**Exhibit10.13**

 

**NONQUALIFIEDDEFERRED COMPENSATION PLAN**

 

**ADOPTIONAGREEMENT**

 

The Employer named below hereby establishes a Nonqualified DeferredCompensation Plan for Eligible Employees as provided in this Adoption Agreementand the Basic Plan Document.

 

**I****                                            EmployerInformation**

 
| (a)    |   | Name and Address of Employer  sponsoring the Plan: |
|--------|--------|--------------------------------------------------------------|
|   |   |                                                         |
|   |   |  SI International, Inc.                                 |
|   |   |  12012 Sunset Hills Road, Suite 800                     |
|   |   |  Reston, VA 20190-5869                                  |
|   |   |                                                         |   |   |
| (b)    |   | Telephone Number:                                       |   | (703) 234-7003 |
|   |   |                                                         |   |   |
| (c)    |   | Tax ID Number:                                     |   | 52-2127278 |
|   |   |                                                         |   |   |
| (d)    |   | Name of Plan:                                                |   | SI International Deferred Compensation Plan |
|   |   |                                                         |   |   |
| (e)    |   | Tax Year End:                                                |   | 12/31 |

 

**II****                                        Definitions**

 

(a)                                  Compensation:  Compensation under the Plan is defined as *(select one or more):*

 

ý                                    The Participant’sgross income paid by the Employer during the Taxable Year as reportable onInternal Revenue Service Form W-2, plus amounts excludible from gross incomewhich are contributed by the Participant on a pre-tax basis to a salaryreduction retirement or welfare plan (including amounts contributed to thisPlan), but excluding commissions, bonuses or other amounts not part of his orher regular salary.

 

ý                                    Cash bonuses orother amounts which are not part of a Participant’s regular salary.

 

ý                                    Commissions.

 

(b)                                 Disability(select one):

 

o                                    A physical ormental condition which prevents an Employee from satisfactorily performing, forat least twelve (12) consecutive months, his usual duties for the Employer orthe duties of such other position or job

 

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which the Employer makes available to him andfor which such Employee is qualified by reason of his training, education orexperience.

 

ý                                    A condition whichqualifies the Participant for total permanent disability benefits under his orher Employer’s long-term disability plan, regardless of whether the Participantis actually covered under such plan, as determined in the sole discretion ofthe Plan Administrator.  If theParticipant’s Employer does not sponsor such a plan, or discontinues to sponsorsuch a plan, Disability shall be determined by the Plan Administrator in itssole discretion.

 

(c)                                  EffectiveDate *(select one)*:

 

ý                                    This is a new Planand the Effective Date will be Effective as of the date this Adoption Agreementis signed, provided that the initial deferral elections shall be effective as ofJanuary 1, 2004.

 

o                                    This is an amendedPlan and the Effective Date will be 

 

**III****                                    Eligibility. **An employee shall be an Eligible Employeeas follows *(select one or more)*:

 
| (a)    |   | ý |   | If he or she is designated as an Eligible  Employee by the Chief Executive Officer and provided that the Plan continues  to constitute a plan for a select group of management or highly compensated  employees. |
|--------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                             |
| (b)    |   | ý |   | If he or she occupies one of the following  positions:                                                                                                                                                           |
|   |   |   |   | Director and above                                                                                                                                                                                               |
|   |   |   |   |                                                                                                                                                                                                             |
| (c)    |   | o      |   | If his or her Compensation for a Taxable  Year is expected to be greater than $                                        |

 

**IV****                                   EmployeeCompensation Deferrals *(select one or more):***

 
| (a)    |   | ý |   | Up to 100% of a Participant’s available  Compensation provided that the Participant shall have made the maximum annual  pre-tax contribution permitted under the Employer’s tax qualified retirement  plan. Available compensation for this purpose shall be determined after all  applicable payroll deductions and withholding requirements. |
|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                                                                                                                                                                     |
| (b)    |   | o      |   | A Participant’s Compensation Deferrals with  respect to a Taxable Year shall be limited to a maximum of $                                                                                                                                                      |

 

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| (c)    |   | o      |   | A dollar amount specified by a Participant  from a minimum of $              to  a maximum of $             with  respect to each Taxable Year.       |
|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                                                                                                         |
| (d)    |   | o      |   | A percentage of Compensation specified by a  Participant from a minimum percentage of              %  to a maximum percentage of              %. |

 

**V****                                       EmployerMatching Credits**

 

(a)                                  TheEmployer’s Matching Credit shall be determined in accordance with one or moreof the following methods *(select one or more)*:

 

o                                    The Employer shallcredit to the Account of each Participant              %of such Participant’s Compensation Deferrals. Employer Matching Credits shall be made based on Compensation Deferralsmade each *(select one)*:

 

o                                    Pay period

o                                    Taxable Year

o                                    Other *(specify)*:              

 

o                                    The Employer shallcredit to the Account of each Participant              %of the first              %of such Participant’s Compensation Deferrals, plus              %of the next              %of such Participant’s Compensation Deferrals, plus              %of the next              %of such Participant’s Compensation Deferrals. Employer Matching Credits shallbe made based on Compensation Deferrals made each *(select one)*:

 

o                                    Pay period

o                                    Taxable Year

o                                    Other *(specify*):              

 

ý                                    An amountdetermined at the discretion of the Employer.

 

o                                    Pay period

ý                                    Taxable Year

o                                    Other *(specify*):              

 

(b)                                 Limitationson Employer Matching Credits *(select one or more):*

 

o                                    The EmployerMatching Credit shall not exceed $              forany Participant.

o                                    The Employer shallnot provide an Employer Matching Credit for any Compensation Deferral in excessof              %of the Participant’s Compensation.

 

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(c)                                  Eligibilityfor Employer Matching Credit *(select one or more):*

 

o                                    All Participantswho have completed at least              hoursof employment during the Taxable Year.

 

o                                    All Participantsemployed on the last day of a Taxable Year.

 

o                                    All Participantswho satisfy the following conditions:

 

 

 

 

ý                                    No eligibilityconditions.  All Participants who makeCompensation Deferrals are eligible.

 

**VI****                                   EmployerDiscretionary Credits**

 

(a)                                  Amount of EmployerDiscretionary Credit *(select one or more):*

 

ý                                    An amount determinedat the discretion of the Employer, which need not be uniform as toParticipants.

 

o                                    An amountdetermined by the following formula:

 

 

 

 

(b)                                 Eligibility forEmployer Discretionary Credit*(select one or more*):

 

o                                    All Participantswho have completed at least              hoursof employment during the Taxable Year.

 

o                                    All Participantsemployed on the last day of a Taxable Year.

 

o                                    All Participantswho are employees of the Employer during the Taxable Year and who satisfy thefollowing conditions:

 

 

 

 

ý                                    No eligibilityconditions.  All Participants who areemployees of the Employer during the Taxable Year are eligible.

 

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**VII****                               Vestingand Forfeitures *(select one or more)*:**

 

o                                    AParticipant’s entire Account shall be 100% vested at all times.

 

ý                                    The Participantshall at all times be one hundred percent (100%) vested in his or herCompensation Deferrals, as well as in any hypothetical appreciation (ordepreciation) specifically attributable to such Compensation Deferrals due toInvestment Credits and Debits.  TheParticipant shall vest in Employer Matching Credits and/or EmployerDiscretionary Credits, as well as in any hypothetical appreciation (ordepreciation) specifically attributable to such amounts due to InvestmentCredits and Debits, pursuant to the vesting schedule shown below.  The Chief Executive Officer will have theright to accelerate vesting for individual participants (other than aparticipants who are executive officers) on a non-uniform basis .  The vesting schedule set forth belowwill apply to each Employer Matching Credit and/or Employer DiscretionaryCredit on an individual basis (i.e. each credit will be subject to thefollowing vesting schedule).

 
| **Years of Service** | ** ** | **Vesting Percentage** | ** ** |
|----------------------|------------|------------------------|------------|
| 0-3                  |       | 0                      | %          |
| 3 and above          |       | 100                    | %          |
|                 |       |                   | %          |
|                 |       |                   | %          |
|                 |       |                   | %          |

 

For purposes of the above schedule, aParticipant shall earn a Year of Service as follows:

A Participant shall earn a year of servicefor each twelve months of employment. 

 

 

 

 

ý                                    Class YearVesting.  Any amount credited to aParticipant’s Account during a Taxable Year shall vest separately from amountscredited In prior Taxable Years and shall be subject to the full vesting schedule describedabove as measured by years of service earned commencing with the Taxable Yearfor which any amount is credited to the Participant’s Account.

 

o                                    The vesting schedule describedabove shall apply separately with respect to any amounts credited to aParticipant’s Account during a given Taxable Year.

 

ý                                    A Participant’sentire Account shall become 100% vested upon:

 

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ý                                    The Participant’sDeath

 

ý                                    The Participant’sDisability

 

ý                                    The Participant’sattainment of age 60

 

ý                                    A Change of Control

 

o                                    The Participant’sinvoluntary Termination of Employment Without Good Cause.

 

o                                    A Participant whois otherwise vested in accordance with this Section VII shall neverthelessforfeit his or her vested Account (other than Compensation Deferrals) under thefollowing circumstances *(please specify)*:

 

 

 

 

o                                    Any forfeituresunder the Plan shall be credited to the Account of each Participant other thanthe Participant whose Account generated the forfeiture in the same proportionthat each such Participant’s Account as of the end of the Taxable Year in whichthe forfeiture occurred bears to the Accounts of all such Participants as ofthe same date.

 

**VIII****                           Changeof Control *(select one)*:**

 

o                                    Change of Controlshall mean the earliest to occur of the following events:

 

(a)                                  Theconsummation of any transaction or series of transactions as a result of whichany “Person” (as the term person is used for purposes of Section 13(d) or14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))other than an “Excluded Person” (as hereinafter defined) has or obtainsownership or control, directly or indirectly, of fifty percent (50%) or more ofthe combined voting power of all securities of the Employer or any successor orsurviving corporation of any merger, consolidation or reorganization involvingthe Employer (the “Voting Securities”). The term “Excluded Person” means any one or more of the following:  (i) the Employer or any majority-ownedsubsidiary of the Employer, (ii) an employee benefit plan (or a trust forming apart thereof) maintained by (A) the Employer or (B) any majority-ownedsubsidiary of the Employer, (iii) any Person who as of the Effective Date ofthis Plan owned or controlled, directly or indirectly, ten percent (10%) ormore of the then outstanding Voting Securities, or any individual, entity orgroup that was part of such a Person;

 

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(b)                                 Amerger, consolidation or reorganization involving the Employer as a result ofwhich the holders of Voting Securities immediately before such merger,consolidation or reorganization do not immediately following such merger,consolidation or reorganization own or control, directly or indirectly, at leastfifty percent (50%) of the Voting Securities in substantially the sameproportion as their ownership or control of the Voting Securities immediatelybefore such merger, consolidation or reorganization;

 

(c)                                  Thesale or other disposition of all or substantially all of the assets of theEmployer to any Person (other than a transfer to a majority-owned subsidiary ofthe Employer); or

 

(d)                                 duringany period of two consecutive years or less, individuals who at the beginningof such period constitute the Board of Directors of the Employer cease, for anyreason, to constitute at least a majority of the Board of Directors, unless theelection or nomination for election of each person who was not a director atthe beginning of such period was approved by vote of at least two-thirds of thedirectors then in office who were directors at the beginning of such period orwho were directors previously so approved.

 

ý                                    Changeof Control shall mean the following:

 

## **A “Change of Control” shall be deemed to occur if (i) there shallbe consummated (x) any consolidation or merger of SI International, Inc. (the “Company”)in which the Company is not the continuing or surviving corporation or pursuantto which shares of the Company’s Common Stock would be converted into cash,securities or other property, other than a merger of the Company in which theholders of the Company’s Common Stock immediately prior to the merger hold morethan fifty percent (50%) of the voting power of the surviving corporationimmediately after the merger, or (y) any sale, lease, exchange or othertransfer (in one transaction or a series of related transactions) of all, orsubstantially all, of the assets of the Company, or (ii) the stockholders ofthe Company shall approve any plan or proposal for liquidation or dissolutionof the Company, or (iii) any person (as such term is used in Section 13(d)and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)) who, on the effective date of the Plan, does not own five percent (5%)or more of the Company’s outstanding Common Stock on a fully-diluted basis (a “5%Owner”) and is not controlling, controlled by or under common control with anysuch 5% Owner, shall become the beneficial owner (within the meaning of Rule13d-3 under the Exchange Act) of fifty percent (50%) or more of the Company’soutstanding Common Stock other than pursuant to a plan or arrangement enteredinto by such person and**

 

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the Company, or (iv) within any twenty-four(24) month period, the following individuals cease for any reason to constitutea majority of the number of directors then serving on the Board: individualswho, on the effective date of the Plan, constitute the Board and any newdirector (other than a director whose initial assumption of office is in connectionwith an actual or threatened election contest, including but not limited to aconsent solicitation relating to the election of directors of the Company)whose appointment or election by the Board or nomination for election by theCompany’s shareholders was approved or recommended by a vote of at leasttwo-thirds (2/3) of the directors then still in office who either weredirectors on the date hereof or whose appointment, election or nomination forelection was previously so approved or recommended.

 

ý                                    A Change of Controlshall constitute a Distributable Event within the meaning of paragraph 1.10 ofthe Basic Plan Document.

 

**IX****                                   SpecialDistribution Rules for Certain Officers**

 

Notwithstanding any other distributionprovisions of the Basic Plan, in the event of a Participant who is “coveredemployee”(1) within the meaning of Section 162(m) of the Internal RevenueCode of 1986 (or any successor provision), unless the Plan Administratordetermines otherwise, no distribution will be made prior to the first day ofthe Employer’s taxable year for which such Participant would not constitute a “coveredemployee.”

 

**IX****                                   Signatures**

 

**This Nonqualified Deferred Compensation Plan,including this Adoption Agreement, has been designed to permit Participants todefer Federal and state income tax on amounts credited to their Accounts untila later Taxable Year.  The Employeradopting this Plan should consult with tax counsel regarding the consequencesof adopting this Plan to both the Employer and Employees.  Advice should also be sought on theadvisability of submitting this document to the Internal Revenue Service toobtain a Private Letter Ruling. Registration of interests under this Nonqualified Deferred CompensationPlan may be required under securities law. Independent legal counsel should be consulted with respect to securitieslaw issues.  By executing this AdoptionAgreement, the Employer acknowledges that no representations or warranties asto the tax or securities law consequences to the Employer and Participants ofthe operation of**

 

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(1) As of the effective date of the Plan, Section 162(m)(3)provides that a covered employee is any employee who “as of the close of thetaxable year, such employee is the chief executive officer of the taxpayer oris an individual acting in such capacity, or the total compensation of suchemployee for the taxable year is required to be reported to shareholders underthe Securities Exchange Act of 1934, by reason of such employee being among the4 highest compensated officers for the taxable year (other than the chiefexecutive officer).” 

 

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**this Plan have been made by the entity whohas provided this Plan document and Adoption Agreement.**

 

 

The Plan and this accompanying AdoptionAgreement were adopted by the Employer the 16th day****of December, 2003.

 

 
| Executed for the Employer by:  | THOMAS E. DUNN     |
|--------------------------------|--------------------|
|                           |               |
| Title of Individual: | CFO                |
|                           |               |
| Signature:                     | /s/ THOMAS E. DUNN |   |

 

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# **EXHIBIT A**

 

## **ADDITIONAL ADOPTING EMPLOYERS**

 

In accordance with paragraph 1.13 of the Basic Plan Document, theEmployer has consented to allow the following entities to participate in thePlan:

 

1.

 

2.

 

3.

 

4.

 

5.

 

6.

 

7.

 

8.

 

9.

 

10.

 

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# **NONQUALIFIED DEFERRED COMPENSATION PLAN**

 

 

# **BASIC PLAN DOCUMENT**

 

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December 2003

 

## **TABLE OF CONTENTS**

 
| **PARAGRAPH**                          |   |                                                   |
|----------------------------------------|--------|--------------------------------------------------------|
|                                   |   |
| PREAMBLE                               |   |
|                                   |   |
| **ARTICLE I**                     |   |
| **DEFINITIONS**                        |   |
|                                   |   |                                                   |   |
|                                   | 1.1    | Account                                                |   |
|                                   | 1.2    | Adoption Agreement                                |   |
|                                   | 1.3    | Beneficiary                                            |   |
|                                   | 1.4    | Change Of Control                            |   |
|                                   | 1.5    | Code                                                   |   |
|                                   | 1.6    | Compensation                                           |   |
|                                   | 1.7    | Compensation Deferrals                                 |   |
|                                   | 1.8    | Compensation Deferral Agreement                        |   |
|                                   | 1.9    | Disability                                             |   |
|                                   | 1.10   | Distributable Event                                    |   |
|                                   | 1.11   | Effective Date                                         |   |
|                                   | 1.12   | Eligible Employee                                      |   |
|                                   | 1.13   | Employer                                               |   |
|                                   | 1.14   | ERISA                                                  |   |
|                                   | 1.15   | Interim Distribution Date                              |   |
|                                   | 1.16   | Investment Credits and Debits                          |   |
|                                   | 1.17   | Investment Preferences                                 |   |
|                                   | 1.18   | Nonqualified Deferred Compensation Plan |   |
|                                   | 1.19   | Participant                                            |   |
|                                   | 1.20   | Plan                                                   |   |
|                                   | 1.21   | Plan Administrator                                     |   |
|                                   | 1.22   | Spouse                                                 |   |
|                                   | 1.23   | Taxable Year                                           |   |
|                                   | 1.24   | Termination of Employment                              |   |
|                                   | 1.25   | Trust                                                  |   |
|                                   | 1.26   | Trustee                                                |   |
|                                   | 1.27   | Valuation Date                                         |   |
|                                   |   |                                                   |   |
| **ARTICLE II**                    |   |
| **ELIGIBILITY AND PARTICIPATION** |   |
|                                   |   |                                                   |   |
|                                   | 2.1    | Eligibility                                            |   |
|                                   | 2.2    | Participation                                          |   |

 

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|                                 | 2.3    | Compensation Deferral Agreement                         |   |
|--------------------------------------|--------|--------------------------------------------------------------|--------|
|                                 | 2.4    | Employer Matching Credits and Employer Discretionary Credits |   |
|                                 | 2.5    | Establishing a Reserve for Plan Liabilities                  |   |
|                                 |   |                                                         |   |
| **ARTICLE III**                 |   |
| **PARTICIPANT ACCOUNTS AND REPORTS** |   |
|                                 |   |                                                         |   |
|                                 | 3.1    | Establishment Of Accounts                          |   |
|                                 | 3.2    | Account Maintenance                                     |   |
|                                 | 3.3    | Investment Credits and Debits                                |   |
|                                 | 3.4    | Participant Statements                                  |   |
|                                 |   |                                                         |   |
| **ARTICLE IV**                  |   |
| **WITHHOLDING OF TAXES**             |   |
|                                 |   |                                                         |   |
|                                 | 4.1    | Annual Withholding From Compensation                         |   |
|                                 | 4.2    | Withholding From Benefit Distributions                       |   |
|                                 |   |                                                         |   |
| **ARTICLE V**                   |   |
| **VESTING**                          |   |
|                                 |   |                                                         |   |
|                                 | 5.1    | Vesting                                                      |   |
|                                 |   |                                                         |   |
| **ARTICLE VI**                  |   |
| **PAYMENTS**                         |   |
|                                 |   |                                                         |   |
|                                 | 6.1    | Benefits                                                     |   |
|                                 | 6.2    | Form of Payment                                              |   |
|                                 | 6.3    | Death Benefit                                                |   |
|                                 | 6.4    | Unforeseeable Emergencies                                    |   |
|                                 | 6.5    | Election to Receive Vested Account                           |   |
|                                 | 6.6    | Election to Receive Interim Distributions                    |   |
|                                 | 6.7    | Beneficiary Designation                                      |   |
|                                 | 6.8    | Claims Procedure                                             |   |
|                                 |   |                                                         |   |
| **ARTICLE VII**                 |   |
| **SUSPENSION OF DEFERRALS**          |   |
|                                 |   |                                                         |   |
|                                 | 7.1    | Unforeseeable Emergencies                                    |   |
|                                 | 7.2    | Suspension of Deferrals for Other Reasons                    |   |

 

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| **ARTICLE VIII**         |   |
|-------------------------------|--------|
| **PLAN ADMINISTRATION**       |   |
|                          |   |   |   |
|                          | 8.1    | Appointment |   |
|                          | 8.2    | Duties Of Plan Administrator |   |
|                          | 8.3    | Employer |   |
|                          | 8.4    | Administrative Fees And Expenses |   |
|                          | 8.5    | Plan Administration And Interpretation |   |
|                          | 8.6    | Powers, Duties, Procedures |   |
|                          | 8.7    | Information |   |
|                          | 8.8    | Indemnification Of Plan Administrator |   |
|                          | 8.9    | Plan Administration Following a Change of  Control |   |
|                          |   |   |   |
| **ARTICLE IX**           |   |
| **TRUST  FUND**               |   |
|                          |   |   |   |
|                          | 9.1    | Trust |   |
|                          | 9.2    | Unfunded Plan |   |
|                          | 9.3    | Assignment And Alienation |   |
|                          |   |   |   |
| **ARTICLE X**            |   |
| **AMENDMENT AND TERMINATION** |   |
|                          |   |   |   |
|                          | 10.1   | Amendment |   |
|                          | 10.2   | Termination |   |
|                          | 10.3   | Existing Rights |   |
|                          |   |   |   |
| **ARTICLE XI**           |   |
| **MISCELLANEOUS**             |   |
|                          |   |   |   |
|                          | 11.1   | Total Agreement |   |
|                          | 11.2   | Employment Rights |   |
|                          | 11.3   | Non-Assignability |   |
|                          | 11.4   | Binding Agreement |   |
|                          | 11.5   | Receipt And Release |   |
|                          | 11.6   | Furnishing Information |   |
|                          | 11.7   | Distribution In The Event of Taxation |   |
|                          | 11.8   | Insurance |   |
|                          | 11.9   | Governing Law |   |
|                          | 11.10  | Heading And Subheadings |   |

 

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### PREAMBLE

###  

The Employer, by executing the Nonqualified Deferred Compensation PlanAdoption Agreement, hereby establishes an unfunded Nonqualified DeferredCompensation Plan for a select group of management or highly compensatedemployees.  Under the terms of the Plan,Eligible Employees may elect to defer receipt of their Compensation to a laterTaxable Year.

 

Participants shall have no right, either directly or indirectly, toanticipate, sell, assign or otherwise transfer any benefit accrued under thePlan.  In addition, no Participant shallhave any interest in any Employer assets set aside as a source of funds tosatisfy its benefit obligations under the Plan. Participants shall have the status of general unsecured creditors of theEmployer and the Plan constitutes an unsecured promise by the Employer to makebenefit payments in the future.

 

The Plan is intended to be “a plan which is unfunded and is maintainedby an employer primarily for the purpose of providing deferred compensation fora select group of management or highly compensated employees” within themeaning of Sections 201(2) and 301(a)(3) of the Employee Retirement IncomeSecurity Act of 1974 (“ERISA”), and shall be interpreted and administered tothe extent possible in a manner consistent with that intent.

 

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**ARTICLE I**

 

**DEFINITIONS**

 

1.1                                 ***Account ***Thebookkeeping account established for each Participant to record his or herbenefit under the Plan.

 

1.2                                 ***Adoption Agreement ***The written instrument attached to this Basic PlanDocument by which the Employer establishes a Nonqualified Deferred CompensationPlan for Eligible Employees.

 

1.3                                 ***Beneficiary ***Anindividual, individuals, trust or other entity designated by the Participant toreceive his or her benefit in the event of the Participant’s death.  If more than one Beneficiary survives theParticipant, payments shall be made equally to all such Beneficiaries, unlessotherwise provided in the Beneficiary Designation form.  Nothing herein shall prevent the Participantfrom designating primary and contingent Beneficiaries.

 

1.4                                 ***Change Of Control ***A change in the beneficial ownership of the Employer asdefined by the Employer in the Adoption Agreement.

 

1.5                                 ***Code*** The Internal Revenue Code of 1986, as amended from time to time.  Reference to any section or subsection ofthe Code includes reference to any comparable or succeeding provisions of anylegislation which amends, supplements or replaces such section orsubsection.

 

1.6                                 ***Compensation***  Shall have the meaning elected by theEmployer in the Adoption Agreement.

 

1.7                                 ***Compensation Deferral Agreement ***The written agreement between an EligibleEmployee and the Employer to defer receipt by the Eligible Employee ofCompensation.  Such agreement shall statethe deferral amount or percentage of Compensation to be withheld from theEligible Employee’s Compensation and shall state the date on which theagreement is effective, as provided at paragraph 2.3.

 

1.8                                 ***Compensation Deferrals ***That portion of an EligibleEmployee’s Compensation which is deferred under the terms of this NonqualifiedDeferred Compensation Plan.

 

1.9                                 ***Disability***  Shall have the meaning elected by theEmployer in the Adoption Agreement.

 

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1.10                           ***Distributable Event***  The events entitling a Participant orBeneficiary to a payment of benefits under the Plan, which shall includeTermination of Employment, Death, Disability, the occurrence of an InterimDistribution Date or an Unforeseeable Emergency, the Participant’s Election ToReceive Vested Account, and Plan Termination. The Employer may specify in the Adoption Agreement whether a Change ofControl shall also constitute a Distributable Event.

 

1.11                           ***Effective Date***  The date selected in the Adoption Agreementas of which the Plan first becomes effective or is amended.

 

1.12                           ***Eligible Employee ***Any common-law employee designated by the Employer aseligible to participate in the Plan in accordance with Paragraph 2.1.  Only those individuals who are part of aselect group of management or highly compensated employees, as determined bythe Employer in its sole discretion, may be designated as Eligible Employeesunder the Plan.

 

1.13***                           Employer ***The corporation or business entityidentified in Section I of the Adoption Agreement, including any successorto all or a major portion of the Employer’s assets or business which assumesthe obligations of the Employer.  Theterm Employer shall also include, where appropriate, any entity affiliated withthe Employer which adopts the Plan with the consent of the Employer and islisted on Exhibit A attached to the Adoption Agreement.  Only the Employer identified in Section Iof the Adoption Agreement shall have the power to amend this Plan, serve as thePlan Administrator, or exercise any of the powers described in Paragraph 8.3hereof.

 

1.14                           ***ERISA***  The Employee Retirement Income Security Actof 1974, as amended. Reference to any section or subsection of ERISAincludes reference to any comparable or succeeding provisions of anylegislation which amends, supplements or replaces such section orsubsection.

 

1.15                           ***Interim Distribution Date***  Interim Distribution Date shall mean thefirst day of a Taxable Year five (5) years, seven (7) years, or ten (10) yearsfrom the effective date of a Compensation Deferral Agreement, as selected bythe Participant at the time he or she files a Compensation Deferral Agreementfor a given Taxable Year, upon which the Compensation Deferrals (as well as anyappreciation or depreciation of such amounts due to Investment Credits andDebits) attributable to a given Taxable Year shall be distributed in a lump sumpayment.

 

1.16                           ***Investment Credits and Debits***  Bookkeeping adjustments to Participants’Accounts to reflect the hypothetical interest, earnings, appreciation, lossesand depreciation that would be accrued or realized if

 

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assets equal to the value of such Accountswere invested in accordance with such Participants’ Investment Preferences.

 

1.17                           ***Investment Preferences***  Investment funds or benchmarks made availableto Participants by the Plan Administrator for purposes of valuing benefitsunder the Plan.

 

1.18                           ***Nonqualified Deferred Compensation Plan ***A plan, within the meaning of ERISA§201(2), the purpose of which is to permit a select group of management orhighly compensated employees to defer receipt of a portion of theirCompensation to a future date.

 

1.19                           ***Participant ***AnEligible Employee who is currently deferring a portion of his or herCompensation under this Plan, or an employee or former employee who is stillentitled to the payment of benefits under the Plan.

 

1.20***                           Plan***The Nonqualified Deferred Compensation Plan established by the Employer underthe terms of this Basic Plan Document and the accompanying Adoption Agreement.

 

1.21                           ***Plan Administrator***  The individual(s) or committee appointed bythe Employer (or, following a Change of Control, appointed by the individualwho, immediately prior to such Change of Control, was the Chief ExecutiveOfficer or most senior officer who is also a Participant) to administer thePlan as provided herein.  Unless theEmployer provides otherwise, the Chief Executive Officer shall serve as thePlan Administrator with respect to Participants who are not executive officersof the Employer and the Compensation Committee of the Board of Directors shallserve as Plan Administrator with respect to Participants who are ExecutiveOfficers. In no event shall any Participant be permitted to make decisionsregarding his or her benefits under this Plan.

 

1.22                           ***Spouse***  The individual to whom a Participant ismarried, or was married in the case of a deceased Participant who was marriedat the time of his or her death.

 

1.23                           ***Taxable Year ***The 12-consecutive month period beginning each January 1and ending each December 31.

 

1.24                           ***Termination Of Employment***Thevoluntary or involuntary severing of employment from the Employer or any entityaffiliated with the Employer, for any reason other than Disability or death.

 

1.25                           ***Trust ***Theagreement between the Employer and the Trustee under which assets may bedelivered by the Employer to the Trustee to offset liabilities assumed by theEmployer under the Plan.  Any assets held

 

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under the terms of the Trust shall be theexclusive property of the Employer and shall be subject to the creditor claimsof the Employer with respect to whom such Trust has been established.  Participants shall have no right, secured orunsecured, to any assets held under the terms of the Trust.

 

1.26                           ***Trustee ***Theinstitution named by the Employer in the Trust agreement and any corporationwhich succeeds the Trustee by merger or by acquisition of assets or operationof law.

 

1.27                           ***Valuation Date***  The date on which Participant Accounts underthe Plan are valued.  The Valuation Dateshall be each business day of the Taxable Year on which the national securityexchanges and, if a Trust has been established in connection with the Plan, theTrustee are open.

 

**ARTICLE II**

 

**ELIGIBILITY ANDPARTICIPATION**

 

2.1                                 ***Eligibility ***TheEmployer will designate in the Adoption Agreement those persons who shall beconsidered Eligible Employees under the Plan.

 

2.2                                 ***Participation***The Plan Administratorshall provide written notification to each Eligible Employee of his or hereligibility to participate in the Plan.

 

2.3                                 ***Compensation Deferral Agreement ***In order to defer Compensationunder the Plan for a given Taxable Year, an Eligible Employee must enter into aCompensation Deferral Agreement with the Employer authorizing the deferral ofall or part of the Participant’s Compensation for such Taxable Year.  The Compensation Deferral Agreement shallalso specify the method of payment for benefits under the Plan and, ifapplicable, an Interim Distribution Date for the Participant’s CompensationDeferrals for the period covered by the Compensation Deferral Agreement.

 

All Compensation Deferral Agreements must becompleted prior to the first day of the Taxable Year to which they relate.Notwithstanding the preceding sentence, if the Effective Date of the Plan isother than the first day of a Taxable Year, or if an employee becomes anEligible Employee on a date other than the first day of a Taxable Year, theCompensation Deferral Agreement must be completed within 30 days after theEffective Date or within 30 days of the Eligible Employee’s initial eligibilitydate.  In no event shall a Participant bepermitted to defer Compensation for a pay period which has commenced prior tothe date on which the Compensation Deferral Agreement is signed by theParticipant and accepted by the Plan Administrator.

 

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Upon receipt of a properly completed andexecuted Compensation Deferral Agreement the Plan Administrator shall notifythe Employer to commence to withhold that portion of the Participant’sCompensation specified in the Agreement. In no event will the Participant bepermitted to defer more than the amount specified by the Employer in theAdoption Agreement.

 

Except as otherwise provided herein or in Article VII,the Compensation Deferral Agreement shall remain in effect for the duration ofthe Taxable Year to which it relates.  The Employer shall have the right to terminate a Participant’sCompensation Deferral Agreement at any time upon written notice to theParticipant.  Such termination shall beeffective on the first day of the next payroll period.  In no event shall the Employer have the rightto terminate a Compensation Deferral Agreement with respect to Compensationalready deferred.

 

2.4                                 ***Employer Matching Credits and Employer DiscretionaryCredits***  The Employer mayadjust the Account of a Participant with matching or discretionary credits. The amount of the Employer’s Discretionary Credits and/or Employer’sMatching Credits and the formula(s) for allocating such credits will beselected by the Employer in the Adoption Agreement.

 

2.5                                 ***Establishing a Reserve for Plan Liabilities***  The Employer may, but is not required to,remit to a Trust an amount equal to the Participants’ Compensation Deferrals,Employer Discretionary Credits and Employer Matching Credits.  Any such assets shall be the property of theEmployer and remain subject to the claims of the Employer’s creditors, to theextent provided under any Trust established with respect to such Employer.  The Trustee shall have no duty to determinewhether the amounts forwarded by the Employer are the correct amount or thatthey have been transmitted in a timely manner.

 

**ARTICLE III**

 

**PARTICIPANT ACCOUNTS AND REPORTS**

 

3.1                                 ***Establishment Of Accounts***  The Plan Administrator shall establish andmaintain individual recordkeeping accounts on behalf of each Participant forpurposes of determining each Participant’s benefits under the Plan. AParticipant’s Account does not represent the Participant’s ownership of, or anyownership interest in, any assets which may be set aside to satisfy theEmployer’s obligations under the Plan.

 

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3.2                                 ***Account Maintenance ***As of each Valuation Date, thePlan Administrator shall credit each Participant’s Account with the following:

 

(a)                                  Anamount equal to any Compensation Deferrals made by the Participant since thelast Valuation Date,

 

(b)                                 Anamount equal to any Employer Matching Credits or Employer DiscretionaryCredits, and any forfeitures, if applicable, since the last Valuation Date, and

 

(c)                                  Anamount equal to deemed Investment Credits under Paragraph 3.3 below since thelast Valuation Date

 

As of each Valuation Date, the PlanAdministrator shall debit each Participant’s Account with the following:

 

(d)                                 Anamount equal to any distributions from the Plan to the Participant orBeneficiary since the last Valuation Date, and

 

(e)                                  Anamount equal to deemed Investment Debits under Paragraph 3.3 below since thelast Valuation Date, and

 

(f)                                    Anamount equal to any forfeitures incurred by the Participant since the lastValuation Date.

 

3.3                                 ***Investment Credits And Debits***   The Accounts of Participants shall beadjusted for Investment Credits and Debits in accordance with this Paragraph3.3.

 

Participants shall have the right to specifyone or more Investment Preferences in which their Compensation Deferrals,Employer Matching Credits and Employer Discretionary Credits shall be deemed tobe invested.  The Investment Preferencesshall be utilized solely for purposes of adjusting their Accounts in accordancewith procedures adopted by the Plan Administrator. The Plan Administrator shallprovide the Participant with a list of the available InvestmentPreferences.  From time to time, in thesole discretion of the Plan Administrator, the Investment Preferences availablewithin the Plan may be revised. All Investment Preference selections must bedenominated in whole percentages unless the Plan Administrator determines thatlower increments are acceptable.  AParticipant may make changes in the manner in which future CompensationDeferrals, Employer Matching Credits and/or Employer Discretionary Credits aredeemed to be invested among the various Investment Preferences within the Planin accordance with procedures established by the Plan Administrator.  A Participant may re-direct the manner inwhich earlier Compensation Deferrals, Employer Matching

 

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Credits and/or Employer DiscretionaryCredits, as well as any appreciation (or depreciation) to-date, are deemed tobe invested among the Investment Preferences available in the Plan inaccordance with procedures established by the Plan Administrator.

 

As of each Valuation Date, the PlanAdministrator shall adjust the Account of each Participant for interest,earnings or appreciation (less losses and depreciation) with respect to thethen balance of the Participant’s Account equal to the actual results of theParticipant’s deemed Investment Preference elections.

 

All notionalacquisitions and dispositions of Investment Preferences which occur within aParticipant’s Account, pursuant to the terms of the Plan, shall be deemed tooccur at such times as the Plan Administrator shall determine to beadministratively feasible in its sole discretion and the Participant’s Accountshall be adjusted accordingly. Accordingly, if a distribution or reallocation must occur pursuant tothe terms of the Plan and all or some portion of the Account must be valued inconnection with such distribution or reallocation (to reflect InvestmentCredits and Debits), the Plan Administrator may in its sole discretion, unlessotherwise provided for in the Plan, select a date or dates which shall be used forvaluation purposes.

 

Notwithstanding anything to the contrary, anyInvestment Credits or Debits made to any Participant’s Account following aChange of Control shall be made in a manner no less favorable to Participantsthan the practices and procedures employed under the Plan, or as otherwise ineffect, as of the date of the Change of Control.

 

Notwithstanding the Participant’s deemedInvestment Preference elections under the Plan, the Employer shall be under noobligation to actually invest any amounts in such manner, or in any manner, andsuch Investment Preference elections shall be used solely to determine theamounts by which the Participant’s Account shall be adjusted under thisParagraph 3.3.

 

3.4                                 ***Participant Statements   ***The Plan Administrator shallprovide Participants with a statement showing the credits and debits from hisor her Account during the period from the last statement date.  Such statement shall be provided toParticipants as soon as administratively feasible following the end of eachTaxable Year and on such other dates as agreed to by the Employer and the partymaintaining Participant records.

 

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**ARTICLE IV**

 

**WITHHOLDING OF TAXES**

 

4.1                                 ***Annual Withholding From Compensation***  For any Taxable Year in which CompensationDeferrals, Employer Matching Credits and/or Employer Discretionary Credits aremade to or vested within the Plan (as applicable), the Employer shall withholdthe Participant’s share of FICA and other employment taxes from the portion ofthe Participant’s Compensation not deferred. If deemed appropriate by the Employer, the Participant’s CompensationDeferral Agreement may be reduced in certain instances where necessary tofacilitate compliance with applicable withholding requirements.

 

4.2                                 ***Withholding From Benefit Distributions***.  The Participant’s Employer (or the trustee ofthe Trust, as applicable) shall withhold from any payments made to aParticipant under this Plan all federal, state and local income, employment andother taxes required to be withheld by the Employer, in connection with suchpayments, in amounts and in a manner to be determined in the sole discretion ofthe Employer.

 

**ARTICLE V**

 

**VESTING**

 

5.1                                 ***Vesting***  A Participant shall be immediately vested in(i.e. shall have a nonforfeitable right to) all Compensation Deferrals creditedto his or her Account, including any Investment Credits or Debits associatedtherewith.  The Employer shall specify inthe Adoption Agreement the vesting provisions applicable to any Employer DiscretionaryCredits or Employer Matching Credits allocated to the Accounts ofParticipants.  Forfeitures incurred byParticipants shall reduce the amounts credited to a Participant’s Account, butshall not be reallocated to the Accounts of other Participants unless otherwisespecified in the Adoption Agreement.

 

**ARTICLE VI**

 

**PAYMENTS**

 

6.1                                 ***Benefits***  A Participant’s or Beneficiary’s benefitpayable under the Plan shall be the value of the Participant’s vested Accountat the time a Distributable Event occurs under the Plan with respect to suchParticipant or Beneficiary.  Such benefitshall be payable from the general assets of the Employer.  In no event, will a Participant’s right to abenefit under this Plan give such Participant a secured right or claim on anyassets set aside

 

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by the Employer to meet its obligations underthe Plan.   All payments from the Planshall be subject to applicable tax withholding and shall commence (or be fullypaid, in the event a lump sum form of distribution was selected) no later thansixty (60) days after the occurrence of the Distributable Event.

 

6.2                                 ***Form of Payment***  Except as otherwise provided below, benefitsunder the Plan shall be paid in the form of a cash lump sum or in annual cashpayments (over a period of five (5), ten (10), or fifteen (15) years), as electedby the Participant. If applicable, the initial installment shall be based onthe value of the Participant’s vested Account, measured on the date of his orher Distributable Event, and shall be equal to 1/n (where ‘n’ is equal to thetotal number of annual benefit payments not yet distributed).  Subsequent installment payments shall becomputed in a consistent fashion, with the measurement date being theanniversary of the original measurement date. Notwithstanding the Participant’s election regarding the form ofpayment, the Employer shall have the right to pay the Participant’s benefit orremaining benefit in a single lump sum payment. Election of the form of payment must be provided to the PlanAdministrator prior to participating in the Plan.

 

Notwithstanding anythingto the contrary, the Participant may subsequently elect to change the form ofpayment previously selected, by submitting the appropriate form to the PlanAdministrator, provided however, such form shall be effective only if:

 

(a)          it is submitted at leastthirteen (13) months prior the Participant’s actual Distributable Event, and

 

(b)         it is approved by thePlan Administrator, in its sole discretion.

 

6.3                                 ***Death Benefit***  In the event of the Participant’s Death,whether before or after the Participant has otherwise incurred a DistributableEvent or commenced receiving payments from the Plan, the Participant’sBeneficiary shall receive the balance of the Participant’s vested Account in asingle lump sum cash payment.

 

6.4                                 ***Unforeseeable Emergencies***  If a Participant suffers an UnforeseeableEmergency, as defined herein, the Plan Administrator, in its sole discretion,may pay to the Participant that portion of his or her vested Account which thePlan Administrator determines is necessary to satisfy the emergency.  A Participant requesting an emergency paymentshall apply for the payment in writing on a form approved by the PlanAdministrator and shall provide such additional information as the Plan Administratormay require.  For purposes of thisparagraph, “Unforeseeable Emergency” means a severe financial hardship of the

 

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Participant resulting from a sudden andunexpected illness or accident of the Participant or a dependent of theParticipant, loss of the Participant’s property due to casualty, or othersimilar extraordinary and unforeseeable circumstances arising as a result ofevents beyond the control of the Participant. The Plan Administrator shall have complete discretion to determinewhether the financial hardship of the Participant constitutes an UnforeseeableEmergency under the Plan.  However, nofinancial hardship shall constitute an Unforeseeable Emergency to the extentthe hardship may be relieved through reimbursement or compensation by insuranceor otherwise or can be reasonably relieved by the liquidation of theParticipant’s assets.  If, subject to thesole discretion of the Plan Administrator, the request for a withdrawal isapproved, the distribution shall be made within sixty (60) days of the date ofapproval by the Plan Administrator.

 

6.5                                 ***Election To Receive Vested Account***  A Participant may request in writing, on aform approved by the Plan Administrator, to receive distribution of his or herentire vested Account without regard to:

 

(a)              whether payment ofbenefits under the Plan are due, or

 

(b)             whether anUnforeseeable Emergency has occurred.

 

Anydistribution so requested shall be made as soon as practical following theParticipant’s submission of the executed writing and shall be subject to:

 

(c)              forfeitureof ten percent (10%) of his or her entire vested Account

 

(d)             suspensionof his or her participation in the Plan for the balance of the Taxable Year inwhich the distribution is requested as well as the subsequent Taxable Year.

 

The Plan Administratorshall have sole and absolute discretion to decide whether such a request shallbe approved.

 

6.6                                 ***Electionto Receive Interim Distributions***  A Participant may make an advance election,at the time he or she files a Compensation Deferral Agreement for a givenTaxable Year, to have those Compensation Deferrals, vested Employer MatchingCredits and/or vested Employer Discretionary Credits to which the agreementrelates paid to him or her at an Interim Distribution Date designated by theParticipant.  Such Compensation Deferrals,vested Employer Matching Credits and/or vested Employer Discretionary Credits,adjusted to reflect Investment Credits and Debits, shall be payable in a singlecash lump sum payment within sixty (60) days of such Interim Distribution Date.  The Participant’s selection of

 

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an Interim DistributionDate is irrevocable and must comply with the definition of Interim DistributionDate under Paragraph 1.15. Notwithstanding a Participant’s advance election to designate an InterimDistribution Date or Dates, the amounts which would otherwise be subject tosuch Interim Distribution Date or Dates shall be distributable upon aDistributable Event pursuant to this Article VI, if such DistributableEvent occurs prior to any Interim Distribution Date.

 

6.7                                 ***Beneficiary Designation***  A Participant shall have the right todesignate a Beneficiary and to amend or revoke such designation at any time inwriting.  Such designation, amendment orrevocation shall be effective upon receipt by the Plan Administrator.   If the Beneficiary is a minor orincompetent, benefits may be paid to a legal guardian, trustee, or other properrepresentative of the Beneficiary, and such payment shall completely dischargethe Employer and the Plan of all further obligations hereunder.

 

If no Beneficiary designation is made, or ifthe Beneficiary designation is held invalid, or if no Beneficiary survives theParticipant and benefits are determined to be payable following the Participant’sdeath, the Plan Administrator shall direct that payment of benefits be made tothe person or persons in the first category in which there is a survivor.  The categories of successor beneficiaries, inorder, are as follows:

 

(a)                                  Participant’sSpouse;

 

(b)                                 Participant’sdescendants, *per stirpes* (eligible descendantsshall be determined by the intestacy laws of the state in which the decedentwas domiciled);

 

(c)                                  Participant’sparents;

 

(d)                                 Participant’sbrothers and sisters (including step brothers and step sisters); and

 

(e)                                  Participant’sestate.

 

6.8                                 ***Claims Procedure***  All claims for benefits under the Plan, andall questions regarding the operation of the Plan, shall be submitted to thePlan Administrator in writing.  The PlanAdministrator has complete discretion and authority to interpret and construeany provision of the Plan, and its decisions regarding claims for benefitshereunder are final and binding.

 

(a)          ***PresentationOf Claim***.  Any Participantor Beneficiary of a deceased Participant (such Participant or Beneficiary beingreferred to below as

 

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a “Claimant”) may deliver to the PlanAdministrator a written claim for a determination with respect to the amountsdistributable to such Claimant from the Plan. All claims must be made within one hundred eighty (180) days of the dateon which the event that caused the claim to arise occurred.  The claim must state with particularity thedetermination desired by the Claimant.

 

(b)         ***NotificationOf Decision***  The PlanAdministrator shall consider a Claimant’s claim within a reasonable time, andshall notify the Claimant in writing:

 

i.)     that the Claimant’s requesteddetermination has been made, and that the claim has been allowed in full; or

 

ii.)  that the Plan Administrator hasreached a conclusion contrary, in whole or in part, to the Claimant’s requesteddetermination, and such notice must set forth in a manner calculated to beunderstood by the Claimant:

 

1)              the specificreason(s) for the denial of the claim, or any part of it;

 

2)              specificreference(s) to pertinent provisions of the Plan upon which such denial was based;

 

3)              a description of anyadditional material or information necessary for the Claimant to perfect theclaim, and an explanation of why such material or information is necessary;

 

4)              a description of theclaim review procedure set forth in Paragraph 6.8(c) below, includinginformation regarding any applicable time limits and a statement regarding theClaimant’s right to bring an action under Section 502(a) of ERISAfollowing an adverse determination on review; and

 

5)              if the decisioninvolved the Disability of the Participant, information regarding whether aninternal rule or procedure was relied upon in making its decision and that theClaimant can request a copy of such rule or procedure, free of charge, uponrequest.

 

The Plan Administrator will notify theClaimant of an adverse decision within 90 days of the date the claim wasreceived, unless the Plan Administrator determines there are specialcircumstances that require an extension of time in which to make a decision.  If an extension of time is needed, the PlanAdministrator shall notify the Claimant of the

 

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extension before the expiration of theoriginal 90-day period.  The notice willinclude a description of the special circumstances requiring an extension oftime and an estimate of the date it expects a decision to be made.  The extension shall not exceed an additional90-day period.

 

If the adverse decision relates to a claiminvolving the Disability of the Participant, the Plan Administrator will notifythe Claimant of an adverse decision within 45 days of the date the claim wasreceived, unless the Plan Administrator determines that matters beyond itscontrol require an extension of time in which to make a decision.  If an extension of time is needed, the PlanAdministrator shall notify the Claimant of the extension before the expirationof the original 45-day period.  Thenotice will include a description of the circumstances requiring the extensionand an estimate of the date it expects a decision to be made.  The extension shall not exceed an additional30-day period unless, within the 30-day period the Plan Administrator againdetermines that more time is needed due to matters beyond its control, in whichcase notice of the need for not more than an additional 30 days is provided tothe Claimant before the first 30-day period expires. The notice will include adescription of the circumstances requiring the extension and an estimate of thedate it expects a decision to be made. Any extension notice will include information regarding the standards onwhich a determination of Disability will be made, the outstanding issues whichprevent a decision from being made, and any additional information which isneeded in order to reach a decision.  TheClaimant will have 45 days to supply any additional information.

 

If the Plan Administrator notifies theClaimant of the need for an extension of time to make a decision regarding hisor her claim in accordance with this Paragraph 6.8(b), and the extension isneeded due to the Claimant’s failure to provide information necessary to decidethe claim, the period of time in which the Plan Administrator must make adecision does not include the time between the date the notice of the extensionwas sent to the Claimant and the date the Claimant responds to the request foradditional information.

 

(c)          ***ReviewOf A Denied Claim***  Withinsixty (60) days after receiving a notice from the Plan Administrator that aclaim has been denied, in whole or in part, a Claimant (or the Claimant’s dulyauthorized representative) may file with the Plan Administrator a writtenrequest for a review of the denial of the claim.  During the 60-day review period, the Claimant(or the Claimant’s duly authorized representative):

 

i.)                                      mayreview relevant documents;

 

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ii.)                                   maysubmit written comments or other documents relating to the claim;

 

iii.)                                mayrequest access to and copies of all relevant documents, free of charge;

 

iv.)                               mayrequest a hearing, which the Plan Administrator, in its sole discretion, maygrant.

 

The Plan Administrator will consider alldocuments and other information submitted by the Claimant in reviewing itsprevious decision, including documents not available to or considered by itduring its initial determination.

 

If the appeal relates to a determination ofthe Plan Administrator involving the Disability of the Participant, theClaimant will have 180 days following receipt of a denial to file a writtenrequest for review.  In such event, nodeference shall be given to the initial benefit determination, and the reviewshall be conducted by an appropriate fiduciary who is someone other than theindividual who made the initial determination or a subordinate of suchindividual.  If the initial determinationwas based in whole or in part on a medical judgment, the reviewer shall consultwith an appropriately trained and experienced health care professional, andshall disclose the identity of any experts who provided advice with regard tothe initial decision.  The health careprofessional whose advice is sought during the appeal process will not be anindividual who was consulted during the initial determination, nor asubordinate of such an individual.

 

***Decision On Review***  The Plan Administrator shall render itsdecision on review promptly, and not later than sixty (60) days after thefiling of a written request for review of the denial, unless a hearing is heldor other special circumstances require additional time, in which case the PlanAdministrator’s decision must be rendered within one hundred twenty (120) daysafter such date. If an extension of time is needed, the Plan Administratorshall notify the Claimant of the extension before the expiration of theoriginal 60-day period. The notice will include a description of thecircumstances requiring the extension and an estimate of the date it expects adecision to be made.  Such decision mustbe written in a manner calculated to be understood by the Claimant, and if thedecision on review is adverse it must contain:

 

i.)                                      specificreasons for the decision;

 

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ii.)                                   specificreference(s) to the pertinent Plan provisions upon which the decision wasbased;

 

iii.)                                astatement that the Claimant may receive, upon request and free of charge,access to and copies of relevant documents and information;

 

iv.)                               astatement describing any voluntary appeal procedures under the Plan and theClaimant’s right to bring an action under Section 502(a) of ERISA;

 

v.)                                  ifthe decision involved the Disability of the Participant, information regardingwhether an internal rule or procedure was relied upon in making its decisionand that the Claimant can request a copy of such rule or procedure, free ofcharge, upon request;

 

vi.)                               astatement that the Claimant and the Plan may have other voluntary alternativedispute resolution options, such as mediation, and that the Claimant may findout what options are available by contacting the local U.S. Department of LaborOffice and the state insurance regulatory agency; and

 

vii.)                            suchother matters as the Plan Administrator deems relevant.

 

If the appeal involves the Disability of theParticipant, the decision of the Plan Administrator will be made within 45 daysafter the filing of the written request for review, unless specialcircumstances require additional time, in which case the Plan Administrator’sdecision will be made within 90 days after the date the request was filed. Ifan extension of time is needed, the Plan Administrator shall notify theClaimant of the extension before the expiration of the original 45-day period.The notice will include a description of the circumstances requiring theextension and an estimate of the date it expects a decision to be made.

 

If the Plan Administrator notifies theClaimant of the need for an extension of time to make a decision regarding hisor her appeal in accordance with this Paragraph 6.8(d), and the extension isneeded due to the Claimant’s failure to provide information necessary to decidethe appeal, the period of time in which the Plan Administrator must make adecision does not include the time between the date the notice of the extensionwas sent to the Claimant and the date the Claimant responds to the request foradditional information.

 

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**ARTICLE VII**

 

**SUSPENSION OF DEFERRALS**

 

7.1                                 ***Unforeseeable Emergencies***  If a Participant experiences an UnforeseeableEmergency, the Participant may petition the Plan Administrator to suspend anyCompensation Deferrals required to be made by the Participant pursuant to hisor her current Compensation Deferral Agreement. The Plan Administrator shall determine, in its sole discretion, whetherto approve the Participant’s petition. If the petition for a suspension is approved, suspension shall commenceupon the date of approval and shall continue until the earlier of (i) the endof the Taxable Year or (ii) the date the Unforeseeable Emergency ceases toexist, as determined by the Plan Administrator in its sole discretion.  The Participant’s eligibility for EmployerMatching Credits and/or Employer Discretionary Credits shall be similarlysuspended.

 

7.2                                 ***Suspension of Deferrals for Other Reasons***  If a Participant commences an authorizedleave of absence which is unpaid or his or her Compensation is significantlyreduced for any reason whatsoever, the Participant’s Compensation Deferralsshall be suspended for such period of time as the Plan Administrator, in itscomplete and absolute discretion, determines. The Participant’s eligibility for Employer Matching Credits and EmployerDiscretionary Credits may be similarly suspended.  Upon the Participant’s return to activeemployment or receipt of his or her normal rate of Compensation, his or herCompensation Deferrals shall resume (as will eligibility for Employer MatchingCredits and Employer Discretionary Credits) for the remaining portion of theTaxable Year in which the suspension occurred, based on the CompensationDeferral Agreement in effect for that Taxable Year.  If resumption would not occur until a laterTaxable Year, the Participant shall be permitted to complete a new CompensationDeferral Agreement as though he or she was a new Eligible Employee.

 

**ARTICLE VIII**

 

**PLAN ADMINISTRATION**

 

8.1                                 ***Appointment***The Plan Administratorshall serve at the pleasure of the Employer, who shall have the right to removethe Plan Administrator at any time upon 30 days written notice.  The Plan Administrator shall have the rightto resign upon 30 days written notice to the Employer.

 

8.2                                 ***Duties Of Plan Administrator ***The Plan Administrator shallbe responsible to perform all administrative functions of the Plan.  These duties include but are not limited to:

 

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(a)                                  Communicatingwith Participants in connection with their rights and benefits under the Plan.

 

(b)                                 ReviewingInvestment Preference elections received from Participants.

 

(c)                                  Arrangingfor the payment of taxes (including income tax withholding), expenses andbenefit payments to Participants under the Plan.

 

(d)                                 Filingany returns and reports due with respect to the Plan.

 

(e)                                  Interpretingand construing Plan provisions and settling claims for Plan benefits.

 

(f)                                    Servingas the Plan’s designed representative for the service of notices, reports,claims or legal process.

 

(g)                                 Employingany agents such as accountants, auditors, attorneys, actuaries or any otherprofessionals it deems necessary in the performance of any of its duties.

 

8.3                                 ***Employer ***TheEmployer has sole responsibility for the establishment and maintenance of thePlan.  The Employer through its Boardshall have the power and authority to appoint the Plan Administrator, Trusteeand any other professionals as may be required for the administration of thePlan.  The Employer shall also have theright to remove any individual or party appointed to perform administrative,investment, fiduciary or other functions under the Plan.  The Employer may delegate any of its powersto the Plan Administrator, Board Member or a Committee of the Board.

 

8.4                                 ***Administrative Fees And Expenses***  Except for Trustee fees and expenses, allreasonable costs, charges and expenses incurred by the Plan Administrator orthe Trustee in connection with the administration of the Plan or the Trustshall be paid by the Employer.  If not sopaid, such costs, charges and expenses shall be charged to the Trust, if any,established in connection with the Plan. The Trustee shall be specifically authorized to charge its fees andexpenses directly to the Trust. If the Trust has insufficient liquid assets tocover the applicable fees, the Trustee shall have the right to liquidate assetsheld in the Trust to pay any fees or expenses due.  Notwithstanding the foregoing, no compensationother than reimbursement for expenses shall be paid to a Plan Administrator whois an Employee of the Employer.

 

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8.5                                 ***Plan Administration And Interpretation***  The Plan Administrator shall have completediscretionary control and authority to determine the rights and benefits andall claims, demands and actions arising out of the provisions of the Plan ofany Participant, Beneficiary, deceased Participant, or other person having orclaiming to have any interest under the Plan. The Plan Administrator shall have complete discretion to interpret thePlan and to decide all matters under the Plan.    Such interpretation and decision shall befinal, conclusive, and binding on all Participants and any person claimingunder or through any Participant.  Anyindividual(s) serving as Plan Administrator who is a Participant will not voteor act on any matter relating solely to himself or herself.  When making a determination or calculation,the Plan Administrator shall be entitled to rely on information furnished by aParticipant, a Beneficiary, the Employer, or other party.  The Plan Administrator shall have theresponsibility for complying with any reporting and disclosure requirements ofERISA.

 

8.6                                 ***Powers, Duties, Procedures***  The Plan Administrator shall have such powersand duties, may adopt such rules, may act in accordance with such procedures,may appoint such officers or agents, may delegate such powers and duties, mayreceive such reimbursement and compensation, and shall follow such claims andappeal procedures with respect to the Plan as it may establish.

 

8.7                                 ***Information***  To enable the Plan Administrator to performits functions, the Employer shall supply full and timely information to thePlan Administrator on all matters relating to the compensation of Participants,their employment, retirement, death, termination of employment, and such otherpertinent facts as the Plan Administrator may require.

 

8.8                                 ***Indemnification Of Plan Administrator***  The Employer agrees to indemnify and todefend to the fullest extent permitted by law any officer(s), Employee(s) orBoard Members who serve as Plan Administrator (including any such individualwho formerly served as Plan Administrator) against all liabilities, damages,costs and expenses (including attorneys’ fees and amounts paid in settlement ofany claims approved by the Employer) occasioned by any act or omission to actin connection with the Plan, if such act or omission is in good faith.

 

8.9                                 ***Plan Administration Following a Change of Control***  Notwithstanding anything to the contrary inthis Article VIII or elsewhere in the Plan or Trust, upon a Change ofControl the individual serving as Chief Executive Officer immediately prior tosuch Change of Control, or the most senior officer of the Company immediately priorto such Change of Control, who is also a Participant in the Plan, shall havethe right to appoint an individual, third party, or Committee to serve as PlanAdministrator.  Such

 

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appointment shall be made in writing andcopies thereof shall be delivered to the Board, to the existing PlanAdministrator, to the Trustee, and to all Plan Participants.  The Trustee and all other service providersshall be entitled to rely fully on instructions received from the successorPlan Administrator and shall be indemnified to the fullest extent permitted bylaw for acting in accordance with the proper instructions of the successor PlanAdministrator.

 

**ARTICLE IX**

 

**TRUST FUND**

 

9.1                                 ***Trust ***Coincidentwith the establishment of the Plan, the Employer may establish a Trust for thepurpose of accumulating assets which may, but need not be used, by the Employerto satisfy some or all of its financial obligations to provide benefits toParticipants under this Plan.  All assetsheld in the Trust shall remain the exclusive property of the Employer and shallbe available to pay creditor claims of the Employer in the event of insolvency,to the extent provided under any Trust established with respect to suchEmployer.  The assets held in Trust shallbe administered in accordance with the terms of the separate Trust Agreementbetween the Trustee and the Employer.

 

9.2                                 ***Unfunded Plan *** In no event will the assets accumulated by theEmployer in the Trust be construed as creating a funded Plan under theapplicable provisions of ERISA or the Code, or under the provisions of anyother applicable statute or regulation. Any funds set aside by the Employer intrust shall be administered in accordance with the terms of the Trust.

 

9.3                                 ***Assignment And Alienation ***No Participant or Beneficiaryof a deceased Participant shall have the right to anticipate, assign, transfer,sell, mortgage, pledge or hypothecate any benefit under this Plan.  The Plan Administrator shall not recognizeany attempt by a third party to attach, garnish or levy upon any benefit underthe Plan except as may be required by law.

 

**ARTICLE X**

 

**AMENDMENT AND TERMINATION**

 

10.1                           ***Amendment***  The Employer shall have the right to amendthis Plan without the consent of any Participant or Beneficiary hereunder,provided that no such amendment shall have the effect of reducing any of the

 

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vested benefits to which a Participant orBeneficiary has accrued a right as of the effective date of the amendment.

 

10.2                           ***Termination***  The Employer may terminate or discontinue thePlan in whole or in part at any time. Upon Plan termination, no further Compensation Deferrals or EmployerDiscretionary Credits or Employer Matching Credits shall be made except thatthe Employer shall be responsible to pay any benefit attributable to vestedamounts credited to the Participant’s Account as of the effective date oftermination  (following any finaladjustments to such Accounts in accordance with Article III hereof).  If the Plan is terminated, the PlanAdministrator shall make distribution of the Participant’s vested benefit assoon as possible following such termination.

 

10.3                           ***Existing Rights***  No amendment or termination of the Plan shalladversely affect the rights of any Participant with respect to vested amountsthat have been credited to his or her Account prior to the date of suchamendment or termination.

 

**ARTICLE XI**

 

**MISCELLANEOUS**

 

11.1                           ***Total Agreement ***This Plan and the executedAdoption Agreement, Compensation Deferral Agreement, Beneficiary designationand other administration forms shall constitute the total agreement or contractbetween the Employer and the Participant regarding the Plan.  No oral statement regarding the Plan may berelied upon by the Participant.  The Employeror Plan Administrator shall have the right to establish such procedures as arenecessary for the administration or operation of the Plan or Trust, and suchprocedures shall also be considered a part of the Plan unless clearly contraryto the express provisions thereof.

 

11.2***                           Employment Rights***  Neither the establishment of this Plan norany modification thereof, nor the creation of any Trust or Account, nor thepayment of any benefits, shall be construed as giving a Participant or otherperson a right to employment with the Employer or any other legal or equitableright against the Employer except as provided in the Plan.  In no event shall the terms of employment ofany Employee be modified or in any way be affected by the Plan.

 

11.3***                           Non-Assignability***  None of the benefits, payments, proceeds orclaims of any Participant or Beneficiary shall be subject to attachment orgarnishment or other legal process by any creditor of such Participant orBeneficiary, nor shall any Participant or Beneficiary have the right to

 

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alienate, commute, pledge, encumber or assignany of the benefits or payments or proceeds which he or she may expect toreceive, contingently or otherwise under the Plan.

 

11.4                           ***Binding Agreement***  Any action with respect to the Plan taken bythe Plan Administrator or the Employer or the Trustee or any action authorized byor taken at the direction of the Plan Administrator, the Employer or otherauthorized party shall be conclusive upon all Participants and Beneficiariesentitled to benefits under the Plan.

 

11.5***                           ReceiptAnd Release***  Any payment to anyParticipant or Beneficiary in accordance with the provisions of the Plan shall,to the extent thereof, be in full satisfaction of all claims against theEmployer, the Plan Administrator and the Trustee under the Plan, and the PlanAdministrator may require such Participant or Beneficiary, as a conditionprecedent to such payment, to execute a receipt and release to sucheffect.  If any Participant orBeneficiary is determined by the Plan Administrator to be incompetent by reasonof physical or mental disability (including not being the age of majority) togive a valid receipt and release, the Plan Administrator may cause payment orpayments becoming due to such person to be made to a legal guardian, trustee,or other proper representative of the Participant or Beneficiary withoutresponsibility on the part of the Plan Administrator, the Employer or theTrustee to follow the application of such funds.

 

11.6                           ***Furnishing Information***  A Participant or his or her Beneficiary willcooperate with the Committee by furnishing any and all information requested bythe Plan Administrator and take such other actions as may be requested in orderto facilitate the administration of the Plan and the payments of benefitshereunder, including but not limited to taking such physical examinations asthe Plan Administrator may deem necessary.

 

11.7                           ***Distribution In The Event Of Taxation***  If, for any reason, all or any portion of aParticipant’s benefit under this Plan becomes income taxable to the Participantprior to a receipt, a Participant may petition the Plan Administrator for adistribution of that portion of his or her benefit that has becometaxable.  Upon the grant of such apetition, which grant shall not be unreasonably withheld, a Participant’sEmployer shall distribute to the Participant immediately, funds in an amountequal to the taxable portion of his or her benefit (which amount shall notexceed a Participant’s unpaid vested Account under the Plan).  If the petition is granted, the tax liabilitydistribution shall be made within ninety (90) days of the date when theParticipant’s petition is granted.  Sucha distribution shall affect and reduce the benefits to be paid under this Plan.

 

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11.8                           ***Insurance***  The Employers, on their own behalf or onbehalf of the trustee of the Trust, and, in their sole discretion, may applyfor and procure insurance on the life of the Participant, in such amounts andin such forms as the Trust may choose. The Employers or the trustee of the Trust, as the case may be, shall bethe sole owner and beneficiary of any such insurance.  The Participant shall have no interestwhatsoever in any such policy or policies, and at the request of the Employersshall submit to medical examinations and supply such information and executesuch documents as may be required by the insurance company or companies to whomthe Employers have applied for insurance.

 

11.9                           ***Governing Law***  Construction, validity and administration ofthis Plan shall be governed by applicable Federal law and applicable state lawin which the principal office of the Employer is located.  If any provision shall be held by a court ofcompetent jurisdiction to be invalid or unenforceable, the remaining provisionshereof shall continue to be fully effective.

 

11.10***                     HeadingsAnd Subheadings***  Headings andsubheadings in this Plan are inserted for convenience only and are not to beconsidered in the interpretation of the provisions hereof.

 

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**AMENDMENT**

**SI INTERNATIONAL DEFERRED COMPENSATION PLAN**

 

THIS AMENDMENT,by SI International, Inc., a Delaware corporation, (hereinafter called the “Company”),

 

**WITNESSETH:**

 

WHEREAS, theCompany sponsors the “SI International Deferred Compensation Plan” (hereinaftercalled the “Plan”);

 

WHEREAS,pursuant to Section 10.1 of the Basic Plan, the Company retained the rightto amend the Plan;

 

WHEREAS, theCompany desires to amend the Plan for amounts deferred under the Plan after December 31,2003, to comply with Section 409A of the Internal Revenue Code of 1986, asamended; and

 

WHEREAS,resolutions were duly adopted by the Compensation Committee of the Board ofDirectors of the Company on December 21, 2004, approving this amendment tothe Plan.

 

NOW, THEREFORE,the Plan is hereby amended, as follows:

 

The terms of this paragraph shall takeprecedence over all other provisions of this Plan and shall apply to all amountdeferred under the Plan after December 31, 2004 (including earnings onsuch amounts) to the extent necessary to comply with Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”). Under this paragraph,(i)  any provision of the Plan which, butfor the application of this paragraph, would permit a distribution of benefitsunder the Plan to be made at other than a time or event permitted by Section 409A(a)(2)of the Code, would permit an acceleration of payments under the Plan prohibitedby Section 409A(a)(3) Code or would permit an election not in

 

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compliance with Section 409A(a)(4) ofthe Code shall be appropriately limited in its application (including, ifnecessary, treated as null and void) so as to preclude any distribution notpermitted by Section 409A(a)(2) of the Code, acceleration of payment notpermitted by Section 409A(a)(3) and election not permitted by Section 409A(a)(4)of the Code; and (ii) the Company may amend the Plan as it deems necessary orappropriate to avoid benefits under the Plan from being included in grossincome for Federal income tax purposes by reason of Section 409A(a)(1)(A)of the Code.  Notwithstanding theforegoing, the Company provides no promise or warranty that payments or creditsunder the Plan will not be subjected to Sections 409A(a)(1)(A) or 409A(a)(1)(B)of the Code.

 

IN WITNESSWHEREOF, the Company has executed this Amendment this 21st day ofDecember, 2004.

 
|   | SI International, Inc. |
|--------|------------------------|
|   |                   |
|   | By:                    | /s/ THOMAS E. DUNN |   |
|   |                   |
|   | Title:                 | CFO |   |
|        |                        |  |  |  |

 

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