Document:

Exhibit

EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of March 27, 2017 by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Ludwig Hantson (the “Employee”).
WITNESSETH
WHEREAS, the Company agrees to employ the Employee, subject to the terms and conditions contained in this Agreement; and
WHEREAS, the Employee agrees to accept employment with the Company, subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:
1.Employment Duties and Acceptance.
(a)    The Company hereby employs the Employee, for the Term (as hereinafter defined), to render full-time services to the Company as Chief Executive Officer and to perform such duties commensurate with such office or other office as the Employee shall reasonably be directed by the Company to perform.  The Employee hereby accepts such employment and agrees to render the services described above.  The Employee shall report to the Board of Directors of the Company (the “Board”).
(b)    The Employee further agrees to accept election and to serve during all or any part of the Term as a Director of the Company without any compensation therefor other than that specified in this Agreement, if elected to such position by the shareholders of the Company.  During the Term, the Company shall use its best efforts to cause the Employee to be elected as a Director and shall include him in the management slate for election as a Director at every shareholders meeting at which his term as a Director would otherwise expire.  The Employee hereby agrees to resign from the Board of Directors immediately upon termination of Employee’s employment.
(c)    During the Term, the Employee shall devote his full business time and his best efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder.  Notwithstanding anything to the contrary herein, although the Employee shall provide services as a full time employee, it is understood that the Employee, with consent of the Board, may (1) have non full-time academic appointments; (2) participate in professional activities; (3) publish academic articles; and (4) participate in community and/or philanthropic activities (collectively, “Permitted Activities”); provided, however, that such Permitted Activities do not interfere with the Employee’s duties to the Company.
(d)    Effective on and after January 1, 2018, Employee may with the consent of the Board, serve on one outside board of directors.

	
			
	 
	 
	 

2.    Term of Employment.  The term of the Employee’s employment under this Agreement shall commence as of March 27, 2017 (the “Effective Date”) and shall end on the third anniversary thereof, unless sooner terminated pursuant to Section 6, 7 or 8 of this Agreement.  Notwithstanding the foregoing, unless notice is given by the Employee or the Company at least sixty (60) days prior to the expiration of the Term of this Agreement (or at least sixty (60) days prior to the expiration of any extension hereof), the Term of the Agreement shall be automatically extended by one (1) year from the date it would otherwise end (whether upon expiration of the original Term or any extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8 hereof.  The term of this Agreement as from time to time extended or renewed is hereafter referred to as “the Term of this Agreement” or “the Term”.
3.    Compensation and Benefits.
(a)    As compensation for services to be rendered pursuant to this Agreement, the Company agrees to pay the Employee, during the Term, an annual base salary of $1,200,000, subject to taxes and withholdings and subject to increase from time to time (the “Base Salary”), payable in accordance with its regular payroll practices.  The Employee’s Base Salary hereunder shall be reviewed at least annually thereafter during the Term of the Agreement for increase at the discretion of the Company.
(b)    The Company agrees that the Employee shall be eligible for an annual performance bonus from the Company with respect to each fiscal year of the Company that ends during the Term, pursuant to the Company’s management incentive bonus program in effect from time to time (such plan, as so in effect, the “Bonus Plan”).  The Employee’s target bonus under the Bonus Plan will be 120% of the Base Salary.  The actual amount of any such bonus payable to the Employee under the Bonus Plan shall be determined by the Board of Directors of the Company (the “Board”) or the Compensation Committee thereof (the “Committee”) and paid by the Company in accordance with the terms of the Bonus Plan, subject to the Employee’s remaining employed on the date that bonuses are paid under the Bonus Plan, except as otherwise expressly provided herein.  
(c)    In addition to the previously-described stock-based awards that will be granted to the Employee on the Effective Date, the Employee shall be eligible to receive stock-based awards under the equity incentive plan or program maintained by the Company as in effect from time to time (such plan, as so in effect, the “Equity Plan”) in the discretion of the Board or the Committee.    Any such stock-based award will be subject to the terms of the Equity Plan, the terms of the award agreement evidencing such stock-based award, and such other restrictions and limitations as are generally applicable to shares of the Company’s common stock or Company employees or otherwise imposed by law.  
(d)    The Company shall pay or reimburse the Employee for all reasonable, customary and necessary business expenses actually incurred or paid by the Employee during the Term in the performance of services under this Agreement, subject to travel and other policies and such reasonable substantiation and documentation as may be required by the Company from time to time, provided that (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year, (ii) reimbursement is made not later than December 31 of the calendar year following the calendar 

	
			
	 
	2
	 

year in which the expense was incurred, and (iii) the right to reimbursement is not subject to liquidation or exchange for any other benefit.  In addition, the Company shall reimburse the Employee for the reasonable attorneys’ fees incurred by him for the negotiation and documentation of this Agreement and related agreements, up to $20,000.
(e)    During the Term, the Employee shall be eligible to participate in all employee benefit plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided under this Agreement (e.g., a severance pay plan).  Participation in such employee benefit plans will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law.
(f)    During the Term, the Employee shall be eligible for paid vacation of four weeks and two personal days per calendar year taken in accordance with applicable Company policy.
(g)    On the first regular payroll date following the Effective Date, the Employee will be paid a gross amount of $200,000, subject to taxes and other withholdings, in lieu of relocation benefits. The Employee shall be required to repay the full gross amount of such payment to the Company if this Agreement is terminated under Sections 6(c) or 7(a) hereof prior to the first anniversary of the Effective Date; the Employee shall be required to repay 50% of the gross amount of such payment to the Company if this Agreement is terminated under Sections 6(c) or 7(a) hereof between the first and second anniversaries of the Effective Date.
4.    Confidentiality.  The Employee acknowledges and agrees that he is bound by the terms and conditions of the Proprietary Information and Inventions Agreement separately entered into with the Company. Notwithstanding any other provision of this Agreement, the Employee shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement which shall survive the termination of this Agreement in accordance with its terms.
5.    Non-Competition, Non-Solicitation and Non-Disparagement.
(a)    During the Term, the Employee shall not (1) provide any services, directly or indirectly, to any other business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion, or (2) participate in the formation of any business or commercial entity without the consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained in this Section 5(a) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit the Employee’s Permitted Activities pursuant to Section 1(c) or limit his ability to serve on an outside board of directors if first approved by the Board under Section 1(d).
(b)    Upon a termination of the Employee’s employment by the Company for any reason other than pursuant to Section 6(a) or Section 6(b), or upon a termination of the Employee’s employment by the Employee for any reason, following such termination of employment and during the Restricted Period, the Employee shall not (1) provide any services in the Company’s Field of 

	
			
	 
	3
	 

Interest (as defined in Section 14), directly or indirectly, to any other business or commercial entity, (2) participate in the formation of any business or commercial entity engaged primarily in the Company’s Field of Interest, or (3) directly or indirectly employ, or seek to employ or secure the services in any capacity of, any person employed at that time by the Company or any of its Affiliates, or otherwise encourage or entice any such person to leave such employment,  or solicit or encourage any customer, consultant, independent contractor, or vendor of the Company to terminate or diminish its relationship with the Company; provided, however, that nothing contained in this Section 5(b) shall be deemed to prohibit the Employee from acquiring, solely as an investment, shares of capital stock (or other interests) of any corporation (or other entity) in the Company’s Field of Interest not exceeding 2% of such corporation’s (or other entity’s) then outstanding shares of capital stock and provided, further, that nothing contained herein shall be deemed to limit Employee’s Permitted Activities pursuant to Section 1(c).  This Section 5(b) shall be subject to written waivers that may be obtained by the Employee from the Company.
(c)    At no time during the Term of this Agreement or thereafter, regardless of the reason for termination, will Employee knowingly make any written or verbal untrue statement that disparages the Company, its Affiliates, its business, its management, or its products in communications with any customer, client or the public.  The employee will, furthermore, not otherwise do or say anything that could disrupt the good morale of employees of the Company or any of its Affiliates, or that harms the interests or reputation of the Company or any of its Affiliates.
(d)    Nothing in this Agreement or the Proprietary Information and Inventions Agreement limits, restricts, or in any other way affects the Employee’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.
(e)    The Employee acknowledges that he has read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 5(a)-(c) above.  The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its Affiliates, and are reasonable in respect to subject matter, length of time, and geographic area.  If the Employee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 5, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages may not provide an adequate remedy to the Company.  The Employee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Employee of any of the provisions of this Section 5, without having to post bond.  So that the Company may enjoy the full benefit of the covenants contained above, the Employee agrees that the Restricted Period shall be tolled, and shall not run, during the period of any breach by the Employee of such covenants.
(f)    If any of the covenants contained in this Section 5, or any part thereof, is hereafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions.

	
			
	 
	4
	 

(g)    If any of the covenants contained in this Section 5, or any part thereof, is held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and that the parties intend for the court to modify the duration and/or area of such provision to the maximum extent permitted by law.  The parties agree that in its reduced form, such provision shall then be enforceable.
(h)    In the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants.
6.    Termination by the Company.  The Company may terminate the employment of the Employee as follows during the Term of this Agreement if any one or more of the following shall occur:
(a)    Death.  If the Employee shall die during the Term, the Employee’s employment hereunder shall automatically terminate.
(b)    Disability.  If the Employee shall become physically or mentally disabled so that the Employee is unable substantially to perform his services hereunder for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating to 180 days during any twelve-month period, the Company may terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.
(c)    For Cause.  If the Employee acts, or fails to act, in a manner that provides Cause for termination, the Company may at any time terminate the Employee’s employment hereunder upon written notice given by the Company to the Employee.  For purposes of this Agreement, the term “Cause” means (1) the Employee’s indictment for, or conviction of, a felony or other crime involving moral turpitude, or any crime or serious offense involving money or other property which constitutes a felony in the jurisdiction involved, (2) the Employee’s willful and continual neglect or failure to discharge duties (including fiduciary duties), responsibilities and obligations with respect to the Company hereunder; provided such neglect or failure, if susceptible of cure, remains uncured for a period of thirty (30) days after written notice describing the same is given to the Employee; provided further that isolated and insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Employee’s material breach of this Agreement or any other material agreement with the Company, (4) the Employee’s violation of Section 5 hereof or the Employee’s breach of any confidentiality provisions contained in the Proprietary Information and Inventions Agreement, or (5) any act of fraud or embezzlement by the Employee involving the Company or any of its Affiliates.
(d)    Without Cause.  The Company may at any time terminate the Employee’s employment hereunder without Cause upon written notice given by the Company to the Employee.

	
			
	 
	5
	 

7.    Termination by the Employee.
(a)    Other than for Constructive Termination.  The Employee may terminate his employment hereunder at any time, for any reason and for no reason, upon not less than sixty (60) days’ prior written notice to the Company.
(b)    Constructive Termination.  The Employee may terminate his employment hereunder upon written notice to the Company if any one or more of the following shall occur, each of which is deemed a Constructive Termination:
(i)    a material breach of the terms of this Agreement by the Company and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company;
(ii)    a relocation of the Employee’s place of employment to a location beyond a 30-mile radius of New Haven, Connecticut; or
(iii)    a material breach by the Company of any other material agreement with the Employee and such breach continues uncured for thirty (30) days after the Employee first gives written notice of such breach to the Company
Notwithstanding the foregoing, the Employee shall not be deemed to have a “Constructive Termination” unless the Employee gives the Company written notice of such a condition within ninety (90) days after such condition first comes into existence, the Company fails to remedy such condition within thirty (30) days after receiving the Employee’s written notice and the Employee terminates this Agreement not later than thirty (30) days after the Company so fails to remedy such condition.
8.    Termination by Employee for Good Reason Following a Change in Control.  In addition to Section 7(b)(i) through (iii) above, during the period commencing on the Change in Control (as defined in Section 14) and ending on the eighteen (18) month anniversary of such Change in Control, the Employee may terminate this Agreement upon expiration of ninety (90) days’ prior written notice if “Good Reason” exists for the Employee’s termination.  For this purpose, termination by the Employee for “Good Reason” shall mean a termination by the Employee of his employment hereunder following the initial occurrence, without his prior written consent, of any of the following events, unless the Company or its successor fully cures all grounds for such termination within thirty (30) days after receipt of the Employee’s written notice (it being understood that a termination of employment hereunder shall only be for Good Reason if the Employee terminates his employment not later than thirty (30) days after the Company so fails to cure such grounds):
(a)    any material adverse change in the Employee’s authority, duties, titles or offices (including reporting responsibility), from those existing immediately prior to the Change in Control;

	
			
	 
	6
	 

(b)    a diminution of the Employee’s Base Salary or annual bonus opportunity as provided for in Section 3; or
(c)    the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company upon a merger, consolidation, sale or similar transaction.
9.    Severance and Benefit Continuation.
(a)    Termination for Cause or Voluntary Termination.  In the event of a termination of the Employee’s employment by the Company for Cause pursuant to Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no severance or other termination pay or benefits shall be due to the Employee and the only obligation of the Company shall be to pay the Employee any accrued but unpaid Base Salary as of the date of termination and any accrued but unpaid vacation as of the date of termination (the “Accrued Obligations”), which amounts shall be paid to the Employee within thirty (30) days of the date of termination.  In the event of a termination of the Employee’s employment pursuant to Section 7(a), the Company may elect to waive the period of notice required by Section 7(a), or any portion thereof, and, if the Company so elects, the Company will pay the Employee his Base Salary for the period so waived.  Upon a termination covered by this Section 9(a), the Employee shall have the same opportunity to continue group health benefits at the Employee’s expense in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available generally to other employees terminating employment with the Company.  Any outstanding equity awards previously granted to the Employee under the Equity Plan shall be treated in accordance with the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.  A termination of the Employee’s employment that occurs by reason of the Employee’s notice to the Company of non-renewal of the Term under Section 2 hereof will be treated as a termination by the Employee under Section 7(a).
(b)    Termination for Death or Disability.  In the event of termination of the Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the death or disability of the Employee, the Company shall pay the Employee (or his estate in the event of a termination due to death), a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365 and shall provide the Health Continuation Benefits (as defined in Section 9(c)(ii)).  In the event of a termination of the Employee’s employment due to death, the Company shall also pay to the Employee’s estate an amount equal to three (3) months of Base Salary.  The Base Salary (if applicable) and the pro-rata bonus shall be paid within thirty (30) days of the date of termination.  All equity awards for which the vesting schedule is based solely on the passage of time and continuation of employment (“Time-Vesting Equity Awards”) previously granted to the Employee shall become immediately vested and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such awards were granted.  All other equity awards previously granted to the Employee will vest as determined in good faith by the Board of Directors based on the percentage of goals and objectives achieved by the Employee and the Company.

	
			
	 
	7
	 

(c)    Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination, or Non-Renewal by the Company.  If (1) the Company terminates the Employee’s employment pursuant to Section 6(d) hereof, (2) the Employee terminates his employment pursuant to Section 7(b) hereof or (3) at the end of the Term of this Agreement the Employee shall cease to be employed by the Company by reason of the Company’s decision not to renew the Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of employment does not occur within eighteen (18) months following the consummation of a Change in Control of the Company, then, in addition to the Accrued Obligations:
(i)    the Company shall pay the Employee two (2) times the amount equal to the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the greater of (I) the average bonus received by the Employee from the Company for the two years preceding the year in which his termination of employment occurs or (II) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs.  Subject to Section 9(g) below, such amounts will be paid to the Employee in equal installments over a twenty-four (24) month period following the Separation Date, payable in accordance with the Company’s regular payroll practices, with the first payment being made on the Company’s next regular payday following the expiration of sixty (60) calendar days from the Separation Date, and with the first payment being retroactive to the day following the Separation Date;
(ii)    if the Employee timely elects to continue his participation and that of his eligible dependents in the Company’s group medical, dental and vision plans under COBRA, the Company shall pay the Employee a lump-sum amount that, after all applicable taxes and withholdings are deducted, is the economic equivalent of the monthly health premiums paid by the Company on behalf of the Employee and his eligible dependents immediately prior to the date of his Separation from Service for a period of eighteen (18) months (the “Health Continuation Benefits”); provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);
(iii)    all Time-Vesting Equity Awards granted to the Employee on March 27, 2017 shall fully and immediately vest as of the Separation Date, and all other Time-Vesting Equity Awards that have both been previously granted to the Employee and are at least 50% vested as of the Separation Date shall fully and immediately vest as of the Separation Date, and any such awards that consist of options shall become exercisable immediately prior to such termination of employment, and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and
(iv)    equity awards, other than the Time-Vested Equity Awards, that have been granted to and earned by the Employee and are at least 50% vested as of the Separation Date, shall fully and immediately vest as of the Separation Date and become exercisable immediately prior to such termination of employment, and shall remain exercisable for such 

	
			
	 
	8
	 

periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.
(d)    Involuntary Termination Other Than for Cause, Voluntary Termination Following Constructive Termination or for Good Reason, or Non-Renewal by the Company, Upon a Change in Control.  In the event that (1) the Company terminates this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this Agreement Following Constructive Termination under Section 7(b) hereof or for Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the Company, and in each case the termination of employment or Non-Renewal occurs within eighteen (18) months following the consummation of a Change in Control, then, in addition to the Accrued Obligations:
(i)    the Company shall pay the Employee three (3) times the amount equal to the sum of (A) the Employee’s Base Salary at the time of his termination of employment plus (B) the greater of (I) the average bonus received by the Employee from the Company for the two years preceding the year in which his termination of employment occurs or (II) the amount equal to the Employee’s bonus target under the Bonus Plan as determined by the Company for the year in which the termination of employment occurs.  The Company shall also pay the Employee a pro-rata annual bonus for the year in which such termination of employment occurs, calculated by multiplying the Employee’s target annual bonus by a fraction, the numerator of which is the number of days the Employee was employed during such year and the denominator of which is 365.  Subject to Section 9(g), such amounts will be paid to the Employee sixty (60) days after such Separation from Service in a cash lump sum; and the Company shall provide the Employee with the Health Continuation Benefits; provided that all such payments shall comply with the reimbursement rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);
(ii)    all Time-Vesting Equity Awards previously granted to the Employee under the Equity Plan shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted; and
(iii)    all equity awards, other than the Time-Vesting Equity Awards, that have been granted to and earned by the Employee as of the Separation Date shall fully and immediately vest and become exercisable immediately prior to such termination of employment and shall remain exercisable for such periods as provided under the terms of the Equity Plan and any individual award agreements under which such equity awards were granted.  All other non-Time Vesting awards previously granted to the Employee, but not earned as of the date of termination of employment, will vest, if at all, as determined in good faith by the Board of Directors based upon the achievement of performance conditions by the Employee and the Company.
(e)    The payments provided in Section 9(c) and 9(d) are intended as enhanced severance for a termination by the Company or by the Employee in the circumstances provided and are subject to the Employee’s continued compliance with the provisions of Section 5 hereof.  As a 

	
			
	 
	9
	 

condition to receiving such payments, the Employee shall first execute and deliver a general release of all claims against the Company, its Affiliates, agents and employees (other than any claims or rights pursuant to this Agreement or pursuant to equity or employee benefit plans), in a form and substance reasonably satisfactory to the Company (the “Release”).  The payments and benefits referenced in Section 9(c)(ii) and Section 9(d)(i), as applicable, shall be paid in a lump sum sixty (60) days after the Employee’s Separation from Service, subject to Section 9(g) below.  The Employee must execute and return the Release on or before the date specified by the Company in the prescribed form (the “Release Deadline”).  The Release Deadline will in no event be later than fifty (50) days after the Employee’s Separation from Service.  If the Employee fails to return the Release on or before the Release Deadline, or if the Release is revoked by the Employee, then the Employee will not be entitled to the payments or benefits, including any accelerated vesting of equity, described in Section 9(c) and 9(d).
(f)    Termination of Employment and Separation from Service.  All references in the Agreement to termination of employment, a termination, retirement, cessation of employment, separation from service, and correlative terms, that result in the payment or vesting of any amounts or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be construed to require a Separation from Service, and the date of such termination in any such case shall be construed to mean the date of the Separation from Service.
(g)    Payment to a “Specified Employee”.  To the extent any payment hereunder that is payable by reason of termination of the Employee’s employment constitutes “nonqualified deferred compensation” subject to Section 409A and would otherwise have been required to be paid during the six (6)-month period following such termination of employment, it shall instead (unless at the relevant time the Employee is no longer a Specified Employee) be delayed and paid, without interest, in a lump sum on the date that is six (6) months and one (1) day after the Employee’s termination (or, if earlier, the date of the Employee’s death).
(h)    Other.  In the event that the Employee’s employment with the Company terminates for any reason, except as otherwise expressly provided by the Company, the Employee’s employment with, or other service to, all Affiliates of the Company by which he is then employed or otherwise engaged in service shall automatically and immediately terminate.
10.    Cooperation.  Following his termination of employment, the Employee agrees to cooperate with, and assist, the Company to ensure a smooth transition in management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three month period thereafter.  At any time following his termination of employment for any reason, the Employee will provide such information as the Company may reasonably request with respect to any Company-related transaction or other matter in which the Employee was involved in any way while employed by the Company.  The Employee further agrees to assist and cooperate with the Company in connection with the defense, prosecution, government investigation, or internal investigation of any claim or matter that may be made against, concerning, or by, the Company or its Affiliates.  Such assistance and cooperation shall include timely, comprehensive, and truthful disclosure of all relevant facts known to the Company, including through in-person interview(s) with the Company’s internal Legal Department or outside counsel 

	
			
	 
	10
	 

for the Company.  The Employee shall be entitled to reimbursement for all properly documented expenses incurred in connection with rendering services under this Section, including, but not limited to, reimbursement for all reasonable travel, lodging, and meal expenses.
11.    Indemnification.  The Company shall indemnify the Employee to the fullest extent permitted by applicable law and its then-current articles of incorporation and by-laws.  The Employee agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment with the Company, or consultant pursuant to Section 10 above.  The Company shall provide, at its expense, Directors and Officers insurance for the Employee in amounts reasonably satisfactory to the Employee, to the extent such insurance is available at reasonable rates, which determination shall be made by the Board of Directors.  The Employee shall also be party to an Indemnification Agreement with the Company in substantially the form attached as Exhibit A hereto.
12.    Excise Tax.  If any payment or benefit that Employee would receive following a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (a) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (b) the largest portion, up to and including the total amount, of the Payment, whichever of the amounts determined under (a) and (b), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order:  reduction of cash payments; cancellation of accelerated vesting of outstanding awards under the Equity Plan; and reduction of employee benefits.  In the event that acceleration of vesting of outstanding awards under the Equity Plan is to be reduced, such acceleration of vesting shall be undertaken in the reverse order of the date of grant of the Employee’s outstanding equity awards.
The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control of the Company shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint another, nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.
The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Employee and the Company within a commercially reasonable period of time after the date on which the Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company).  Any good faith 

	
			
	 
	11
	 

determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Employee and the Company.
13.    No Mitigation.  The Employee shall not be required to mitigate the amount of any payment provided for hereunder by seeking other employment or otherwise, nor shall the amount of any payment provided for hereunder be reduced by any compensation earned by the Employee as the result of employment by another employer after the date of termination of employment by the Company (other than as described above in Section 9(c)(ii) and Section 9(d)(ii)).
14.    Definitions.  As used herein, the following terms have the following meaning:
(a)    “Affiliate” means and includes any person, corporation or other entity controlling, controlled by or under common control with the corporation in question.
(b)    “Change in Control” means the occurrence of any of the following events:
(i)    Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 40% of the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors (“Voting Securities”) of the Company, or
(ii)    Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) as of the beginning of any twenty-four month period (not including any period prior to the date of this Agreement), cease for any reason to constitute at least a majority of the Directors.  Notwithstanding the foregoing, any individual becoming a Director subsequent to the beginning of such period, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or
(iii)    Consummation by the Company of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the Beneficial Owners of the Voting Securities immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, 50% or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or
(iv)    Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, 

	
			
	 
	12
	 

following consummation of all transactions intended to constitute part of such sale or disposition, more than 50% of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.
For purposes of this definition 14(b), the following terms shall have the meanings set forth below:
(A)    “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;
(B)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and
(C)    “Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.
To the extent required to comply with Section 409A and to the extent necessary to establish a time or form of payment that complies with Section 409A, including under Treasury Regulation § 1.409A-3(c)(1), a Change in Control shall be deemed to occur only if such event also constitutes a “change in the ownership”, “change in effective control”, and/or a “change in the ownership of a substantial portion of assets” of the Company, as those terms are defined under Treasury Regulation § 1.409A-3(i)(5).  If a Change in Control does not satisfy this requirement, to the extent required to comply with Section 409A, the time or form of payment hereunder shall be determined in a manner disregarding the fact that a Change in Control has occurred (e.g., any severance entitlements shall be paid in installments over the post-termination period that would have applied absent such Change in Control or such shorter period that would comply with Section 409A).
(c)    “Code” means the Internal Revenue Code of 1986, as amended.
(d)    "Company’s Field of Interest” means products, product candidates, processes or services of the Company with which the Employee works during the time of his employment with the Company or about which the Employee acquires confidential information through his work with the Company.
(e)     “Restricted Period” shall mean twenty-four (24) months.
(f)     “Section 409A” shall mean Section 409A of the Code.
(g)    “Separation from Service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations.  The Board of Directors or the Compensation Committee of the Board of Directors may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for 

	
			
	 
	13
	 

purposes of determining whether a “separation from service” has occurred.  Any such written election shall be deemed part of the Agreement.
(h)    “Specified Employee” shall mean an individual determined by the Board of Directors, Compensation Committee of the Board of Directors or their delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A.  The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status.  Any such written election shall be deemed part of the Agreement.
15.    Representations by the Parties.  The Employee represents and warrants that he has full right, power and authority to execute the terms of this Agreement; this Agreement has been duly executed by the Employee and such execution and the performance of this Agreement by the Employee does not result in any conflict, breach or violation of or default under any other agreement or any judgment, order or decree to which the Employee is a party or by which he is bound.  The Employee acknowledges and agrees that any material breach of the representations set forth in this Section will constitute Cause under Section 6.  The Company represents and warrants that it will not attempt to induce or otherwise require the Employee to violate any such agreement, judgment, order or decree that the Executive has disclosed in writing to the Company.
16.    Arbitration.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of Employee’s employment and the termination of such employment, shall be settled by arbitration in Connecticut, in accordance with the employment dispute rules then existing of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.  Such claims shall include, without limitation, claims for breach of contract or breach of the covenant of good faith and fair dealing, any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA, and/or any applicable or equivalent state or local laws, claims for wrongful termination, including employment termination in violation of public policy, and claims for personal injury including, without limitation, defamation, fraud and infliction of emotional distress.  The parties shall be free to pursue any remedy before the arbitrator that they shall be otherwise permitted to pursue in a court of competent jurisdiction.  As a material part of this agreement to arbitrate claims, the Employee and the Company expressly waive all rights to a jury trial in court on all statutory or other claims.  The award of the arbitrator shall be final and binding.  The costs of the American Arbitration Association and the arbitrator will be borne by the Company, and the parties will otherwise bear their own costs (including attorneys fees).  Nothing contained herein, however, shall limit the right of the Company or any of its Affiliates to seek equitable or other relief from any court of competent jurisdiction for violation of any provision of Sections 4 and 5 above.
17.    Recoupment.  The Employee hereby acknowledges and agrees that the annual bonus described in Section 3(b) and all other payments of incentive-based compensation payable to the Employee by the Company or its Affiliates (whether under this Agreement or otherwise) shall be 

	
			
	 
	14
	 

subject to any applicable clawback or recoupment policy of the Company, as such policy may be amended and in effect from time to time, and shall be subject to recoupment as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.
18.    Notices.  All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):
If to the Company: 
 
Alexion Pharmaceuticals, Inc. 
100 College Street 
New Haven, Connecticut 06510 
Telephone:  (203) 272-2596 
Fax:  (203) 271-8198 
Attn:  General Counsel
If to the Employee:  to the Employee’s Address on file with the Company.
19.    General.
(a)    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut applicable to agreements made and to be performed entirely in Connecticut by Connecticut residents.
(b)    This Agreement, the Proprietary Information and Inventions Agreement and the agreements attached as Exhibits hereto set forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof.  No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.
(c)    This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance.  The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or any one or more or continuing waivers of any such breach, shall constitute a waiver of the breach of any other term or covenant contained in this Agreement.

	
			
	 
	15
	 

(d)    This Agreement shall be binding upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto.  The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Employee, except to a successor of substantially all the Company’s business which expressly assumes the Company’s obligations hereunder in writing.  In the event of a sale of all or substantially all of the assets of the Company, the Company shall use its best efforts to cause the purchaser to expressly assume this Agreement.  The Employee may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except by will or operation of law, provided that the Employee may designate beneficiaries to receive any payments permitted under the terms of the Company’s benefit plans.
(e)    If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
(f)    Provisions of this Agreement shall survive any termination of employment if so provided herein or if necessary or desirable fully to accomplish the purposes of other surviving provisions, including without limitation, the obligations of the Employee under Section 5 hereof.  Upon termination of the Employee’s employment hereunder by either the Employee or the Company as permitted hereby, all rights, duties and obligations of the Employee and the Company to each other pursuant to this Agreement shall cease, except for the provisions hereof that contemplate performance after termination, including without limitation the obligations of the Employee under Section 5 hereof.
(g)    This Agreement is intended to comply with the applicable requirements of Section 409A and shall be construed accordingly.  Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments.  In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Agreement to comply with, or be exempt from, the requirements of Section 409A.

	
			
	 
	16
	 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
	
		
	 
	ALEXION PHARMACEUTICALS, INC. 
 
 
By:      /s/ Clare Carmichael     
   Name:   Clare A. Carmichael 
   Title:    EVP & Chief Human Resources  
      Officer

	 
	EMPLOYEE 
 
 
      /s/ Ludwig Hantson    
   Name:    Ludwig Hantson 
   Title:   Chief Executive Officer

	
			
	 
	17Exhibit

NONQUALIFIED DEFERRED 
COMPENSATION PLAN BASIC PLAN DOCUMENT

TABLE OF CONTENTS	
			
	PREAMBLE
	 
	1

	 
	 
	 

	1.1
	Account
	2

	1.2
	Adoption Agreement
	2

	1.3
	Affiliate
	2

	1.4
	Aggregated Plan
	2

	1.5
	Beneficiary
	2

	1.6
	Benefit Benchmarks
	2

	1.7
	Board
	2

	1.8
	Change in Control Event
	2

	1.9
	Code
	6

	1.10
	Commissions
	7

	1.11
	Compensation
	7

	1.12
	Compensation Deferral Agreement
	7

	1.13
	Compensation Deferrals
	7

	1.14
	Conflict of Interest Divestiture
	7

	1.15
	Corporate Dissolution
	7

	1.16
	De Minimis Distribution
	7

	1.17
	Disability
	7

	1.18
	Distributable Event
	7

	1.19
	Domestic Partner
	8

	1.20
	Domestic Relations Order
	8

	1.21
	Effective Date
	8

	1.22
	Eligible Individual
	8

	1.23
	ERISA
	8

	1.24
	Income Inclusion Under Code § 409A
	8

	1.25
	Interim Distribution Date
	8

	1.26
	Investment Commissions
	8

	1.27
	Investment Credits and Debits
	9

	1.28
	Nonqualified Deferred Compensation Plan
	9

	1.29
	Participant
	9

	1.30
	Performance-Based Compensation
	9

	1.31
	Plan
	10

	1.32
	Plan Administrator
	10

	1.33
	Plan Sponsor
	10

	1.34
	Plan Termination Following a Change in Control Event
	11

	1.35
	Plan Termination Following a Corporate Dissolution
	11

	1.36
	Plan Termination in Connection with Termination of Certain Similar Arrangements
	11

	1.37
	Regular Salary
	11

	1.38
	Sales Commissions.
	11

	1.39
	Separation from Service
	12

	1.40
	Specified Employee
	13

	1.41
	Spouse
	13

	1.42
	Taxable Year
	13

	1.43
	Trust
	13

	1.44
	Trustee
	14

	1.45
	Unforeseeable Emergency
	14

	1.46
	Valuation Date
	14

	1.47
	Without Good Cause
	14

	
			
	ARTICLE II

	ELIGIBILITY AND PARTICIPATION
	14

	2.1
	Eligibility
	14

	2.2
	Participation
	14

	2.3
	Compensation Deferral Agreement
	15

	2.4
	Subsequent Changes in Time and Form of Payment
	16

	2.5
	Matching Credits and Discretionary Credits
	17

	2.6
	Establishing a Reserve for Plan Liabilities
	17

	
			
	ARTICLE III

	PARTICIPANT ACCOUNTS AND REPORTS
	17

	3.1
	Establishment of Accounts
	17

	3.2
	Account Maintenance
	17

	3.3
	Investment Credits and Debits
	18

	3.4
	Participant Statements
	19

	
			
	ARTICLE IV

	WITHHOLDING OF TAXES
	19

	4.1
	Withholding from Compensation
	19

	4.2
	Withholding from Benefit Distributions
	20

	
			
	ARTICLE V

	VESTING

	20

	5.1
	Vesting
	20

	
			
	ARTICLE VI

	PAYMENTS

	20

	6.1
	Benefits
	20

	6.2
	Separation from Service Payment
	20

	6.3
	Conflict of Interest Divestiture
	21

	6.4
	Death Benefit
	22

	6.5
	Disability Benefit
	22

	6.6
	Domestic Relations Order Payment
	22

	6.7
	Unforeseeable Emergency Distribution
	22

	6.8
	Election to Receive Interim Distributions
	23

	6.9
	Payment upon Income Inclusion Under § 409A
	23

	6.10
	Permissible Delay in Payments
	23

	6.11
	Beneficiary Designation
	24

	6.12
	Claims Procedure
	25

	
			
	ARTICLE VII

	CANCELLATION OF DEFERRALS

	29

	7.1
	Unforeseeable Emergency

	29

	
			
	ARTICLE VIII

	PLAN ADMINISTRATION

	30

	8.1
	Appointment
	30

	8.2
	Duties of Plan Administrator
	30

	8.3
	Plan Sponsor
	30

	8.4
	Administrative Fees and Expenses.
	30

	8.5
	Plan Administration and Interpretation
	31

	8.6
	Powers, Duties, Procedures
	31

	8.7
	Information
	31

	8.8
	Indemnification of Plan Administrator
	31

	8.9
	Plan Administration Following a Change in Control Event
	31

	
			
	ARTICLE IX

	TRUST FUND
	32

	9.1
	Trust
	32

	9.2
	Unfunded Plan
	32

	9.3
	Assignment and Alienation
	32

	
			
	ARTICLE X

	AMENDMENT AND PLAN TERMINATION
	32

	10.1
	Amendment
	32

	10.2
	Plan Termination
	33

	10.3
	Plan Termination Following a Change in Control Event
	33

	10.4
	Plan Termination Following a Corporate Dissolution
	34

	10.5
	Plan Termination in Connection with Termination of Certain Similar Arrangements
	34

	10.6
	Effect of Payment
	35

	
			
	ARTICLE XI

	MISCELLANEOUS
	35

	11.1
	Total Agreement
	35

	11.2
	Employment Rights
	35

	11.3
	Non-Assignability
	36

	11.4
	Binding Agreement
	36

	11.5
	Receipt and Release
	36

	11.6
	Furnishing Information
	36

	11.7
	Compliance with Code § 409A
	36

	11.8
	Insurance
	37

	11.9
	Governing Law
	37

	11.10
	Headings and Subheadings
	37

PREAMBLE

The Plan Sponsor, by executing the Nonqualified Deferred Compensation Plan Adoption Agreement, hereby establishes or amends an unfunded Nonqualified Deferred Compensation Plan for a select group of management or highly compensated Eligible Individuals. Under the terms of the Plan, Eligible Individuals may elect to defer receipt of their Compensation to a later Taxable Year.

Participants shall have no right, either directly or indirectly, to anticipate, sell, assign or otherwise transfer any benefit accrued under the Plan. In addition, no Participant shall have any  interest  in  any assets set aside as a source of funds to satisfy benefit obligations under the Plan. Participants shall have the status of general unsecured creditors of the Plan Sponsor, and the Plan shall constitute an unsecured promise by the Plan Sponsor to make benefit payments in the future.

The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA §§201(2) and 301(a)(3), is intended to comply with the requirements of Code §409A and the regulations and binding guidance issued thereunder to avoid adverse tax consequences and shall be interpreted and administered to the extent possible in a manner consistent with that intent.

1

ARTICLE I 

DEFINITIONS

		
	1.1
	Account The bookkeeping account established for each Participant to record his or her benefit under the Plan. Where the context so requires, references to the Participant’s Account, or to the Participant’s vested Account, shall mean the applicable portion of the Account attributable to a specific Taxable Year and type of Compensation Deferral or Matching or Discretionary Contribution.

		
	1.2
	Adoption Agreement The written instrument by which the Plan Sponsor establishes or amends a Nonqualified Deferred Compensation Plan for Eligible Individuals.

		
	1.3
	Affiliate Any corporation or business entity that would be considered a single employer with the Plan Sponsor pursuant to Code §§ 414(b) or 414(c).

		
	1.4
	Aggregated Plan A nonqualified deferred compensation plan that is required to be aggregated and treated with the Plan as a single plan under Code § 409A.

		
	1.5
	Beneficiary An individual, individuals, trust or other entity designated by the Participant to receive his or her benefit in the event of the Participant’s death. If more than one Beneficiary survives the Participant, the Participant’s benefit shall be divided equally among all such Beneficiaries, unless otherwise provided in the Beneficiary Designation form. Nothing herein shall prevent the Participant from designating primary and contingent Beneficiaries.

		
	1.6
	Benefit Benchmarks Hypothetical investment funds or benchmarks made available to Participants by the Plan Administrator for purposes of valuing benefits under the Plan.

		
	1.7
	Board The Board of Directors of the Plan Sponsor identified in Section I of the Adoption Agreement, or similar governing body if such Plan Sponsor has no Board of Directors.

		
	1.8
	Change in Control Event A Change in Ownership, Change in Effective Control or Change in Ownership of a Substantial Portion of Assets, as elected by the Plan Sponsor in the Adoption Agreement, of a corporation identified in Section 1.8(e).

		
	(a)
	Change in Effective Control of the Corporation

		
	(i)
	Notwithstanding that a corporation has not undergone a Change in Ownership, a Change in Effective Control occurs 

2

on the date that either:
		
	(1)
	any one person or Persons Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Persons Acting as a Group) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation; or

		
	(2)
	a majority of members of the corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors prior to the date of the appointment or election, provided that for purposes of this Section 1.8(a)(i)(2) the term corporation refers solely to the relevant corporation identified in Section 1.8(e) for which no other corporation is a majority shareholder for purposes of that section.

In the absence of an event described in Section 1.8(a)(i)(1) or Section 1.8(a)(i)(2) a Change in Effective Control will not have occurred.

		
	(ii)
	A Change in Effective Control may occur in any transaction in which either of the two corporations involved in the transaction has a Change in Ownership or a Change in Ownership of a Substantial Portion of Assets.

		
	(iii)
	If any one person or Persons Acting as a Group, is considered to effectively control a corporation (within the meaning of this Section 1.8(a)), the acquisition of additional control of the corporation by the same person or Persons Acting as a Group is not considered to cause a Change in Effective Control (or to cause a Change in Ownership within the meaning of Section 1.8(b)).

		
	(b)
	Change in the Ownership of the Corporation. A Change in Ownership occurs on the date that any one person or Persons Acting as a Group, acquires ownership of stock of the corporation that, together with stock held by such person or Persons Acting as a Group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person or Persons Acting as a Group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or Persons Acting  as  a  Group  is  not  considered  to  cause  a  Change  in

Ownership (or to cause a Change in Effective Control). An increase in 

3

the percentage of stock owned by any one person or Persons Acting as a Group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of a Change in Ownership. A Change in Ownership applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains  outstanding after the transaction.

		
	(c)
	Change  in  the  Ownership  of  a  Substantial  Portion  of  a Corporation’s Assets

		
	(i)
	A Change in Ownership of a Substantial Portion of Assets occurs on the date that any one person or Persons Acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Persons Acting as a Group) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

		
	(ii)
	There is no Change in Ownership of a Substantial Portion of Assets when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer, as provided in this Section 1.8(c)(ii). A transfer of assets by a corporation is not treated as a change in the ownership of such assets if the assets are transferred to:

		
	(1)
	a shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock;

		
	(2)
	an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the corporation;

		
	(3)
	a person or Persons Acting as a Group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the corporation; or

		
	(4)
	an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in Section 1.8(c)(ii)(c.).

For purposes of this Section 1.8(c)(ii) and except as otherwise provided, a person’s  status is determined immediately after the transfer of the 

4

assets.

		
	(d)
	Persons Acting as a Group

		
	(i)
	With regards to Change in the Ownership, persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations  that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

		
	(ii)
	With regards to Change in Effective Control, persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations  that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

		
	(iii)
	With regards to Change in Ownership of a Substantial Portion of Assets, persons will not be considered to  be acting as a group solely because they purchase assets of the same corporation at the same time.  However, persons

will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or similar business transaction with the corporation. If a person, including an entity shareholder owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership 

5

in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

		
	(e)
	To constitute a Change in Control Event as to a Participant, the Change in Control Event must relate to:

		
	(i)
	the corporation with respect to which the Participant is an Eligible Individual at the time of the Change in Control Event;

		
	(ii)
	the corporation that is liable for the payment of the Account (or all corporations liable for the payment if more than one corporation is liable) but only if either the Participant’s benefits under the Plan are attributable to the performance of services by the Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation or corporations to be liable for such payment and, in either case, no significant purpose in making such corporation or corporations liable for such payment is the avoidance of Federal income tax; or

		
	(iii)
	a corporation that is a majority shareholder of a corporation identified in Sections 1.8(e)(i) or 1.8(e)(ii), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in Section 1.8(e)(i) or Section 1.8(e)(ii). With regard to a relevant corporation, a majority shareholder is a shareholder owning more than 50% of the total fair market value and total voting power of such corporation.

		
	(f)
	Stock Ownership. For the purposes of this Section 1.8, ownership of stock will be determined by the application of Code §318(a). Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is

not substantially vested (as defined by Treasury Regulation §§ 1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option. In addition, mutual and cooperative corporations are treated as having stock for purposes of this Section 1.8(f).

		
	1.9
	Code The Internal Revenue Code of 1986, as amended from time to time. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation which amends, 

6

supplements or replaces such section or subsection.

		
	1.10
	Commissions Shall mean both Investment Commissions and Sales Commissions.

		
	1.11
	Compensation Shall mean a Participant’s Regular Salary, bonuses, Commissions, Performance-Based Compensation, and director fees, as elected by the Plan Sponsor in the Adoption Agreement.

		
	1.12
	Compensation Deferral Agreement The written agreement between an Eligible Individual and the Plan Sponsor to defer receipt by the Eligible Individual of Compensation. Such agreement shall state the deferral amount or percentage of Compensation to be withheld from the Eligible Individual’s Compensation and shall state the date on which the agreement is effective, as provided at Section 2.3.

		
	1.13
	Compensation Deferrals That portion of a Participant’s Compensation which is deferred under the terms of this Plan.

		
	1.14
	Conflict of Interest Divestiture Shall have the meaning set forth in Section 6.3.

		
	1.15
	Corporate Dissolution A corporate dissolution taxed pursuant to Code §331 or with the approval of a bankruptcy court pursuant to section 503(b)(1)(A) of title 11, United States Code.

		
	1.16
	De Minimis Distribution Shall have the meaning elected by the Plan Sponsor in the Adoption Agreement.

		
	1.17
	Disability Shall have the meaning elected by the Plan Sponsor in the Adoption Agreement.

		
	1.18
	Distributable Event The events entitling a Participant or Beneficiary to a payment of benefits under the Plan, which shall be: Separation from Service; death; Disability, if applicable; the occurrence of an Interim Distribution Date; the occurrence of an Unforeseeable Emergency; Plan Termination Following a Change of Control Event, if applicable; Plan Termination Following a Corporate Dissolution; Plan Termination in Connection with Termination of Certain Similar Arrangements; Conflict of Interest Divestiture; Domestic Relations Order; and Income Inclusion Under Code § 409A.

7

		
	1.19
	Domestic Partner Shall have the meaning elected by the Plan Sponsor in the Adoption Agreement. The Plan Administrator in its sole discretion shall determine whether an individual meets the requirements of a Domestic Partner and shall have the right to request documentary proof of the existence of a Domestic Partner relationship, which proof may include, but is not limited to, a joint checking account, a joint mortgage or lease, driver’s licenses showing the same address, the registration of a  domestic partnership or civil union in states that recognize such relationships or such other proof as the Plan Administrator may determine.

		
	1.20
	Domestic Relations Order Any judgment, decree or order (including approval of a property settlement agreement) which relates to the provision of child support, alimony payments or marital property rights to a Spouse, former Spouse, child or other dependent of a Participant and is made pursuant to a State domestic relations law (including a community property law).

		
	1.21
	Effective Date The date as of which the Plan becomes effective or is amended, as selected in the Adoption Agreement.

		
	1.22
	Eligible Individual Any common-law employee, independent contractor or non- employee director who provides services to the Plan Sponsor and is designated by the Plan Sponsor as eligible to participate in the Plan in accordance with Section 2.1. Only those individuals who are part of a select group of management or highly compensated individuals, as determined by the Plan Sponsor in its sole discretion, may be designated as Eligible Individuals under the Plan.

		
	1.23
	ERISA The Employee Retirement Income Security Act of 1974, as amended. Reference to any section or subsection of ERISA includes reference to any comparable or succeeding provisions of any legislation which amends, supplements or replaces such section or subsection.

		
	1.24
	Income Inclusion Under Code § 409A Shall have the meaning set forth in Section 6.9.

		
	1.25
	Interim Distribution Date Shall have the meaning elected by the Plan Sponsor in the Adoption Agreement.

		
	1.26
	Investment Commissions The Compensation or the portion of Compensation earned by a Participant that meets the following requirements: (a) a substantial portion of the services provided by the Participant for such Compensation consists of sales of financial products or other direct customer services to an unrelated customer with respect to customer assets or customer asset accounts; (b) the customer retains the right to terminate the customer relationship and may move or liquidate the assets or asset accounts without undue delay (which may be subject to a reasonable notice period); (c) such 

8

Compensation consists of a portion of the value of the overall assets or asset account balance, an amount substantially all of which
is calculated by reference to the increase in the value of the overall assets or account balance during a specified period, or both; and (d) the value of the overall assets or account balance and Investment Commission is determined at least annually. For this purpose, a customer is treated as an unrelated customer only if the customer is not related (within the meaning of Code § 409A) to either the Plan Sponsor, any Affiliate or the Participant. Notwithstanding the foregoing, Compensation involving a related customer will be treated as an Investment Commission provided that (x) the Compensation otherwise meets the requirements set forth in this section, (y) substantial sales from which Investment Commissions arise are made, or substantial services from which Investment Commissions arise are provided, to unrelated customers by the Plan Sponsor or an Affiliate and (z) the sales and service arrangement and the commission arrangement with respect to the related customers are bona fide, arise from the Plan Sponsor’s or Affiliate’s ordinary course of business and are substantially the same, both in terms and in practice, as the terms and practices applicable to unrelated customers (within the meaning of Code § 409A) to which (individually or in the aggregate) substantial sales are made or substantial services provided by the Plan Sponsor or an Affiliate.

		
	1.27
	Investment Credits and Debits Bookkeeping adjustments to Participants’ Accounts to reflect the hypothetical interest, earnings, appreciation, losses and depreciation that would be accrued or realized if assets equal to the value of such Accounts were invested in accordance with such Participants’ Benefit Benchmarks.

		
	1.28
	Nonqualified Deferred Compensation Plan A pension plan, within  the meaning of ERISA §201(2), the purpose of which is to permit a select group of management or highly compensated Eligible Individuals to defer receipt of a portion of their Compensation to a future date.

		
	1.29
	Participant An Eligible Individual who is currently deferring a portion of his or her Compensation under this Plan, or an Eligible Individual or former Eligible Individual who is still entitled to the payment of benefits under the Plan.

		
	1.30
	Performance-Based Compensation Compensation, the amount of which, or entitlement to which, is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by no later than 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-Based Compensation does not include any amount, or portion of any amount, that will be paid either 

9

regardless of performance or based upon a level of performance that is substantially certain to be met at the time the criteria is established. If payments  are  based  upon  the  satisfaction  of  subjective  criteria,  the
subjective performance criteria must be bona fide and relate to the performance of the Participant, a group that includes the Participant or a business unit for which the Participant provides services, and the determination that any subjective performance criteria have been met must not be made by the Participant, a family member of the Participant or a person under the effective control of the Participant or a family member of the Participant or where any amount of the compensation of the person making such determination is effectively controlled in whole or in part by the Participant or family member of the Participant. Compensation determined by reference to the value of the Plan Sponsor or an Affiliate, or the stock of the Plan Sponsor or an Affiliate, shall be Performance Based Compensation only as provided under Code § 409A and the regulations and binding guidance issued thereunder.

		
	1.31
	Plan The Nonqualified Deferred Compensation Plan established by the Plan Sponsor under the terms of this Basic Plan Document and the accompanying Adoption Agreement.

		
	1.32
	Plan Administrator The individual(s) or committee appointed by the Plan Sponsor identified in Section I of the Adoption Agreement to administer the Plan as provided herein. If no such appointment is made, the Chief Executive Officer of the Plan Sponsor identified in Section I of the Adoption Agreement (or the most senior officer of such Plan Sponsor if the Plan Sponsor does not have a Chief Executive Officer) shall serve as the Plan Administrator. In no event shall a Plan Administrator who is a Participant be permitted to make decisions regarding his or her benefits under this Plan; rather, such decisions shall be made by the other members of any committee appointed to act as the Plan Administrator or, if no such committee has been appointed, the most senior officer of the Plan Sponsor identified in Section I of the Adoption Agreement whose benefits are not at issue in the decision. If a Change in Control Event occurs with respect to the Plan Sponsor named in Section I of the Adoption Agreement, the existing Plan Administrator shall be removed, and a new Plan Administrator shall be appointed as provided in Section 8.9.

		
	1.33
	Plan Sponsor The corporation or business entity identified in Section I of the Adoption Agreement, including any successor to such corporation or business that assumes the obligations of such corporation or business. The term Plan Sponsor shall also include, where appropriate, any entity affiliated with the Plan Sponsor which adopts the Plan with the consent of the Plan Sponsor and is listed on Exhibit A attached to the Adoption Agreement. Only the Plan Sponsor identified in Section I of the Adoption Agreement shall have the power to amend this Plan, appoint the Plan Administrator, or exercise any of the powers described in Section 8.3 hereof.

10

		
	1.34
	Plan Termination Following a Change in Control Event Shall have the meaning set forth in Section 10.3.

		
	1.35
	Plan Termination Following a Corporate Dissolution Shall have the meaning set forth in Section 10.4.

		
	1.36
	Plan Termination in Connection with Termination of Certain Similar Arrangements  Shall have the meaning set forth in Section 10.5.

		
	1.37
	Regular Salary The Participant’s gross income paid by the Plan Sponsor during the Taxable Year as reportable on Internal Revenue Service Form W-2, including amounts excludible from gross income that are contributed by the Participant on a pre-tax basis to a salary reduction retirement or welfare plan (including amounts contributed to this Plan), but excluding Commissions, bonuses, Performance-Based Compensation, director fees, or any other irregular payments.

		
	1.38
	Sales Commissions Compensation earned by a Participant that meets the following requirements: (a) a substantial portion of the services provided by the Participant for the Compensation consists of the direct sale of a product or service to an unrelated customer; (b) the Compensation paid by the Plan Sponsor consists of either a portion of the purchase price for the product or service or an amount substantially all of which is calculated by reference to the volume of sales; and (c) payment of the Compensation is either contingent upon the Plan Sponsor or Affiliate receiving payment from an unrelated customer for the product or services or, if applied consistently to all similarly situated Participants, is contingent upon the closing of the sales transaction and such other requirements as may be specified by the Plan Sponsor or Affiliate before the closing of the sales transaction. For this purpose, a customer will be treated as an unrelated customer only if the customer is not related (within the meaning of Code § 409A) to either the Plan Sponsor, any Affiliate or the Participant. Notwithstanding the foregoing, Compensation involving a related customer will be treated will be treated as a Sales Commission provided that (x) the Compensation otherwise meets the requirements set forth in this section, (y) substantial sales from which Sales Commissions arise are made, or substantial services from which Sales Commissions arise are provided, to unrelated customers by the Plan Sponsor or an Affiliate and (z) the sales and service arrangement and the commission arrangement with respect to the related customers are bona fide, arise from the Plan Sponsor’s or Affiliate’s ordinary course of business and are substantially the same, both in terms and in practice, as the terms and practices applicable to unrelated customers (within the meaning of Code

§ 409A) to which (individually or in the aggregate) substantial sales are made or substantial services provided by the Plan Sponsor or an Affiliate.

11

		
	1.39
	Separation from Service A Participant shall have a Separation from Service under the circumstances described below.

		
	(a)
	Employees  A Participant who is a common law employee has a Separation from Service if the Participant voluntarily or involuntarily

terminates employment with the Plan Sponsor and all Affiliates, for any reason other than Disability or death. A termination of employment occurs if the facts and circumstances indicate that the Plan Sponsor and the Participant reasonably anticipate that no further services will be performed after a certain date or that the level of bona fide services the Participant will perform after such date (whether as an employee or an independent contractor) will decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for less than 36 months). Notwithstanding the foregoing, the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed 6 months, or if longer, so long as the Participant retains the right to reemployment with the Plan Sponsor or an Affiliate under an applicable statute or contract. When a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of at least 6 months and such impairment causes the Participant to be unable to perform the duties of his or her position or any substantially similar position, a 29-month period of absence shall be substituted for the 6-month period above.

		
	(b)
	Independent Contractors A Participant who is an independent contractor shall have a Separation from Service upon the expiration of all contracts under which services are performed for the Plan Sponsor and all Affiliates if the expiration constitute a good faith and complete termination of the contractual relationship. An expiration does not constitute a good faith and complete termination of the contractual relationship if the Plan Sponsor or an Affiliate anticipates a renewal of a contractual relationship or the independent contractor becoming an employee. For this purpose, a Plan Sponsor is considered to anticipate the renewal of the contractual relationship if the Plan Sponsor or an Affiliate intends to contract again for the services provided under the expired contract and the independent contractor has not been eliminated as a possible provider of services under any such new contract. A Plan Sponsor is considered to intend to contract again for the services provided under an expired contract if doing so is conditioned only upon incurring a need for the services, the availability of funds or both.

12

		
	(c)
	Directors Except as otherwise provided hereunder, a Participant who  is  a  member  of  the  Board  shall  be  considered  to  be  an

Independent Contractor for purposes of determining whether the Participant has had a Separation from Service.

		
	(d)
	Dual Status If a Participant provides services to the Plan Sponsor and any Affiliates as an employee and as an independent contractor, the Participant must have a Separation from Service with the Plan Sponsor and all Affiliates both as an employee and an independent contractor to have a Separation from Service. Notwithstanding the foregoing, if a Participant provides services to the Plan Sponsor and any Affiliates as an employee and as a director, (1) the services provided as a director are not taken into account in determining whether the Participant has a Separation from Service as an employee under the Plan if the Participant participates in the Plan as an employee, provided the Participant does not participate in any other nonqualified deferred compensation plan as a director that is aggregated with the Plan under Code §409A, and (2) the services provided as an employee are not taken into account in determining whether the Participant has a Separation from Service as a director under the Plan if the Participant participates in the Plan as a director, provided the Participant does not participate in any other nonqualified deferred compensation plan as an employee that is aggregated with the Plan under Code §409A.

		
	1.40
	Specified Employee A key employee (as defined in Code § 416(i) without regard to paragraph (5) thereof) of a Plan Sponsor or its Affiliates, any stock of which is publicly traded on an established securities market or otherwise. A Participant is a key employee if the Participant meets the requirements of Code §416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code §416(i)(5)) at any time during the 12- month period ending each December 31. If a Participant is a key employee at any time during the 12-month period ending on such December 31, the Participant is treated as a Specified Employee for the 12-month period beginning on the following April 1. Whether any stock of a Plan Sponsor or its Affiliates is publicly traded on an established securities market or otherwise must be determined as of the date of the Participant’s Separation from Service.

		
	1.41
	Spouse The individual to whom a Participant is married, or was married in the case of a deceased Participant who was married at the time of his or her death.

		
	1.42
	Taxable Year The 12-consecutive-month period beginning each January 1 and ending each December 31.

		
	1.43
	Trust The agreement, if any, between the Plan Sponsor and the Trustee under 

13

which assets may be delivered by the Plan Sponsor to the Trustee to offset
liabilities assumed by the Plan Sponsor under the Plan. Any assets held under the terms of the Trust shall be the exclusive property of the Plan Sponsor and shall be subject to the creditor claims of the Plan Sponsor with respect to whom such Trust has been established. Participants shall have no right, secured or unsecured, to any assets held under the terms of the Trust.

		
	1.44
	Trustee The institution named by the Plan Sponsor in the Trust agreement, if any, and any corporation which succeeds the Trustee by merger or by acquisition of assets or operation of law.

		
	1.45
	Unforeseeable Emergency A severe financial hardship to the Participant resulting from an illness or accident of the Participant or the Participant’s Spouse, Beneficiary or dependent (as defined in Code §152 without regard to §§ 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Participant’s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

		
	1.46
	Valuation Date The date on which Participant Accounts under the Plan are valued. The Valuation Date shall be each business day of the Taxable Year on which the New York Stock Exchange and, if a Trust has been established in connection with the Plan, the Trustee are open for business.

		
	1.47
	Without Good Cause A Participant’s involuntary Separation from Service shall be without good cause if it occurs for reasons other than the Participant’s commission of a crime involving dishonesty or moral turpitude (e.g., fraud, theft, embezzlement, deception, etc.); misconduct, including but not limited to insubordinate behavior, by the Participant in the performance of his or her job duties and responsibilities; any conduct by the Participant of a nature which reflects negatively upon the Plan Sponsor or any Affiliate or which would prevent the Participant from being able to adequately perform his or her job duties and responsibilities (e.g., malicious, willful and wanton, or negligent conduct, etc.); the Participant’s failure to adequately perform his/her duties and responsibilities as such duties and responsibilities are, from time to time in the Plan Sponsor’s absolute discretion, determined; and the Participant’s breach of any of the Plan Sponsor’s established operating policies and procedures.

ARTICLE II

 ELIGIBILITY AND PARTICIPATION

		
	2.1
	Eligibility   The Plan Sponsor will designate in the Adoption Agreement those

persons who shall be considered Eligible Individuals under the Plan.

		
	2.2
	Participation The Plan Administrator shall provide written notification to each 

14

Eligible Individual of his or her eligibility to participate in the Plan.
		
	2.3
	Compensation Deferral Agreement In order to defer Compensation under the Plan for a given Taxable Year, an Eligible Individual must enter into a Compensation Deferral Agreement with the Plan Sponsor authorizing the deferral of all or part of the Participant’s Compensation for such Taxable Year. The Compensation Deferral Agreement shall also specify the method of payment for benefits under the Plan and any Interim Distribution Date that shall apply with respect to amounts credited to the Participant’s Account for such Taxable Year.

Upon receipt of a properly completed and executed Compensation Deferral Agreement, the Plan Administrator shall notify the Plan Sponsor to withhold that portion of the Participant’s Compensation specified in the Agreement. In no event will the Participant be permitted to defer more or less than the amount(s) specified by the Plan Sponsor in the Adoption Agreement.

The Compensation Deferral Agreement shall remain in effect for the duration of the Taxable Year to which it relates.

Except as provided below, a Compensation Deferral Agreement must be completed and returned to the Plan Sponsor prior to the first day of the Taxable Year in which services are performed for the Compensation deferred and shall be irrevocable except as otherwise provided hereunder.

		
	(a)
	Initial Eligibility If the Plan is established on a date other than the first day of a Taxable Year, or if an individual becomes an Eligible Individual on a date other than the first day of a Taxable Year and such individual has not at any time been eligible to participate in the Plan or any Aggregated Plan, the Compensation Deferral Agreement may be completed and returned to the Plan Sponsor within 30 days after the Effective Date or within 30 days after the Eligible Individual’s initial eligibility date. In no event shall a Participant be permitted to defer Compensation with respect to services performed before the date on which the Compensation Deferral Agreement is signed by the Participant and accepted by the Plan Administrator.

		
	(b)
	Former Participants With No Account Balance If an Eligible Individual who is a former Participant has been paid all amounts deferred under the Plan and any Aggregated Plan and, on and before the date of the last payment, is not eligible to continue (or elect to continue) to participate in the Plan or any Aggregated Plan for periods after the last payment (other than through an election of a different time and form of payment with respect to the amounts paid), the Eligible Individual may be treated as initially eligible to participate in the Plan pursuant to subsection (a) above as of the first date following such last payment that the Eligible Individual again becomes eligible 

15

to participate in the Plan.
		
	(c)
	Participants Ineligible for Two Years If an Eligible Individual who is a Participant or former Participant ceases being eligible to participate in the Plan and any Aggregated Plan, regardless of whether all amounts deferred under such plans have been paid, and subsequently becomes eligible to participate in the Plan again, the Eligible Individual may be treated as being initially eligible to participate in the Plan pursuant to subsection (a) above if the Eligible Individual has not been eligible to participate in the Plan or an Aggregated Plan (other than through the accrual of earnings) at any time during the twenty-four (24) month period ending on the date the Eligible Individual again becomes eligible to participate in the Plan.

		
	(d)
	Performance-Based Compensation A Compensation Deferral Agreement with respect to Performance-Based Compensation may be completed and returned to the Plan Sponsor no later than the date that is six months before the end of the performance period to which the Performance-Based Compensation relates, provided the Participant performs services continuously from the later of the beginning of the performance period or the date upon which the performance criteria are established through the date upon which the Participant makes an initial deferral election, and further provided that in no event may an election to defer Performance- Based Compensation be made with respect to Compensation that has become readily ascertainable.

		
	(e)
	Sales Commissions Compensation Deferral Agreements made with respect to Sales Commissions must be completed and returned to the Plan Sponsor prior to the first day of the Taxable Year in which the customer remits payment to the Plan Sponsor or Affiliate for which the Sales Commission is paid or, if applied consistently to all similarly situated Participants, the Taxable Year in which the sale occurs.

		
	(f)
	Investment Commissions Compensation Deferral Agreements made with respect to Investment Commissions must be completed and returned to the Plan Sponsor prior to the first day of the Taxable Year in which falls the date that is twelve (12) months before the date as of which the overall value of the assets or asset accounts is determined for purposes of calculating the Investment Commission.

		
	2.4
	Subsequent Changes in Time and Form of Payment A Participant may elect to change the time or form of payment of amounts distributable upon a Separation from Service or elect to change the time of payment of amounts distributable upon an Interim Distribution Date, provided, however, that any such election shall be effective only if:

		
	(a)
	the election does not accelerate the time or schedule of any payment 

16

within the meaning of Code § 409A;

		
	(b)
	the election does not take effect until at least twelve 12 months after the date on which the election is made;

		
	(c)
	the first payment with respect to which such election is made is deferred for a period of 5 years from the date such payment would otherwise have been made; and

		
	(d)
	for a change to a payment made upon an Interim Distribution Date, such election is made at least 12 months before such Interim Distribution Date.

The Plan Administrator shall have sole and absolute discretion to decide whether such a request shall be approved but may approve no more than one such  request  for  any Participant with respect to any Compensation Deferral or Matching or Discretionary Credit.

		
	2.5
	Matching Credits and Discretionary Credits The Plan Sponsor may adjust the Account of a Participant with matching or discretionary credits. The amount of the Discretionary Credits and/or Matching Credits and the formula(s) for allocating such credits will be selected by the Plan Sponsor in the Adoption Agreement.

		
	2.6
	Establishing a Reserve for Plan Liabilities The Plan Sponsor may, but is not required to, establish one or more Trusts to which the Plan Sponsor may transfer such assets as the Plan Sponsor determines in its sole discretion to assist in meeting its obligations under the Plan. Any such assets shall be the property of the Plan Sponsor and remain subject to the claims of the Plan Sponsor’s creditors, to the extent provided under any Trust established with respect to such Plan Sponsor. The Trustee shall have no duty to determine whether the amounts forwarded by the Plan Sponsor are the correct amount or that they have been transmitted in a timely manner.

ARTICLE III

PARTICIPANT ACCOUNTS AND REPORTS

		
	3.1
	Establishment of Accounts The Plan Administrator shall establish and maintain individual recordkeeping accounts and subaccounts, as applicable, on behalf of each Participant for purposes of determining each Participant’s benefits under  the  Plan. A Participant’s Account does not represent the Participant’s ownership of, or any ownership interest in, any assets which may be set aside to satisfy the Plan Sponsor’s obligations under the Plan.

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

17

		
	(a)
	An  amount  equal  to  any  Compensation  Deferrals  made  by  the Participant since the last Valuation Date;

		
	(b)
	An amount equal to any Matching Credits or Discretionary Credits, and any forfeitures, if applicable, since the last Valuation Date; and

		
	(c)
	An amount equal to deemed Investment Credits under Section 3.3 below since the last Valuation Date.

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

		
	(d)
	An  amount  equal  to  any  distributions  from  the  Plan  to  the Participant or Beneficiary since the last Valuation Date; and

		
	(e)
	An amount equal to deemed Investment Debits under Section 3.3 below since the last Valuation Date; and

		
	(f)
	An amount equal to any forfeitures incurred by the Participant since the last Valuation Date.

		
	3.3
	Investment Credits and Debits    The Accounts of Participants shall be adjusted for Investment Credits and Debits in accordance with this Section 3.3.

Participants shall have the right to specify one or more Benefit Benchmarks in which their Compensation Deferrals, Matching Credits and Discretionary Credits shall be deemed to be invested. The Benefit Benchmarks shall be utilized solely for purposes of adjusting their Accounts in accordance with procedures adopted by the Plan Administrator. The Plan Administrator shall provide the Participant with a list of the available Benefit Benchmarks. From time to time, in the sole discretion of the Plan Administrator, the Benefit Benchmarks available within the Plan may be revised. All Benefit Benchmark selections must be denominated in whole percentages unless the Plan Administrator determines that lower increments are acceptable.  A Participant may make changes in the manner in which future Compensation Deferrals, Matching Credits and/or Discretionary Credits are deemed to be invested among the various Benefit Benchmarks within the Plan in accordance with procedures established by the Plan Administrator. A Participant may re-direct the manner in which earlier Compensation Deferrals, Matching  Credits and/or Discretionary Credits, as well as any appreciation (or depreciation) to-date, are deemed to be invested among the Benefit Benchmarks available in the Plan in accordance with procedures established by the Plan Administrator.

As of each Valuation Date, the Plan Administrator shall adjust the Account of each Participant for interest, earnings or appreciation (less losses and 

18

depreciation) with respect to the then balance of the Participant’s Account
equal to the actual results of the Participant’s deemed Benefit Benchmark elections.

All notional acquisitions and dispositions of Benefit Benchmarks which occur within a Participant’s Account, pursuant to the terms of the Plan, shall be deemed to occur at such times as the Plan Administrator shall determine to be administratively feasible in its sole discretion and the Participant’s Account shall be adjusted accordingly. Accordingly, if a distribution or reallocation must occur pursuant to the terms of the Plan and all or some portion of the Account must be valued in connection with such distribution or reallocation (to reflect Investment Credits and Debits), the Plan Administrator may in its sole discretion, unless otherwise provided for in the Plan, select a date or dates which shall be used for valuation purposes.

Notwithstanding anything to the contrary, any Investment Credits or Debits made to any Participant’s Account following a Plan Termination or a Change in Control Event shall be made in a manner no less favorable to Participants than the practices and procedures employed under the Plan, or as otherwise in effect, as of the date of the Plan Termination or the Change in Control Event.

Notwithstanding the Participant’s deemed Benefit Benchmark elections under the Plan, the Plan Sponsor shall be under no obligation to actually invest any amounts in such manner, or in any manner, and such Benefit Benchmark elections shall be used solely to determine the amounts by which the Participant’s Account shall be adjusted under this Article III.

		
	3.4
	Participant Statements The Plan Administrator shall provide each Participant with a statement showing the credits and debits from his or her Account during the period from the last statement date. Such statement shall be provided to Participants as soon as administratively feasible following the end of each Taxable Year and on such other dates as agreed to by the Plan Sponsor and the party maintaining Participant records.

ARTICLE IV

 WITHHOLDING OF TAXES

		
	4.1
	Withholding   from   Compensation       For   any   Taxable   Year   in   which

Compensation Deferrals, Matching Credits and/or Discretionary Credits are made to or vested within the Plan (as applicable), the Plan Sponsor shall withhold the Participant’s share of income, FICA and other employment taxes from the portion of the Participant’s Compensation not deferred. If deemed appropriate by the Plan Sponsor, all or any portion of a benefit under the Plan may be distributed in certain instances where necessary to facilitate compliance with applicable withholding requirements to the extent such 

19

distribution would not result in adverse tax consequences under Code §
409A. The amount of any such distribution shall not exceed the amount necessary to comply with applicable withholding requirements.

		
	4.2
	Withholding from Benefit Distributions The Plan Sponsor (or the Trustee of the Trust, as applicable) shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Plan Sponsor, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Plan Sponsor.

ARTICLE V

 VESTING

		
	5.1    
	Vesting   A Participant shall be immediately vested in (i.e., shall have a non-

forfeitable right to) all Compensation Deferrals credited to his or her Account, including any Investment Credits or Debits associated therewith. The Plan Sponsor shall specify in the Adoption Agreement the vesting provisions applicable to any Discretionary Credits or Matching Credits allocated to the Accounts of Participants. Upon a Distributable Event, except as otherwise provided under the Plan, any amount of the benefit payment credited to the Account of the Participant that is not vested shall be forfeited. Forfeitures incurred by a Participant shall reduce the amounts credited to a Participant’s Account, but shall not be reallocated to the Accounts of other Participants unless otherwise specified in the Adoption Agreement. A distribution for a Domestic Relations Order Payment under Section 6.6 shall be made from the Account of the Participant only to the extent it is vested.

ARTICLE VI

 PAYMENTS 

		
	6.1
	Benefits    Except  as  otherwise  provided  under  the  Plan,  a  Participant’s  or Beneficiary’s benefit payable under the Plan shall be the value of the Participant’s vested Account at the time a Distributable Event occurs with respect to such Participant or Beneficiary. In no event, will a Participant’s right to a benefit under this Plan give such Participant a secured right or claim on any assets set aside by the Plan Sponsor to meet its obligations under the Plan. All payments from the Plan shall be subject to applicable tax withholding and shall commence (or be fully paid, in the event a lump sum form of distribution was selected) no later than ninety (90) days after the occurrence of the Distributable Event, except as otherwise provided herein.

		
	6.2
	Separation from Service Payment In the event of a Participant’s Separation from Service, the Participant’s vested Account shall be paid in the form of a 

20

cash lump sum or, if elected by the Participant, in annual cash payments (over a period of five (5), ten (10), or fifteen (15) years). For purposes of Code § 409A, installment payments shall be treated as a single payment.  If
applicable, the initial installment shall be based on the value of the Participant’s vested Account, measured on the date of his or her Separation from Service, and shall be equal to 1/n (where ‘n’ is equal to the total number of annual benefit payments not yet distributed). Subsequent installment payments shall be computed in a consistent fashion, with the measurement date being the anniversary of the original measurement date. Election of the form of the Separation from Service Payment must be provided to the Plan Administrator at the time the Participant first enters into a Compensation Deferral Agreement.

Notwithstanding a Participant’s election regarding the form of the Separation from Service Payment, the Plan Sponsor shall make a De Minimis Distribution, as elected by the Plan Sponsor in the Adoption Agreement, and pay the Participant’s or Beneficiary’s benefit in a single lump-sum payment.

Notwithstanding the foregoing, a distribution resulting from a Separation from Service by a Participant who is a Specified Employee on the date of Separation from Service shall be made within the ninety (90) days following the date that is 6 months after the Separation from Service or, if earlier, within the ninety (90) days following the death of the Specified Employee. The first payment made following the 6-month period described in the preceding sentence shall include all payments that otherwise would have been made after Separation from Service but for the delay required by this paragraph.

		
	6.3
	Conflict  of  Interest  Divestiture    The  Plan  Administrator  shall  pay  to  a Participant all or a portion of the Participant’s vested Account to the extent

		
	(a)
	necessary for any Participant who is Federal officer or employee in the executive branch to comply with an ethics agreement with the Federal government; or

		
	(b)
	reasonably necessary to avoid the violation of an applicable Federal, state or local ethics or conflicts of interest law (including when such payment is reasonably necessary to permit the Participant to participate in activities in the normal course of his or her position in which the Participant would not otherwise be able to participate under an applicable rule).

The Plan Administrator shall have complete discretion to determine whether the Participant’s circumstances meet the requirements for a Conflict of Interest Divestiture and the amount of any distribution. A distribution under this Section  shall  be  made at such time and in such form as shall be necessary to comply with an applicable ethics agreement or to avoid the violation of an applicable ethics or conflict of interest law.

21

		
	6.4
	Death Benefit  In the event of the Participant’s death, whether before or after the Participant  has  otherwise  incurred  a  Distributable  Event  or  commenced

receiving payments from the Plan, the Participant’s Beneficiary shall receive the balance of the Participant’s vested Account in a single lump-sum cash payment.

		
	6.5
	Disability Benefit If the occurrence of a Disability is a Distributable Event, as elected by the Plan Sponsor in the Adoption Agreement, the Plan Administrator shall pay to a Participant the balance of the  Participant’s vested Account in a single lump-sum cash payment in the event the Participant suffers a Disability (whether before or after the Participant has otherwise incurred a Distributable Event or commenced receiving payments from the Plan). The Plan Administrator shall have complete discretion to determine whether the circumstances of the Participant constitute a Disability and the time at which such Disability occurs consistent with the terms of the Plan.

		
	6.6
	Domestic Relations Order Payment If it is necessary to satisfy a Domestic Relations Order, whether before or after the Participant has otherwise incurred a Distributable Event or commenced receiving payments from the Plan, the Plan Administrator shall pay to the Spouse, former Spouse, child, or other dependent of the Participant, as specified in the Domestic Relations Order, the amount from the Participant’s vested Account required to fulfill the Domestic Relations Order. The Plan Administrator shall have complete discretion to determine whether the circumstances of the Participant meet the requirements for a Domestic Relations Order Payment under this Section. If the request for a payment due to a Domestic Relations Order is approved, the distribution shall be made at such time and in such form as shall be necessary to satisfy the Domestic Relations Order.

		
	6.7
	Unforeseeable Emergency Distribution If a Participant has an Unforeseeable Emergency, as defined herein, the Plan Administrator may pay to the Participant that portion of his or her vested Account which the Plan Administrator determines is reasonably necessary to satisfy the emergency. The amounts distributed to the Participant as a result of an Unforeseeable Emergency may not exceed the amounts reasonably necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by cancellation of Compensation Deferrals pursuant to Section 7.1. A Participant requesting an Unforeseeable Emergency Distribution shall apply for the payment in writing on a form approved by the Plan Administrator and shall provide such additional information as the Plan Administrator may require. 

22

The Plan Administrator shall have complete discretion to determine whether the financial hardship of the Participant constitutes an Unforeseeable Emergency under the Plan. If, subject to the sole discretion of the Plan Administrator, the request for a
withdrawal is approved, the distribution shall be made within ninety (90) days after the date of approval by the Plan Administrator.

		
	6.8
	Election to Receive Interim Distributions A Participant may make an election, at the time he or she files a Compensation Deferral Agreement for a given Taxable Year,  to have those Compensation Deferrals to which the agreement relates paid to him or her at an Interim Distribution Date designated by the Participant. Such Compensation Deferrals, adjusted to reflect Investment Credits and Debits, shall be payable in a single cash lump sum payment within ninety (90) days after an applicable Interim Distribution Date. The Participant’s selection of an Interim Distribution Date is irrevocable, except as provided in Section 2.4, and must comply with the definition of Interim Distribution Date under Section 1.25. Notwithstanding a Participant’s advance election to designate Interim Distribution Dates, the amounts which would otherwise be subject to such Interim Distribution Dates shall be distributable upon a Distributable Event pursuant to the Plan, if such Distributable Event occurs prior to an applicable Interim Distribution Date. Matching Credits and Discretionary Credits shall not be payable at an Interim Distribution Date.

		
	6.9
	Payment upon Income Inclusion Under § 409A If the Plan Administrator determines at any time that the Plan fails to meet the requirements of Code § 409A with respect to a Participant, the Plan Administrator shall distribute to the Participant the amount from the Participant’s vested Account that is required to be included in income as a result of such failure in a single lump- sum payment.

		
	6.10
	Permissible Delay in Payments A payment may be delayed beyond the distribution date otherwise provided for under the Plan in one or more of the circumstances below, if the Plan Sponsor so elects in the Adoption Agreement.

		
	(a)
	Payments Subject to Code § 162(m) A payment, including any portion thereof, will be delayed when the Plan Sponsor reasonably anticipates that its deduction with respect to such payment otherwise would be eliminated by application of Code § 162(m), provided that the payment is made either during the Participant’s first Taxable Year in which the Plan Sponsor reasonably anticipates (or should reasonably anticipate) that if the payment is made during such year the deduction of such payment will not be barred by Code § 162(m) or during the period beginning with the date of the Participant’s Separation from Service and ending on the later of the last day of the Plan Sponsor’s taxable year in which the Participant has a Separation from Service or the 15th day of the third month following 

23

the Participant’s Separation from Service, and provided further that when any scheduled payment to a Participant in the Plan Sponsor’s taxable year is delayed in accordance with this
Section, all scheduled payments to such Participant that could be delayed in accordance with this Section are also delayed. When a payment is delayed to a date on or after the Participant’s Separation from Service, the payment shall be treated as a payment upon a Separation from Service and, in the case of a Specified Employee, the date that is 6 months after a Participant’s Separation from Service is substituted for any reference to a Participant’s Separation from Service in the foregoing provisions of this Section.

		
	(b)
	Violation of Federal Securities Laws or Other Applicable Law A payment will be delayed when the Plan Sponsor reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law, provided that the payment will be made at the earliest date at which the Plan Sponsor reasonably anticipates that the making of the payment will  not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.

		
	6.11
	Beneficiary Designation A Participant shall have the right to designate a Beneficiary and to amend or revoke such designation at any time in writing. Such designation, amendment or revocation shall be effective upon receipt by the Plan Administrator. If the Beneficiary is a minor or incompetent, benefits may be paid to a legal guardian, trustee, or other proper representative of the Beneficiary, and such payment shall completely discharge the Plan Sponsor and the Plan of all further obligations hereunder.

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

		
	(a)
	Participant’s Spouse;

		
	(b)
	Participant’s Domestic Partner, if elected by the Plan Sponsor in the Adoption Agreement:

		
	(c)
	Participant’s descendants, per stirpes (eligible descendants shall be determined by the intestacy laws of the state in which the decedent was domiciled);

24

		
	(d)
	Participant’s parents;

		
	(e)
	Participant’s brothers and sisters (including step brothers and step sisters); and

		
	(f)
	Participant’s estate.

		
	6.12
	Claims Procedure All claims for benefits under the Plan, and all questions regarding the operation of the Plan, shall be submitted to the Plan Administrator in writing. The Plan Administrator has complete discretion and authority to interpret and construe any provision of the Plan, and its decisions regarding claims for benefits hereunder are final and binding.

		
	(a)
	Presentation of Claim. Any Participant, Beneficiary or person claiming benefits under the Plan (such Participant, Beneficiary or other person being referred to below as a “Claimant”) may deliver to the Plan Administrator a written claim for a determination with respect to benefits distributable to such Claimant from the Plan. The claim must state with particularity the determination desired by the Claimant.

Any claim by a Participant that a payment made under the Plan is less than the amount to which the Participant is entitled must be made in writing pursuant to the foregoing provisions of this Section within 180 days after the date of such payment. Notwithstanding any other provision of the Plan, including the provisions of Section 5.1, a Participant shall forfeit all rights to any amounts claimed if the Participant fails to make claim as provided in the preceding sentence.

		
	(b)
	Notification of Decision The Plan Administrator shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

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

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

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

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

		
	(3)
	a description of any additional material or 

25

information necessary for the Claimant to perfect the claim, and
an explanation of why such material or information is necessary;

		
	(4)
	a description of the claim review procedure set forth in Section 6.12(c) below, including information regarding any applicable time limits and a statement regarding the Claimant’s right to bring an action under ERISA

§502(a)    following    an    adverse    determination    on review; and

		
	(5)
	if the decision involved the Disability of the Participant, information regarding whether an internal rule or procedure was relied upon in making its decision and that the Claimant can request a copy of such rule or procedure, free of charge, upon request.

The Plan Administrator will notify the Claimant of an adverse decision within ninety (90) days after the date the claim was received, unless the Plan Administrator determines there are special circumstances that require an extension of time in which to make a decision. If an extension of time is needed, the Plan Administrator shall notify the Claimant of the extension before the expiration of the original 90-day period. The notice will include a description of the special circumstances requiring an extension of time and an estimate of the date it expects a decision to be made. The extension shall not exceed an additional 90-day period.

If the adverse decision relates to a claim involving the Disability of the Participant, the Plan Administrator will notify the Claimant of an adverse decision within forty-five (45) days after the date the claim was received, unless the Plan Administrator determines that matters beyond its control require an extension of time in which to make a decision. If an extension of time is needed, the Plan Administrator shall notify the Claimant of the extension before the expiration of the original 45-day period. The notice will include a description of the circumstances necessitating the extension and an estimate of the date it expects a decision to be made. The extension shall not exceed an additional 30-day period unless, within the 30-day period the Plan Administrator again determines that more time is needed due to matters beyond its control, in which case notice of the need for not more than an additional thirty (30) days is provided to the Claimant before the first 30-day period expires. The notice will include a description of the circumstances requiring the extension and an estimate of the date it expects a decision to be made. Any extension notice will include information regarding the standards on which a determination of Disability will be made, the outstanding 

26

issues which prevent a decision from
being made, and any additional information which is needed in order to reach a decision. The Claimant will have forty-five (45) days to supply any additional information.

If the Plan Administrator notifies the Claimant of the need for an extension of time to make a decision regarding his or her claim in accordance with this Section 6.12(b), and the extension is needed due to the Claimant’s failure to provide information necessary to decide the claim, the period of time in which the Plan Administrator must make a decision does not include the time between the date the notice of the extension was sent to the Claimant and the date the Claimant responds to the request for additional information.

		
	(c)
	Review of a Denied Claim Within sixty (60) days after receiving a notice from the Plan Administrator that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Plan Administrator a written request 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)
	may review relevant documents;

		
	(ii)
	may submit written comments or other documents relating to the claim;

		
	(iii)
	may request access to and copies of all relevant documents, free of charge;

		
	(iv)
	may request a hearing, which the Plan Administrator, in its sole discretion, may grant.

The Plan Administrator will consider all documents and other information submitted by the Claimant in reviewing its previous decision, including documents not available to or considered by it during its initial determination.

If the appeal relates to a determination of the Plan Administrator involving the Disability of the Participant, the Claimant will have one-hundred-eighty (180) days following receipt of a denial to file a written request for review. In such event, no deference shall be given to the initial benefit determination, and the review shall be conducted by an appropriate fiduciary who is someone other than the individual who made the initial determination or a subordinate of such individual. If the initial determination was based in whole or in part on a medical judgment, the reviewer shall consult with an appropriately trained and experienced health care professional, and shall disclose the identity of 

27

any experts who provided advice with
regard to the initial decision. The health care professional whose advice is sought during the appeal process will not be an individual who was consulted during the initial determination, nor a subordinate of such an individual.

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

		
	(i)
	specific reasons for the decision;

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

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

		
	(iv)
	a statement describing any voluntary appeal procedures under the Plan and the Claimant’s right to bring an action under ERISA §502(a);

		
	(v)
	if the decision involved the Disability of the Participant, information regarding whether an internal rule or procedure was relied upon in making its decision and that the Claimant can request a copy of such rule or procedure, free of charge, upon request;

		
	(vi)
	if the decision involved the Disability of the Participant, a statement that the Claimant and the Plan may have other voluntary alternative dispute resolution options, such as mediation, and that the Claimant may find out what options are available by contacting the local U.S. Department of Labor Office and the state insurance regulatory agency; and

		
	(vii)
	such other matters as the Plan Administrator  deems relevant.

28

If the appeal involves the Disability of the Participant, the decision of the Plan Administrator will be made within forty-five (45) days after the filing of the written request for review, unless special circumstances require additional time, in which case the Plan Administrator’s decision will be made within ninety (90) days after the date the request was filed. If an extension of time is needed, the Plan Administrator shall notify the Claimant of the extension before the expiration of the original 45-day period. The notice will include a description of the circumstances requiring the extension and an estimate of the date it expects a decision to be made.

If the Plan Administrator notifies the Claimant of the need for an extension of time to make a decision regarding his or her appeal in accordance with this Section 6.12(d), and the extension is needed due to the Claimant’s failure to provide information necessary to decide the appeal, the period of time in which the Plan Administrator must make a decision does not include the time between the date the notice of the extension was sent to the Claimant and the date the Claimant responds to the request for additional information.

ARTICLE VII 

CANCELLATION OF DEFERRALS

		
	7.1
	Unforeseeable Emergency  If a Participant has an Unforeseeable Emergency, as defined herein, the Plan Administrator may cancel all future Compensation Deferrals pertaining to Compensation not yet earned and required to be made pursuant to the Participant’s current Compensation Deferral Agreement if reasonably necessary to satisfy the Participant’s financial hardship subject to the standards and requirements for an Unforeseeable Emergency Distribution set forth in Section 6.7. If a Participant receives a hardship distribution from a qualified plan of the Plan Sponsor pursuant to Code § 401(k)(2)(B)(IV), the Plan Administrator shall cancel all future Compensation Deferrals pertaining to Compensation not yet earned and required to be made pursuant to the Participant’s current Compensation Deferral Agreement, and the Participant will be prohibited from making Compensation Deferrals under the Plan for at least six (6) months after receipt of the hardship distribution or such longer period as may be prescribed by the qualified plan. The Participant’s eligibility for Employer Matching Credits and/or Employer Discretionary Credits shall be similarly canceled, and the Participant shall be eligible to defer Compensation again at a later time only as provided under Article II.

29

ARTICLE VIII 

PLAN ADMINISTRATION

		
	8.1
	Appointment   The Plan Administrator shall serve at the pleasure of the Plan

Sponsor, who shall have the right to remove the Plan Administrator at any time upon thirty (30) days’ written notice. The Plan Administrator shall have the right to resign upon thirty (30) days’ written notice to the Plan Sponsor.

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

		
	(a)
	Communicating with Participants in connection with their rights and benefits under the Plan;

		
	(b)
	Reviewing Benefit Benchmark elections received from Participants;

		
	(c)
	Arranging for the payment of taxes (including income tax withholding), expenses and benefit payments to Participants under the Plan;

		
	(d)
	Filing any returns and reports due with respect to the Plan;

		
	(e)
	Interpreting and construing Plan provisions and settling claims for Plan benefits; and

		
	(f)
	Serving as the Plan’s designated representative for the service of notices, reports, claims or legal process.

		
	8.3
	Plan Sponsor The Plan Sponsor has sole responsibility for the establishment and maintenance of the Plan. The Plan Sponsor through its Board shall have the power and authority to appoint the Plan Administrator, Trustee and any other professionals as may be required for the administration of the Plan. The Plan Sponsor shall also have the right to remove any individual or party appointed to perform administrative, investment, fiduciary or other functions under the Plan. The Plan Sponsor may delegate any of its powers to the Plan Administrator, Board member or a committee of the Board.

		
	8.4
	Administrative Fees and Expenses All reasonable costs, charges and expenses incurred by the Plan Administrator or the Trustee in connection with the administration of the Plan or the Trust shall be paid by the Plan Sponsor. If not so paid, 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 and expenses directly to the Trust. If the Trust has insufficient liquid assets to cover the applicable fees, the Trustee shall have the right to liquidate assets held in the Trust to pay any fees or expenses 

30

due.  Notwithstanding the foregoing, no Compensation
other than reimbursement for expenses shall be paid to a Plan Administrator who is an employee of the Plan Sponsor.

		
	8.5
	Plan Administration and Interpretation The Plan Administrator shall have complete discretionary control and authority to determine the rights and benefits and all claims, demands and actions arising out of the provisions of the Plan or any Participant, Beneficiary, deceased Participant, or other person having or claiming to have any interest under the Plan. The Plan Administrator shall have complete discretion to interpret the Plan and to decide all matters under the Plan. Such interpretation and decision shall be final, conclusive, and binding on all Participants and any person claiming under or through any Participant. Any individual serving as  Plan Administrator who is a Participant will not vote or 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 a Participant, a Beneficiary, the Plan Sponsor, or other party. The Plan Administrator shall have the responsibility for complying with any reporting and disclosure requirements of ERISA.

		
	8.6
	Powers, Duties, Procedures The Plan Administrator shall have such powers and duties, may adopt such rules, may act in accordance with such procedures, may appoint such officers or agents, may delegate such powers and duties, may receive such reimbursement and compensation, and shall follow such claims and appeal procedures with respect to the Plan as it may establish, each consistently with the terms of the Plan.

		
	8.7
	Information To enable the Plan Administrator to perform its functions, the Plan Sponsor shall supply full and timely information to the Plan Administrator on all matters relating to the Compensation of Participants, their employment, retirement, death, Separation from Service, and such other pertinent facts as the Plan Administrator may require.

		
	8.8
	Indemnification of Plan Administrator The Plan Sponsor agrees to indemnify and to defend to the fullest extent permitted by law any officer(s), employee(s) or Board members who serve as Plan Administrator (including any such individual who formerly served as Plan Administrator) against all liabilities, damages, costs and expenses (including reasonable  attorneys’ fees and amounts paid in settlement of any claims approved by the Plan Sponsor) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.

		
	8.9
	Plan Administration Following a Change in Control Event Notwithstanding anything to the contrary in this Article VIII or elsewhere in the Plan or Trust, upon a Change in Control Event with respect to the Plan Sponsor identified in Section I of the Adoption Agreement the individual serving as Chief Executive Officer of such Plan Sponsor immediately prior to such Change in Control 

31

Event who is also a Participant in the Plan, or if the Plan Sponsor has
no Chief Executive Officer who is also a Participant in the Plan, the Plan Sponsor’s most senior officer who is also a Participant in the Plan, shall have the right to appoint an individual, third party or committee to serve as Plan Administrator. Such appointment shall be made in writing and copies thereof shall be delivered to the Board, to the existing Plan Administrator, to the Trustee, and to all Plan Participants. The Trustee and all other service providers shall  be  entitled to rely fully on instructions received from the successor Plan Administrator and shall be indemnified to the fullest extent permitted by law for acting in accordance with the proper instructions of the successor Plan Administrator.

ARTICLE IX

 TRUST FUND

		
	9.1
	Trust  The Plan Sponsor may establish a Trust for the purpose of accumulating

assets which may, but need not be used, by the Plan Sponsor to satisfy some or all of its financial obligations to provide benefits to Participants under this Plan. Any trust created under this Section 9.1 shall be domiciled in the United States of America, and no assets of the Plan shall be held or transferred outside the United States. All assets held in the Trust  shall remain the exclusive property of the Plan Sponsor and shall be available to pay creditor claims of the Plan Sponsor in the event of insolvency, to the extent provided under any Trust established with respect to such Plan Sponsor. The assets held in Trust shall be administered in accordance with the terms of the separate Trust Agreement between the Trustee and the Plan Sponsor.

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

		
	9.3
	Assignment and Alienation No Participant or Beneficiary of 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 recognize any attempt by a third party to attach, garnish or levy upon any benefit under the Plan except as may be required by law.

ARTICLE X

AMENDMENT AND PLAN TERMINATION

		
	10.1
	Amendment The Plan Sponsor identified in Section I of the Adoption Agreement shall have the right to amend this Plan without the consent of any 

32

Participant or Beneficiary hereunder, provided that no such amendment shall have the effect of reducing any of the vested benefits to which a Participant
or Beneficiary has accrued a right as of the effective date of the amendment. Notwithstanding the foregoing, the Plan Sponsor identified in Section I of the Adoption Agreement shall have the right to amend this Plan in any manner whatsoever without the consent of any Participant or Beneficiary to comply with the requirements of Code §409A and any binding guidance thereunder to avoid adverse tax consequences even if such amendment has the affect of reducing a vested benefit or existing right of a Participant or Beneficiary hereunder.

		
	10.2
	Plan Termination The Plan Sponsor identified in Section I of the Adoption Agreement may terminate or discontinue the Plan in whole or in part at any time. No further Discretionary Credits or Matching Credits shall be made following Plan Termination, and no further Compensation Deferrals shall be permitted after the Taxable Year in which the Plan Termination  occurs, except that the Plan Sponsor shall be responsible to pay any benefit attributable to vested amounts credited to the Participant’s Account as of the effective date of termination (following any adjustments to such Accounts in accordance with Article III hereof). If the Plan is terminated in accordance with this Section 10.2, the Plan Administrator shall make distribution of the Participant’s vested benefit upon the occurrence of a Distributable Event with respect to a Participant. A Participant’s vested benefit shall be adjusted to reflect Investment Credits and Debits for all Valuation Dates between Plan Termination and the occurrence of a Participant’s Distributable Event.

		
	10.3
	Plan Termination Following a Change in Control Event If, as elected by the Plan Sponsor in the Adoption Agreement:

		
	(a)
	a Change in Control Event constitutes a Plan Termination; or

		
	(b)
	within the 30 days preceding or the 12 months following a Change in Control Event, the Plan Sponsor takes irrevocable action to terminate the Plan,

the Plan will be terminated and liquidated with respect to the Participants of each corporation that experienced the Change in Control Event. The Plan will be terminated under this Section 10.3 only if all other arrangements sponsored by the Plan Sponsor experiencing the Change in Control Event that would be aggregated with the Plan as a single plan under Code § 409A are also terminated, so all participants under such aggregated arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within 12 months after the date the Plan Sponsor takes all necessary action to terminate the Plan and the other arrangements. For purposes of this Section 10.3, when the Change of Control Event results from an asset purchase transaction, the applicable 

33

Plan Sponsor with the discretion to terminate the Plan and the other arrangements is the Plan Sponsor that is primarily  liable  immediately  after  the  transaction  for  the  payment  of
deferred compensation. Upon a Plan Termination Following a Change in Control Event, no further Compensation Deferrals or Employer Discretionary Credits or Employer Matching Credits shall be made, and the Plan Administrator shall be responsible to pay any benefit attributable to vested amounts credited to the Participant’s Account as soon as practicable following date on which the Plan Sponsor irrevocably takes all necessary action to terminate the Plan (following any final adjustments to such Accounts in accordance with Article III hereof), but not later than 12 months following such date.

		
	10.4
	Plan Termination Following a Corporate Dissolution The Plan Sponsor in its discretion may terminate and liquidate the Plan and make the payments provided below within 12 months after a Corporate Dissolution provided that the value of the Participants’ vested benefits is included in the Participants’ gross incomes in the latest of the following years (or, if earlier, the year in which the amount is actually or constructively received):

		
	(a)
	the calendar year in which the Plan Termination occurs;

		
	(b)
	the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or

		
	(c)
	the first  calendar  year in which the payment is administratively practicable.

Upon a Plan Termination Following a Corporate Dissolution, no further Compensation Deferrals or Employer Discretionary Credits or Employer Matching Credits shall be made, and the Plan Administrator shall be responsible to pay any benefit attributable to vested amounts credited to the Participant’s Account as of the effective date of termination (following any final adjustments to such Accounts in accordance with Article III hereof).

		
	10.5
	Plan Termination in Connection with Termination of Certain Similar Arrangements The Plan Sponsor in its discretion may terminate the Plan and make the distribution provided below provided that

		
	(a)
	the termination does not occur proximate to a downturn in the financial health of the Plan Sponsor and its Affiliates;

		
	(b)
	the Plan Sponsor terminates all other arrangements that would be aggregated with the Plan as a single plan under Code § 409A if the same Participant had deferrals of compensation under all of the other arrangements;

34

		
	(c)
	no payments in liquidation of the Plan are made within 12 months after the date the Plan Sponsor takes all necessary action to irrevocably terminate the Plan, other than payments that would be

payable under the terms of the Plan if action to terminate the Plan had not occurred;

		
	(d)
	all payments are made within 24 months after the date the Plan Sponsor takes all necessary action to irrevocably terminate the Plan; and

		
	(e)
	neither the Plan Sponsor nor any Affiliate adopts a new plan that would be aggregated with any terminated plan or arrangement under the definition of what constitutes a plan for purposes of Code

§409A if the same Participant participated in both arrangements, at any time within 3 years following the date the Plan Sponsor takes all necessary action to irrevocably terminate the Plan.

Upon a  Plan  Termination in Connection with the Termination of Certain Similar Arrangements, no further Employer Discretionary Credits or Employer Matching Credits shall be made, and no further Compensation Deferrals shall be made after the Taxable Year in which the Plan Termination in Connection with the Termination of Certain Similar Arrangements occurs. The Plan Administrator shall be responsible to pay any benefit attributable to vested amounts credited to the Participant’s Account as soon as practicable after distributions are permissible under Code § 409A (following any final adjustments to such Accounts in accordance with Article III hereof).

		
	10.6
	Effect of Payment The full payment of the balance of a Participant’s vested Account under the provisions of the Plan shall completely discharge all obligations to a Participant and his designated Beneficiaries under this Plan and each of the Participant’s Compensation Deferral Agreements shall terminate.

ARTICLE XI 

MISCELLANEOUS

		
	11.1
	Total Agreement  This Plan document and the executed Adoption Agreement,

Compensation Deferral Agreement, Beneficiary designation and other administration forms shall constitute the total agreement or contract between the Plan Sponsor and the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by a Participant or Beneficiary. The Plan Sponsor or Plan Administrator shall have the right to establish such procedures as are necessary for the administration or operation of the Plan or Trust, and such procedures shall also be considered a part of the Plan unless clearly contrary to the express provisions thereof.

35

		
	11.2
	Employment Rights Neither the establishment of this Plan nor any modification thereof, nor the creation of any Trust or Account, nor the payment of any benefits, shall be construed as giving a Participant or other person a right to

employment with the Plan Sponsor or any Affiliate or any other legal or equitable right against the Plan Sponsor of any Affiliate except as provided in the Plan. In no event shall the terms of employment of any Eligible Individual be modified or in any way be affected by the Plan.

		
	11.3
	Non-Assignability None of the benefits, payments, proceeds or claims of any Participant or Beneficiary shall be subject to attachment or garnishment or other legal process by any creditor of such Participant or Beneficiary, nor shall any Participant or Beneficiary have the right to alienate, commute, pledge, encumber or assign any of the benefits or payments or proceeds which he or she may expect to receive, contingently or otherwise under the Plan.

		
	11.4
	Binding Agreement Any action with respect to the Plan taken by the Plan Administrator or the Plan Sponsor or the Trustee or any action authorized by or taken at the direction of the Plan Administrator, the Plan Sponsor or other authorized party shall be conclusive upon all Participants and Beneficiaries entitled to benefits under the Plan.

		
	11.5
	Receipt and Release Any payment to any Participant or Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Plan Sponsor, the Plan Administrator and the Trustee under the Plan, and the Plan Administrator may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. If any Participant or Beneficiary is determined by the Plan Administrator to be incompetent by reason of physical or mental disability (including not being the age of majority) to give a valid receipt and release, the Plan Administrator may cause payment or payments becoming due to such person to be made to a legal guardian, trustee, or other proper representative of the Participant or Beneficiary without responsibility on the part of the Plan Administrator, the Plan Sponsor or the Trustee to follow the application of such funds.

		
	11.6
	Furnishing Information A Participant or Beneficiary will cooperate with the Plan Administrator or any representative thereof by furnishing any and all information requested by the Plan Administrator and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Plan Administrator may deem necessary.

		
	11.7
	Compliance with Code § 409A Notwithstanding any provision of the Plan to the contrary, all provisions of the Plan will be interpreted and applied to comply 

36

with the requirements of Code §409A and any regulations and applicable binding guidance so as to avoid adverse tax consequences. No provision of the Plan, however, is intended or shall be interpreted to create any right with respect to the tax treatment of the amounts paid or payable hereunder, and neither the Plan Sponsor nor any Affiliate shall under any circumstances
have any liability to a Participant or Beneficiary for any taxes, penalties or interest due on amounts paid or payable under the Plan, including taxes, penalties or interest imposed under Code § 409A.

		
	11.8
	Insurance The Plan Sponsors, on their own behalf or on behalf of the trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as they may choose. The Plan Sponsors or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Plan Sponsor shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Plan Sponsor have applied for insurance.

		
	11.9
	Governing Law Construction, validity and administration of this Plan shall be governed by applicable Federal law and applicable state law in which the principal office of the Plan Sponsor is located, without regard to the conflict of law provisions of such state law. If any provision shall be held by a court of competent jurisdiction to be invalid or unenforceable, the  remaining provisions hereof shall continue to be fully effective.

		
	11.10
	Headings and Subheadings Headings and subheadings in this Plan are inserted for convenience only and are not to be considered in the interpretation of the provisions hereof.

37

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}]]