Exhibit 10.2
AMENDED AND RESTATED
NEUROCRINE BIOSCIENCES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
As Amended and Restated on October 24, 2007

 

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Table of Contents

                      Page
 
           
ARTICLE 1
  DEFINITIONS     1  
1.1
  “Account Balance”     1  
1.2
  “Account Balance Plan”     1  
1.3
  “Accounts”     1  
1.4
  “Administrator”     1  
1.5
  “Annual Bonus”     2  
1.6
  “Annual Company Contribution Amount”     2  
1.7
  “Annual Company Matching Amount”     2  
1.8
  “Annual Deferral Amount”     2  
1.9
  “Annual Installment Method”     2  
1.10
  “Base Annual Salary”     2  
1.11
  “Beneficiary”     3  
1.12
  “Beneficiary Designation Form”     3  
1.13
  “Board”     3  
1.14
  “Cause”     3  
1.15
  A “Change in Control”     3  
1.16
  “Change in Control Benefit”     4  
1.17
  “Claimant”     4  
1.18
  “Code”     5  
1.19
  “Committee”     5  
1.20
  “Company”     5  
1.21
  “Company Contribution Account”     5  
1.22
  “Company Matching Account”     5  
1.23
  “Company Stock Measurement Fund”     5  
1.24
  “Deduction Limitation”     5  
1.25
  “Deferral Account”     5  
1.26
  “Dependent”     6  
1.27
  “Director”     6  
1.28
  “Director Fees”     6  
1.29
  “Disability”     6  
1.30
  “Disability Benefit”     6  
1.31
  “Election Form”     6  

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Table of Contents
(CONTINUED)

                      Page
 
           
1.32
  “Employee”     6  
1.33
  “Employer(s) “     6  
1.34
  “Equity Plan”     6  
1.35
  “ERISA”     6  
1.36
  “Exchange Act”     6  
1.37
  “Excise Tax Limitation”     6  
1.38
  “Key Employee”     7  
1.39
  “Measurement Fund”     7  
1.40
  “Non-Employee Director”     7  
1.41
  “Participant”     7  
1.42
  “Performance-Based Compensation”     8  
1.43
  “Plan”     8  
1.44
  “Plan Year”     8  
1.45
  “Post-409A Deferrals”     8  
1.46
  “Pre-409A Deferrals”     8  
1.47
  “Pre-Retirement Survivor Benefit”     8  
1.48
  “Retirement”, “Retire(s)” or “Retired”     8  
1.49
  “Retirement Benefit”     8  
1.50
  “RSU Account”     8  
1.51
  “RSU Award”     9  
1.52
  “RSU Deferral Amount”     9  
1.53
  “Rule 16b-3”     9  
1.54
  “Section 409A”     9  
1.55
  “Securities Act”     9  
1.56
  “Separation From Service”     9  
1.57
  “Specified Date Payout Account Balance”     10  
1.58
  “Specified Distribution Date”     10  
1.59
  “Specified Employee”     10  
1.60
  “Stock”     10  
1.61
  “Termination Benefit”     10  
1.62
  “Termination of Service”     10  
1.63
  “Trust”     10  

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Table of Contents
(CONTINUED)

                      Page
 
           
1.64
  “Unforeseeable Financial Emergency”     11  
1.65
  “Years of Service”     11  
 
           
ARTICLE 2
  SELECTION, ENROLLMENT, ELIGIBILITY     11  
2.1
  Selection by Administrator     11  
2.2
  Enrollment Requirements     11  
2.3
  Eligibility; Commencement of Participation     11  
2.4
  Termination of Participation and/or Pre-409A Deferrals     11  
 
           
ARTICLE 3
  DEFERRAL COMMITMENTS/COMPANY CONTRIBUTIONS/CREDITING/TAXES     12  
3.1
  Election to Defer; Effect of Election Form     12  
3.2
  Minimum Deferrals for Base Annual Salary, Annual Bonus and/or Director Fees  
  13  
3.3
  Maximum Deferral     13  
3.4
  Accounts; Crediting of Deferrals     13  
3.5
  Vesting     14  
3.6
  Earnings Credits or Losses     15  
3.7
  Distributions     16  
 
           
ARTICLE 4
  DISTRIBUTIONS     16  
4.1
  Specified Distribution Date Payout Election     16  
4.2
  Retirement Benefit     17  
4.3
  Pre-Retirement Survivor Benefit     18  
4.4
  Termination of Service Benefit for Pre-409A Deferrals     19  
4.5
  Termination of Service Benefit for Post-409A Deferrals     19  
4.6
  Disability Benefit     20  
4.7
  Change in Control Benefit     21  
4.8
  Form of Distributions     22  
4.9
  Change In Company Shares     22  
 
           
ARTICLE 5
  UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION     22  
5.1
  Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies     22  
5.2
  Withdrawal Election     22  
5.3
  No Discretionary Distributions     23  
 
           
ARTICLE 6
  BENEFICIARY DESIGNATION     23  
6.1
  Beneficiary     23  

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Table of Contents
(CONTINUED)

                      Page
 
           
6.2
  Beneficiary Designation; Change     23  
6.3
  No Beneficiary Designation     23  
6.4
  Doubt as to Beneficiary     23  
6.5
  Discharge of Obligations     23  
 
           
ARTICLE 7
        24  
7.1
  Acceleration of Payments     24  
7.2
  Compliance with Ethics Agreements and Legal Requirements     24  
7.3
  Corporate Events     24  
7.4
  Offset     24  
 
           
ARTICLE 8
  TERMINATION, AMENDMENT OR MODIFICATION     24  
8.1
  Suspension     24  
8.2
  Termination     24  
8.3
  Amendment     25  
 
           
ARTICLE 9
  ADMINISTRATION     26  
9.1
  Administrator Duties     26  
9.2
  Binding Effect of Decisions     26  
9.3
  Committee     26  
9.4
  Indemnification     26  
9.5
  Employer Information     26  
 
           
ARTICLE 10
  CLAIMS PROCEDURES     27  
10.1
  Presentation of Claim     27  
10.2
  Notification of Decision     27  
10.3
  Review of a Denied Claim     27  
10.4
  Decision on Review     28  
10.5
  Designation     28  
10.6
  Arbitration     28  
 
           
ARTICLE 11
  TRUST     29  
11.1
  Establishment of the Trust     29  
11.2
  Interrelationship of the Plan and the Trust     29  
11.3
  Investment of Trust Assets     29  
11.4
  Distributions From the Trust     29  
 
           
ARTICLE 12
  PROVISIONS RELATING TO SECURITIES LAWS     29  

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Table of Contents
(CONTINUED)

                      Page
 
           
12.1
  Designation of Participants     29  
12.2
  Action by Committee     29  
12.3
  Compliance with Section 16     29  
 
           
ARTICLE 13
  MISCELLANEOUS     30  
13.1
  Status of Plan     30  
13.2
  Unsecured General Creditor     30  
13.3
  Employer’s Liability     30  
13.4
  Nonassignability     30  
13.5
  Tax Withholding     30  
13.6
  Coordination with Other Benefits     31  
13.7
  Compliance     31  
13.8
  Not a Contract of Employment     31  
13.9
  Furnishing Information     31  
13.10
  Governing Law     32  
13.11
  Notice     32  
13.12
  Successors     32  
13.13
  Spouse’s Interest     32  
13.14
  Validity     32  
13.15
  Incompetent     32  
13.16
  Court Order     32  
13.17
  Distribution of Deferrals in the Event of Taxation     33  
13.18
  Insurance     33  
13.19
  Scrivener’s Error     33  
13.20
  Compliance With Section 409A     33  
13.21
  Disclaimer     33  

-v-

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AMENDED AND RESTATED
NEUROCRINE BIOSCIENCES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
As Amended and Restated on October 24, 2007
Purpose
     Neurocrine Biosciences, Inc., a Delaware corporation (the “Company”)
established, originally effective December 1, 1996, the Neurocrine Biosciences,
Inc. Nonqualified Deferred Compensation Plan (the “Plan”), for the benefit of a
select group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of the Company and its subsidiaries, if any, that sponsor this Plan.
This Plan shall be unfunded for tax purposes and for purposes of Title I of
ERISA. The Company hereby amends and restates the Plan in its entirety effective
October 24, 2007 as set forth herein.
     This Plan shall consist of two plans, one for the benefit of a select group
of management and highly compensated Employees of the Employers as described in
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and one for the benefit of
Non-Employee members of the boards of directors of any Employer. To the extent
required by law, the terms of this Plan applicable to Directors shall also
constitute a separate written plan document with its terms set forth in the
applicable portions of this Plan.
ARTICLE 1
DEFINITIONS
          As used within this document, the following words and phrases have the
meanings described in this Article 1 unless a different meaning is required by
the context. Some of the words and phrases used in the Plan are not defined in
this Article 1, but for convenience, are defined as they are introduced into the
text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only and are not to
be construed so as to alter any of the terms of the Plan.
     1.1 “Account Balance” shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of (i) the Deferral Account
balance, (ii) the Company Contribution Account balance, (iii) the Company
Matching Account balance, and (iv) the RSU Account balance. The Account Balance,
and each other specified account balance, shall be a bookkeeping entry only and
shall be utilized solely as a device for the measurement and determination of
the amounts to be paid to a Participant, or his or her designated Beneficiary,
pursuant to this Plan.
     1.2 “Account Balance Plan” means any non-qualified deferred compensation
account balance plan (as defined in §31.3121(v)(2)-1(c)(1)(ii)(A) of the
Treasury Regulations) sponsored by the Company, its subsidiaries or its
affiliates that would be aggregated with the Plan for purposes of Section 409A.
     1.3 “Accounts” of a Participant shall mean, as the context indicates,
either or all of his or her Deferral Account, Company Contribution Account,
Company Matching Account and RSU Account.
     1.4 “Administrator” shall mean the Committee appointed pursuant to
Article 9 to administer the Plan, or such other person or persons to whom the
Committee has delegated its duties pursuant to Article 9.

1.

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     1.5 “Annual Bonus” shall mean any cash compensation, in addition to Base
Annual Salary, relating to services performed during any calendar year, whether
or not paid in such calendar year or included on the Federal Income Tax Form W-2
for such calendar year, payable to a Participant as an Employee under any
Employer’s annual bonus and cash incentive plans, excluding stock options,
restricted stock, restricted stock units and other equity awards.
     1.6 “Annual Company Contribution Amount” shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.4(b).
     1.7 “Annual Company Matching Amount” for any one Plan Year shall be the
amount determined in accordance with Section 3.4(c).
     1.8 “Annual Deferral Amount” shall mean that portion of a Participant’s
Base Annual Salary, Annual Bonus and Director Fees that a Participant elects to
defer, and is deferred, in accordance with Article 3, for any one Plan Year. In
the event of a Participant’s Retirement, Termination of Service as a result of
his or her Disability or death or a Termination of Service prior to the end of a
Plan Year, such year’s Annual Deferral Amount shall be the actual amount
withheld prior to such event.
     1.9 “Annual Installment Method” shall be an annual installment payment over
the number of years selected by the Participant in accordance with this Plan,
which shall in no event exceed fifteen (15) years, calculated as follows: The
applicable portion of the Account Balance of the Participant (or the applicable
portion of the Specified Date Payout Account Balance, in the event of a
Specified Distribution Date election made pursuant to Section 4.1) shall be
calculated as of the close of business three (3) business days prior to the last
business day of the year or the date of the Specified Distribution Date. The
annual installment shall be calculated by multiplying this balance by a
fraction, the numerator of which is one, and the denominator of which is the
remaining number of annual payments due the Participant. By way of example, if
the Participant elects a ten (10) year Annual Installment Method, the first
payment shall be 1/10 of the applicable portion of the Account Balance (or the
Specified Date Payout Account Balance, in the event of a Specified Distribution
Date election), calculated as described in this definition. The following year,
the payment shall be 1/9 of the applicable portion of the Account Balance (or
the applicable portion of the Specified Date Payout Account Balance, in the
event of a Specified Distribution Date election), calculated as described in
this definition. Each annual installment shall be paid within sixty (60) days
following each anniversary of the day the distributions are scheduled to
commence.
     1.10 “Base Annual Salary” shall mean the annual cash compensation relating
to services performed during any calendar year, whether or not paid in such
calendar year or included on the Federal Income Tax Form W-2 for such calendar
year, excluding bonuses, commissions, overtime, fringe benefits, stock options,
relocation expenses, incentive payments, non-monetary awards, Director Fees and
other fees, automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the Employee’s
gross income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to
all qualified or non qualified plans of any Employer and shall be calculated to
include amounts not otherwise included in the Participant’s gross income under
Code Sections 125, 132(f), 402(e)(3), 402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such amounts will be
included in compensation only to the extent that, had there been no such plan,
(i) the amount would have been payable in cash to the Employee; and (ii) the
Participant’s contributions, deferrals and the Company related withholding
obligations under all Company plans, including the Plan, do not exceed 100% of
the Employee’s total compensation

2.

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     1.11 “Beneficiary” shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 6, that are entitled to receive
benefits under this Plan upon the death of a Participant.
     1.12 “Beneficiary Designation Form” shall mean the form established from
time to time by the Administrator that a Participant completes, signs and
returns to the Administrator to designate one or more Beneficiaries.
     1.13 “Board” shall mean the board of directors of the Company.
     1.14 “Cause” shall mean, with respect to a Participant, the occurrence of
any of the following (in each case determined by the Participant’s Employer (or
the Employer’s Board of Directors, if the Participant is the Employer’s Chief
Executive Officer)):
     (a) any intentional action or intentional failure to act by a Participant
which was performed in bad faith and to the material detriment of the
Participant’s Employer;
     (b) Participant’s intentional refusal or intentional failure to act in
accordance with any lawful and proper direction or order of the Chief Executive
Officer (or the Employer’s Board of Directors, if the Participant is the
Employer’s Chief Executive Officer);
     (c) Participant’s willful and habitual neglect of the duties of employment;
or
     (d) Participant’s conviction of a felony crime involving moral turpitude;
          provided, that in the event any of the foregoing events is capable of
being cured, the Employer (or the Employer’s Board of Directors, if the
Participant is the Employer’s Chief Executive Officer) shall provide written
notice to Participant describing the nature of such event and Participant shall
thereafter have ten (10) business days to cure such event.
     1.15 A “Change in Control” shall be deemed to occur if any of the following
events shall occur:
     (a) the Company is merged or consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than fifty percent (50%) of the combined
voting power of the then-outstanding securities of such surviving corporation or
person immediately after such transaction are held in the aggregate by the
holders of voting securities of the Company immediately prior to such
transaction;
     (b) the Company sells all or substantially all of its assets or any other
corporation or other legal person and thereafter less than fifty percent (50%)
of the combined voting securities of the acquiring or consolidated entity are
held in the aggregate by the holders of voting securities of the Company
immediately prior to such sale;
     (c) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any “person” (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) has become the “beneficial
owner” (as defined in Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power of the
then-outstanding voting securities of the Company;

3.

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     (d) the Company shall file a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response to
Item 1 of Form 8-X thereunder or Item 5(f) of Schedule 14A thereunder (or any
successor schedule, form or report or item therein) that the change in control
of the Company has or may have occurred or will or may occur in the future
pursuant to any then-existing contract or transaction; or
     (e) during any period of two (2) consecutive years, individuals who at the
beginning of any such period constitute the Directors of the Company cease for
any reason to constitute at least a majority thereof unless the election or the
nomination for election by the Company’s shareholders of each Director of the
Company first elected during such period was approved by a vote of at least
two-thirds (2/3) of the Directors of the Company then still in office who were
Directors of the Company at the beginning of such period;
          provided, that for purposes of distribution of Post-409A Deferrals
under Section 4.7(b), “Change in Control” shall be limited to the foregoing
events that also qualify as one or more of the following events:
     (f) the acquisition by any one person, or more than one person acting as a
group (within the meaning of Q&A-12(b) of Internal Revenue Service Notice
2005-1, of ownership of stock of the Company that, together with stock held by
such person or group constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company; provided,
however, that if any one person or more than one person acting as a group, is
considered to own more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons is not considered to be a Change in Control.
such foregoing definition of Change in Control shall be deemed amended to the
extent necessary to comply with the provisions of Section 409A.
     (g) Either (i) the acquisition by one person or more than one person acting
as a group during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons of ownership of stock of the
Company possessing thirty percent (30%) or more of the total voting power of the
stock of the Company or (ii) the replacement of a majority of the members of the
Board during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Company’s Board
prior to the date of the appointment or election; or
     (h) The acquisition by one person or more than one person acting as a group
during the twelve (12) month period ending on the date of the most recent
acquisition, assets from the Company that have a total gross fair market value
equal to or more than forty percent (40%) of the total gross fair market value
of all assets of the Company immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.
          Notwithstanding the foregoing, whether a Change in Control has
occurred for purposes of distributions of Post-409A Deferrals shall be
determined in accordance with Section 409A.
     1.16 “Change in Control Benefit” shall mean the benefit set forth in
Section 4.7.
     1.17 “Claimant” shall have the meaning set forth in Section 10.1.

4.

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     1.18 “Code” shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time. Reference to a section of the Code shall include that
section and any comparable section or sections of any future legislation that
amends, supplements or supersedes such section.
     1.19 “Committee” shall mean the Compensation Committee of the Board or
another committee or subcommittee of the Board appointed to administer the Plan
pursuant to Article 9.
     1.20 “Company” shall mean Neurocrine Biosciences, Inc, a Delaware
corporation, and any successor to all or substantially all of the Company’s
assets or business.
     1.21 “Company Contribution Account” shall mean (i) the sum of all of a
Participant’s Annual Company Contribution Amounts, plus (ii) the hypothetical
deemed investment earnings and losses credited or charged in accordance with all
the applicable provisions of this Plan that relate to the Participant’s Company
Contribution Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to this Plan that relate to the Participant’s
Company Contribution Account.
     1.22 “Company Matching Account” shall mean (i) the sum of all of a
Participant’s Annual Company Matching Amounts, plus (ii) the hypothetical deemed
investment earnings and losses credited or charged in accordance with all the
applicable provisions of this Plan that relate to the Participant’s Company
Matching Account, less (iii) all distributions made to the Participant or his or
her Beneficiary pursuant to this Plan that relate to the Participant’s Company
Matching Account.
     1.23 “Company Stock Measurement Fund” shall mean the Measurement Fund which
shall be deemed invested in the Company’s Stock. Participants will have no
rights as stockholders of the Company with respect to allocations made to their
RSU Accounts which are deemed invested in the Company Stock Measurement Fund.
     1.24 “Deduction Limitation” shall mean the following described limitation
on a benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied to all
distributions that are “subject to the Deduction Limitation” under this Plan. If
an Employer determines in good faith that there is a reasonable likelihood that
any compensation paid to a Participant for a taxable year of the Employer would
not be deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Employer to ensure
that the entire amount of any distribution to the Participant pursuant to this
Plan is deductible, the Employer may defer all or any portion of a distribution
under this Plan. Any amounts deferred pursuant to this limitation shall continue
to be credited/debited with additional amounts in accordance with Section 3.6
below. The amounts so deferred and amounts credited thereon shall be distributed
to the Participant or his or her Beneficiary (in the event of the Participant’s
death) at the earliest possible date, as determined by the Employer in good
faith, on which the deductibility of compensation paid or payable to the
Participant for the taxable year of the Employer during which the distribution
is made will not be limited by Section 162(m), or if earlier, the date that is
twenty-four (24) months following the date on which the distribution was first
distributable to the Participant pursuant to the provisions of this Plan.
     1.25 “Deferral Account” shall mean (i) the sum of all of a Participant’s
Annual Deferral Amounts, plus (ii) the hypothetical deemed investment earnings
and losses credited or charged in accordance with all the applicable provisions
of this Plan that relate to the Participant’s Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to his or her Deferral Account.

5.

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     1.26 “Dependent” means the Participant’s dependent as defined in
Section 152 of the Code without regard to Sections 152(b)(1), (b)(2) and
(d)(1)(B) of the Code.
     1.27 “Director” shall mean any member of the board of directors of any
Employer.
     1.28 “Director Fees” shall mean the annual fees paid by any Employer,
including retainer fees and meetings fees, as compensation for serving on the
board of directors.
     1.29 “Disability” shall mean a mental or physical disability as determined
by the Administrator in accordance with standards and procedures similar to
those under the Company’s broad-based regular long-term disability plan, if any.
At any time that the Company does not maintain such a long-term disability plan,
“Disability” shall mean the inability of a Participant, as determined by the
Administrator, substantially to perform such Participant’s regular duties and
responsibilities due to a medically determinable physical or mental illness
which has lasted, or can reasonably be expected to last, for a period of six
(6) consecutive months, but only to the extent that such definition does not
violate the Americans with Disabilities Act. Notwithstanding the foregoing, for
purposes of distributions of Post-409A Deferrals under Section 4.6, Disability
shall be limited to any medically determinable mental or physical impairment,
which can be expected to result in death or to last for a continuous period of
not less than twelve (12) months, rendering a Participant (i) unable to engage
in any substantial gainful activity, or (ii) eligible to receive income
replacement benefits for a period of not less than three (3) months under the
Company’s accident and health plan, if any.
     1.30 “Disability Benefit” shall mean the benefit set forth in Section 4.6.
     1.31 “Election Form” shall mean the form established from time to time by
the Administrator that a Participant completes, signs and returns to the
Administrator to make an election under the Plan, or any equivalent electronic
election procedures established by the Administrator.
     1.32 “Employee” shall mean a person who is an employee of any Employer.
     1.33 “Employer(s) “ shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been selected by
the Board to participate in the Plan and have adopted the Plan as a sponsor.
     1.34 “Equity Plan” shall mean the Company’s 2003 Incentive Stock Plan and
any successor equity incentive plan adopted by the Company.
     1.35 “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time. Reference to a section of ERISA
shall include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.
     1.36 “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended. Reference to a section of the Exchange Act shall include that section
and any comparable section or sections of any future legislation that amends,
supplements or supersedes such section.
     1.37 “Excise Tax Limitation” shall mean the following described limitation
on a benefit applicable to Pre-409A Deferrals that may otherwise be
distributable pursuant to the provisions of this Plan. Except as otherwise
provided, this limitation shall be applied to all distributions of Pre-409A
Deferrals that are “subject to the Excise Tax Limitation” under this Plan. If an
Employer determines in good faith that there is a reasonable likelihood that any
distribution to be paid to a Participant pursuant to

6.

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this Plan of a Pre-409 Deferral would not be deductible by the Employer solely
because all or a portion of the distribution would constitute an “excess
parachute payment” within the meaning of Code Section 280G, as determined
consistent with the proposed regulations issued by the Internal Revenue Service
under Code Section 280G, then to the extent deemed necessary by the Employer to
ensure that the entire amount of any such distribution to the Participant
pursuant to this Plan is deductible, the Employer may defer all or any portion
of such distribution under this Plan. Any amounts deferred pursuant to this
limitation shall continue to be credited/debited with additional amounts in
accordance with Section 3.6 below. The amounts so deferred and amounts credited
thereon shall be distributed to the Participant or his or her Beneficiary (in
the event of the Participant’s death) at the earliest possible date, as
determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the
Employer during which the distribution is made will not be limited or, if
earlier, the date that is twenty-four (24) months following the date on which
the distribution was first distributable to the Participant pursuant to the
provisions of this Plan.
     1.38 “Key Employee” shall mean for purposes of this Plan, and in accordance
with Section 409A, a key employee as set forth below and as defined in Section
416(i) of the Code, without regard to paragraph (5) thereof, of a corporation
any stock in which is publicly traded on an established securities market or
otherwise. An Employee will be considered a Key Employee if such Employee is at
any time during the 12-month period ending on the “Key Employee Identification
Date,” which is December 31st:
     (a) An officer of the Company having an annual compensation greater than
$130,000, as adjusted at the same time and in the same manner as under Section
415(d) of the Code, except that the base period shall be the calendar quarter
beginning July 1, 2001 (which amount is $135,000 for the Plan Year beginning
January 1, 2005, $140,000 for the Plan Year beginning January 1, 2006, and
$145,000 for the Plan Year beginning January 1, 2007). Not more than fifty
(50) employees or, if less, the greater of three (3) employees or ten percent
(10%) of the Company’s employees shall be considered as officers for purposes of
this subsection;
     (b) A five percent owner of the Company; or
     (c) A one percent owner of the Company having an annual compensation from
the Company of more than $150,000.
     Whether an Employee is a five percent owner or a one percent owner shall be
determined in accordance with Section 416(i)(1)(B) of the Code.
     1.39 “Measurement Fund” shall mean the investment fund or funds selected by
the Administrator from time to time.
     1.40 “Non-Employee Director” shall mean a Director who is not an Employee
of the Company.
     1.41 “Participant” shall mean any Employee or Director (i) who is selected
to participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs an Election Form and a Beneficiary Designation Form, (iv) whose
signed Election Form and Beneficiary Designation Form are accepted by the
Administrator, and (v) who commences participation in the Plan. A spouse or
former spouse of a Participant shall not be treated as a Participant in the Plan
or have an Account Balance under the Plan, even if he or she has an interest in
the Participant’s benefits under the Plan as a result of applicable law or
property settlements resulting from legal separation or divorce.

7.

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     1.42 “Performance-Based Compensation” means compensation deferrable under
the Plan, if any, that meets the requirements of performance-based compensation
specified in Section 409A(a)(4)(B)(iii) of the Code and regulations and other
guidance promulgated thereunder. Performance-Based Compensation shall be
designated as such by the Company as contingent upon the satisfaction of
performance goals and must relate to services performed by the Participant
during a designated incentive period of at least twelve (12) months. The
performance goals must be pre-established by the Company in writing no later
than ninety (90) days after the commencement of the performance period, and the
outcome must be substantially uncertain at the time the criteria are
established.
     1.43 “Plan” shall mean this Amended and Restated Neurocrine Biosciences,
Inc. Nonqualified Deferred Compensation Plan, which shall be evidenced by this
instrument, as amended from time to time.
     1.44 “Plan Year” shall mean a period beginning on January 1 of each
calendar year and continuing through December 31 of such calendar year.
     1.45 “Post-409A Deferrals” means any portion of a Participant’s Accounts
which as of December 31, 2004 were not earned and vested within the meaning of
Internal Revenue Service Notice 2005-1, together with earnings and losses
allocable to such amounts. The Plan shall maintain separate accounting for
Post-409A Deferrals. Post-409A Deferrals shall be subject to Section 409A.
     1.46 “Pre-409A Deferrals” means the portions of a Participant’s Account
that were earned and vested as of December 31, 2004 within the meaning of
Internal Revenue Service Notice 2005-1, together with any earnings and losses
allocable to such amounts. The Plan shall maintain separate accounting for
Pre-409A Deferrals. Pre-409A Deferrals are not subject to the provisions of the
Plan applicable to Post-409A Deferrals that are intended to reflect compliance
with Section 409A.
     1.47 “Pre-Retirement Survivor Benefit” shall mean the benefit set forth in
Section 4.3.
     1.48 “Retirement”, “Retire(s)” or “Retired” for purposes of Pre-409A
Deferrals shall mean, with respect to an Employee, severance from employment
from all Employers, and with respect to a Director who is not an Employee,
severance of his or her directorships with all Employers, for any reason other
than a leave of absence, death or Disability on or after the earlier of the
attainment of (a) age sixty-five (65) or (b) age fifty-five (55) with a minimum
of five (5) Years of Service. For purposes of Post-409A Deferrals “Retirement”
shall mean a Separation From Service for any reason other than death or
Disability on or after the earlier of the attainment of (a) age sixty-five
(65) or (b) age fifty-five (55) with a minimum of five (5) Years of Service.
     1.49 “Retirement Benefit” shall mean the benefit set forth in Section 4.2.
     1.50 “RSU Account” shall mean (i) the sum of all of a Participant’s RSU
Deferral Amounts, plus (ii) the hypothetical deemed investment earnings and
losses credited or charged in accordance with all the applicable provisions of
this Plan that relate to the Participant’s RSU Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to the Participant’s RSU Account.
     1.51 “RSU Award” shall mean any restricted stock unit award or other
deferred issuance stock award granted by the Company to a Participant that is
eligible to be deferred under the Plan in accordance with the terms of such
award.

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     1.52 “RSU Deferral Amount” shall be the amount determined in accordance
with Section 3.4(d).
     1.53 “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.
     1.54 “Section 409A” shall mean Internal Revenue Code Section 409A and any
regulations and other applicable guidance promulgated thereunder.
     1.55 “Securities Act” shall mean the Securities Act of 1933, as amended.
     1.56 “Separation From Service” shall mean a “separation from service”
determined in a manner consistent with Section 409A, and the following
provisions, to the extent applicable:
          (i) While a Participant is on military leave, sick leave, or other
bona fide leave of absence authorized by the Company (such as temporary
employment by the government) if the period of such leave does not exceed six
months, or if longer, so long as the Participant’s right to reemployment with
the Company is provided either by statute or by contract, the Participant shall
continue to be considered to be providing services to the Company and shall not
be deemed to have a Separation From Service. If a Participant’s period of leave
of absence exceeds six months and the Participant’s right to reemployment is not
provided either by statute or by contract, the Participant’s employment
relationship will be deemed to terminate so that the Participant shall have a
Separation From Service on the first date immediately following such six-month
period. The Participant’s deferral election shall be cancelled as soon as
administratively practicable following such Separation From Service and the
Participant will receive a distribution in accordance with the provisions of
Section 4.5.
          (ii) If the Participant provides insignificant services to the
Company, the Participant will be deemed to have incurred a Separation From
Service. For this purpose, a Participant is considered to be providing
insignificant services if he or she provides services at an annual rate that is
less than twenty percent of the services rendered by such individual, on
average, during the immediately preceding three calendar years of employment (or
such lesser period of employment) or the annual remuneration for such services
is less than twenty percent of the average annual remuneration earned during the
final three full calendar years of employment (or such less period of
employment).
          (iii) If a Participant continues to provide services to the Company in
a capacity other than as an employee, the Participant will not be deemed to have
a Separation From Service if the Participant is providing services at an annual
rate that is at least fifty percent of the services rendered by such individual,
on average, during the immediately preceding three calendar years of employment
(or such lesser period of employment) and the annual remuneration for such
services is at least fifty percent of the average annual remuneration earned
during the final three full calendar years of employment (or such less period of
employment).
          Additionally, the following shall also apply if a Participant serves
as both a Director and an Employee, to the extent required by Section 409A:
          (iv) Upon Participant’s cessation of service as a Director of all
Employers, a Separation From Service will occur only with respect to the portion
of the Account attributable to deferred Director Fees, plus net amounts credited
in accordance with all the applicable crediting provisions of this Plan that
relate to such deferrals, less all distributions made to the Participant

9.

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or his or her Beneficiary pursuant to this Plan that relate to such deferrals
(collectively the “Director Deferrals”);
          (v) Upon Participant’s severing of employment with all Employers, a
Separation From Service will occur only with respect to the portion of the
Account that is not attributable to Director Deferrals; and
          (vi) The Plan shall maintain separate accounting for Director
Deferrals.
     1.57 “Specified Date Payout Account Balance” shall mean, with respect to a
Participant, a credit on the records of the Employer equal to the sum of (i) the
amount deferred by the Participant and/or Employer contributions made on his or
her behalf and with respect to which a Specified Distribution Date was elected
pursuant to Section 4.1, plus (ii) amounts credited or debited in the manner
provided in Section 3.6 on such amount. The Specified Date Payout Account
Balance shall be a bookkeeping entry only and shall be utilized solely as a
device for the measurement and determination of the amounts to be paid to a
Participant, or his or her designated Beneficiary, pursuant to this Plan.
     1.58 “Specified Distribution Date” means the specified future date
indicated on the Participant’s Election Form pursuant to an election made under
Section 4.1.
     1.59 “Specified Employee” means for purposes of this Plan, and in
accordance with Section 409A, a “Key Employee” as defined in Section 1.38 of the
Plan. If a person is a Key Employee, the person is treated as a Specified
Employee for the 12-month period beginning on the April 1st that first follows
the Key Employee Identification Date, as defined in Section 1.38 of the Plan.
     1.60 “Stock” shall mean Neurocrine Biosciences, Inc. common stock.
     1.61 “Termination Benefit” shall mean with respect to Pre-409A Deferrals
the benefit set forth in Section 4.4, and with respect to Post-409A Deferrals
the benefit set forth in Section 4.5.
     1.62 “Termination of Service” shall have the meaning applicable to such
term as specified below:
     (a) For Pre-409 Deferrals “Termination of Service” shall mean the severing
of employment with all Employers, or service as a Director of all Employers,
voluntarily or involuntarily, for any reason other than Retirement, Disability,
death or an authorized leave of absence. If a Participant is both an Employee
and a Director, a Termination of Service shall occur only upon the termination
of the last position held.
     (b) For Post-409A Deferrals, “Termination of Service” means a Participant’s
“Separation From Service” for purposes of Section 409A from the Company for any
reason other than death, Disability or Retirement.
     1.63 “Trust” shall mean one or more trusts established pursuant to that
certain Trust Agreement, dated as of January 1, 2004, between the Company and
Reliance Trust Company, as amended from time to time, or any successor trust
agreement.
     1.64 “Unforeseeable Financial Emergency” shall mean a severe financial
hardship of the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, the Participant’s beneficiary or the
Participant’s Dependent; loss of the Participant’s property due to casualty
(including the need to rebuild a home following damage to a home not otherwise
covered by insurance,

10.

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for example, not as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in the sole discretion
of the Administrator. “Unforeseeable Financial Emergency” may include, for
example, the imminent foreclosure of or eviction from the Participant’s primary
residence or the need to pay for medical expenses, including non-refundable
deductibles, as well as for the costs of prescription drug medication and the
need to pay for the funeral expenses of a spouse, beneficiary or Dependent.
     1.65 “Years of Service” shall mean each twelve (12) month period during
which a Participant is employed by an Employer, whether or not continuous, and
including periods commencing prior to the effective date of this Plan; provided,
however, that in the case of a Participant whose employment with an Employer has
been interrupted by a period of twelve (12) consecutive months or more (a “Break
in Service”), his or her Years of Service prior to such Break in Service shall
be disregarded for any purpose under the Plan.
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
     2.1 Selection by Administrator. Participation in the Plan shall be limited
to a select group of management and highly compensated Employees and
Non-Employee Directors of the Employers, as determined by the Administrator in
its sole discretion on an annual basis prior to the commencement of each Plan
Year. Subject to the requirements of Article 11, from that group, the
Administrator shall select on an annual basis, in its sole discretion, Employees
and Non-Employee Directors to participate in the Plan.
     2.2 Enrollment Requirements. As a condition to participation, each selected
Employee or Non-Employee Director shall complete, execute and return to the
Administrator an Election Form and a Beneficiary Designation Form. In addition,
the Administrator shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary.
     2.3 Eligibility; Commencement of Participation. Provided an Employee or
Non-Employee Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Administrator, including
returning all required documents to the Administrator within the specified time
period, that Employee or Non-Employee Director shall commence participation in
the Plan on the day on which his or her Election Form first becomes effective or
the date on which a contribution is first credited to his or her Company
Contribution Account or Company Matching Account, whichever occurs first.
     2.4 Termination of Participation and/or Pre-409A Deferrals. If the
Administrator determines in good faith that a Participant no longer qualifies as
a member of a select group of management or highly compensated Employees, as
membership in such group is determined in accordance with Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, or as a Non-Employee Director, the
Administrator shall have the right, in its sole discretion, (1) to prevent the
Participant from making deferral elections for future Plan Years and/or
(b) immediately distribute the portion of the Participant’s Account Balance
attributable to Pre-409A Deferrals as a Termination Benefit pursuant to
Section 4.4(a) and terminate the Participant’s participation in the Plan with
respect to such Pre-409A Deferrals.
ARTICLE 3
DEFERRAL COMMITMENTS/COMPANY CONTRIBUTIONS/CREDITING/TAXES
     3.1 Election to Defer; Effect of Election Form. Subject to the terms and
conditions set forth herein and such terms and conditions as the Administrator
may determine, Participants may elect to defer

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Base Annual Salary, Annual Bonus and/or Director Fees by timely completing and
delivering to the Administrator an Election Form prior to the beginning of each
Plan Year during such period as may be established by the Administrator in its
discretion for such elections. After a Plan Year commences, such deferral
election shall be irrevocable and shall continue for the entire Plan Year and
subsequent years unless otherwise provided in this Plan; provided, however, that
a deferral election shall terminate with respect to future Plan Years upon the
execution and timely submission of a newly completed Election Form during a
subsequent election period, which new election will apply to future Plan
Year(s). Additionally, subject to the terms and conditions set forth herein and
such additional terms and conditions as the Administrator may determine,
Participants may elect to defer RSU Awards by timely completing and delivering
to the Administrator an Election Form in accordance with procedures established
by the Administrator.
     (a) Base Annual Salary, Annual Bonus and/or Director Fees. Subject to any
terms and conditions imposed by the Administrator, Participants may elect to
defer, under the Plan, Base Annual Salary, Annual Bonus and/or Director Fees.
For these elections to be valid with respect to deferrals of Base Annual Salary,
Annual Bonus and/or Director Fees, the Election Form must be completed and
signed by the Participant, timely delivered to the Administrator no later than
December 31 of the year immediately preceding the Plan Year for which the
deferral election is to be effective and accepted by the Administrator. If no
such Election Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.
     (b) Performance-Based Compensation. Notwithstanding the foregoing and
subject to any terms and conditions imposed by the Administrator, in the case of
any Performance-Based Compensation, Participants may elect to defer such
compensation by timely completing and delivering to the Administrator an
Election Form no later than six (6) months before the end of the service period
applicable to the Performance-Based Compensation, or during such earlier period
as may be established by the Administrator in its discretion for making such
elections; provided that at the time such election is made (A) such compensation
has not yet become readily ascertainable, and (B) the Participant has performed
services continuously from the later of (i) the beginning of the performance
period, or (ii) the date the performance goals are established through the date
of filing of the Election Form.
     (c) First Plan Year. Notwithstanding the foregoing, in the case of the
first Plan Year in which a Participant becomes eligible to participate in this
Plan, elections may be made within thirty (30) days after the date the
Participant first becomes eligible to participate in this Plan. Such election
will become irrevocable thirty (30) days after the Participant becomes eligible
to participate in the Plan, and shall only be effective with respect to
compensation attributable to services to be performed after the election becomes
irrevocable. Unless the Participant’s election can comply with the requirements
in Section 3.1(b) for “Performance-Based Compensation,” any deferral of Annual
Bonus earned with respect to such initial year of eligibility shall be limited
to a fraction of such Annual Bonus, with the numerator of the fraction being the
number of days remaining in the performance period after the election becomes
irrevocable and the denominator of which is the total number of days in the
performance period. The deferral election cannot be for the first year that the
Participant first becomes eligible to participate in the Plan if the Participant
previously was eligible to participate in any other Account Balance Plan. For
purposes of the initial eligibility election, a Participant who previously
ceased to be eligible to participate in the Plan will also be treated as being
initially eligible to participate in the Plan if the Participant has not been
eligible to participate in the Plan (other than the accrual of earnings) at any
time during the 24-month period ending on the date the Participant again becomes
eligible to participate in the Plan.

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     (d) RSU Awards. Subject to any terms and conditions imposed by the
Administrator, Participants may elect to defer RSU Awards under the Plan. For
these elections to be valid, the Election Form must be completed and signed by
the Participant, timely delivered to and accepted by the Administrator either
(i) no later than thirty (30) days following the grant date of the RSU Award
(which may not vest any earlier than thirteen (13) months following its grant
date), or (ii) such deferral election must otherwise be in compliance with the
requirements of Section 409A.
     3.2 Minimum Deferrals for Base Annual Salary, Annual Bonus and/or Director
Fees. For each Plan Year, with respect to deferrals of Base Annual Salary,
Annual Bonus and/or Director Fees, the minimum percentage of each component of
compensation that may be deferred is 5%. If an election is made for less than
such minimum percentage, or if no election is made, the percentage deferred
shall be zero.
     3.3 Maximum Deferral. For each Plan Year, a Participant may elect to defer,
as his or her Annual Deferral Amount, up to one hundred percent (100%) of his or
her Base Annual Salary, Annual Bonus and/or Director Fees. A Participant’s
Annual Deferral Amount may be automatically reduced if the Administrator
determines that such action is necessary to meet federal or state tax
withholding obligations. A Participant may elect to defer up to one hundred
percent (100%) of his or her RSU Awards.
     3.4 Accounts; Crediting of Deferrals. Solely for record keeping purposes,
the Administrator shall establish a Deferral Account, a Company Contribution
Account, a Company Matching Account and a RSU Account for each Participant. A
Participant’s Accounts shall be credited with the deferrals made by him or her
or on his or her behalf by his or her Employer under this Article 3 and shall be
credited (or charged, as the case may be) with the hypothetical or deemed
investment earnings and losses determined pursuant to Section 3.6, and charged
with distributions made to or with respect to him or her.
     (a) Annual Deferral Amounts. For each Plan Year, the Base Annual Salary
portion of the Annual Deferral Amount shall be withheld and credited to the
Participant’s Deferral Account at the time of each regularly scheduled Base
Annual Salary payroll in the percentage specified by the Participant in the
Election Form, as adjusted from time to time for increases and decreases in Base
Annual Salary. The Annual Bonus and/or Director Fees portion of the Annual
Deferral Amount shall be withheld and credited to the Participant’s Deferral
Account at the time the Annual Bonus and/or Director Fees are or otherwise would
be paid to the Participant, whether or not this occurs during the Plan Year
itself.
     (b) Annual Company Contribution Amount. For each Plan Year, an Employer, in
its sole discretion, may, but is not required to, credit any amount it desires
to any Participant’s Company Contribution Account under this Plan, which amount
shall be for that Participant the Annual Company Contribution Amount for that
Plan Year. The amount so credited to a Participant may be smaller or larger than
the amount credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other
Participants receive an Annual Company Contribution Amount for that Plan Year.
The Annual Company Contribution Amount, if any, shall be credited to
Participants’ Company Contribution Accounts on the date declared by the
Employer.
     (c) Annual Company Matching Amount. For each Plan Year, an Employer, in its
sole discretion, may, but is not required to, credit any amount it desires to
any Participant’s Company Matching Account under this Plan, which amount shall
be for that Participant the Annual Company Matching Amount for that Plan Year.
The amount so credited to a Participant

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may be smaller or larger than the amount credited to any other Participant, and
the amount credited to any Participant for a Plan Year may be zero, even though
one or more other Participants receive an Annual Company Contribution Amount for
that Plan Year. The Annual Company Contribution Amount, if any, shall be
credited to Participants’ Company Matching Accounts on the date declared by the
Employer.
     (d) RSU Deferral Amount. Each time a Participant timely elects to defer a
RSU Award in accordance with Section 3.1(d), an equivalent number of shares of
Company common stock subject to such RSU Award shall be credited to the
Participant’s RSU Account.
     3.5 Vesting.
     (a) A Participant shall at all times be one hundred percent (100%) vested
in his or her Deferral Account.
     (b) A Participant shall vest in his or her RSU Account in accordance with
the vesting schedule applicable to the particular RSU Award (including
provisions in any separately applicable employment or severance arrangement with
the Participant), which may vary among Participants and among RSU Awards. In the
event of the Participant’s death, Disability, Retirement or Termination of
Service prior to the date on which all RSU Awards have vested, the unvested
portion of such RSU Award shall be forfeited and no Employer or the Plan shall
be liable for the distribution of such shares under the Plan to such
Participant; provided, however, that such forfeiture shall not apply with
respect to any portion of the RSU Award with respect to which vesting is
accelerated upon such event in accordance with the vesting schedule applicable
to such RSU Award. Any shares credited to a Participant’s RSU Account by his or
her Employer that are forfeited by such Participant pursuant to the preceding
sentence shall cease to be liabilities of the Employer or the Plan and such
shares shall be immediately debited from the Participant’s RSU Account.
     (c) Employer contributions credited to a Participant’s Company Contribution
Account under Section 3.4(b) of the Plan or to a Participant’s Company Matching
Account under Section 3.4(c) of the Plan and any hypothetical or deemed
investment earnings and losses attributable to these contributions shall become
vested or nonforfeitable as determined by the Administrator from time to time.
The vesting schedule may vary among Participants.
     (d) In addition, a Participant shall be one hundred percent (100%) vested
in his or her Company Contribution Account and Company Matching Account,
including any deemed investment earnings and losses attributable to these
accounts, immediately prior to the effective date of a Change in Control, and
immediately upon his or her death or Disability. In the event of a Participant’s
Retirement or Termination of Service prior to the date on which all Employer
contributions in such Participant’s Company Contribution Account and Company
Matching Account have vested pursuant to this Section 3.5, the unvested portion
of such Employer contributions shall be forfeited and no Employer or the Plan
shall be liable for the payment of such unvested amounts under the Plan to such
Participant. Any amounts credited to a Participant’s Company Contribution
Account and Company Matching Account by his or her Employer on his or her behalf
which are forfeited by such Participant pursuant to the preceding sentence shall
cease to be liabilities of the Employer or the Plan and such amounts shall be
immediately debited from the Participant’s Company Contribution Account and
Company Matching Account and credited to such Employer.

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     3.6 Earnings Credits or Losses. In accordance with, and subject to, the
rules and procedures that are established from time to time by the
Administrator, in its sole discretion, amounts shall be credited or debited to a
Participant’s Account Balance in accordance with the following rules:
     (a) Election of Measurement Funds. A Participant, in connection with his or
her initial deferral election in accordance with Section 3.1 above, shall elect,
on the Election Form, one or more Measurement Fund(s) (as described in
Section 3.6(c) below) to be used to determine the additional amounts to be
credited (or charged, as the case may be) to his or her Account Balance, unless
changed in accordance with the next sentence. The Participant may (but is not
required to) elect, by submitting an Election Form to the Administrator that is
accepted by the Administrator, to add or delete one or more Measurement Fund(s)
to be used to determine the additional amounts to be credited (or charged, as
the case may be) to his or her Account Balance, or to change the portion of his
or her Account Balance allocated to each previously or newly elected Measurement
Fund. If an election is made in accordance with the previous sentence, it shall
become effective as soon as administratively practicable and shall continue
thereafter until changed in accordance with the previous sentence. Changes may
be made to allocations at any time during the Plan Year.
     (b) Proportionate Allocation. In making any election described in Section
3.6(a) above, the Participant shall specify on the Election Form, in increments
of whole percentage points (1%), the percentage of his or her Account Balance to
be allocated to a Measurement Fund (as if the Participant was making an
investment in that Measurement Fund with that portion of his or her Account
Balance).
     (c) Measurement Funds. The Administrator shall from time to time select
types of Measurement Funds and specific Measurement Funds for deemed investment
designation by Participants for the purpose of crediting or charging
hypothetical or deemed investment earnings and losses to his or her Account
Balance. As necessary, the Administrator may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. The Administrator shall
notify the Participants of the types of Measurement Funds and the specific
Measurement Funds selected from time to time. Notwithstanding anything to the
contrary set forth herein, the Company Stock Measurement Fund is not available
for elective investment designations by Participants.
     (d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by the
Administrator, in its sole discretion, based on the performance of the
Measurement Funds themselves. A Participant’s Account Balance shall be credited
or debited as frequently as is administratively feasible, but no less often than
monthly, based on the performance of each Measurement Fund selected by the
Participant, as determined by the Administrator in its sole discretion.
     (e) No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used
for measurement purposes only, and a Participant’s election of any such
Measurement Fund, the allocation to his or her Account Balance thereto, the
calculation of additional amounts and the crediting or debiting of such amounts
to a Participant’s Account Balance shall not be considered or construed in any
manner as an actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as that term is
defined in the Trust), in its own discretion, decides to invest funds in any or
all of the Measurement Funds, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant’s Account
Balance shall at all times be a bookkeeping entry only and shall not represent
any investment made on his or her behalf by the Employer or the Trust; the
Participant

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shall at all times remain an unsecured creditor of the Employers. Any liability
of an Employer to any Participant, former Participant, or Beneficiary with
respect to a right to payment shall be based solely upon contractual obligations
created by the Plan. The Company, the Board, the Administrator, any Employer and
any individual or entity shall not be deemed to be a trustee of any amounts to
be paid under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Company and an Employer and a
Participant, former Participant, Beneficiary or any other individual or entity.
Neither the Company nor any Employer in any way guarantees any Participant’s
Account Balance against loss or depreciation, whether caused by poor investment
performance, insolvency of a deemed investment or by any other event or
occurrence. In no event shall any Employee, officer, Director or stockholder of
the Company or any Employer be liable to any individual or entity on account of
any claim arising by reason of the Plan provisions or any instrument or
instruments implementing its provisions, or for the failure of any Participant,
Beneficiary or other individual or entity to be entitled to any particular tax
consequences with respect to the Plan or any credit or payment hereunder.
     (f) Company Contribution Accounts. Notwithstanding any other provision of
this Plan to the contrary, Company Contribution Amounts may only be allocated to
the Measurement Funds designated by the Administrator from time to time, in its
sole discretion.
     (g) RSU Account. Notwithstanding any other provision of this Plan to the
contrary, RSU Deferral Amounts shall be automatically allocated to the Company
Stock Measurement Fund and may not be allocated to any other Measurement Fund.
     3.7 Distributions. Any distribution with respect to a Participant’s Account
Balance shall be charged to the appropriate account as of the date such payment
is made by the Employer or the trustee of the Trust which may be established for
the Plan.
ARTICLE 4
DISTRIBUTIONS
     4.1 Specified Distribution Date Payout Election.
     (a) Election of Specified Date Payout. A Participant may irrevocably elect
to receive a distribution from the Plan of his or her vested Specified Date
Payout Account Balance on a Specified Distribution Date. Subject to the
Deduction Limitation and the other terms and conditions of this Plan, any
elected Specified Distribution Date may not be earlier than five (5) years from
January 1 of the Plan Year following the Plan Year in which the Annual Deferral
Amount or RSU Award is actually deferred or the Employer contribution is
actually credited to the Participant’s account (the “Earliest Specified
Distribution Date”), and the Specified Distribution Date may not be later than
the date on which the Participant reaches age seventy (70). By way of example,
if a Specified Distribution Date is elected for amounts or awards that are
deferred in the Plan Year commencing January 1, 2003, the Specified Distribution
Date could be no earlier than January 1, 2009. A Participant shall elect on each
Election Form whether the Specified Date Payout Account Balance applicable to
the Specified Distribution Date election shall be paid in a lump sum or pursuant
to an Annual Installment Method over a period of up to fifteen (15) years
commencing on the Specified Distribution Date. If a Participant does not elect
to have his or her Specified Date Payout Account Balance paid in accordance with
the Annual Installment Method, then such benefit shall be payable in a lump sum.
The lump sum payment shall be made, or the Annual Installment Method payments
shall commence, no later than the fifteenth day of the third month following the
Specified Distribution Date designated by the

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Participant. Any payment made shall be subject to the Deduction Limitation.
Notwithstanding anything to the contrary set forth herein, Specified Date Payout
Account Balances that are less than $50,000 at any time on or after the
Specified Distribution Date shall be immediately paid in a lump sum
notwithstanding any Annual Installment Method payment election provided,
however, that no payment acceleration shall occur prior to January 1, 2008
pursuant to this provision.
     (b) Redeferrals. The following provisions shall govern any redeferral
election made with respect to amounts elected to be distributed on a Specified
Distribution Date:

  (i)   For Pre-409A Deferrals, a Participant may annually change his or her
Specified Distribution Date election to an allowable alternative payout method
by submitting a new Election Form to the Administrator during such period as may
be established by the Administrator in its discretion for such elections,
provided, however, that such change shall not be given any effect until at least
twelve (12) months after the date on which the new election is made and only if
such new Election Form is submitted to and accepted by the Administrator in its
sole discretion at least thirteen (13) months prior to the scheduled payout date
of the distribution to be modified. The Election Form most recently accepted by
the Administrator shall govern the payout of the Participant’s benefits under
the Plan.     (ii)   For Post-409A Deferrals, a Participant may modify the
Specified Distribution Date or revoke a previous election with respect thereto
by submitting a new Election Form; provided that any such modification or
revocation shall not be given any effect until at least twelve (12) months after
the date on which the new election is made and only if (i) such new Election
Form is submitted to and accepted by the Administrator in its sole discretion at
least thirteen (13) months prior to the Specified Distribution Date to be
modified or revoked and (ii) any newly elected Specified Distribution Date
designated in such form is at least five (5) years following the original
Specified Distribution Date of the distribution to be deferred.

     (c) Other Benefits Take Precedence Over Specified Date Payout Election.
Should an event occur that triggers a benefit under Section 4.2, 4.3, 4.4, 4.5,
4.6 or 4.7, any Specified Date Payout Account Balance that is subject to a
Specified Distribution Date election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the other
applicable Section.
     4.2 Retirement Benefit.
     (a) Retirement Benefit. A Participant who Retires shall receive, as a
Retirement Benefit, his or her vested Account Balance. A Participant, in
connection with his or her commencement of participation in the Plan, shall
elect on an Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method over a period of up to fifteen
(15) years. If a Participant does not make any election with respect to the
payment of the Retirement Benefit, then such benefit shall be payable in a lump
sum. The lump sum payment shall be made, or installment payments shall commence,
no later than sixty (60) days after the date the Participant Retires. Any
payment made shall be subject to the Deduction

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Limitation. Notwithstanding anything to the contrary set forth herein, Account
Balances that are less than $50,000 at any time on or after the date that
distributions are scheduled to commence shall be immediately paid in a lump sum
notwithstanding any Annual Installment Method payment election; provided,
however, that no payment acceleration shall occur prior to January 1, 2008
pursuant to this provision.
     (b) Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant’s unpaid Retirement Benefit payments shall be paid to the
Participant’s Beneficiary in a lump sum that is equal to the Participant’s
unpaid remaining vested Account Balance as of the date of the Participant’s
death. Any lump sum payment shall be made no later than sixty (60) days after
the date of the Participant’s death. Any payment made shall be subject to the
Deduction Limitation.
     (c) Redeferrals of Retirement Benefits

  (i)   Redeferral Elections for Pre-409A Deferrals. For Pre-409A Deferrals, a
Participant may annually change his or her election with respect to Retirement
Benefit distributions to an allowable alternative payout method by submitting a
new Election Form to the Administrator during such period as may be established
by the Administrator in its discretion for such elections, provided, however,
that such change shall not be given any effect until at least twelve (12) months
after the date on which the new election is made and only if such new Election
Form is submitted to and accepted by the Administrator in its sole discretion at
least thirteen (13) months prior to the scheduled payout date of the
distribution to be modified. The Election Form most recently accepted by the
Administrator shall govern the payout of the Participant’s benefits under the
Plan.     (ii)   Redeferral Elections for Post-409A Deferrals. For Post-409A
Deferrals, a Participant may not change his or her election with respect to
Retirement Benefit distributions.

     (d) Post-409A Deferrals and 6 Month Delay in Payment of Retirement Benefit
to Specified Employees. Notwithstanding any provision in Section 4.2(a) above,
if a Participant is a Specified Employee as of the date of his or her
Retirement, solely with regard to the portion of the Account Balance
attributable to Post-409A Deferrals, if any, the lump sum payment shall be made,
or installment payments shall commence, no earlier than six (6) months after the
date of the Participant’s Retirement. Any amounts otherwise payable during the
six (6) month period following the Retirement of the Specified Employee will
accrue and be paid out as soon as administratively practicable following the six
(6) month delay period. Any installment payments otherwise payable after the six
(6) month delay following the Retirement of a Specified Employee will be paid on
the corresponding annual anniversaries of the first actual distribution date to
the Specified Employee.
     4.3 Pre-Retirement Survivor Benefit. If a Participant dies before he or she
receives complete payment of benefits pursuant to this Article 4, such
Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
to the Participant’s vested Account Balance as of the date of the Participant’s
death (after giving effect to any accelerated vesting as a result of the
Participant’s death pursuant to Section 3.5). The Pre-Retirement Survivor
Benefit shall be paid to the Participant’s

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Beneficiary in a lump sum. Any lump sum payment shall be made no later than
sixty (60) days after the date of the Participant’s death. Any payment made
shall be subject to the Deduction Limitation.
     4.4 Termination of Service Benefit for Pre-409A Deferrals.
     (a) Pre-409A Deferrals and Termination of Service Other Than For Cause.
With respect to Pre-409A Deferrals, if a Participant experiences a Termination
of Service for any reason other than as a result of a termination by the Company
for Cause prior to his or her becoming entitled to receive benefits by reason of
any other sections of this Article 4, such Participant shall receive a
Termination Benefit, which shall be equal to the Participant’s vested Account
Balance as of the date on which he or she experiences a Termination of Service.
A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Termination Benefit
pursuant to this Section 4.4(a) in a lump sum or pursuant to an Annual
Installment Method over a period of up to fifteen (15) years. If a Participant
does not make any election with respect to the payment of the Termination
Benefit pursuant to this Section 4.4(a), then such benefit shall be payable in a
lump sum. The lump sum payment shall be made, or installment payments shall
commence, no later than sixty (60) days after the date of the Participant
experiences a Termination of Service. Any payment made shall be subject to the
Deduction Limitation. Notwithstanding anything to the contrary set forth herein,
Account Balances that are less than $50,000 at any time on or after the date
that distributions are scheduled to commence shall be immediately paid in a lump
sum notwithstanding any Annual Installment Method payment election provided,
however, that no payment acceleration shall occur prior to January 1, 2008
pursuant to this provision.
     (b) Pre-409A Deferrals and Termination of Service For Cause. With respect
to Pre-409A Deferrals, if a Participant experiences a Termination of Service as
a result of a termination by the Company for Cause prior to his or her becoming
entitled to receive benefits by reason of any other sections of this Article 4,
such Participant shall receive an accelerated lump sum payment of a portion of
the Termination Benefit, which shall be equal to the Participant’s vested
Account Balance attributable to Pre-409A Deferrals as of the date on which he or
she experiences a Termination of Service. The lump sum payment of vested
Pre-409A Deferrals shall be made no later than sixty (60) days after the date of
the Participant’s Termination of Service. Any payment made shall be subject to
the Deduction Limitation.
     (c) Pre-409A Deferrals and Redeferrals of Termination Benefits. For
Pre-409A Deferrals, a Participant may annually change his or her election with
respect to Termination Benefit distributions to an allowable alternative payout
method by submitting a new Election Form to the Administrator during such period
as may be established by the Administrator in its discretion for such elections,
provided, however, that such change shall not be given any effect until at least
twelve (12) months after the date on which the new election is made and only if
such new Election Form is submitted to and accepted by the Administrator in its
sole discretion at least thirteen (13) months prior to the scheduled payout date
of the distribution to be modified. The Election Form most recently accepted by
the Administrator shall govern the payout of the Participant’s benefits under
the Plan.
     4.5 Termination of Service Benefit for Post-409A Deferrals.
     (a) Termination of Service Benefit for Post-409A Deferrals With respect to
Post-409A Deferrals, if a Participant experiences a Termination of Service prior
to his or her becoming entitled to receive benefits by reason of any other
sections of this Article 4, such Participant shall receive a Termination
Benefit, which shall be equal to the Participant’s vested Account Balance

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as of the date on which he or she experiences a Termination of Service. A
Participant, in connection with his or her commencement of participation in the
Plan, shall elect on an Election Form to receive the Termination Benefit
pursuant to this Section 4.5 in a lump sum or pursuant to an Annual Installment
Method over a period of up to fifteen (15) years. If a Participant does not make
any election with respect to the payment of the Termination Benefit pursuant to
this Section 4.5, then such benefit shall be payable in a lump sum. The lump sum
payment shall be made, or installment payments shall commence, no later than
sixty (60) days after the date of the Participant experiences a Termination of
Service. Any payment made shall be subject to the Deduction Limitation.
Notwithstanding anything to the contrary set forth herein, Account Balances that
are less than $50,000 at any time on or after the date that distributions are
scheduled to commence shall be immediately paid in a lump sum notwithstanding
any Annual Installment Method payment election provided, however, that no
payment acceleration shall occur prior to January 1, 2008 pursuant to this
provision.
     (b) Post-409A Deferrals and 6 Month Delay in Payment of Termination of
Service Benefit to Specified Employees. Notwithstanding any provision in
Section 4.5(a) above, if a Participant is a Specified Employee as of the date of
his or her Termination of Service, the lump sum payment shall be made, or
installment payments shall commence, no earlier than six (6) months after the
date of the Participant’s Termination of Service. Any amounts otherwise payable
during the six (6) month period following the Termination of Service of the
Specified Employee will accrue and be paid out as soon as administratively
practicable following the six (6) month delay period. Any installment payments
otherwise payable after the six (6) month delay following the Termination of
Service of a Specified Employee will be paid on the corresponding annual
anniversaries of the first actual distribution date to the Specified Employee.
     (c) Redeferral Elections for Post-409A Deferrals. For Post-409A Deferrals,
a Participant may not change his or her election with respect to Termination
Benefit distributions.
     4.6 Disability Benefit.
     (a) Distribution of Disability Benefit. In the event of the Participant’s
Disability, as determined by the Administrator, the Participant shall receive a
Disability Benefit, which shall be equal to the Participant’s vested Account
Balance as of the date on which he or she experiences a Disability (after giving
effect to any accelerated vesting as a result of the Participant’s Disability
pursuant to Section 3.5). A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form to
receive the Disability Benefit in a lump sum or pursuant to an Annual
Installment Method over a period of up to fifteen (15) years. If a Participant
does not make any election with respect to the payment of the Disability
Benefit, then the Participant shall be deemed to have elected to have the
Disability Benefit paid in a lump sum. The lump sum payment shall be made, or
installment payments shall commence, no later than sixty (60) days after the
date of the Participant’s Disability. Any payment made shall be subject to the
Deduction Limitation. Notwithstanding anything to the contrary set forth herein,
Account Balances that are less than $50,000 at any time on or after the date
that distributions are scheduled to commence shall be immediately paid in a lump
sum notwithstanding any Annual Installment Method payment election provided,
however, that no payment acceleration shall occur prior to January 1, 2008
pursuant to this provision.
     (b) Administrator Discretion to Accelerate Disability Benefits for Pre-409A
Deferrals. Notwithstanding a Participant’s election, for Pre-409A Deferrals the
Administrator may decide, in its sole discretion, whether the Disability Benefit
shall be paid in a lump sum or pursuant to an Annual Installment Method.

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     (c) Redeferrals of Disability Benefits

  (i)   Redeferral Elections for Pre-409A Deferrals. For Pre-409A Deferrals, a
Participant may annually change his or her election with respect to Disability
Benefit distributions to an allowable alternative payout method by submitting a
new Election Form to the Administrator during such period as may be established
by the Administrator in its discretion for such elections, provided, however,
that such change shall not be given any effect until at least twelve (12) months
after the date on which the new election is made and only if such new Election
Form is submitted to and accepted by the Administrator in its sole discretion at
least thirteen (13) months prior to the scheduled payout date of the
distribution to be modified. The Election Form most recently accepted by the
Administrator shall govern the payout of the Participant’s benefits under the
Plan.     (ii)   Redeferral Elections for Post-409A Deferrals. For Post-409A
Deferrals, a Participant may not change his or her election with respect to
Disability Benefit distributions.

     4.7 Change in Control Benefit.
     (a) Change in Control Benefit for Pre-409A Deferrals. For Pre-409A
Deferrals, the Committee may, in its sole discretion, determine that a
Participant shall receive a Change in Control Benefit, which shall be equal to
the Participant’s vested Account Balance in the event of a Change in Control
(after giving effect to any accelerated vesting as a result of the Participant’s
Disability pursuant to Section 3.5). A Participant’s Change in Control Benefit
shall be paid in a lump sum. The lump sum payment shall be made immediately
prior to the Change in Control. Any payment made shall be subject to the
Deduction Limitation and the Excise Tax Limitation on distributions. Should the
Committee decide to pay a Change in Control Benefit, any Pre-409A Deferral that
is subject to an existing payout election under Section 4.1, 4.2, 4.3, 4.4, 4.5
or 4.6 shall not be paid in accordance with such Section but shall be paid in
accordance with this Section 4.7(a).
     (b) Change in Control Benefit for Post-409A Deferrals. For Post-409A
Deferrals, the Committee may, in its sole discretion, determine that a
Participant shall receive a Change in Control Benefit, which shall be equal to
the Participant’s vested Account Balance in the event of a Change in Control
(after giving effect to any accelerated vesting as a result of the Participant’s
Disability pursuant to Section 3.5). A Participant’s Change in Control Benefit
shall be paid in a lump sum. The lump sum payment shall be made immediately
prior to the Change in Control. Any payment made shall be subject to the
Deduction Limitation on distributions. Any Change in Control Benefit that the
Committee determines to pay in accordance with this Section 4.7(b) shall result
in a termination of the Plan and all other Account Balance Plans, and the
Committee’s determination to pay the Change in Control Benefit must be made
within the 30 days preceding the Change in Control. Should the Committee decide
to pay a Change in Control Benefit, any Post-409A Deferral that is subject to an
existing payout election under Section 4.1, 4.2, 4.3, 4.4, 4.5 or 4.6 shall not
be paid in accordance with such Section but shall be paid in accordance with
this Section 4.7(b).
     4.8 Form of Distributions. Distributions of the Account Balance not
including the portion of the Account Balance allocated to the Company Stock
Measurement Fund shall be paid to Participants in

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cash. The portion of the Account Balance allocated to the Company Stock
Measurement Fund shall be paid to Participant’s in an equivalent number of
shares of the Company’s common stock credited to the Participant’s Account. The
source of shares of Company common stock distributed pursuant to this Plan shall
be the Equity Plan. Any portion of the Account Balance designated to be
distributed in shares of Company common stock, but which is not equal to the
value of one whole share of Company common stock shall instead be paid to the
Participant in cash.
     4.9 Change In Company Shares. If any capitalization adjustment is made to
outstanding awards granted under the Company’s Equity Plan pursuant to Section
15(a) of the Company’s 2003 Incentive Stock Plan or any other similar provision
in a successor equity incentive plan, then such adjustments shall automatically
apply to the number of shares credited to the RSU Account attributable to such
awards as appropriate in order to prevent dilution or enlargement of the
benefits intended to be made available under the Plan.
ARTICLE 5
UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION
     5.1 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
If a Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Administrator to (i) suspend any deferrals required
to be made by a Participant and/or (ii) receive a partial or full payout from
the Plan. The payout shall not exceed the lesser of the Participant’s vested
Account Balance, calculated as if such Participant were receiving a Termination
Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial
Emergency. If, subject to the sole discretion of the Administrator, the petition
for a suspension and/or payout is approved, suspension shall take effect upon
the date of approval and any payout shall be made within sixty (60) days of the
date of approval. The payment of any amount under this Section 5.1 shall be
subject to the Deduction Limitation.
     Whether a Participant is faced with an Unforeseeable Financial Emergency
shall be determined by the Administrator on the relevant facts and circumstances
of each case, but, in any case, a distribution on account of unforeseeable
emergency may not be made to the extent that such emergency is or may be
relieved through reimbursement or compensation from insurance or otherwise, by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not cause severe financial hardship), or by cessation of deferrals
under the Plan. The Participant will be required to certify that the need cannot
be reasonably met from other sources (not taking into account amounts available
under any qualified employer plan, or amounts available another nonqualified
deferred compensation plan due to an Unforeseeable Financial Emergency).
     If the Participant qualifies for an Unforeseeable Financial Emergency
distribution under this Section or has received a hardship distribution pursuant
to Treasury Regulation Section 1.401(k)-1(d)(3) (or its successor) under the
Company’s qualified retirement plan, the Participant shall not be eligible to
participate in the Plan for the remainder of the Plan Year during which the
payout is paid and the subsequent Plan Year.
     5.2 Withdrawal Election. A Participant (or, after a Participant’s death,
his or her Beneficiary) may elect, at any time, to withdraw all or a portion of
his or her vested Account Balance attributable to Pre-409A Deferrals, calculated
as if there had occurred a Termination of Service as of the day of the election,
less a withdrawal penalty equal to ten percent (10%) of such amount (the net
amount shall be referred to as the “Withdrawal Amount”). This election can be
made at any time. The Participant (or his or her Beneficiary) shall make this
election by giving the Administrator advance written notice of the election in a
form determined from time to time by the Administrator. The Participant (or his
or her Beneficiary) shall be paid the Withdrawal Amount within sixty (60) days
of his

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or her election. Once the Withdrawal Amount is paid, the Participant shall not
be eligible to participate in the Plan for the subsequent Plan Year that
commences immediately following the Plan Year during which the Withdrawal Amount
is paid. The payment of this Withdrawal Amount shall be subject to the Deduction
Limitation.
     5.3 No Discretionary Distributions. Except as expressly provided herein,
the Administrator shall not exercise discretion with respect to the timing or
form of distributions from the Plan, but shall make distributions at the time
and in the form elected by the Participant on the Election Form or as otherwise
specified in the Plan. Notwithstanding anything to the contrary set forth
herein, the Administrator retains the right, in its sole discretion, to delay or
accelerate distributions under the Plan to the extent permitted by Section 409A.
ARTICLE 6
BENEFICIARY DESIGNATION
     6.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.
     6.2 Beneficiary Designation; Change. A Participant shall designate his or
her Beneficiary by completing and signing the Beneficiary Designation Form, and
returning it to the Administrator or its designated agent. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the
Administrator’s rules and procedures, as in effect from time to time. Upon the
acceptance by the Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Administrator
shall be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Administrator prior to his or her death.
     6.3 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 6.1 and 6.2 above or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then the Participant’s designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant’s estate.
     6.4 Doubt as to Beneficiary. If the Administrator has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Administrator
shall have the right, exercisable in its discretion, to cause the Participant’s
Employer to withhold such payments until this matter is resolved to the
Administrator’s satisfaction.
     6.5 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Administrator from all further obligations under this Plan with respect to the
Participant, and that Participant’s Election Form shall terminate upon such full
payment of benefits.

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ARTICLE 7
     7.1 Acceleration of Payments. Payments of the portion of the Account
Balance attributable to Post-409A Deferrals may be accelerated only upon the
occurrence of an event specified in this Article 7.
     7.2 Compliance with Ethics Agreements and Legal Requirements. A payment may
be accelerated as may be necessary to comply with ethics agreements with the
Federal government or as may be reasonably necessary to avoid the violation of
Federal, state, local or foreign ethics law or conflicts of laws, in accordance
with the requirements of Section 409A.
     7.3 Corporate Events. A payment may be accelerated in the Administrator’s
discretion in connection with any of the following events, in accordance with
the requirements of Section 409A: (i) a corporate dissolution taxed under
Section 331 of the Code, (ii) with the approval of a bankruptcy court pursuant
to 11 U.S.C. Section 503(b)(1)(A); (iii) in connection with a Change in Control
event as further specified in Section 4.7(b); (iv) the termination and
liquidation of the Plan and any other Account Balance Plan; and (v) such other
events and conditions as permitted by Section 409A.
     7.4 Offset. A payment may be accelerated in the Administrator’s discretion
as satisfaction of a debt of the Participant to the Company, where such debt is
incurred in the ordinary course of the service relationship between the
Participant and the Company, the entire amount of the reduction in any of the
Company’s taxable years does not exceed $5,000, and the reduction is made at the
same time and in the same amount as the debt otherwise would have been due and
collected from the Participant.
ARTICLE 8
TERMINATION, AMENDMENT OR MODIFICATION
     8.1 Suspension. The Plan may be suspended or “frozen” at any time by the
Company so that Participants may not make new elections for additional
contributions to the Plan. In the event that the Plan is suspended or “frozen,”
benefits shall be held in the Plan and paid out in accordance with the terms of
the Plan.
     8.2 Termination.
     (a) Although each Employer anticipates that it will continue the Plan for
an indefinite period of time, there is no guarantee that any Employer will
continue the Plan or will not terminate the Plan at any time in the future.
Accordingly, each Employer reserves the right to discontinue its sponsorship of
the Plan and/or to terminate the Plan at any time with respect to any or all of
its participating Employees and Non-Employee Directors, by action of its board
of directors or similar governing body.
     (b) With respect to Pre-409A Deferrals, upon the termination of the Plan
with respect to any Employer, the participation of the affected Participants who
are employed by that Employer, or in the service of that Employer as Directors,
shall terminate and the portion of their Account Balances attributable to
Pre-409A Deferrals shall be paid to the Participants in a lump sum within sixty
(60) days following the plan termination. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to the
payment of any benefits under the Plan as of the date of termination; provided,
however, that with respect to Pre-409A Deferrals, in the event of a Plan
termination the Employer shall have the right to accelerate installment payments
without a premium or prepayment penalty by paying the Account Balance in a lump
sum or pursuant to an Annual Installment Method using fewer years (provided that
the

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present value of all payments that will have been received by a Participant at
any given point of time under the different payment schedule shall equal or
exceed the present value of all payments that would have been received at that
point in time under the original payment schedule).
     (c) With respect to Post-409A Deferrals, the Plan may be terminated and
liquidated at any time by the Company, provided that, to the extent required by
Section 409A: (i) the termination and liquidation does not occur proximate to a
downturn in the financial health of the Company; (ii) all other Account Balance
Plans are terminated with respect to all Participants, (iii) no Participant
Account Balances are paid, other than those otherwise payable under the terms of
the Plan absent a termination of the Plan, within 12 months of the termination
of the Plan, (iv) all Participant Account Balances are paid within 24 months of
the termination of the Plan, and (v) the Company does not adopt another Account
Balance Plan with respect to the Plan’s Participants at any time for a period of
three years following the date of termination of the Plan. Additionally, the
Plan may be terminated with respect to Post-409A Deferrals pursuant to the
provisions set forth in Section 4.7(b) of the Plan.
     8.3 Amendment. An Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its board of
directors or similar governing body; provided, however, that no amendment or
modification shall be effective to decrease or restrict the value of a
Participant’s Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had experienced a
Termination of Service as of the effective date of the amendment or modification
or, if the amendment or modification occurs after the date upon which the
Participant was eligible to Retire, the Participant had Retired as of the
effective date of the amendment or modification. The amendment or modification
of the Plan shall not affect any Participant or Beneficiary who has become
entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that with respect to the portion
of the Account Balance attributable to Pre-409A Deferrals the Employer shall
have the right to accelerate installment payments by paying such portion of the
Account Balance in a lump sum or pursuant to an Annual Installment Method using
fewer years (provided that the present value of all payments that will have been
received by a Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that would have
been received at that point in time under the original payment schedule).
     Notwithstanding any provisions of this Section 8.3 to the contrary, the
Administrator may amend the Plan at any time, in any manner, if the
Administrator determines any such amendment is required to ensure that the Plan
is characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA
Sections 201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law, including ERISA and the Code.
     Notwithstanding any provision of the Plan to the contrary, in the event
that the Administrator determines that any provision of the Plan may cause
amounts deferred under the Plan to become immediately taxable to any Participant
under Section 409A, the Administrator may (i) adopt such amendments to the Plan
and appropriate policies and procedures, including amendments and policies with
retroactive effect, that the Administrator determines necessary or appropriate
to preserve the intended tax treatment of the Plan benefits provided by the Plan
and/or (ii) take such other actions as the Administrator determines necessary or
appropriate to comply with the requirements of Section 409A.

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ARTICLE 9
ADMINISTRATION
     9.1 Administrator Duties. The Committee appointed pursuant to Section 9.3
shall be the Administrator and shall conduct the general administration of the
Plan in accordance with the Plan and shall have all the necessary power and
authority to carry out that function. Members of the Administrator may be
Participants under this Plan. Any individual serving on the Administrator who is
a Participant shall not vote or act on any matter relating solely to himself or
herself. Among the Committee’s necessary powers and duties are the following:
     (a) Except to the extent provided otherwise by Article 12, to delegate all
or part of its function as Administrator to others and to revoke any such
delegation.
     (b) To determine questions of eligibility of Participants and their
entitlement to benefits, subject to the provisions of Articles 10 and 12.
     (c) To select and engage attorneys, accountants, actuaries, trustees,
appraisers, brokers, consultants, administrators, physicians or other persons to
render service or advice with regard to any responsibility the Administrator has
under the Plan, or otherwise, to designate such persons to carry out fiduciary
responsibilities (other than trustee responsibilities) under the Plan, and (with
the Committee, the Employers and their officers, Directors, trustees and
Employees) to rely upon the advice, opinions or valuations of any such persons,
to the extent permitted by law, being fully protected in acting or relying
thereon in good faith.
     (d) To interpret the Plan for purpose of the administration and application
of the Plan, in a manner not inconsistent with the Plan or applicable law and to
amend or revoke any such interpretation.
     (e) To administer the Plan’s claims procedures as provided in Article 10
and Appendix A.
     9.2 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.
     9.3 Committee. The Committee shall consist solely of two or more
Non-Employee Directors appointed by and holding office at the pleasure of the
Board, each of whom is both a “non-employee director” as defined by Rule 16b-3
and an “outside director” for purposes of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.
     9.4 Indemnification. All Employers shall indemnify and hold harmless any of
their officers, Directors, Committee members or Employees who are involved in
the administration of the Plan against any and all claims, losses, damages,
expenses or liabilities arising out of the good faith performance of their
administrative functions.
     9.5 Employer Information. To enable the Administrator to perform its
functions, each Employer shall supply full and timely information to the
Administrator on all matters relating to the compensation of its Participants,
the date and circumstances of the Retirement, Disability, death or

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Termination of Service of its Participants, and such other pertinent information
as the Administrator may reasonably require.
ARTICLE 10
CLAIMS PROCEDURES
     10.1 Presentation of Claim. Any application for benefits, inquiries about
the Plan or inquiries about present or future rights under the Plan must be
submitted to the Administrator in writing by a Participant or Beneficiary of a
deceased Participant, or his or her authorized representative, (the “Claimant”)
in accordance with the Plan’s claims procedures. The Claimant must deliver to
the Administrator a written claim for a determination with respect to the
amounts distributable to such Claimant from the Plan. The claim must state with
particularity the determination desired by the Claimant. The claims procedures
applicable to Disability related claims are set forth on the attached
Appendix A. The claims procedures applicable to non-Disability related claims
are as set forth in this Article 10.
     10.2 Notification of Decision. The Administrator shall consider a
Claimant’s claim within a reasonable time, and shall notify the Claimant in
writing:
     (a) that the Claimant’s requested determination has been made, and that the
claim has been allowed in full; or
     (b) that the Administrator has reached a conclusion contrary, in whole or
in part, to the Claimant’s requested determination, and such notice must set
forth in a manner calculated to be understood by the Claimant:

  (i)   the specific reason(s) for the denial of the claim, or any part of it;  
  (ii)   specific reference(s) to pertinent provisions of the Plan upon which
such denial was based;     (iii)   a description of any additional material or
information necessary for the Claimant to perfect the claim, and an explanation
of why such material or information is necessary; and     (iv)   an explanation
of the claim review procedure set forth in Section 9.3 below, including a
statement that the Claimant does not have the right to bring a civil action
under Section 502(a) of ERISA following an adverse decision on review, and that
arbitration pursuant to the terms of Section 10.6 of the Plan is the Claimant’s
sole remedy following an adverse decision on review.

          The notice of denial shall be given within a reasonable time period
but no later than ninety (90) days after the claim is filed, unless special
circumstances require an extension of time for processing the claim. If such
extension is required, written notice shall be furnished to the Claimant within
ninety (90) days of the date the claim was filed stating the special
circumstances requiring an extension of time and the date by which a decision on
the claim can be expected, which shall be no more than one hundred eighty
(180) days from the date the claim was filed.
     10.3 Review of a Denied Claim. Within sixty (60) days after receiving a
notice from the Administrator that a claim has been denied, in whole or in part,
a Claimant (or the Claimant’s duly

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authorized representative) may file with the Administrator a written request for
a review of the denial of the claim. Thereafter, but not later than thirty
(30) days after the review procedure began, the Claimant (or the Claimant’s duly
authorized representative):
     (a) may review and/or copy, free of charge, pertinent documents, records
and other information relevant to the Claimant’s claim;
     (b) may submit issues, written comments or other documents, records and
information relating to the claim; and/or
     (c) may request a hearing, which the Administrator, in its sole discretion,
may grant.
     10.4 Decision on Review. The Administrator shall render its decision on
review promptly, and not later than sixty (60) days after the filing of a
written request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the Administrator’s
decision must be rendered within one hundred twenty (120) days after such date.
Such decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:
     (a) specific reasons for the decision;
     (b) specific reference(s) to the pertinent Plan provisions upon which the
decision was based;
     (c) a statement that the Claimant is entitled to receive upon request and
free of charge reasonable access to and copies of all documents, records and
other information relevant to the Claimant’s claim for benefits;
     (d) a statement that the Claimant does not have the right to bring a civil
action under Section 502(a) of ERISA following an adverse decision on review,
and that arbitration pursuant to the terms of Section 10.6 of the Plan is the
Claimant’s sole remedy; and
     (e) such other matters as the Administrator deems relevant.
     10.5 Designation. The Administrator may designate any other person of its
choosing to make any determination otherwise required under this Article 10.
     10.6 Arbitration.
     (a) A Claimant whose appeal has been denied under Section 10.4 shall have
the right as his or her sole remedy to submit said claim to final and binding
arbitration before a single arbitrator in San Diego, California, pursuant to the
rules of the American Arbitration Association. Any such requests for arbitration
must be filed by written demand to the American Arbitration Association within
sixty (60) days after receipt of the decision regarding the appeal. The
arbitrator’s decision shall be final and binding upon the parties, and may be
entered and enforced in any court of competent jurisdiction by either of the
parties; provided, however, that the arbitrator shall not have any power to
alter, amend, modify or change any of the terms of this Plan nor to grant any
remedy which is either prohibited by the terms of this Plan or not available in
a court of law. The arbitrator shall have the power to grant temporary,
preliminary and permanent relief, including without limitation, injunctive
relief and specific performance.

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     (b) The Company will pay the direct costs and expenses of the arbitration.
The Claimant and the Company are responsible for their respective attorneys’
fees incurred in connection with the arbitration; however, to the extent
permitted by law, the arbitrator may, in his or her discretion, award reasonable
attorneys’ fees to the prevailing party.
ARTICLE 11
TRUST
     11.1 Establishment of the Trust. The Company shall establish the Trust. All
benefits payable under this Plan to a Participant shall be paid directly by the
Employer(s) from the Trust. To the extent that such benefits are not paid from
the Trust, the benefits shall be paid from the general assets of the
Employer(s). The Trust, if any, shall be an irrevocable grantor trust which
conforms to the terms of the model trust as described in IRS Revenue Procedure
92 64, I.R.B. 1992 33. The assets of the Trust are subject to the claims of each
Employer’s creditors in the event of its insolvency. Except as provided under
the Trust agreement, neither the Company nor an Employer shall be obligated to
set aside, earmark or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and/or his or her designated
Beneficiaries shall not have any property interest in any specific assets of the
Company or an Employer other than the unsecured right to receive payments from
the Employer, as provided in this Plan.
     11.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan shall govern the rights of a Participant to receive distributions pursuant
to the Plan. The provisions of the Trust shall govern the rights of the
Employers, Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain liable to
carry out its obligations under the Plan.
     11.3 Investment of Trust Assets. The Trustee of the Trust shall be
authorized, upon written instructions received from the Administrator or
investment manager appointed by the Administrator, to invest and reinvest the
assets of the Trust in accordance with the applicable Trust Agreement, including
the disposition of Stock and reinvestment of the proceeds in one or more
investment vehicles designated by the Administrator.
     11.4 Distributions From the Trust. Each Employer’s obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer’s obligations under
this Plan.
ARTICLE 12
PROVISIONS RELATING TO SECURITIES LAWS
     12.1 Designation of Participants. With respect to any Employee or
Non-Employee Director who is then subject to Section 16 of the Exchange Act,
only the Committee may designate such Employee or Non-Employee Director as a
Participant in the Plan.
     12.2 Action by Committee. With respect to any Participant who is then
subject to Section 16 of the Exchange Act, any function of the Administrator
under the Plan relating to such Participant shall be performed solely by the
Committee, if and to the extent required to ensure the availability of an
exemption under Section 16 of the Exchange Act for any transaction relating to
such Participant under the Plan.
     12.3 Compliance with Section 16. Notwithstanding any other provision of the
Plan or any rule, instruction, election form or other form, the Plan and any
such rule, instruction or form shall be

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subject to any additional conditions or limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b 3) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, such provision, rule, instruction or
form shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.
ARTICLE 13
MISCELLANEOUS
     13.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that “is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan
shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
     13.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of any Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer’s assets shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.
     13.3 Employer’s Liability. An Employer’s liability for the payment of
benefits shall be defined only by the Plan and the Election Form(s), as entered
into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Election Form(s).
     13.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable
and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in the
event of a Participant’s or any other person’s bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise. The
benefits which a Participant may accrue under this Plan are not subject to the
terms of any Qualified Domestic Relations Order (as that term is defined in
Section 414(p) of the Code) with respect to any Participant, and the
Administrator, the Board, the Committee, the Company and any Employer shall not
be required to comply with the terms of such order in connection with this Plan.
Notwithstanding the foregoing, the withholding of taxes from Plan payments, the
recovery of Plan overpayments of benefits made to a Participant or Beneficiary,
the transfer of Plan benefit rights from the Plan to another plan, or the direct
deposit of Plan payments to an account in a financial institution (if not
actually a part of an arrangement constituting an assignment or alienation)
shall not be construed as an assignment or alienation under this Section 13.4
and shall be permitted under the Plan.
     13.5 Tax Withholding.
     (a) Annual Deferral Amounts. For each Plan Year in which an Annual Deferral
Amount is being withheld from a Participant, the Participant’s Employer(s) shall
be entitled to require payment by the Participant of any sums required by
federal, state or local tax law to be

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withheld with respect to the deferral, in amounts and in a manner to be
determined in the sole discretion of the Employer(s).
     (b) RSU Deferral Amounts. When an Employee Participant becomes vested in a
portion of his or her RSU Award, the Participant’s Employer(s) shall be entitled
to require payment by the Participant of the Participant’s share of FICA and
other employment taxes, and any other sums required by federal, state or local
tax law to be withheld with respect to such vesting, in amounts and in a manner
to be determined in the sole discretion of the Employer(s).
     (c) Company Matching Amounts and Company Contribution Amounts. When a
Participant becomes vested in a portion of his or her Company Matching Account
and/or Company Contribution Account, the Participant’s Employer(s) shall be
entitled to require payment by the Participant of any sums required by federal,
state or local tax law to be withheld with respect to such vesting, in amounts
and in a manner to be determined in the sole discretion of the Employer(s).
     (d) Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan
all federal, state and local income, employment and other taxes required to be
withheld by the Employer(s), or the trustee of the Trust, in connection with
such payments, in amounts and in a manner to be determined in the sole
discretion of the Employer(s) and the trustee of the Trust.
     (e) Satisfaction of Tax Obligations. The Administrator, in its sole
discretion, may allow a Participant to pay to his or her Employer(s) any amounts
required to be withheld by the Employer(s) in connection with the Plan in cash,
by deduction of such amounts from other compensation payable to the Participant,
or to have such amounts withheld from his or her deferrals, vested Account
Balance or distributions.
     13.6 Coordination with Other Benefits. The benefits provided for a
Participant and Participant’s Beneficiary under the Plan are in addition to any
other benefits available to such Participant under any other plan or program for
Employees of the Participant’s Employer(s). The Plan shall supplement and shall
not supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.
     13.7 Compliance. A Participant shall have no right to receive payment with
respect to the Participant’s Account Balance until all legal and contractual
obligations of the Employer(s) relating to establishment of the Plan and the
making of such payments shall have been complied with in full.
     13.8 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an “at will”
employment relationship that can be terminated at any time for any reason, or no
reason, with or without cause, and with or without notice, unless expressly
provided in a written employment agreement. Nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of any Employer,
either as an Employee or a Director, or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.
     13.9 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Administrator by furnishing any and all information requested
by the Administrator and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Administrator may deem necessary.

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     13.10 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of
California without regard to its conflicts of laws principles.
     13.11 Notice. Any notice or filing required or permitted to be given to the
Administrator under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
Chief Financial Officer
Neurocrine Biosciences, Inc.
12790 El Camino Real
San Diego, CA 92130
with a copy to:
Secretary
Neurocrine Biosciences, Inc.
12790 El Camino Real
San Diego, CA 92130
          Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
          Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Participant.
     13.12 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant’s Employer and its successors and assigns and the
Participant and the Participant’s designated Beneficiaries.
     13.13 Spouse’s Interest. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall automatically pass to
the Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse’s will, nor shall such interest pass
under the laws of intestate succession.
     13.14 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.
     13.15 Incompetent. If the Administrator determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person’s property,
the Administrator may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Administrator may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to
distribution of the benefit. Any payment of a benefit shall be a payment for the
account of the Participant and the Participant’s Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan for such
payment amount.
     13.16 Court Order. The Administrator is authorized to make any payments
directed by court order in any action in which the Plan or the Administrator has
been named as a party. In addition, if a

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court determines that a spouse or former spouse of a Participant has an interest
in the Participant’s benefits under the Plan in connection with a property
settlement or otherwise, the Administrator, in its sole discretion, shall have
the right, notwithstanding any election made by a Participant, to immediately
distribute the spouse’s or former spouse’s interest in the Participant’s
benefits under the Plan to that spouse or former spouse.
     13.17 Distribution of Deferrals in the Event of Taxation.
     (a) In General. If, for any reason, all or any portion of a Participant’s
benefits under this Plan becomes taxable to the Participant prior to receipt, a
Participant may petition the Administrator for a distribution of that portion of
his or her benefit that has become taxable. Upon the grant of such a petition,
which grant shall not be unreasonably withheld, a Participant’s Employer shall
distribute to the Participant immediately available funds in an amount equal to
the Federal Insurance Contributions Act (“FICA”) tax imposed under Code
Sections 3101 and 3121(v)(2) on amounts deferred under the Plan (the “FICA
Amount”) as well as income tax at source on wages imposed under Code Section
3401 with respect to his or her benefit, as well as the additional income tax at
source on wages attributable to the pyramiding Code Section 3401 wages and taxes
(which aggregate amounts shall not exceed the lesser of (i) a Participant’s
unpaid Account Balance under the Plan or (ii) the aggregate amount required to
satisfy the tax liability. If the petition is granted, the tax liability
distribution shall be made within ninety (90) days of the date when the
Participant’s petition is granted. Such a distribution shall affect and reduce
the benefits to be paid under this Plan.
     (b) Trust. If the Trust terminates in accordance with the provisions of the
Trust and benefits are distributed from the Trust to a Participant in accordance
with such provisions, the Participant’s benefits under this Plan shall be
reduced to the extent of such distributions
     13.18 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms as
the Trust may choose. The Employers or the trustee of the Trust, as the case may
be, shall be the sole owner and beneficiary of any such insurance. The
Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Employers shall submit to medical examinations and
supply such information and execute such documents as may be required by the
insurance company or companies to whom the Employers have applied for insurance.
     13.19 Scrivener’s Error. Notwithstanding any other provision of the Plan to
the contrary, if there is a scrivener’s error in properly transcribing this
Plan, it shall not be a violation of the Plan terms to operate the Plan in
accordance with its proper provisions, rather than in accordance with the terms
of the Plan, pending correction of the Plan through Plan amendment. In addition,
any provisions of the Plan improperly added as a result of scrivener’s error
shall be considered null and void as of the date such error occurred.
     13.20 Compliance With Section 409A. With respect to Post-409A Deferrals,
this Plan is intended to comply with the requirements of Section 409A. With
respect to Post-409A Deferrals, the Plan Committee shall interpret the Plan
provisions in a manner consistent with the requirements of Section 409A. To the
extent one or more provisions of this Plan do not comply with Section 409A, such
provision shall be automatically and immediately voided, and shall be amended as
soon as administratively feasible and shall be administered to so comply.
     13.21 Disclaimer. It is the parties intention that this arrangement comply
with the provisions of Section 409A. Notwithstanding the foregoing or anything
else to the contrary in the Plan, the Company

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shall have no liability to any Participant should any provision of the Plan fail
to satisfy the requirements of Section 409A.
          IN WITNESS WHEREOF, the Company has signed this amended and restated
Plan document as of October 24, 2007.

            Neurocrine Biosciences, Inc., a Delaware corporation
      By:   /s/ Timothy P. Coughlin               Title:   Vice President and
Chief Financial Officer
   

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Appendix A
Disability Claims Procedures
The following claim procedures shall apply only for Disability benefits payable
under the Plan. An Authorized Representative may act on a Participant’s or a
beneficiary’s behalf in pursuing a benefit claim or appeal of an Adverse Benefit
Determination.
     1. Definitions. For purposes of these claims procedures, the following
definitions shall apply:
          A. “Adverse Benefit Determination” means any of the following:
               (i) a denial, reduction, or termination of a benefit by the Plan,
or a failure of the Plan to provide or make payment (in whole or in part) for a
benefit; and
               (ii) a denial, reduction, or termination of a benefit by the
Plan, or a failure of the Plan to provide or make payment (in whole or in part)
for a benefit resulting from the application of any utilization review.
          B. “Authorized Representative” means an individual who is authorized
to represent a Participant or beneficiary with respect to any claims or appeals
filed pursuant to these procedures. Whether an individual is an Authorized
Representative will be determined by the Administrator in accordance with
reasonable procedures established by the Plan.
          C. “Claimant” means a Participant or beneficiary who has submitted a
claim for benefits in accordance with these claims procedures.
          D. “Health Care Professional” means a physician or other health care
professional who is licensed, accredited, or certified to perform specified
health services consistent with applicable state law.
          E. “Relevant Records” means any document, record, or other information
that:
               (i) the Administrator relied upon in making a benefit
determination for the Claimant’s claim;
               (ii) was submitted, considered, or generated in the course of
making the benefit determination for a claim, without regard to whether such
document, record, or other information was relied upon in making the benefit
determination;
               (iii) demonstrates compliance with the administrative processes
and safeguards required pursuant to Department of Labor Regulations in making
the benefit determination for a claim; or

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               (iv) constitutes a statement of policy or guidance with respect
to the Plan concerning the denied treatment option or benefit for a Claimant’s
diagnosis, without regard to whether such advice or statement was relied upon in
making the benefit determination.
     2. Claims Procedure- Disability Claims. In the case of a Disability claim,
the Administrator will notify the Claimant of the Plan’s Adverse Benefit
Determination within a reasonable time, but not later than forty-five (45) days
after the Plan receives the claim. The Plan may extend this period for up to
thirty (30) days, provided that the Administrator both (i) determines that such
an extension is necessary due to matters beyond the control of the Plan, and
(ii) notifies the Claimant, prior to the expiration of the initial forty-five
(45) day period, of the circumstances requiring the extension of time and the
date by which the Plan expects to make a decision.
          If, prior to the end of the first thirty (30) day extension period,
the Administrator determines that, due to matters beyond the control of the
Plan, a decision cannot be rendered within the first thirty (30) day extension
period, the period for making a determination may be extended for an additional
thirty (30) days. Such additional extension is permitted only if (i) the
Administrator notifies the Claimant, prior to the end of the first thirty
(30) day extension, of the circumstances requiring the second thirty (30) day
extension and (ii) the Administrator notifies the Claimant of the date the Plan
expects to render the decision.
          Any notice of extension will explain the standards on which the
Claimant’s entitlement to a benefit is based, the unresolved issues that prevent
a decision on the claim, and the additional information needed to resolve these
issues. A Claimant will be given at least forty-five (45) days to provide the
requested information.
     3. Calculating Time Periods For Claims Procedure. The time within which a
benefit determination is required to be made will begin at the time a claim is
filed in accordance with these procedures, without regard to whether all the
information necessary to make a benefit determination accompanies the filing. In
the event that the time within which a benefit determination is required to be
made is extended due to the Claimant’s failure to submit information necessary
to decide a claim, the period for making the benefit determination will be
suspended from the date on which the Administrator sends the notification of
extension to the Claimant until the date on which the Claimant responds to the
request for additional information.
     4. Notice of Benefit Determination. The Administrator will provide the
Claimant with written or electronic notification of any Adverse Benefit
Determination. If the notice of an Adverse Benefit Determination is provided
electronically, such notice will comply with the standards imposed by the
Department of Labor Regulations.
          Any notice of Adverse Benefit Determination will set forth, in a
manner calculated to be understood by the Claimant:
          A. the specific reason or reasons for the Adverse Benefit
Determination;
          B. references to the specific Plan provisions on which the Adverse
Benefit Determination is based;
          C. 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;

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          D. a description of the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring a civil action under Section 502(a) of ERISA following an Adverse Benefit
Determination on review; and
          E. if an internal rule, guideline, protocol, or other similar
criterion was relied upon in making the Adverse Benefit Determination, either
(i) the specific rule, guideline, protocol, or other similar criterion, or
(ii) a statement that such a rule, guideline, protocol, or other similar
criterion was relied upon in making the Adverse Benefit Determination and that a
copy of such rule, guideline, protocol, or other criterion will be provided free
of charge to the Claimant upon request.
     5. Review Procedure. If the Claimant receives an Adverse Benefit
Determination, the Claimant may appeal the Adverse Benefit Determination within
one hundred eighty (180) days after the Claimant’s receipt of the notice of
Adverse Benefit Determination. The Claimant must make any appeal in writing. The
appeal must be addressed to the Review Panel of the Administrator.
          During the one hundred eighty (180) day period, the Claimant may:
          A. submit written comments, documents, records, and other information
relating to the claim for benefits; and
          B. request and receive, free of charge, reasonable access to, and
copies of, all Relevant Records.
          The Review Panel shall consist of one or more individuals who are
neither the individuals who made the initial Adverse Benefit Determination, nor
the subordinate of any of such individuals. The review of the Claimant’s appeal
will not give deference to the initial Adverse Benefit Determination. The review
will take into account all comments, documents, records, and other information
that the Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.
          In deciding the appeal of an Adverse Benefit Determination that is
based in whole or in part on a medical judgment, the Review Panel will consult
with a health care professional who has appropriate training and experience in
the field of medicine involved in the medical judgment. Such health care
professional must be an individual who is neither the individual who was
consulted in connection with the initial Adverse Benefit Determination, nor the
subordinate of such individual.
          The Review Panel will provide the Claimant with the identification of
medical or vocational experts whose advice was obtained on behalf of the Plan in
connection with the Claimant’s Adverse Benefit Determination, without regard to
whether the advice was relied upon in making the benefit determination.
     6. Timing of Notice of Benefit Determination on Review. In the case of a
Disability claim, the Administrator will notify the Claimant of the Plan’s
benefit determination on review within a reasonable period, but not later than
forty-five (45) days after the Plan receives the Claimant’s request for review
of an Adverse Benefit Determination. The Administrator may extend this period
for up to an additional forty-five (45) days if the Administrator determines
that special circumstances exist, such as the need to hold a hearing.
          If the Administrator determines that an extension is required, the
Administrator will provide the Claimant written notice of the extension before
the end of the initial forty-five (45) day

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period. The extension notice will describe the special circumstances requiring
the extension and the date by which the Plan expects to make a decision on the
Claimant’s appeal.
     7. Calculating Time Periods for Review Procedure. The period of time within
which a benefit determination on review is required to be made shall begin at
the time an appeal is filed in accordance with Section 5 of these claims
procedures, without regard to whether all the information necessary to make a
benefit determination on review accompanies the filing.
     8. Notice of Benefit Determination on Review. The Administrator will
provide the Claimant with written or electronic notification of the Plan’s
benefit determination on review. Any electronic notification shall comply with
the Department of Labor Regulations.
          In the case of an Adverse Benefit Determination, the notification will
set forth, in a manner calculated to be understood by the Claimant:
          A. the specific reason or reasons for the Adverse Benefit
Determination;
          B. reference to the specific Plan provisions on which the benefit
determination is based;
          C. a statement that the Claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all Relevant Records;
          D. a statement of the Claimant’s right to bring an action under
Section 502(a) of ERISA;
          E. if an internal rule, guideline, protocol, or other similar
criterion was relied upon in making the Adverse Benefit Determination, either
the specific rule, guideline, protocol, or other similar criterion, or a
statement that such rule, guideline, protocol, or other similar criterion was
relied upon in making the Adverse Benefit Determination and that a copy of the
rule, guideline, protocol, or other similar criterion will be provided free of
charge to the Claimant upon request; and
          F. the following statement: “You and your plan may have other
voluntary alternative dispute resolution options, such as mediation. One way to
find out what may be available is to contact the local U.S. Department of Labor
Office and your State insurance regulatory agency.”
     9. Administration. The Administrator will establish rules and procedures,
consistent with the Plan and with ERISA, as necessary and appropriate in
carrying out its responsibilities in reviewing benefit claims. The Administrator
may require an applicant who wishes to submit additional information in
connection with an appeal from the denial of benefits to do so at the
applicant’s own expense.
     10. Exhaustion of Remedies. No legal action for benefits under the Plan may
be brought until the Claimant (i) has submitted a written application for
benefits in accordance with the procedures described above, (ii) has been
notified by the Administrator that the application is denied, (iii) has filed a
written request for a review of the application in accordance with the appeal
procedure described above, and (iv) has been notified in writing that the
Administrator has denied the appeal.

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