411(a)-8T(b)(3)) as of the close of the last year
that the Plan was top-heavy. For all other Members, the vested percentage
provided in the preceding schedule prior to the date the Plan ceases to be
top-heavy shall not be reduced.

 

13.3 Minimum Contribution Provisions: Each Member who (i) is a Non-Key Employee,
as defined in Section 13.7 and (ii) is employed on the last day of the Plan Year
will be entitled to have contributions and forfeitures allocated to his account
of not less than three percent (3%) (the “Minimum Contribution Percentage”) of
the Member’s Compensation. This minimum allocation shall be provided without
taking Pre-Tax Contributions into account. A Non-Key Employee may not fail to
receive a Minimum Contribution Percentage because of a failure to receive a
specified minimum amount of compensation or a failure to make mandatory employee
or elective contributions. This Minimum Contribution Percentage will be reduced
for any Plan Year to the percentage at which contributions (including
Forfeitures) are made or are required to be made under the Plan for the Plan
Year for the Key Employee for whom such percentage is the highest for such Plan
Year. For this purpose, the percentage with respect to a Key Employee will be
determined by dividing the contributions (including Forfeitures) made for such
Key Employee by his total compensation (as defined in Section 415 of the Code)
not in excess of $200,000 for the Plan Year.

 

45

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Such amount will be adjusted in the same manner as the amount set forth in
Section 13.4 below.

 

Contributions considered under the first paragraph of this Section 13.3 will
include Employer contributions under this Plan and under all other defined
contribution plans required to be included in an Aggregation Group (as defined
in Section 13.7 below), but will not include Employer contributions under any
plan required to be included in such aggregation group if the plan enables a
defined benefit plan required to be included in such group to meet the
requirements of the Code prohibiting discrimination as to contributions in favor
of employees who are officers, shareholders or the highly compensated or
prescribing the minimum participation standards. If the highest rate allocated
to a Key Employee for a year in which the Plan is top-heavy is less then three
percent (3%), amounts contributed as a result of a salary reduction agreement
must be included in determining contributions made on behalf of Key Employees.

 

Contributions considered under this Section will not include any contributions
under the Social Security Act or any other federal or state law.

 

13.4 Limitation on Compensation: The annual compensation of a Member taken into
account under this Article XIII and under Section 1.11 for purposes of computing
benefits under this Plan shall not exceed $200,000. Such amount shall be
adjusted automatically for each Plan Year to the amount prescribed by the
Secretary of the Treasury or his delegate pursuant to regulations for the
calendar year in which such Plan Year commences.

 

13.5 Coordination with Other Plans: If another defined benefit plan maintained
by a Considered Company provides contributions or benefits on behalf of a Member
in this Plan, such other plan shall be treated as a part of this Plan pursuant
to applicable principles prescribed by U.S. Treasury Regulations or applicable
IRS rulings (such as Revenue Ruling 81-202 or any successor ruling) to determine
whether this Plan satisfies the requirements of Sections 13.3 and 13.4 and to
avoid inappropriate omissions or inappropriate duplication of minimum
contributions. The determination shall be made by the Committee upon the advice
of counsel. In the event a Member is covered by a defined benefit plan which is
top-heavy pursuant to Section 416 of the Code, a comparability analysis (as
prescribed by Revenue Ruling 81-202 or any successor ruling) shall be performed
in order to establish that the plans are providing benefits at least equal to
the defined benefit minimum.

 

13.6 Distributions to Certain Key Employees: Notwithstanding any other provision
of this Plan to the contrary, the entire interest in this Plan of each Member
who is a five-percent owner (as described in Section 416(i)(1)(A) of the Code
determined with respect to the Plan Year ending in the calendar year in which
such individual attains age 70- 1/2) shall be distributed to such Member not
later than the first day of April following the calendar year in which such
individual attains age 70- 1/2.

 

13.7 Determination of Top-Heavy Status: The Plan will be a Top-Heavy Plan for
any Plan Year if, as of the Determination Date, the aggregate of the accounts
under the Plan (determined as of the Valuation Date) for Members (including
former Members) who are Key

 

46

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Employees exceeds sixty percent (60%) of the aggregate of the accounts of all
Members, excluding former Key Employees, or if this Plan is required to be in an
Aggregation Group, any such Plan Year in which such Group is a Top-Heavy Group.
In determining Top-Heavy status, if an individual has not performed one hour of
service for any Considered Company at any time during the five-year period
ending on the Determination Date, any accrued benefit for such individual and
the aggregate accounts of such individual shall not be taken into account.

 

For purposes of this Section, the capitalized words have the following meanings:

 

(a) “Aggregation Group” means the group of plans, if any, that includes both the
group of plans required to be aggregated and the group of plans permitted to be
aggregated. The group of plans required to be aggregated (the “required
aggregation group”) includes:

 

(i) Each plan of a Considered Company in which a Key Employee is a participant,
including collectively bargained plans, and

 

(ii) Each other plan, including collectively bargained plans, of a Considered
Company which enables a plan in which a Key Employee is a participant to meet
the requirements of the Code, prohibiting discrimination as to contributions or
benefits in favor of employees who are officers, shareholders, or the highly
compensated or prescribing minimum participation standards.

 

The group of plans that are permitted to be aggregated (the “permissive
aggregation group”) includes the required aggregation group plus one or more
plans of a Considered Company that is not part of the required aggregation group
and that the Considered Company certifies as a plan within the permissive
aggregation group. Such plan or plans may be added to the permissive aggregation
group only if, after the addition, the aggregation group as a whole continues
not to discriminate as to contributions or benefits in favor of officers,
shareholders, or the highly compensated and to meet the minimum participation
standards under the Internal Revenue Code of 1986, as amended.

 

(b) “Determination Date” means for any Plan Year the last day of the immediately
preceding Plan Year. However, for the first Plan Year of this Plan,
Determination Date means the last day of that Plan Year.

 

(c) “Key Employee” means any Employee or former Employee under this Plan who, at
any time during the Plan Year in question or during any of the four preceding
Plan Years, is or was one of the following:

 

(i) An officer of a Considered Company having an annual compensation greater
than fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of
the Code for any such Plan Year. Whether an individual is an officer shall be
determined by the Considered Company on the basis of all the facts and
circumstances, such as an

 

47

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

individual’s authority, duties, and term of office, not on the mere fact that
the individual has the title of an officer. For any such Plan Year, officers
considered to be Key Employees will be no more than the fewer of:

 

(A) Fifty (50) Employees; or

 

(B) Ten percent (10%) of the Employees or, if greater than ten percent (10%),
three (3) Employees.

 

For this purpose, the highest paid officers shall be selected.

 

(ii) One of the ten (10) Employees owning (or considered as owning, within the
meaning of the constructive ownership rules of Section 416(i)(1)(B) of the Code)
the largest interests in the Considered Company. An Employee who has some
ownership interest is considered to be one (1) of the top ten (10) owners unless
at least ten (10) other employees own a greater interest than that Employee.
However, an Employee will not be considered a top ten (10) owner for a Plan Year
if the Employee earns less than the maximum dollar limitation on annual
additions to a participant’s account in a defined contribution plan under the
Code, as in effect for the calendar year in which the Determination Date falls.

 

(iii) Any person who owns (or is considered as owning, within the meaning of the
constructive ownership rules of Section 416(i)(1)(B) of the Code) more than five
percent (5%) of the outstanding stock of a Considered Company or stock
possessing more than five percent (5%) of the combined voting power of all stock
of the Considered Company.

 

(iv) Any person who has an annual compensation from the Considered Company of
more than One Hundred Fifty Thousand Dollars ($150,000) and who owns (or is
considered as owning within the meaning of the constructive ownership rules of
Section 416(i)(1)(B) of the Code) more than one percent (1%) of the outstanding
stock of the Considered Company or stock possessing more than one percent
(1%) of the total combined voting power of all stock of the Considered Company.
For purposes of this subsection, compensation means all items includable as
compensation for purposes of applying the limitations on annual additions to a
Member’s account in a defined contribution plan and the maximum benefit payable
under a defined benefit plan under the Code.

 

For purposes of this subsection (c), a Beneficiary of a Key Employee shall be
treated as a Key Employee. For purposes of parts (iii) and (iv), each Considered
Company is treated separately in determining ownership percentages; but all such
Considered Companies shall be considered a single employer in determining the
amount of compensation.

 

48

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

(d) “Non-Key Employee” means any employee (and any Beneficiary of an employee)
who is not a Key Employee.

 

(e) “Top-Heavy Group” means the Aggregation Group, if as of the applicable
Determination Date, the sum of the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans included in the
Aggregation Group plus the aggregate of the accounts of Key Employees under all
defined contribution plans included in the Aggregation Group exceeds sixty
percent (60%) of the sum of the present value of the cumulative accrued benefits
for all employees, excluding former Key Employees as provided in paragraph (i)
below, under all such defined benefit plans plus the aggregate accounts for all
employees, excluding former Key Employees as provided in paragraph (i) below,
under all such defined contribution plans. In determining Top-Heavy status, if
an individual has not performed one hour of service for any Considered Company
at any time during the five-year period ending on the Determination Date, any
accrued benefit for such individual and the aggregate accounts of such
individual shall not be taken into account. If the Aggregation Group that is a
Top-Heavy Group is a required aggregation group, each plan in the group will be
a Top-Heavy Plan. If the Aggregation Group that is a Top-Heavy Group is a
permissive aggregation group, only those plans that are part of the required
aggregation group will be treated as Top-Heavy Plans. If the Aggregation Group
is not a Top-Heavy Group, no plan within such group will be a Top-Heavy Plan.

 

In determining whether this Plan constitutes a Top-Heavy Plan, the Committee (or
its agent) will make the following adjustments:

 

(f) When more than one plan is aggregated, the Committee shall determine
separately for each plan as of each plan’s Determination Date the present value
of the accrued benefits (for this purpose using the actuarial assumptions set
forth in the applicable plan or account balance). The results shall then be
aggregated by adding the results of each plan as of the Determination Dates for
such plans that fall within the same calendar year.

 

(g) In determining the present value of the cumulative accrued benefit (for this
purpose using the actuarial assumptions set forth in the applicable pension
plan) or the amount of the account of any employee, such present value or
account will include the amount in dollar value of the aggregate distributions
made to such employee under the applicable plan during the five-year period
ending on the Determination Date unless reflected in the value of the accrued
benefit or account balance as of the most recent Valuation Date. The amounts
will include distributions to employees representing the entire amount credited
to their accounts under the applicable plan.

 

49

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

(h) Further, in making such determination, such present value or such account
shall include any rollover contribution (or similar transfer), as follows:

 

(i) If the rollover contribution (or similar transfer) is initiated by the
employee and made to or from a plan maintained by another Considered Company,
the plan providing the distribution shall include such distribution in the
present value of such account; the plan accepting the distribution shall not
include such distribution in the present value of such account unless the plan
accepted it before December 31, 1983.

 

(ii) If the rollover contribution (or similar transfer) is not initiated by the
employee or made from a plan maintained by another Considered Company, the plan
accepting the distribution shall include such distribution in the present value
of such account, whether the plan accepted the distribution before or after
December 31, 1983; the plan making the distribution shall not include the
distribution in the present value of such account.

 

(i) In any case where an individual is a Non-Key Employee with respect to an
applicable plan but was a Key Employee with respect to such plan for any prior
Plan Year, any accrued benefit and any account of such employee shall be
altogether disregarded. For this purpose, to the extent that a Key Employee is
deemed to be a Key Employee if he or she met the definition of Key Employee
within any of the four preceding Plan Years, this provision shall apply
following the end of such period of time.

 

(j) “Valuation Date” means for purposes for determining the present value of an
accrued benefit as of the Determination Date the date determined as of the most
recent valuation date which is within a twelve-month period ending on the
Determination Date. For the first plan year of a plan, the accrued benefit for a
current employee shall be determined either (i) as if the individual terminated
service as of the Determination Date or (ii) as if the individual terminated
service as of the valuation date, but taking into account the estimated accrued
benefit as of the Determination Date. The Valuation Date shall be determined in
accordance with the principles set forth in Q.&A. T-25 of Treasury Regulations
Section 1.416-1.

 

(k) For purposes of this Article XIII, “Compensation” shall have the meaning
given to it in Section 12(III)(5).

 

50

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ARTICLE XIV

 

TESTING OF CONTRIBUTIONS

 

14.1 Definitions: For purposes of this Article XIV, the capitalized words have
the following meanings:

 

A. “After-Tax Contributions” shall mean those contributions defined in
Section 1.4.

 

B. “Compensation” shall mean the Employee’s total Compensation for services
rendered to an Employer during the Plan Year and, unless the Committee elects
otherwise, the Employee’s Pre-Tax Contributions for the Plan Year and any
amounts not currently included in the Employee’s gross income by reason of the
application of Section 125 or 132(f)(4) of the Code.

 

C. “Employer Contributions” shall mean the amounts contributed to the Trust Fund
by the Employer pursuant to Section 4.2.

 

D. “Highly Compensated Employee” shall mean any Employee and any employee of an
Affiliate who is a highly compensated employee under Section 414(q) of the Code,
including any Employee and any employee of an Affiliate who:

 

(i) was a 5% owner during the current Plan year or prior Plan Year; or

 

(ii) received Compensation during the Plan Year (as defined in
Section 12(III)(5) in excess of $85,000 or such other dollar amount as may be
prescribed by the Secretary of the Treasury or his delegate and, if elected by
the Employer, was in the ‘top-paid group’ (the top 20% of payroll) for the Plan
Year, excluding Employees described in Code Section 414(p)(8).

 

In determining an Employee’s status as a Highly Compensated Employee within the
meaning of Section 414(q), the entities set forth in Treasury Regulation
Section 1.414(q)-1T Q&A-6(a)(1) through (4) must be taken into account as a
single employer.

 

A former Employee shall be treated as a Highly Compensated Employee if (1) such
former Employee was a Highly Compensated Employee when such Employee separated
from Service, or (2) such former Employee was a Highly Compensated Employee in
Service at any time after attaining age 55.

 

E. “Pre-Tax Contributions” shall mean the amounts contributed to the Trust Fund
out of a Member’s Compensation pursuant to Section 4.1(A).

 

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14.2 Actual Deferral Percentage: The Actual Deferral Percentage for a specified
group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:

 

(a) The amount of Pre-Tax Contributions actually paid to the Plan on behalf of
each such Employee for such Plan Year which relate to Compensation that either
would have been received by the Employee in such Plan Year (but for the deferral
election) or are attributable to services performed by the Employee in the Plan
Year and would have been received by the Employee within two and one-half
(2- 1/2) months after the close of the Plan Year (but for the deferral
election), over

 

(b) The Employee’s Compensation for such Plan Year.

 

The individual ratios and Actual Deferral Percentages shall be calculated to the
nearest one-hundredth (1/100) of one percent (1%) of an Employee’s Compensation.

 

14.3 Actual Deferral Percentage Limits: The Actual Deferral Percentage for the
eligible Highly Compensated Employees for any Plan Year shall not exceed the
greater of (a) or (b), as follows:

 

(a) The Actual Deferral Percentage of Compensation for the eligible non-Highly
Compensated Employees times 1.25, or

 

(b) The lesser of (i) the Actual Deferral Percentage of Compensation for the
eligible non-Highly Compensated Employees times 2.0 or (ii) the Actual Deferral
Percentage of Compensation for the eligible non-Highly Compensated Employees
plus two (2) percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.

 

The Actual Deferral Percentage for any Highly Compensated Employee who is
eligible to have deferred contributions allocated to his account under one or
more plans described in Section 401(k) of the Code that are maintained by an
Employer or an Affiliate in addition to this Plan shall be determined as if all
such contributions were made to this Plan. For purposes of determining whether
the Actual Deferral Percentage limits of Section 14.3 are satisfied, all Pre-Tax
Contributions that are made under two or more plans that are aggregated for
purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)) are to be treated as made under a single plan and if
two or more plans are permissively aggregated for purposes of Code
Section 401(k) the aggregated plans must also satisfy Code Sections 401(a)(4)
and 410(b) as though they were a single plan.

 

14.4 Reduction of Pre-Tax Contribution Rates by Leveling Method: If on the basis
of the Pre-Tax Contribution rates elected by Members for any Plan Year, the
Committee determines, in its sole discretion, that neither of the tests
contained in (a) or (b) of Section 14.3 will be satisfied, the Committee may
reduce the Pre-Tax Contribution rate of any Member who is among the eligible
Highly Compensated Employees to the extent necessary to reduce the overall

 

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Actual Deferral Percentage for eligible Highly Compensated Employees to a level
which will satisfy either (a) or (b) of Section 14.3. The reductions in Pre-Tax
Contribution rates shall be made in a manner so that the Actual Deferral
Percentage of the affected Members who elected the highest Actual Deferral
Percentage shall be first lowered to the level of the affected Members who
elected the next to the highest Actual Deferral Percentage. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 14.3,
both of the above-described groups of Members will be lowered to the level of
Members with the next highest Actual Deferral Percentage, and so on, until
sufficient total reductions in Pre-Tax Contribution rates have occurred to
achieve compliance with (a) or (b) of Section 14.3.

 

14.5 Increase in Pre-Tax Contribution Rates: If a Member’s Pre-Tax Contribution
rate is reduced below the level necessary to satisfy either (a) or (b) of
Section 14.3 for the Plan Year, such Member may be eligible to increase his
Pre-Tax Contribution rate for the remainder of the Plan Year to a level not in
excess of that level which will satisfy the greater of (a) or (b) of
Section 14.3. Such an increase in the Pre-Tax Contribution rate shall be made by
Members on a uniform and non-discriminatory basis, pursuant to such rules and
procedures as the Committee may prescribe.

 

14.6 Excess Pre-Tax Contributions: As soon as possible following the end of the
Plan Year, the Committee shall determine whether either of the tests contained
in Section 14.3 were satisfied as of the end of the Plan Year, and any excess
Pre-Tax Contributions, plus any income and minus any loss attributable thereto,
of those Participants who are among the Highly Compensated Employees shall be
distributed to such Participants in the manner provided below based on the
amount of Pre-Tax Contributions. In addition, the Employer Contribution made
with respect to such excess Pre-Tax Contributions shall be forfeited and applied
to reduce future Employer Contributions otherwise required under Section 4.2.
Such income shall include the allocable gain or loss for the Plan Year only.

 

The amount of any excess Pre-Tax Contributions to be distributed to a
Participant shall be reduced by Excess Deferrals previously distributed to him
pursuant to Section 4.1 for the taxable year ending in the same Plan Year. All
excess Pre-Tax Contributions shall be returned to the Participants no later than
the last day of the following Plan Year. The excess Pre-Tax Contributions, if
any, of each Participant who is among the Highly Compensated Employees shall be
determined by computing the maximum Actual Deferral Percentage which each such
Participant may defer under (a) or (b) of Section 14.3 and then reducing the
Actual Deferral Percentage of some or all of such Participants through the
distribution of such excess Pre-Tax Contributions, on the basis of the amount of
Pre-Tax Contributions of such Participants, as necessary to reduce the overall
Actual Deferral Percentage for eligible Participants who are among the Highly
Compensated Employees to a level which satisfies either (a) or (b) of
Section 14.3, according to the following procedures:

 

(a) the Pre-Tax Contributions of the Highly Compensated Employee or Employees
with the highest dollar amount of Pre-Tax Contributions shall be reduced to
equal the dollar amount of the Pre-Tax Contributions of the Highly Compensated
Employee or Employees with the next highest dollar amount of Pre-Tax
Contributions;

 

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(b) the reduction amount determined in clause (a) shall be distributed to the
Highly Compensated Employee or Employees who had the highest dollar amount of
Pre-Tax Contributions prior to such reduction; and

 

(c) the procedures in clause (a) and (b) shall be repeated until the total
excess Pre-Tax Contributions are distributed and compliance is achieved with
(a) or (b) of Section 14.3.

 

If these distributions are made, the Actual Deferral Percentage is treated as
meeting the nondiscrimination test of Section 401(k)(3) of the Code regardless
of whether the Actual Deferral Percentage, if recalculated after distributions,
would satisfy Section 401(k)(3) of the Code. The above procedures are used for
purposes of recharacterizing excess Pre-Tax Contributions under
Section 401(k)(8)(A)(ii) of the Code. For purposes of Section 401(m)(9) of the
Code, if a corrective distribution of excess Pre-Tax Contributions has been
made, or a recharacterization has occurred, the Actual Deferral Percentage for
Highly Compensated Employees is deemed to be the largest amount permitted under
Section 401(k)(3) of the Code.

 

The income or loss attributable to the Participant’s excess Pre-Tax
Contributions for the Plan Year shall be determined by multiplying the income or
loss attributable to the Participant’s Pre-Tax Contribution Account balance for
the Plan Year by a fraction, the numerator of which is the excess Pre-Tax
Contribution and the denominator of which is the Participant’s total Pre-Tax
Contribution Account balance. Excess Pre-Tax Contributions shall be treated as
Annual Additions under Section 12(III)(8) of the Plan.

 

14.7 Contribution Percentage: The Contribution Percentage for a specified group
of Employees for a Plan Year shall be the average of the ratios (calculated
separately for each Employee in such group) of:

 

(a) The total of the After-Tax Contributions and Employer Contributions (the
“Aggregate Contributions”) paid under the Plan on behalf of each Employee for
such Plan Year which are made on account of the Employee’s Pre-Tax Contributions
for the Plan Year, are allocated to the Employee’s Employer Contribution Account
and After-Tax Contribution Account during such Plan Year and are paid to the
Trust no later than the end of the next following Plan Year, to

 

(b) The Employee’s Compensation for such Plan Year.

 

To the extent permitted by the Code and applicable regulations, the Employer may
elect to take into account, in computing the Contribution Percentage, pre-tax
contributions made under this Plan or any other plan of the Employer. A Member’s
Contribution Percentage shall be determined after determining the Member’s
Excess Deferrals, if any, pursuant to Section 4.1, and after determining the
Member’s excess Pre-Tax Contributions pursuant to Section 14.6.

 

14.8 Contribution Percentage Limits: The Contribution Percentage for the
eligible Employees for any Plan Year who are Highly Compensated Employees shall
not exceed the greater of (a) or (b), as follows:

 

(a) The Contribution Percentage for the eligible Employees who are not Highly
Compensated Employees times 1.25, or

 

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(b) The lesser of (i) the Contribution Percentage for the eligible Employees who
are not Highly Compensated Employees times 2.0 or (ii) the Contribution
Percentage for the eligible Employees who are not Highly Compensated Employees
plus two (2) percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.

 

The Contribution Percentage for any Highly Compensated Employee for any Plan
Year who is eligible to have matching employer contributions made on his behalf
or to make after-tax contributions under one or more plans described in
Section 401(a) of the Code that are maintained by an Employer or an Affiliate in
addition to this Plan shall be determined as if all such contributions were made
to this Plan.

 

In the event that this Plan must be combined with one or more other plans in
order to satisfy the requirements of Code Section 410(b), then the Contribution
Percentage shall be determined as if all such plans were a single plan.

 

14.9 Treatment of Excess Aggregate Contributions: If neither of the tests
described above in Section 14.8 are satisfied with respect to either Aggregate
Contributions, the excess Aggregate Contributions, plus any income and minus any
loss attributable thereto, shall be forfeited or, if not forfeitable, shall be
distributed no later than the last day of the Plan Year following the Plan Year
in which such excess Aggregate Contributions were made. Such income shall
include the allocable gain or loss for the Plan Year only. The income or loss
attributable to the Participant’s excess Aggregate Contributions for the Plan
Year shall be determined by multiplying the income or loss attributable to the
Participant’s Account for the Plan Year by a fraction, the numerator of which is
the excess Aggregate Contribution, and the denominator of which is the
Participant’s total Account balance. Excess Aggregate Contributions shall be
treated as Annual Additions under Section 12(III)(8) of the Plan.

 

The excess Aggregate Contributions, if any, of each Participant who is among the
Highly Compensated Employees shall be determined by computing the maximum
Contribution Percentage under (a) or (b) of Section 14.8 and then reducing the
Contribution Percentage of some or all of such Participants whose Contribution
Percentage exceeds the maximum through the distribution or forfeiture of the
excess Aggregate Contributions, on the basis of the amount of such excess
contributions attributable to such Participants, as necessary to reduce the
overall Contribution Percentage for eligible Participants who are among the
Highly Compensated Employees to a level which satisfies either (a) or (b) of
Section 14.8, according to the following procedures:

 

(a) the Aggregate Contributions (as applicable) of the Highly Compensated
Employee or Employees with the highest dollar amount of such contributions shall
be reduced to equal the dollar amount of the Aggregate Contributions of the
Highly Compensated Employee or Employees with the next highest dollar amount of
such contributions;

 

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(b) the reduction amount determined in clause (a) shall be forfeited by or, if
not forfeitable, distributed to the Highly Compensated Employee or Employees who
had the highest dollar amount of Aggregate Contributions prior to such
reduction; and

 

(c) the procedures in clause (a) and (b) shall be repeated until the total
excess Aggregate Contributions are forfeited and/or distributed and compliance
is achieved with (a) or (b) of Section 14.8.

 

If these forfeitures and/or distributions are made, the Contribution Percentage
is treated as meeting the nondiscrimination test of Section 401(m)(2) of the
Code regardless of whether the Contribution Percentage, if recalculated after
such forfeitures and/or distributions would satisfy Section 401(m)(2) of the
Code. For purposes of Section 401(m)(9) of the Code, if a corrective
distribution of excess Aggregate Contributions has been made, the Contribution
Percentage for Highly Compensated Employees is deemed to be the largest amount
under Section 401(m)(2) of the Code.

 

For each Participant who is a Highly Compensated Employee, the amount of excess
Aggregate Contributions is equal to the total Employer Contributions and
After-Tax Contributions on behalf of the Participant (determined prior to the
application of this paragraph) minus the amount determined by multiplying the
Participant’s actual contribution ratio (determined after application of this
paragraph) by his Compensation used in determining such ratio. The individual
ratios and Contribution Percentages shall be calculated to the nearest 1/100 of
1% of the Employee’s Compensation, as such term is used in paragraph (b) of
Section 14.8.

 

14.10 Application of Participation and Discrimination Standards: The Plan will
use the actual deferral percentage and the actual contribution percentage for
Members who are Highly Compensated Employees and non-highly compensated
employees for the current Plan Year.

 

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IN WITNESS WHEREOF, the Company has executed these presents as evidenced by the
signatures affixed hereto of its officers hereunto duly authorized, and by its
corporate seal being affixed hereto, in a number of copies, all of which shall
constitute but one and the same instrument which may be sufficiently evidenced
by any such executed copy hereof, this _____ day of February, 2002, but
effective as of January 1, 2001.

 

CABOT OIL AND GAS CORPORATION By  

 

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ATTEST:

 

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Secretary [SEAL]

 

THE STATE OF TEXAS        §          § COUNTY OF HARRIS        §

 

BEFORE ME, the undersigned authority, on this day personally appeared
                                        ,
                                         of CABOT OIL AND GAS CORPORATION, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same as the act of the
said CABOT OIL AND GAS CORPORATION, a corporation, and that he was duly
authorized to perform the same and that he executed the same as the act and deed
of said corporation for the purposes and consideration therein expressed and in
the capacity therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE this the      day of
                    , 2002.

 

 

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Notary Public, State of Texas

 

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APPENDIX A

 

Vesting of Certain Employees Upon Termination of Employment

 

The following Employees who, upon termination of employment with the Company,
(i) are eligible to receive benefits under the following severance plans and
(ii) if required by the applicable severance plan, sign a valid waiver and
release shall be fully vested in their benefits under the Plan.

 

1. Severance Plans 507 through 574

 

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