Document:

EX-10.25 Deferred Compensation Plan

 

EXHIBIT 10.25

 

 

 

 

FGX INTERNATIONAL, INC.

“DEFERRED COMPENSATION PLAN”

 

 

FGX INTERNATIONAL, INC.

“DEFERRED COMPENSATION PLAN”

     THIS PLAN is adopted and enacted as of the first day of January, 2007, by FGX International,
Inc., a corporation organized and existing under the laws of the State of Delaware, hereinafter
referred to as the “Plan Sponsor”.

     WHEREAS, the Plan Sponsor intends that the Plan shall at all times be administered and
interpreted in such a manner as to constitute a “Top-Hat” unfunded nonqualified deferred
compensation plan for tax purposes and for purposes of Title I of ERISA. This Plan is not intended
to qualify for favorable tax treatment pursuant to Section 401(a) of the Code or any successor
section or statute; and confirms that the Plan is intended to comply with the requirements of
Section 409A of the Code, as added by The American Jobs Creation Act of 2004, and any Treasury
Regulations and other applicable guidance thereunder issued by the Treasury Department or the
Internal Revenue Service.

     NOW, THEREFORE, the Plan Sponsor hereby adopts the Plan, as set forth below.

ARTICLE 1

Definitions

     For the purpose of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

     1.1 “Account” or “Accounts” shall mean a book account reflecting amounts credited to a
Participant’s Separation Account and/or Plan Sponsor Contribution Account, as adjusted for deemed
investment performance and all distributions or withdrawals made by the Participant or his or her
Beneficiary. To the extent that it is considered necessary or appropriate, the Plan Administrator
shall maintain separate subaccounts for each source of contribution under this Plan or shall
otherwise provide a means for determining that portion of an Account attributable to each
contribution source.

     1.2 “Annual Bonus” shall mean any compensation, in addition to Base Salary and
Performance-Based Compensation relating to services performed during any Plan Year, whether or not
paid in such Plan Year or included on the Federal Income Tax Form W-2 for such Plan Year, payable
to a Participant as an employee under any of the Plan Sponsor’s annual bonus or cash incentive
plans, excluding stock options. Annual Bonus shall consist of any amount or portion of any amount
that will be paid either regardless of performance or based on a level of performance that is
substantially certain to be met.

     1.3 “Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary and Annual
Bonus and/or Performance-Based Compensation that a Participant elects to defer for any one Plan
Year.

     1.4 “Affiliate” shall mean any business entity other than the Plan Sponsor that is
a member of a controlled group of corporations, within the meaning of Section 414(b) of the Code,
of which the Plan Sponsor is a member; all other trade or business (whether or not incorporated)
under common control, within the meaning of Section 414(c) of the Code, with the Plan Sponsor; any
service organization other than the Plan Sponsor that is a member of an Affiliated service group,
within the meaning of Section 414(m) of the Code, of which the Plan Sponsor is a member; and any
other organization that is required to be aggregated with the Plan Sponsor under Section 414(o) of
the Code and whose Eligible Employees are authorized to participate in this Plan by the Plan
Administrator.

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     1.5 “Applicable Guidance” shall mean Section 409A of the Code and any Treasury Regulations and
other applicable guidance thereunder issued by the Treasury Department or the Internal Revenue
Service.

     1.6 “Base Salary” shall mean the annual cash compensation relating to services performed
during any Plan Year, (excluding bonuses, commissions, overtime, fringe benefits, incentive
payments, non-monetary awards, relocation expenses, retainers, directors fees and other fees,
severance allowances, pay in lieu of vacations, insurance premiums paid by the Plan Sponsor,
insurance benefits paid to the Participant or his or her Beneficiary, stock options and grants, and
car allowances) paid to a Participant for services rendered to the Plan Sponsor or an Affiliate.
Base Salary shall be calculated before reduction for compensation voluntarily deferred or
contributed by the Participant pursuant to all qualified or non-qualified plans of the Plan Sponsor
or an Affiliate and shall be calculated to include amounts not otherwise included in the
Participant’s gross income under Sections 125, 402(e)(3), 402(h), or 403(b) of the Code pursuant to
plans established by the Plan Sponsor; provided, however, that all such amounts will be included in
Compensation only to the extent that, had there been no such Plan, the amounts would have been
payable in cash to the Participant.

     1.7 “Beneficiary” shall mean one or more persons, trusts, estates or other entities that are
entitled to receive benefits under this Plan upon the death of the Participant.

     1.8 “Cause” shall mean any of the following acts or circumstances:

(a) willful destruction by the Participant of property of the Plan Sponsor or an Affiliate
having a material value to the Plan Sponsor or such Affiliate;

(b) fraud, embezzlement, theft, or comparable dishonest activity committed by the
Participant (excluding acts involving a de minimis dollar value and not related to the Plan
Sponsor or an Affiliate);

(c) the Participant’s conviction of or entering a plea of guilty or nolo contendere to any
crime constituting a felony or any misdemeanor involving fraud, dishonesty or moral
turpitude (excluding acts involving a de minimis dollar value and not related to the Plan
Sponsor or an Affiliate);

(d) the Participant’s breach, neglect, refusal, or failure to materially discharge the
Participant’s duties (other than due to physical or mental illness) commensurate with the
Participant’s title and function or the Participant’s failure to comply with the lawful
directions of the Board of Directors or a senior managing officer of the Plan Sponsor, or of
the Board of Directors or a senior managing officer of an Affiliate that employs the
Participant, in any such case that is not cured within fifteen (15) days after the
Participant has received written notice thereof from such Board of Directors or senior
managing officer;

(e) any willful misconduct by the Participant which may cause substantial economic or
reputation injury to the Plan Sponsor, including, but not limited to, sexual harassment, or;

(f) A willful and knowing material misrepresentation to the Board or a senior managing
officer of the Plan Sponsor or to the Board of Directors or a senior managing officer of an
Affiliate that employs the Participant.

     1.9 “Change of Control” shall mean the occurrence of the events described in any of
subparagraph (a), (b), or (c), below, or any combination of said event(s) as described within the
meaning of Treasury Regulations 1.409A-3(g)(5):

(a) Change of Ownership of the Plan Sponsor. A change of ownership occurs on the date
that any one person, or more than one person acting as a group, acquires

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ownership
of the stock of the Plan Sponsor that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market value or total voting
power of the stock of the Plan Sponsor or of any corporation that owns at least fifty
percent (50%) of the total fair market value and total voting power of the Plan Sponsor.
However, if any person, or more than one person acting as a group, is
considered to own more than fifty percent (50%) of the total fair market value or total
voting power of the stock of the Plan Sponsor, the acquisition of additional stock by the
same person or group of persons is not considered to cause a Change of Control. For this
purpose, an increase in the percentage of stock owned by any one person or group, as a
result of a transaction in which the Plan Sponsor acquires its stock in exchange for
property will be treated as an acquisition of stock. The rule set forth in the immediately
preceding sentence applies only when there is a transfer of stock of the Plan Sponsor (or
issuance of stock of the Plan Sponsor) and the stock of the Plan Sponsor remains outstanding
after the transaction. Persons will not be considered to be acting as a group solely
because they purchase or own stock of the Plan Sponsor 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 shareholders of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock or similar business transaction with the Plan Sponsor or its parent.
Persons will also be considered to be acting as a group to the extent set forth in
Applicable Guidance.

(b) Effective Change of Control. Effective Change of Control shall occur on the date that
either:

(i) Any one person, or more than one person acting as a group, acquires (or has
acquired during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Plan Sponsor
possessing thirty-five percent (35%) or more of the total voting power of the stock
of the Plan Sponsor; or

(ii) A majority of the members of the Plan Sponsor’s Board of Directors is replaced
during any twelve (12) month period by directors whose appointment or election is
not endorsed by a majority of the members of the Plan Sponsor’s Board of Directors
prior to the date of the appointment or election.

(c) Change in Ownership of Plan Sponsor’s Assets. A change in the ownership of a substantial
portion of the Plan Sponsor’s assets occurs on the date that any one person, or more than
one person acting as a group, acquires or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons of assets from
the Plan Sponsor that have a total fair market value equal to more than forty percent (40%)
of the total gross fair market value of all of the assets of the Plan Sponsor immediately
prior to such initial acquisition or acquisitions. For this purpose, gross fair market value
means the value of the assets of the Plan Sponsor, or the value of the assets being disposed
of, determined without regard to any liabilities associated with such assets.

There will be no Change of Control under this Subparagraph (c) when there is a transfer to
an entity that is controlled by the shareholders of the Plan Sponsor immediately after the
transfer. A transfer of assets by the Plan Sponsor is not treated as a change in ownership
of such assets if the assets are transferred to:

(i) A shareholder of the Plan Sponsor (immediately before the asset transfer) in
exchange for or with respect to its stock;

(ii) An entity, fifty percent (50%) or more of the total value or voting power of
which is owned directly or indirectly by the Plan Sponsor;

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(iii) A person, or more than one person, acting as a Group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all
the outstanding stock of the Plan Sponsor; or

(iv) An entity, at least fifty percent (50%) of the total value or voting power of
which is owned, directly or indirectly, by a person described in (iii) above.

Notwithstanding the above, the definition of Change of Control shall in any event comply with
Section 409A and Applicable Guidance.

     1.10 “Claimant” shall mean a person who believes that he or she is being denied a
benefit to which he or she is entitled hereunder.

     1.11 “Code” shall mean the Internal Revenue Code of 1986, as amended.

     1.12 “Compensation” shall mean the total cash remuneration, including regular Base Salary,
Annual Bonus, and/or Performance-Based Compensation paid by the Plan Sponsor to an Eligible
Employee with respect to his or her services performed for the Plan Sponsor or an Affiliate.

     1.13 “Deemed Investments” shall be defined as provided in Paragraph 4.2 below.

     1.14 “Deemed Investment Options” shall be defined as provided in Paragraph 4.1 below.

     1.15 “Disability” shall mean a condition of the Participant whereby he or she either: (i) is
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health
plan covering employees of the Plan Sponsor. The Plan Administrator will determine whether a
Participant has incurred a Disability based on its own good faith determination and may require a
Participant to submit to reasonable physical and mental examinations for this purpose. A
Participant will also be deemed to have incurred a Disability if determined to be totally disabled
by the Social Security Administration or in accordance with a disability insurance program,
provided that the definition of disability applied under such disability insurance program complies
with the requirements of Treasury Regulation 1.409A-3(g)(4) and Applicable Guidance.

     1.16 “Effective Date” shall mean January 1, 2007.

     1.17 “Election Form” shall mean the form or forms established from time to time by the Plan
Administrator on which the Participant makes certain designations as required on that form and
under the terms of this Plan.

     1.18 “Eligible Employee” shall mean for any Plan Year (or applicable portion of a Plan
Year), a person who is determined by the Plan Sponsor, or its designee, to be a member of a select
group of management or highly compensated employees of the Plan Sponsor, and who is designated by
the Plan Sponsor, or its designee, to be an Eligible Employee under the Plan. If the Plan Sponsor
determines that an individual first becomes an Eligible Employee during a Plan Year, the Plan
Sponsor shall notify the individual of its determination and of the date during the Plan Year on
which the individual shall first become an Eligible Employee.

     1.19 “Entry Date” shall mean the first day of the pay period following the date on which an
individual first becomes an Eligible Employee.

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     1.20 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

     1.21 “Participant” shall mean any (a) Eligible Employee (i) who is selected to participate in
this Plan, (ii) who elects to participate in this Plan by signing a Participation Agreement, (iii)
who completes and signs certain Election Form(s) required by the Plan Administrator, and (iv) whose
signed Election Form(s) are accepted by the Plan Administrator or (b) former Eligible Employee who
continues to be entitled to a benefit under this Plan. A spouse or former spouse of a Participant
shall not be treated as a Participant in this Plan or
have an Account balance under this Plan, even if he or she has an interest in the Participant’s
benefits under this Plan as a result of applicable law or property settlements resulting from legal
separation or marital dissolution or divorce.

     1.22 “Participation Agreement” shall mean the document executed by the Eligible Employee and
Plan Administrator whereby the Eligible Employee agrees to participate in the Plan.

     1.23 “Performance-Based Compensation” shall mean that portion of a Participant’s Compensation
that is contingent on the satisfaction of pre established organizational or individual performance
criteria relating to a performance period of at least twelve (12) consecutive months in which the
Participant performs services. Organizational or individual performance criteria are considered
pre-established if established in writing by no later than ninety (90) days after the commencement
of the period of services to which the criteria relate, provided that the right to receive the
contingent portion is substantially uncertain, or the amount of the contingent portion is not
readily ascertainable, at the time the criteria is established within the meaning of Treasury
Regulation 1.409A-1(e) and Applicable Guidance.

     1.24 “Permissible Payments” shall mean one or more of the following events upon which payment
may be made to a Participant or his Beneficiary under the terms of the Plan: (i) the Participant’s
Separation from Service, (ii) the Participant’s death, (iii) the Participant’s Disability, or (iv)
a change in ownership or effective control of the Plan Sponsor, or in the ownership of a
substantial portion of the assets of the Plan Sponsor.

     1.25 “Plan” shall mean the FGX International, Inc. Deferred Compensation Plan which shall be
evidenced by this instrument, as amended from time to time.

     1.26 “Plan Administrator” shall be the Board of Directors of the Plan Sponsor or its designee.
A Participant in the Plan should not serve as a singular Plan Administrator. If a Participant is
part of a group of persons designated as a committee or Plan Administrator, then the Participant
may not participate in any activity or decision relating solely to his or her individual benefits
under this Plan. Matters solely affecting the applicable Participant will be resolved by the
remaining Plan Administrator members.

     1.27 “Plan Sponsor Contribution Account” shall be defined as provided in Paragraph 3.4 below.

     1.28 “Plan Year” shall mean, for the first plan year, the period beginning on the Effective
Date of the Plan and ending December 31 of such calendar year, and thereafter, a twelve (12) month
period beginning January 1 of each calendar year and continuing through December 31 of such
calendar year.

     1.29 “Separation Account” shall mean: (i) the sum of the Participant’s Annual Deferral Amount
that may be allocated in whole or in part by a Participant pursuant to his or her deferral election
to the Separation Account for each Plan Year, plus (ii) amounts credited (net of amounts debited,
which may result in an aggregate negative number) from Deemed Investment Options, less (iii) all
distributions made to, or withdrawals by, the Participant and his or her Beneficiary, and tax
withholding amounts which may have been deducted from the Participant’s Separation Account. At the
time of the Participant’s deferral election for each Plan

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Year, the Participant may specify the
form in which payment shall be made to the Participant or his or her Beneficiary from this Account.
The Participant may be permitted to change the form of payment subject to Paragraph 6.7
(Subsequent Changes in the Time or Form of Payment) below.

     1.30 “Section 409A” shall mean Section 409A of the Code and the Treasury Regulations or other
authoritative guidance issued under that Section.

     1.31 “Separation From Service” shall mean a Participant’s termination of active employment,
whether voluntary or involuntary, other than by death, Disability, or leave of
absence with the Plan Sponsor and Affiliate, within the meaning of Section 409A(a)(2)(A)(i) of the
Code, and Applicable Guidance.

     1.32 “Treasury Regulations” shall mean regulations promulgated by the Internal
Revenue Service for the U.S. Department of the Treasury, either proposed, temporary or final as
they may be amended from time to time.

     1.33 “Trust” shall mean a trust that may be established in accordance with the terms of
Article 12 of this Plan.

     1.34 “Unforeseeable Emergency” shall mean a severe financial hardship of the Participant or
Beneficiary resulting from an illness or accident of the Participant or Beneficiary, the
Participant’s or Beneficiary’s spouse, or the Participant’s or Beneficiary’s dependent(s) (as
defined in Section 152(a) of the Code) or loss of the Participant’s or Beneficiary’s property due
to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant or Beneficiary, within the meaning of Section 409A and
Treasury Regulation 1.409A-3(g)(3).

     1.35 “Valuation Date” shall mean each day at the close of business (currently 4:00 p.m.
Eastern Time) of the New York Stock Exchange (“NYSE”), on days that the (NYSE) is open for trading
or any other day on which there is sufficient trading in securities of the applicable fund to
materially affect the unit value of the fund and the corresponding unit value of the Participant’s
Deemed Investment Options. If the NYSE extends its closing beyond 4:00 p.m. Eastern Time, and
continues to value after the time of closing, the Plan Administrator reserves the right to treat
communications received after 4:00 p.m. Eastern Time as being received as of the beginning of the
next day.

     1.36 “Year of Plan Participation” shall mean each twelve (12) month period during which the
Participant is employed on a full-time basis by the Plan Sponsor, (determined without regard to
whether deferrals have been made by a Participant for any Plan Year), inclusive of any approved
leaves of absence, beginning on the Participant’s date of entry into this Plan.

     1.37 “Year of Service” shall mean each twelve (12) month period during which the
Participant is employed on a full-time basis by the Plan Sponsor, with a minimum of 1,000 hours of
service, inclusive of any approved leaves of absence, beginning on the Participant’s date of hire.

ARTICLE 2

Selection, Enrollment, Eligibility 

     2.1 Selection by Plan Sponsor. Participation in this Plan shall be limited to a select
group of management or highly compensated employees of the Plan Sponsor, as determined by the Plan
Sponsor in its sole and absolute discretion. The initial group of Eligible Employees

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shall become
Participants on the Effective Date of this Plan. Any individual selected as an Eligible Employee
after the Effective Date, shall become a Participant on the first Entry Date occurring on or after
the date on which he or she becomes an Eligible Employee.

     2.2 Re-Employment. If a Participant who incurs a Separation from Service is
subsequently re-employed by the Plan Sponsor, he or she may at the sole and absolute discretion of
the Plan Administrator, become a Participant in accordance with the provisions of this Plan.

     2.3 Enrollment Requirements. As a condition to participation in this Plan, each
selected Eligible Employee shall complete, execute, and return to the Plan Administrator a
Participation Agreement and Election Form within the time specified by the Plan Administrator
in accordance with Article 3. In addition, the Plan Administrator shall establish such other
enrollment requirements as it determines necessary or advisable. All elections to defer
Compensation with respect to a Plan Year shall be irrevocable, except as permitted in the event of
an Unforeseeable Emergency pursuant to Paragraph 3.2(d) below.

     2.4 Plan Aggregation Rules. This Plan shall constitute an “account balance plan” as
defined in Treasury Regulations 31.3121(v)(2)-1(c)(1)(ii)(A). For purposes of Section 409A, all
amounts deferred by or on behalf of a Participant under this Plan shall be aggregated with deferred
amounts under other “account balance plans” currently maintained or adopted in the future by the
Plan Sponsor, as required by Applicable Guidance and all amounts shall be treated as deferred under
the rules governing a single plan.

     2.5 Termination of Participation and/or Deferrals. If the Plan Administrator
determines that a Participant who has not experienced a Separation from Service no longer qualifies
as a member of a select group of management or highly compensated employees or that such a
Participant’s participation in the Plan could jeopardize the status of this Plan as “unfunded” and
“maintained by an employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees,” the Plan Administrator shall have the
right to terminate any deferral election the Participant has made for the remainder of the Plan
Year but only to the extent such termination complies with the requirements of Sections 409A,
and/or to prevent the Participant from making future deferral elections and receiving Plan Sponsor
Contribution Amounts under the Plan.

ARTICLE 3

Contributions and Credits

     3.1 Annual Deferral Amount.

(a) Minimum Deferrals. For each Plan Year, a Participant may elect to defer
Compensation in fixed dollar amounts or percentages subject to the minimums (if any) set
forth in his or her Election Form. If the election is made for less than the stated minimum
amount, or if no election is made, the amount deferred shall be zero.

(b) Maximum Deferrals. For each Plan Year, a Participant may elect to defer
Compensation in fixed dollar amounts or percentages subject to the maximums (if any) set
forth in his or her Election Form. If the election is made for more than the stated maximum
amount, then the amount deferred shall default to the maximum amount.

     3.2 Election to Defer Compensation.

(a) Deferral Election Rules. A Participant shall make an election to defer
Compensation for each Plan Year on the Election Form provided by the Plan Sponsor. For the
election to be effective, the Election Form must be delivered to the Plan Administrator
during the Participant’s taxable year before the Plan Year in which the services are
performed. If no Election Form is timely delivered for a Plan Year, the

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Annual Deferral
Amount shall be zero for that Plan Year. An election to defer Compensation shall include an
election as to both the time and form of payment.

(b) Short Plan Year. If an Eligible Employee becomes a Participant after the
beginning of a Plan Year, he or she may make an initial deferral election within thirty (30)
days after the date he or she first becomes an Eligible Employee with respect to
Compensation paid for services to be performed subsequent to the election. In the event an
election of deferral is made with respect to an Annual Bonus in the first year of
eligibility but after the beginning of a performance period, the deferral election will
apply to the portion of the Annual Bonus paid for services performed subsequent to the
election and will be calculated based on the total Annual Bonus for the performance period
multiplied by a fraction whose numerator is the number of days remaining in the performance
period after the election and whose denominator is the total number of days in the
performance period.

(c) Bonus Qualifying as Performance-Based Compensation. Notwithstanding anything in
Paragraph 3.2(a) or (b) above to the contrary, to the extent that the Plan Sponsor
determines that an Eligible Employee’s bonus constitutes Performance-Based Compensation,
within the meaning of Section 409A(a)(4)(B)(iii) of the Code, based on services performed
over a period of at least twelve (12) months, an election to defer Performance-Based
Compensation with respect to a performance period shall be made on or before the day which
is six (6) months before the end of the performance period. In no event may an election to
defer Performance-Based Compensation be made after such has become both substantially
certain to be paid and readily ascertainable, within the meaning of Treasury Regulations
1.409A-2(a)(7).

(d) Terminations of Deferral Elections Following an Unforeseeable Emergency. If a
Participant receives a payment upon an Unforeseeable Emergency under this Plan, the deferral
election for that Plan Year shall terminate upon payment from his or her Account to the
Participant. A Participant may again elect to defer Compensation for any succeeding Plan
Year, in accordance with the terms of this Plan.

     3.3 Withholding and Crediting of Annual Deferral Amounts. For each Plan Year, the Base
Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled
payroll in approximately equal amounts (or as otherwise specified by the Plan Administrator), as
adjusted from time to time for increases and decreases in Base Salary if the Annual Deferral Amount
with respect to Base Salary is expressed as a percentage. The Annual Bonus and/or Performance-Based
Compensation portion of the Annual Deferral Amount shall be withheld at the time such Compensation
otherwise would be paid to the Participant. Annual Deferral Amounts shall be credited to a
Participant’s Separation Account at the time such amounts would otherwise have been paid to a
Participant.

     3.4 Plan Sponsor Discretionary Contributions. The Plan Sponsor may make discretionary
contributions as it may determine from time to time and may direct that such contributions be
allocated to those Participants that it may select. The amount so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero. No Participant shall have a right to compel the Plan
Sponsor to make a Plan Sponsor discretionary contribution under this Article and no Participant
shall have the right to share in any such contribution for any Plan Year unless selected by the
Plan Sponsor, in its sole and absolute discretion.

ARTICLE 4

Earnings or Losses on Account(s)

     4.1 Deemed Investment Options. The Plan Administrator shall select from
time to time certain mutual funds, insurance company separate accounts, indexed rates or other
methods (the “Deemed Investment Options”) for purposes of crediting or debiting additional amounts
to each Participant’s Account(s). The Plan Administrator may discontinue, substitute

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or add Deemed
Investment Options. Any discontinuance, substitution, or addition of a Deemed Investment Option
will take effect as soon as administratively practical.

     4.2 Allocation of Deemed Earnings or Losses on Accounts. Subject to Paragraph 4.3
below, each Participant shall have the right to direct the Plan Administrator as to how the
Participant’s Annual Deferral Amounts and Plan Sponsor matching and/or discretionary contributions
shall be deemed to be invested, (“Deemed Investments”), subject to any operating rules and
procedures imposed from time to time by the Plan Administrator. As of each Valuation Date, the
Participant’s Account(s) will be credited or debited to reflect the Participant’s Deemed
Investments.

     4.3 Deemed Investment Directions of Participants. A Participant’s Deemed Investment
directions for his or her Separation Account and Plan Sponsor Contribution Account shall be subject
to the following rules:

(a) Any initial or subsequent Deemed Investment direction shall be in writing, on a form
supplied by and filed with the Plan Sponsor (or made in any other manner
specified by the Plan Administrator), and shall be effective on such date as specified by
the Plan Administrator.

(b) All Deemed Investment directions shall continue indefinitely until changed by the
Participant in the manner permitted by the Plan Administrator.

(c) If the Plan Sponsor receives an initial or revised Deemed Investment direction which it
determines to be incomplete, unclear or improper, the Participant’s Deemed Investment
direction then in effect shall remain in effect (or, in the case of a deficiency in an
initial Deemed Investment direction, the Participant shall be deemed to have filed no Deemed
Investment direction) until a date so designated by the Plan Administrator in its sole and
absolute discretion, unless the Plan Administrator provides for, and permits the application
of, corrective action prior to that date.

(d) Each Participant, as a condition of his or her participation in the Plan, agrees to
indemnify and hold harmless the Plan Sponsor and the Plan Administrator from any losses or
damages of any kind relating to the Deemed Investment of the Participant’s Account(s).

(e) Each reference in this Article to a Participant shall be deemed to include, where
applicable, the Beneficiary.

(f) In making any election described in this Article, the Participant shall specify on the
deemed investment Election Form (or in any other manner specified by the Plan
Administrator), in increments of at least one full percent (1.0%), the percentage of the
Participant’s Account(s) to be allocated to a Deemed Investment Option. A Participant’s
election must total one hundred percent (100%). If the Plan Administrator possesses (or is
deemed to possess, as provided in Paragraph 4.3(c) above) at any time Deemed Investment
directions of less than 100% of a Participant’s Separation Account, or Plan Sponsor
Contribution Account, the Participant shall be deemed to have directed that the undesignated
portion of the said Account(s) be deemed to be invested in a money market, fixed income, or
similar fund made available under this Plan as determined by the Plan Administrator.

(g) At the end of each calendar quarter (or such shorter period as the Plan Administrator
may determine), the Plan Sponsor shall compute the total return for the quarter (or such
shorter period) as to each Participant’s Deemed Investment Elections and may reduce such
returns for that quarter (or shorter period) by items such as money management fees,
mortality charges, cost of insurance, taxes and deemed

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investment expenses associated
specifically with each deemed investment alternative. The total return for each deemed
investment alternative shall be that deemed investment alternative’s total return for that
quarter (or shorter period) reduced by applicable expenses as described above and approved
by the Plan Administrator.

(h) The Deemed Investment Options are to be used for measurement purposes only, and a
Participant’s election of any such Deemed Investments, the allocation of such Deemed
Investments to his or her Account(s), the calculation of additional amounts and the
crediting or debiting of such amounts to a Participant’s Account(s) shall
not be considered or construed in any manner as an actual investment of his or her
Account balance in any such Deemed Investments. In the event that the Plan Sponsor or the
trustee of the Trust, in its own discretion, decides to invest funds in any or all of the
investments on which any of the Deemed Investments are based, no Participant (or
Beneficiary) shall have any rights in or to such investments themselves. Without limiting
the foregoing, a Participant’s Account(s) shall at all times be a bookkeeping entry only and
shall not represent any investment made on his or her behalf by the Plan Sponsor or the
Trust. The Participant (or Beneficiary) shall at all times remain an unsecured creditor of
the Plan Sponsor. Any liability of the Plan Sponsor to any Participant, former Participant,
or Beneficiary with respect to a right to payment shall be based solely upon contractual
obligations created by this Plan.

ARTICLE 5

Vesting and Taxes

5.1 Vesting of Benefits.

(a) A Participant shall at all times be 100% vested in his or her Separation Account.

(b) A Participant shall be vested in his or her Plan Sponsor Contribution Account based on the
schedule below:

	 	 	 	 	 	 	 	 
	 
	 	Completed Years of Service	 	 	Vested %	 	 
	 	Less than 1 year
	 	 	 	00.00	%	 
	 	1 year but less than 2
	 	 	 	20.00	%	 
	 	2 years but less than 3
	 	 	 	40.00	%	 
	 	3 years but less than 4
	 	 	 	60.00	%	 
	 	4 years but less than 5
	 	 	 	80.00	%	 
	 	5 years or more
	 	 	 	100.00	%	 
	 

(c) A Participant shall be 100% vested in his or her Plan Sponsor Contribution Account if the
Participant’s employment is terminated by reason of his or her death, upon the Participant’s
Disability, or upon a Change of Control.

(d) In the event the Participant’s employment is terminated for Cause, no benefits of any kind
will be due or payable under the terms of this Plan from amounts credited to the Plan Sponsor
Contribution Account (as adjusted for deemed investment performance) and all rights of the
Participant, his or her designated Beneficiary, executors, or administrators, or any other person,
to receive payments thereof shall be forfeited.

     5.2 FICA, Withholding and Other Taxes.

(a) Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount
is being withheld from a Participant, the Plan Sponsor shall withhold from that portion of
the Participant’s Base Salary, and Performance-Based Compensation that is not being
deferred, in a manner determined in the sole discretion of the Plan Sponsor, the
Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If
necessary, the Plan Sponsor may reduce all or a portion of the Annual Deferral Amount in
order to comply with this Paragraph 6.2.

10

 

(b) Plan Sponsor Contribution Account. When a Participant becomes vested in a
portion of his or her Plan Sponsor Contribution Account, the Plan Sponsor shall withhold
from the Participant’s Compensation that is not deferred, in a manner determined in the sole
discretion of the Plan Sponsor, the Participant’s share of FICA and other employment taxes
on such vested Plan Sponsor Contribution Account. If necessary, the Plan Sponsor may reduce
all or a portion of the Annual Deferral Amount in order to comply with this Paragraph 5.2.

(c) Distributions. The Plan Sponsor, or trustee of the Trust, shall withhold from any
payments made to a Participant or Beneficiary under this Plan all federal, state and local income,
employment and other taxes required to be withheld by the Plan Sponsor in a manner elected by the
Participant or Beneficiary (or in the absence of such an election, in a manner determined in the
sole and absolute discretion of the Plan Sponsor or the trustee of the Trust), provided that such
manner complies with applicable tax withholding requirements.

ARTICLE 6

Entitlement to Payment of Benefits

     6.1 Method of Payment. A Participant (or his or her Beneficiary) shall become entitled
to receive, on the date designated as provided in Article 6, a distribution (or commencement of
distribution) in an aggregate amount equal to the Participant’s Account(s).

(a) Form of Payment. A Participant, in connection with his or her commencement of
participation in the Plan, may elect the form of payment for the applicable Permissible
Payment Event. Upon the occurrence of a Permissible Payment Event, the Participant’s
Account(s) shall be calculated as of the Valuation Date of said event. If a Participant has
failed to select a form of payment, his Account(s) shall be paid in a lump sum. Installment
payments (if applicable) made after the first payment shall be paid on or about the
applicable modal anniversary of the first payment date until all required installments have
been paid. The amount of each payment shall be determined by dividing the value of the
Participant’s Account(s) immediately prior to such payment by the number of payments
remaining to be paid. Any unpaid Account balance shall continue to be deemed to be invested
pursuant to Article 4, in which case any deemed income, gains, losses, or expenses shall be
reflected in the actual payments. The final installment payment shall be equal to the
balance of the Account, calculated as of the applicable modal anniversary.

(b) Medium of Payment. All payments made under the Plan shall be made in cash.

(c) Definition of Payment. The term “payment” shall be treated as a single payment
for purposes of subsequent deferrals of time or form of payment, within the meaning of
section 1.409A-2(b)(4) of the proposed Treasury Regulations.

(d) Permissible Payment Events. A Participant in connection with his or her
commencement of participation in this Plan shall elect on his or her Election Form to
receive payment of his or her Account(s), based on the earlier of the following
permissible payment events:

(i) Separation from Service,

(ii) Change of Control,

(iii) Death,

(iv) Disability

11

 

     6.2 Payment Following Separation From Service. A Participant shall be paid his or
her vested Account balance with payments being made or commencing within ninety (90) days following
the Participant’s Separation from Service. Amounts shall be distributed according to the form of
payment selected by the Participant and permitted by the Plan.

     6.3 Payment Following Disability. In the event of a qualifying Disability, the
Participant shall be paid his or her vested Account balance with payment or payments being made or
commencing within ninety (90) days following the determination of a Participant’s Disability.
Amounts shall be distributed according to the form of payment selected by the Participant and
permitted by the Plan Sponsor.

     6.4 Payment Following Death Prior to Commencement of Retirement Benefits. In the
event of the Participant’s death while in the employment of the Plan Sponsor or an Affiliate and
prior to commencement of benefit payments, the Plan Sponsor shall pay a death benefit equal to the
greater of: (a) the Participant’s Vested Account Balance as of the date of his or her death, or (b)
a dollar amount specified in the Participation Agreement and attached hereto. Amounts shall be
distributed according to the form of payment selected by the Participant and permitted by the Plan
Sponsor.

     6.5 Payment Following Death After Commencement of Retirement Benefits. In the event
of the Participant’s death, the Participant’s Beneficiary shall be paid the Participant’s vested
Account balance with payment or payments being made or commencing within ninety
(90) days following the date of death of the Participant. Amounts shall be distributed
according to the form of payment selected by the Participant and permitted by the Plan Sponsor.

     6.6 Payment Following Change in Control. A Participant shall be paid his or her vested
Account balance following a Change in Control with payments being made or commencing within ninety
(90) days following the Change in Control event, but only to the extent such payment(s) complies
with regulations and other guidance issued by the United States Secretary of the Treasury or
Internal Revenue Service with respect to Section 409A(a)(2)(A)(v) of the Code. Amounts shall be
distributed in a single lump sum following a Change in Control Event.

     6.7 Payment in the Event of an Unforeseeable Emergency. If the Participant experiences
an Unforeseeable Emergency, the Participant may petition the Plan Administrator for payment of an
amount that shall not exceed the lesser of: (i) the Participant’s vested Account(s), or (ii) the
amount reasonably needed to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the payment. A Participant may not receive such a payment to
the extent that the Unforeseeable Emergency is or may be relieved: (a) through reimbursement or
compensation by insurance or otherwise, or (b) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not itself cause severe financial hardship. If the Plan
Administrator approves a Participant’s petition for such a payment then the Participant shall
receive said payment, in a lump sum, as soon as administratively feasible after such approval.

     6.8 Subsequent Changes in the Time or Form of Payment. If permitted by the Plan
Sponsor, but subject to limitations below, a Participant may elect to change the time or form of
payment to him or her, by submitting a new Election Form to the Plan Administrator, provided the
following conditions are met:

(i) Such change will not take effect until at least twelve (12) months after the date
on which the new election is made and approved by the Plan Administrator.

(ii) If the original election is pursuant to a specified time or fixed schedule, the
change cannot be made less than twelve (12) months before the date of the first scheduled
original payment,

12

 

(iii) In the case of an election related to a payment other than a payment on account of
death, disability, or unforeseeable emergency, the first payment with respect to which the
change is made must be deferred for a period of not less than five (5) years from the date
such payment would otherwise have been made.

     6.9 No Accelerations. Notwithstanding anything in this Plan to the contrary,
neither the Plan Sponsor nor a Participant may accelerate the time of any payment or amount
scheduled to be paid under this Plan, except as otherwise permitted by Applicable Guidance. The
Plan Sponsor shall deny any change made to an election if the Plan Sponsor determines that the
change violates the requirements of Applicable Guidance. The Plan Sponsor may, however, accelerate
certain distributions under this Plan to the extent permitted under Applicable Guidance as follows:

(a) Domestic Relations Order. Direct payment of a Participant’s vested Account
Balance may be made to an individual other than a Participant as necessary to fulfill a
domestic relations order, as defined in Section 414(p)(1)(B) of the Code.

(b) Conflicts of Interest. Acceleration of the time of payment under this Plan may
be made as may be necessary to comply with a “certificate of divestiture.”

(c) De Minimis and Specified Amounts. The time of payment to a Participant may be
accelerated, provided that: (i) the payment accompanies the termination in the entirety of
the Participant’s interest in this Plan and all similar plans; (ii) the payment is made on
or before the later of: (A) December 31 of the calendar year in which occurs the
Participant’s Separation From Service, and (B) the date which is 2 1/2 months after the
Participant’s Separation From Service; and (iii) the payment is not greater than $10,000.

(d) Payment of Employment Taxes. The time of a payment to pay the Federal Insurance
Contributions Act (FICA) tax imposed on Compensation deferred by a Participant and Plan
Sponsor contributions under this Plan (the “FICA amount”) may be accelerated. Additionally,
the acceleration of the time a payment to pay the income tax on wages imposed as a result of
the payment of the FICA amount, and to pay the additional income tax on wages attributable
to the pyramiding of wages and taxes also is permissible. However, the total payment under
this acceleration provision may not exceed the aggregate of the FICA amount plus the income
tax required to be withheld with respect to such FICA amount.

(e) Payment upon Income Inclusion under Section 409A. The time of a payment to a
Participant may be accelerated at any time this Plan fails to meet the requirements of
Section 409A and related Treasury Regulations. However, such payment may not exceed the
amount required to be included in income as a result of the failure to comply with the
requirements of Section 409A and Applicable Guidance.

     6.10 Unsecured General Creditor Status of Participant:

(a) Payment to the Participant or any Beneficiary hereunder shall be made from assets which
shall continue, for all purposes, to be part of the general, unrestricted assets of the Plan
Sponsor and no person shall have any interest in any such asset by virtue of any provision of this
Plan. The Plan Sponsor’s obligation hereunder shall be an unfunded and unsecured promise to pay
money in the future. To the extent that any person acquires a right to receive payments from the
Plan Sponsor under the provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Plan Sponsor and no such person shall have or acquire any legal
or equitable right, interest or claim in or to any property or assets of the Plan Sponsor.

13

 

(b) In the event that the Plan Sponsor purchases an insurance policy or policies insuring
the life of a Participant or employee, to allow the Plan Sponsor to recover or meet the cost
of providing benefits, in whole or in part, hereunder, no Participant or Beneficiary shall
have any rights whatsoever in said policy or the proceeds therefrom. The Plan Sponsor or the
Trustee of the Trust shall be the primary owner and beneficiary of any such insurance policy
or property and shall possess and may exercise all incidents of ownership therein.

(c) In the event that the Plan Sponsor purchases an insurance policy or policies on the life
of a Participant as provided for above, then all of such policies shall be subject to the claims of
the creditors of the Plan Sponsor.

(d) If the Plan Sponsor chooses to obtain insurance on the life of a Participant in connection
with its obligations under this Plan, the Participant hereby agrees to take such physical
examinations and to truthfully and completely supply such information as may be required by the
Plan Sponsor or the insurance company designated by the Plan Sponsor.

     6.11 Facility of Payment. If a distribution is to be made to a minor, or to a person
who is otherwise incompetent, then the Plan Administrator may make such distribution: (i) to the
legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her
residence, or (ii) to the conservator or administrator or, if none, to the person having custody of
an incompetent payee. Any such distribution shall fully discharge the Plan Sponsor and the Plan
Administrator from further liability on account thereof.

     6.12 Delay in Payment by Plan Sponsor.

(a) In the case of payments by the Plan Sponsor to a Participant or Participant’s
Beneficiary, the deduction for which would be limited or eliminated by the application of
Section 162(m) of the Code, payments that would otherwise violate securities laws, or
payments that would violate loan covenants or other contractual terms to which the Plan
Sponsor is a party, and where such a violation would result in material harm to the Plan
Sponsor, said payments may be delayed. In the case of deduction limitations imposed by
Section 162(m) of the Code payment will be deferred either to any date in the first calendar
year in which the Plan Sponsor reasonably anticipates that a payment of such amount would
not result in a limitation under Section 162(m) or in the year in which the Participant
experiences Separates from Service. Payments delayed for other permissible reasons must be
made in the first calendar year in which the Plan Sponsor reasonably anticipates that the
payment would not violate the applicable loan covenants or other terms, the violation would
not result in material harm to the Plan Sponsor, and the payment would not result in a
violation of Federal securities laws or other applicable laws.

(b) Treatment of Payment as Made on Designated Payment Date. Each payment under
this Plan is deemed made on the required payment date even if the payment is made after such
date, provided the payment is made by the latest of: (i) the end of the calendar year in
which the payment is due; (ii) the 15th day of the third calendar month following the
payment due date; (iii) in case the Plan Sponsor cannot calculate the payment amount on
account of administrative impracticality which is beyond the Participant’s control (or the
control of the Participant’s estate), in the first calendar year in which payment is
practicable; (iv) in case the Plan Sponsor does not have sufficient funds to make the
payment without jeopardizing the Plan Sponsor’s solvency, in the first calendar year in
which the Plan Sponsor’s funds are sufficient to make the payment.

     6.13 Lump Sum Payment of Minimum Account Balances. Notwithstanding anything else
contained herein to the contrary, if a Participant or Beneficiary is to receive a
Permissible Payment in the form of installments, and if the Vested Account

14

 

balance for a
Participant at the due date of the first installment is twenty-five thousand dollars
($25,000.00) or less, payment of the Account(s) shall be made instead in a lump sum, and no
installment payments shall be available.

ARTICLE 7

Beneficiary Designation

     7.1 Designation of Beneficiaries.

     (a) Each Participant may designate any person or persons (who may be named contingently or
successively) to receive any benefits payable under the Plan upon the Participant’s death, and the
designation may be changed from time to time by the Participant by filing a new designation. Each
designation will revoke all prior designations by the same Participant, shall be in the form
prescribed by the Plan Administrator, and shall be effective only when filed in writing with the
Plan Administrator during the Participant’s lifetime.

     (b) In the absence of a valid Beneficiary designation, or if, at the time any benefit payment
is due to a Beneficiary, there is no living Beneficiary validly named by the Participant, the Plan
Sponsor shall pay the benefit payment to the Participant’s spouse, if then living, and if the
spouse is not then living to the Participant’s then living descendants, if any, per stripes, and if
there are no living descendants, to the Participant’s estate. In determining the existence or
identity of anyone entitled to a benefit payment, the Plan Sponsor may rely conclusively upon
information supplied by the Participant’s personal representative, executor or administrator.

     (c) If a question arises as to the existence or identity of anyone entitled to receive a death
benefit payment under the Plan, or if a dispute arises with respect to any death benefit payment
under the Plan, the Plan Sponsor may distribute the
payment to the Participant’s estate without liability for any tax or other consequences, or
may take any other action which the Plan Sponsor deems to be appropriate.

     7.2 Information to be Furnished by Participants and Beneficiaries; Inability to Locate
Participants or Beneficiaries. Any communication, statement or notice addressed to a
Participant or to a Beneficiary at his or her last post office address as shown on the Plan
Sponsor’s records shall be binding on the Participant or Beneficiary for all purposes of this Plan.
The Plan Sponsor shall not be obligated to search for any Participant or Beneficiary beyond the
sending of a registered letter to the last known address.

ARTICLE 8

Termination, Amendment or Modification

     8.1 Plan Termination. The Plan Sponsor reserves the right to terminate this Plan
in accordance with one of the following, subject to the restrictions imposed by Section 408A and
Applicable Guidance:

(a) Corporate Dissolution or Bankruptcy. This Plan may be terminated within twelve
(12) months of a corporate dissolution taxed under Section 331 of the Code, or with the
approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), and distributions
may then be made to Participants provided that the amounts deferred under this Plan are
included in the Participants’ gross income in the latest of:

(i) The calendar year in which the Plan termination occurs;

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

15

 

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

(b) Change of Control This Plan may be terminated within the thirty (30) days
preceding or the twelve (12) months following a Change in Control. This plan will then be
treated as terminated only if all substantially similar arrangements sponsored by the Plan
Sponsor or any of its Affiliates are terminated so that all participants in all similar
arrangements are required to receive all amounts of Compensation deferred under the
terminated arrangements within twelve (12) months of the date of termination of the
arrangements.

(c) Discretionary Termination The Plan Sponsor may also terminate this
Plan and make distributions provided that:

(i) All plans sponsored by the Plan Sponsor that would be aggregated with any
terminated arrangements under Treasury Regulations 1.408A-1(c) that are terminated;

(ii) No payments other than payments that would be payable under the terms of this
plan if the termination had not occurred are made within twelve (12) months of this
plan termination;

(iii) All payments are made within twenty-four (24) months of this plan termination;
and

(iv) Neither the Plan Sponsor nor any of its Affiliates adopts a new plan that would
be aggregated with any terminated plan if the same Participant participated in both
arrangements, at any time within five years following the date of termination of
this Plan.

     The Plan Sponsor also reserves the right to suspend the operation of this Plan for a
fixed or indeterminate period of time.

     8.2 Amendment. The Plan Sponsor reserves the right to amend this Plan at
any time to comply with Section 408A, Notice 2005-1, Proposed Treasury Regulations §1.408A and
other Applicable Guidance or for any other purpose, provided that such amendment will not cause the
Plan to violate the provisions of Section 408A. Except as this Plan and Applicable Guidance
otherwise may require, the Plan Sponsor may make any such amendments effective immediately. Except
to the extent necessary to bring this Plan into compliance with Section 408A: (i) no amendment or
modification shall be effective to decrease the value or vested percentage of a Participant’s
Account(s) in existence at the time an amendment or modification is made, and (ii) no amendment or
modification shall materially and adversely affect the Participant’s rights to be credited with
additional amounts on such Account(s), or otherwise materially and adversely affect the
Participant’s rights with respect to such Account(s). A change in the Deemed Investment Options
offered under this Plan shall not constitute an amendment or modification that is materially
adverse to the Participant’s rights with respect to the Participant’s Account(s) for purposes of
the preceding sentence.

ARTICLE 9

Administration

     9.1 Plan Administrator Duties. The Plan Administrator shall be responsible for the
management, operation and administration of the Plan. The Plan Administrator shall act at meetings
by affirmative vote of a majority of its members. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a unanimous written consent to the action is
signed by all members and such written consent is filed with the minutes of the proceedings of the
Plan Administrator, provided, however that no member may vote or act upon any matter which relates
solely to himself or herself as a Participant. The Chair or any

16

 

other member or members of the Plan
Administrator designated by the Chair may execute any certificate or other written direction on
behalf of the Plan Administrator. When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a Participant or the Plan
Sponsor. No provision of this Plan shall be construed as imposing on the Plan Administrator any
fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or
other law.

     9.2 Plan Administrator Authority. The Plan Administrator shall enforce this Plan in
accordance with its terms, shall be charged with the general administration of this Plan, and shall
have all powers necessary to accomplish its purposes, including, but not by way of limitation, the
following:

(a) To select the Deemed Investment Options available from time to time;

(b) To construe and interpret the terms and provisions of this Plan;

(c) To compute and certify the amount and kind of benefits payable to Participants and their
Beneficiaries; to determine the time and manner in which such benefits are paid; and to determine
the amount of any withholding taxes to be deducted;

(d) To maintain all records that may be necessary for the administration of this Plan;

(e) To provide for the disclosure of all information and the filing or provision of all
reports and statements to Participants, Beneficiaries and governmental agencies as shall be
required by law;

(f) To make and publish such rules for the regulation of this Plan and procedures for the
administration of this Plan as are not inconsistent with the terms hereof;

(g) To administer this Plan’s claims procedures;

(h) To approve election forms and procedures for use under this Plan; and

(i) To appoint a plan record keeper or any other agent, and to delegate to them such powers
and duties in connection with the administration of this Plan as the Plan Administrator may from
time to time prescribe.

     9.3 Binding Effect of Decision. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the administration, interpretation and
application of this Plan and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in this Plan.

     9.4 Compensation, Expenses and Indemnity. The Plan Administrator shall serve without
compensation for services rendered hereunder. The Plan Administrator is authorized at the expense
of the Plan Sponsor to employ such legal counsel and/or Plan record keeper as it may deem advisable
to assist in the performance of its duties hereunder. Expense and fees in connection with the
administration of this Plan shall be paid by the Plan Sponsor.

     9.5 Plan Sponsor 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 its Participants, the date and circumstances of the
Disability, death, or Separation From Service of its employees who are Participants, and such other
pertinent information as the Plan Administrator may reasonably require.

17

 

     9.6 Periodic Statements. Under procedures established by the Plan Administrator, a
Participant shall be provided a statement of account on an annual basis (or more frequently as the
Plan Administrator shall determine) with respect to such Participant’s Accounts.

ARTICLE 10

Claims Procedures

     10.1 Claims Procedure. This Article is based on final regulations issued by the
Department of Labor and published in the Federal Register on November 21, 2000 and codified in
Section 2560.503-1 of the Department of Labor Regulations. If any provision of this Article
conflicts with the requirements of those regulations, the requirements of those regulations will
prevail.

(a) Claim. A Participant or Beneficiary (hereinafter referred to as a “Claimant”) who
believes he or she is entitled to any Plan benefit under this Plan may file a claim with the Plan
Sponsor. The Plan Sponsor shall review the claim itself or appoint an individual or entity to
review the claim.

(b) Claim Decision. The Claimant shall be notified within ninety (90) days after the
claim is filed whether the claim is allowed or denied, unless the claimant receives written notice
from the Plan Sponsor or appointee of the Plan Sponsor prior to the end of the ninety (90) day
period stating that special circumstances require an extension of the time for decision. Such
extension is not to extend beyond the day which is one hundred eighty (180) days after the day the
claim is filed. If the Plan Sponsor denies the claim, it must provide to the Claimant, in writing
or by electronic communication:

(i) The specific reasons for such denial;

(ii) Specific reference to pertinent provisions of this Plan on which such denial is
based;

(iii) A description of any additional material or information necessary for the
Claimant to perfect his or her claim and an explanation why such material or such
information is necessary; and

(iv) A description of the Plan’s appeal procedures and the time limits applicable to such
procedures, including a statement of the Claimant’s right to bring a civil action under Section
502(a) of ERISA following a denial of the appeal of the denial of the benefits claim.

(c) Review Procedures. A request for review of a denied claim must be made in writing
to the Plan Sponsor within sixty (60) days after receiving notice of denial. The decision upon
review will be made within sixty (60) days after the Plan Sponsor’s receipt of a request for
review, unless special circumstances require an extension of time for processing, in which case a
decision will be rendered not later than one hundred twenty (120) days after receipt of a request
for review. A notice of such an extension must be provided to the Claimant within the initial sixty
(60) day period and must explain the special circumstances and provide an expected date of
decision. The reviewer shall afford the Claimant an opportunity to review and receive, without
charge, all relevant documents, information and records and to submit issues and comments in
writing to the Plan Sponsor. The reviewer shall take into account all comments, documents, records
and other information submitted by the Claimant relating to the claim regardless of whether the
information was submitted or considered in the benefit determination. Upon completion of its
review of an adverse initial claim determination, the Plan Sponsor will give the Claimant, in
writing or by electronic notification, a notice containing:

(i) its decision;

18

 

(ii) the specific reasons for the decision;

(iii) the relevant Plan provisions on which its decision is based;

(iv) a statement that the Claimant is entitled to receive, upon request and without
charge, reasonable access to, and copies of, all documents, records and other
information in the Plan’s files which is relevant to the Claimant’s claim for
benefit;

(v) a statement describing the Claimant’s right to bring an action for judicial
review under ERISA Section 502(a); and

(vi) If an internal rule, guideline, protocol, or other similar criterion was relied
upon in making the adverse determination on review, a statement that a copy of the
rule, guideline, protocol or other similar criterion will be provided without charge
to the Claimant upon request.

(c) Calculation of Time Periods. For purposes of the time periods specified in this
Article, the period of time during which a benefit determination is required to be made begins at
the time a claim is filed in accordance with this Plan procedures without regard to whether all the
information necessary to make a decision accompanies the claim. If a period of time is extended due
to a Claimant’s failure to submit all information necessary, the period for making the
determination shall be tolled from the date the notification is sent to the Claimant until the date
the Claimant responds.

(d) Failure of Plan to Follow Procedures. If the Plan Sponsor fails to follow the
claims procedure required by this Article, a Claimant shall be deemed to have exhausted the
administrative remedies available under this Plan and shall be entitled to pursue any
available remedy under Section 502(a) of ERISA on the basis that this Plan has failed to
provide a reasonable claims procedure that would yield a decision on the merits of the
claim.

(e) Failure of Claimant to Follow Procedures. A Claimant’s compliance with the
foregoing provisions of this Article is a mandatory prerequisite to the Claimant’s right to
commence any legal action with respect to any claim for benefits under the Plan.

     10.2 Arbitration of Claims. All claims or controversies arising out of or in
connection with this Plan shall, subject to the initial review provided for in the foregoing
provisions of this Article be resolved through arbitration as provided in this Paragraph 10.2.
Except as otherwise agreed mutual by the parties, any arbitration shall be administered under and
by the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with the JAMS
procedure then in effect. The arbitration shall be held in the JAMS office nearest to where the
Claimant is or was last employed by the Plan Sponsor or at a mutually agreeable location. The
prevailing party in the arbitration shall have the right to recover its reasonable attorney’s fees,
disbursements and costs of the arbitration (including enforcement of the arbitration decision),
subject to any contrary determination by the arbitrator.

ARTICLE 11

The Trust

     11.1 Establishment of Trust. The Plan Sponsor may establish a grantor trust, of which
the Plan Sponsor is the grantor, within the meaning of subpart E, part I, subchapter J, subtitle A
of the Code, to pay benefits under this Plan (the “Trust”). If the Plan Sponsor establishes the
Trust, all benefits payable under this Plan to a Participant shall be paid directly by the Plan
Sponsor from the Trust. To the extent such benefits are not paid from the Trust, the benefits shall
be paid from the general assets of the Plan Sponsor. The Trust, if any, shall be an irrevocable
grantor trust which conforms to the terms of the model trust as described in IRS Revenue Procedure
92-64, I.R.B. 1992 33, as same may be amended or modified from time

19

 

to time. If the Plan Sponsor
establishes a Trust, the assets of the Trust will be subject to the claims of the Plan Sponsor’s
creditors in the event of its insolvency. Except as may otherwise be provided under the Trust, the
Plan Sponsor shall not be obligated to set aside, earmark or escrow any funds or other assets to
satisfy its obligations under this Plan, and the Participant and/or his or her designated
Beneficiaries shall not have any property interest in any specific assets of the Plan Sponsor other
than the unsecured right to receive payments from the Plan Sponsor, as provided in this Plan.

     11.2 Interrelationship of the Plan and the Trust. The provisions of this Plan shall
govern the rights of a Participant to receive distributions pursuant to this Plan. The provisions
of the Trust (if established) shall govern the rights of the Participant and the creditors of the
Plan Sponsor to the assets transferred to the Trust. The Plan Sponsor and each Participant shall at
all times remain liable to carry out its obligations under this Plan. The Plan Sponsor’s
obligations under this Plan may be satisfied with Trust assets distributed pursuant to the terms of
the Trust.

     11.3 Contribution to the Trust. Amounts may be contributed by the Plan Sponsor to the
Trust at the sole discretion of the Plan Sponsor.

ARTICLE 12

Miscellaneous

     12.1 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof,
but this Plan shall be construed and enforced as if such illegal or invalid provision had never
been inserted herein. To the extent any provision of this Plan is determined by the Plan
Administrator (acting in good faith), the Internal Revenue Service, the United States Department of
the Treasury or a court of competent jurisdiction to fail to comply with Section 409A of the Code
or Applicable Guidance with respect to any Participant or Participants, such provision shall have
no force or effect with respect to such Participant or Participants.

     12.2 Nonassignability. Neither any Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part hereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment (except to the extent the Plan Sponsor may
be required to garnish amounts from payments due under this Plan pursuant to
applicable law) or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by operation of law in the
event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a
spouse as a result of a property settlement or otherwise. If any Participant, Beneficiary or
successor in interest is adjudicated bankrupt or purports to commute, sell, assign, transfer,
pledge, anticipate, mortgage or otherwise encumber transfer, hypothecate, alienate or convey in
advance of actual receipt, the amount, if any, payable hereunder, or any part thereof, the Plan
Administrator, in its discretion, may cancel such distribution or payment (or any part thereof) to
or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the
Plan Administrator shall direct.

     12.3 Not a Contract of Employment. The terms and conditions of this Plan shall not
be deemed to constitute a contract of employment between the Plan Sponsor and the Participant.
Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service
of the Plan Sponsor as an employee or otherwise or to interfere with the right of the Plan Sponsor
to discipline or discharge the Participant at any time.

     12.4 Unclaimed Benefits. In the case of a benefit payable on behalf of such
Participant, if the Plan Administrator is unable to locate the Participant or Beneficiary to whom
such benefit is payable, such Plan benefit may be forfeited to the Plan Sponsor upon the Plan

20

 

Administrator’s determination. Notwithstanding the foregoing, if, subsequent to any such
forfeiture, the Participant or beneficiary to whom such Plan benefit is payable makes a valid claim
for such Plan benefit, such forfeited Plan benefit shall be paid by the Plan Administrator to the
Participant or Beneficiary, without interest from the date it would have otherwise been paid.

     12.5 Governing Law. Subject to ERISA, the provisions of this Plan shall be construed
and interpreted according to the internal laws of the State of Texas, without regard to its
conflicts of laws principles.

     12.6 Notice. Any notice, consent or demand required or permitted to be given under the
provisions of this Plan shall be in writing and shall be signed by the party giving or making the
same. If such notice, consent or demand is mailed, it shall be sent by United States certified
mail, postage prepaid, addressed to the addressee’s last known address as shown on the records of
the Plan Sponsor. The date of such mailing shall be deemed the date of notice consent or demand.
Any person may change the address to which notice is to be sent by giving notice of the change of
address in the manner aforesaid.

     12.7 Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under this Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Plan Sponsor. This Plan shall
supplement and shall not supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided herein.

     12.8 Compliance. A Participant shall have no right to receive payment with respect to
the Participant’s Account balance until all legal and contractual obligations of the Plan Sponsor
relating to establishment of the Plan and the making of such payments shall have been complied with
in full.

     12.9 Successor Company. The Plan may be continued after a sale of assets of the Plan
Sponsor, or a merger or consolidation of the Plan Sponsor into another corporation or entity only
if and to the extent that the transferee, purchaser or successor entity agrees to continue the
Plan. In the event that the Plan is not continued by the transferee, purchaser or successor entity,
the Plan shall automatically terminate, and the provisions of Paragraph 9.1 shall become operative.

     12.10 Compliance with Section 409A and Applicable Guidance. Notwithstanding anything
in this Plan to the contrary, all provisions of this Plan, including but not limited to the
definitions of terms, elections to defer, and distributions, shall be made in accordance with and
shall comply with Section 409A and any Applicable Guidance. The Plan Sponsor will amend
the terms of this Plan retroactively if necessary, to the extent required to comply with
Section 409A and any Applicable Guidance. No provision of this Plan shall be followed to the
extent that following such provision would result in a violation of Section 409A or the Applicable
Guidance, and no election made by a Participant hereunder, and no change made by a Participant to a
previous election, shall be accepted by the Plan Sponsor if the Plan Sponsor determines that
acceptance of such election or change could violate any of the requirements of Section 409A or the
Applicable Guidance. This Plan and any accompanying forms shall be interpreted in accordance with,
and incorporate the terms and conditions required by Section 409A and the Applicable Guidance,
including, without limitation, any such Treasury Regulations or other guidance that may be issued
after the date hereof.

     12.11 Good Faith. The Plan Sponsor will operate the Plan during the 2007 taxable
years in good faith compliance in accordance with: (i) Notice 2005-1; and (ii) Section §409A and
any Applicable Guidance. The Plan Sponsor also may operate this Plan consistent with the Proposed
Treasury Regulations § 1.409A before such Regulations become effective and may apply such Treasury
Regulations to the extent that they are inconsistent with Notice 2005-1. The Plan Sponsor intends
this Plan to comply with the provisions of Notice 2005-1 and of Proposed Treasury Regulations §
1.409A. Therefore, the Plan Sponsor will not apply any Plan

21

 

provision which is inconsistent
therewith and, by the relevant date, will amend any such provision to comply therewith and with any
other Applicable Guidance. Notwithstanding anything to the contrary set forth herein, neither the
Plan Sponsor nor the Participants may exercise any discretion under this Plan in a manner that
would violate Section 409A or any Applicable Guidance.

     IN WITNESS WHEREOF, the Plan Sponsor has signed this Plan document as of January 30, 2007.

	 	 	 	 	 
	ATTEST/WITNESS 

 	 
	/s/ RICHARD R. LEVINE
 	 
	(Signature)                  	 
	 	 
	 
	 	 
	
Richard R. Levine
 	 
	(Print Name)                 	 
	 	 	 
	 

	 	 	 	 	 
	For:  FGX INTERNATIONAL, INC. 	 
	 
	 	 
	/s/ BRIAN J. LAGARTO
 	 
	(Signature) 	 
	 	 
	 
	 	 
	Brian J. Lagarto
 	 
	(Print Name) 	 
	 	 
	 
	 	 
	Chief Financial Officer
 	 
	(Title) 	 
	 	 	 
	 

 

22EX-10.26 Single Employer Welfare Benefit Plan

 

EXHIBIT 10.26

 

 

 

 

 

 

INSURED SECURITY PROGRAM

 

 

 

 

 

 

SINGLE EMPLOYER

WELFARE BENEFIT PLAN

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page No.
	ARTICLE 1	 	Introduction and Purpose of Plan	 	 	1	 
	 	 	Section 1.1
	 	Establishment of Plan

	 	 	1	 
	 	 	Section 1.2
	 	Purpose of Plan

	 	 	1	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 2	 	Definitions	 	 	1	 
	 	 	 	2.1	 	 	Administrator

	 	 	1	 
	 	 	 	2.2	 	 	Adoption Agreement

	 	 	2	 
	 	 	 	2.3	 	 	Age

	 	 	2	 
	 	 	 	2.4	 	 	Anniversary Date

	 	 	2	 
	 	 	 	2.5	 	 	Assigned Interest

	 	 	2	 
	 	 	 	2.6	 	 	Assignment of Policy for Collateral Security

	 	 	2	 
	 	 	 	2.7	 	 	Beneficiary

	 	 	2	 
	 	 	 	2.8	 	 	Benefits

	 	 	2	 
	 	 	 	2.9	 	 	Board

	 	 	2	 
	 	 	 	2.10	 	 	Code

	 	 	2	 
	 	 	 	2.11	 	 	Compensation

	 	 	2	 
	 	 	 	2.12	 	 	Contract Administrator

	 	 	3	 
	 	 	 	2.13	 	 	Death Benefit

	 	 	3	 
	 	 	 	2.14	 	 	Death Benefit Option Agreement

	 	 	3	 
	 	 	 	2.15	 	 	Dependent

	 	 	4	 
	 	 	 	2.16	 	 	Effective Date

	 	 	4	 
	 	 	 	2.17	 	 	Employee

	 	 	4	 
	 	 	 	2.18	 	 	Employer

	 	 	4	 
	 	 	 	2.19	 	 	ERISA

	 	 	4	 
	 	 	 	2.20	 	 	Key Employee

	 	 	4	 
	 	 	 	2.21	 	 	Insured Benefit

	 	 	5	 
	 	 	 	2.22	 	 	Insured Death Benefit

	 	 	5	 
	 	 	 	2.23	 	 	Insured Long-Term Care Benefit

	 	 	5	 
	 	 	 	2.24	 	 	Insurer

	 	 	5	 
	 	 	 	2.25	 	 	Long-Term Care Benefit

	 	 	5	 
	 	 	 	2.26	 	 	Named Fiduciary

	 	 	5	 
	 	 	 	2.27	 	 	Participant

	 	 	5	 
	 	 	 	2.28	 	 	Participation Premium

	 	 	5	 
	 	 	 	2.29	 	 	Payee

	 	 	5	 
	 	 	 	2.30	 	 	Plan

	 	 	5	 
	 	 	 	2.31	 	 	Plan Year

	 	 	6	 
	 	 	 	2.32	 	 	Policy

	 	 	6	 
	 	 	 	2.33	 	 	Policy Proceeds

	 	 	6	 
	 	 	 	2.34	 	 	Policy Owner

	 	 	6	 
	 	 	 	2.35	 	 	Policy Year

	 	 	6	 
	 	 	 	2.36	 	 	Post-Retirement Death Benefit

	 	 	6	 
	 	 	 	2.37	 	 	Post-Retirement Medical Benefit

	 	 	6	 

     i     

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page No.
	 	 	 	2.38	 	 	Post-Retirement Medical Benefit Reserve

	 	 	6	 
	 	 	 	2.39	 	 	Qualified Asset Account

	 	 	7	 
	 	 	 	2.40	 	 	Qualified Asset Account Limit

	 	 	7	 
	 	 	 	2.41	 	 	Qualified Medical Care Expense

	 	 	7	 
	 	 	 	2.42	 	 	Spouse

	 	 	7	 
	 	 	 	2.43	 	 	Termination of Employment

	 	 	7	 
	 	 	 	2.44	 	 	Trust

	 	 	7	 
	 	 	 	2.45	 	 	Trustee

	 	 	7	 
	 	 	 	2.46	 	 	Trust Fund

	 	 	7	 
	 	 	 	2.47	 	 	Valuation Date

	 	 	7	 
	 	 	 	2.48	 	 	Year of Participation

	 	 	8	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 3	 	Eligibility	 	 	8	 
	 	 	Section 3.1
	 	Eligibility

	 	 	8	 
	 	 	Section 3.2
	 	Termination of Participation

	 	 	9	 
	 	 	Section 3.3
	 	Eligibility for Benefit Payment(s)

	 	 	10	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 4	 	Death Benefits	 	 	11	 
	 	 	Section 4.1
	 	General

	 	 	11	 
	 	 	Section 4.2
	 	Amount of Death Benefit

	 	 	12	 
	 	 	Section 4.3
	 	Life Insurance Policies

	 	 	12	 
	 	 	Section 4.4
	 	Designation of Beneficiary

	 	 	14	 
	 	 	Section 4.5
	 	Survivorship or “Second-to-Die” Death
Benefit Coverage

	 	 	14	 
	 	 	Section 4.6
	 	Forfeiture of Death Benefit; Post-Retirement
Death Benefit

	 	 	15	 
	 	 	Section 4.7
	 	Time of Distribution

	 	 	15	 
	 	 	Section 4.8
	 	Method of Distribution

	 	 	15	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 5	 	Long-Term Care Benefits	 	 	15	 
	 	 	Section 5.1
	 	Long-Term Care Benefit

	 	 	15	 
	 	 	Section 5.2
	 	Amount of Long-Term Care Benefit

	 	 	15	 
	 	 	Section 5.3
	 	Long-Term Care Policy(ies)

	 	 	16	 
	 	 	Section 5.4
	 	Forfeiture of Long-Term Care Benefit

	 	 	18	 
	 	 	Section 5.5
	 	Time of Distribution

	 	 	18	 
	 	 	Section 5.6
	 	Method of Distribution

	 	 	18	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 6	 	Post-Retirement Medical Benefits	 	 	18	 
	 	 	Section 6.1
	 	Post-Retirement Medical Benefit

	 	 	18	 
	 	 	Section 6.2
	 	Amount of Post-Retirement Medical Benefit

	 	 	19	 
	 	 	Section 6.3
	 	Qualified Asset Account

	 	 	19	 
	 	 	Section 6.4
	 	Separate Accounts for Key Employees

	 	 	19	 
	 	 	Section 6.5
	 	Nondiscrimination Requirements

	 	 	21	 
	 
	 	 	 	 	 	 
	 	 	 	 
	ARTICLE 7	 	Claims Procedures	 	 	21	 
	 	 	Section 7.1
	 	Claim for Benefits

	 	 	21	 
	 	 	Section 7.2
	 	Claims Procedures

	 	 	21	 
	 	 	Section 7.3
	 	Initial Claim

	 	 	21	 

     ii     

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.
	 	 	Section 7.4
	 	Review Procedures

	 	 	24	 
	 	 	Section 7.5
	 	Failure of Plan to Follow Procedures

	 	 	26	 
	 	 	Section 7.6
	 	Failure of Claimant to Follow Procedures

	 	 	26	 
	 	 	Section 7.7
	 	Preemption of State Law

	 	 	26	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 8	 	Contributions	 	 	26	 
	 	 	Section 8.1
	 	Contributions

	 	 	26	 
	 	 	Section 8.2
	 	Direction of Death Benefit Investment

	 	 	27	 
	 	 	Section 8.3
	 	Irrevocability of Contributions

	 	 	27	 
	 	 	Section 8.4
	 	Limitation on Liability

	 	 	27	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 9	 	Provision of Benefits	 	 	27	 
	 	 	Section 9.1
	 	Provision of Benefits

	 	 	27	 
	 	 	Section 9.2
	 	Benefits Not Subject to Legal Process

	 	 	28	 
	 	 	Section 9.3
	 	Facility of Payment

	 	 	28	 
	 	 	Section 9.4
	 	Unpaid Benefit Payments

	 	 	28	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 10	 	Administration of the Plan	 	 	28	 
	 	 	Section 10.1
	 	Allocation or Delegation of Duties
and Responsibilities

	 	 	28	 
	 	 	Section 10.2
	 	Indemnification

	 	 	28	 
	 	 	Section 10.3
	 	Liability for Breach by Co-Fiduciary

	 	 	29	 
	 	 	Section 10.4
	 	Liability of the Contract Administrator to
Participants

	 	 	29	 
	 	 	Section 10.5
	 	Expenses of the Plan

	 	 	29	 
	 	 	Section 10.6
	 	Adequacy of the Trust Fund

	 	 	29	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 11	 	Amendment and Termination	 	 	30	 
	 	 	Section 11.1
	 	Right to Amend or Terminate the Plan

	 	 	30	 
	 	 	Section 11.2
	 	The Contract Administrator

	 	 	32	 
	 	 	Section 11.3
	 	Failure to Pay Fees

	 	 	32	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 12	 	Agreements of Trust	 	 	32	 
	 	 	Section 12.1
	 	Trustee

	 	 	32	 
	 	 	Section 12.2
	 	Trust Funds Are for Exclusive Benefit of
Participants of the Plan and Their
Beneficiaries

	 	 	32	 
	 
	 	 	 	 
	 	 	 	 
	ARTICLE 13	 	Miscellaneous	 	 	32	 
	 	 	Section 13.1
	 	Titles Are for Reference Only

	 	 	32	 
	 	 	Section 13.2
	 	Construction

	 	 	32	 
	 	 	Section 13.3
	 	Gender and Number

	 	 	32	 
	 	 	Section 13.4
	 	Transfer of Assets to or from other Trusts

	 	 	32	 
	 	 	Section 13.5
	 	Agent for Service of Process

	 	 	33	 
	 	 	Section 13.6
	 	No Guarantee against Losses in the Trust

	 	 	33	 

     iii     

 

 

ARTICLE I

Introduction and Purpose of Plan

Section 1.1 Establishment of Plan. By executing the attached Adoption Agreement (the
“Adoption Agreement”), the Employer (as defined herein) has adopted the Insured Security Program
Single Employer Welfare Plan and Trust, effective as provided in the Adoption Agreement. In
addition, by executing the attached Adoption Agreement, the Contract Administrator and Trustee
(each as defined herein) acknowledge the Employer’s adoption of the Plan and Trust and agree to the
terms and conditions of the Plan and Trust to the extent applicable to such Contract Administrator
and Trustee.

Section 1.2 Purpose of Plan.

     (a) The purpose of this Plan is to provide welfare benefits to the Employer’s eligible current
and, in certain cases, former employees and their eligible dependents. Specifically, the Employer
has adopted this Plan in order to provide term death benefit, long-term care benefit and/or
post-retirement medical benefit coverage (as elected by the Employer in the Adoption Agreement) to
eligible current and, in certain cases, former employees of the Employer and their eligible
dependents. The type(s) and level(s) of term death benefit, long-term care benefit and/or
post-retirement medical benefit coverage offered under the Plan are those selected by the Employer
in the Adoption Agreement.

     (b) The provision of benefits in the nature of retirement benefits or deferred compensation
benefits is not among the Employer’s objectives in adopting the Plan.

     (c) The Plan shall be maintained for the exclusive benefit of covered employees, former
employees and dependents.

     (d) Notwithstanding anything in the Plan to the contrary, no post-retirement coverage shall be
offered under the Plan unless: (i) to the extent required under Section 419A(e)(1) of the Code,
the nondiscrimination requirements of Section 505(b) of the Code are satisfied; and (ii) to the
extent required under Section 419A(d) of the Code, beginning in the first taxable year for which a
Post-Retirement Medical Benefit Reserve (as defined herein) is taken into account for purposes of
determining the Qualified Asset Account Limit (as defined herein) and for all subsequent taxable
years, any post-retirement medical benefits provided with respect to a key employee may only be
paid from a separate account which is established under the Plan for the purpose of providing such
benefits.

ARTICLE 2

Definitions

When used in the Plan, the following words and phrases shall have the following meanings unless the
context demands otherwise:

2.1 “Administrator” The Employer, or any other individual or committee appointed by the Employer to
serve as the official Administrator for the Plan.

1

 

2.2 “Adoption Agreement” The agreement enumerating the Plan’s specifications and executed by the
Employer in order to adopt this Plan, establish as grantor the Trust and appoint the Contract
Administrator(s) to whom the Employer delegates those duties and responsibilities relating to the
Plan which are described in Section 10.1. The Adoption Agreement shall constitute part of the
Plan.

2.3 “Age” Unless specifically stated otherwise, Age shall mean the age at the birthday nearest the
Anniversary Date in question.

2.4 “Anniversary Date” The first day (January 1st) of each Plan Year.

2.5 “Assigned Interest” With respect to an Insured Death Benefit, the security interest in and lien
on a Policy and Policy Proceeds granted to the Trustee under an Assignment of Policy for Collateral
Security, which Assigned Interest is utilized by the Plan for the purpose of providing the Insured
Death Benefit.

2.6 “Assignment of Policy for Collateral Security” Grants to the Trustee a security interest in and
lien on a Policy and Policy proceeds as collateral security for payment to the Trustee of the
Trustee Total Death Benefit (as defined in Section 4.3).

2.7 “Beneficiary” The person, persons or other entity under the provisions of this Plan entitled to
receive a Death Benefit under the Plan after the death of a Participant.

2.8 “Benefits” Death Benefits provided under Article 4, Long-Term Care Benefits provided under
Article 5, and Post-Retirement Medical Benefits provided under Article 6 hereof.

2.9 “Board” The Board of Directors of the Employer which adopts the Plan, if a corporation; if not
a corporation, then such entity’s governing body, e.g., managing partner(s) or sole proprietor.

2.10 “Code” The Internal Revenue Code of 1986 as amended from time to time and as interpreted and
applied by valid regulations and rulings issued pursuant thereto.

2.11 “Compensation”

     (a) For any Employee other than a self-employed person, Compensation shall mean earned income,
wages, salaries, and fees for professional services actually rendered in the course of employment
with the Employer (including, but not limited to, commissions paid to salespersons, compensation
for services on the basis of a percentage of profits, commissions on insurance premiums, tips and
bonuses) and excluding the following:

          (i) Employer contributions to a plan of deferred compensation which are not includible in the
Employee’s gross income for the taxable year in which contributed, or Employer contributions under
a simplified employee pension plan to the extent such contributions are deductible by the
Participant, or any distributions from a plan of deferred compensation;

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

2

 

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

          (iv) Other amounts which received special tax benefits.

          Notwithstanding the preceding, Compensation shall include any elective deferral (as defined
in Code §402(g)(3)) and any amount which is contributed or deferred by the Employer at the election
of the Participant and which is not includible in the gross income of the Participant by reason of
Code §§125, 457 or 132(f)(4).

     (b) For any self-employed person (as defined in Code Section 401(c)(1) and the regulations
thereunder), Compensation shall mean his earned income for the Plan Year, defined as the net
earnings from self-employment in the trade or business with respect to which the Plan is
established, for which personal services of the individual are a material income-producing factor.
For purposes of calculating earned income net earnings will be determined without regard to items
not included in gross income and the deductions allocable to such items. Net earnings are reduced
by contributions by the Employer to a qualified retirement plan to the extent deductible under Code
Section 404. Net earnings shall be determined with regard to the deduction allowed to the taxpayer
by section 164(f) of the Code.

2.12 “Contract Administrator” The person or entity identified in the Adoption Agreement as the
Contract Administrator, or any successor or successors thereto, to perform certain administrative
functions for the Plan. If so provided in the Adoption Agreement, the Contract Administrator with
respect to the Death Benefit provisions of the Plan (the “Death Benefit Contract Administrator”)
may be different than the Contract Administrator with respect to the Long-Term Care Benefit
provisions of the Plan (the “Long-Term Care Benefit Contract Administrator”) and/or the Contract
Administrator with respect to the Post-Retirement Medical Benefit provisions of the Plan (the
“Post-Retirement Medical Benefit Contract Administrator”), in which case any reference to the
Contract Administrator herein shall mean the Death Benefit Contract Administrator with respect to
those Plan provisions applicable solely to Death Benefits, the Long-Term Care Contract
Administrator with respect to those Plan provisions applicable solely to Long-Term Care Benefits,
the Post-Retirement Medical Benefit Contract Administrator with respect to those Plan provisions
applicable solely to Post-Retirement Medical Benefits and, collectively, the Death Benefit Contract
Administrator, the Long-Term Care Contract Administrator and the Post-Retirement Medical Benefit
Contract Administrator with respect to those Plan provisions applicable to all Benefits.

2.13 “Death Benefit” A Benefit payable pursuant to Article 4 to a Beneficiary by reason of the
death of a Participant. Unless the context indicates otherwise, the term “Death Benefit” shall
also include a Post-Retirement Death Benefit.

2.14 “Death Benefit Option Agreement” With respect to an Insured Death Benefit, an agreement
between the Policy Owner and the Trustee (at the direction of the Contract Administrator) whereby
the two parties agree to define and limit the extent of the Trustee’s Assigned Interest in the
Policy and Policy Proceeds.

3

 

2.15 “Dependent” Any of the following individuals with respect to a Participant:

     (a) the Spouse;

     (b) an unmarried minor child of the Participant who receives over half of his or her support
from the Participant;

     (c) an unmarried child of the Participant who is a full time student in regular attendance at
an educational organization which normally maintains a regular faculty and curriculum and normally
has a regularly enrolled body of pupils or students in attendance at the place where its
educational activities are regularly carried on, and who receives over half of his or her support
from the Participant;

     (d) any other individual who is a dependent of the Employee described in Section 152(a) of the
Code.

     For purposes of this Section, the word “child” includes natural children, legally adopted
children who are under age eighteen (18) years of age at the time of the adoption, foster children
(provided the foster child is not a ward of the state), stepchildren and children placed for
adoption who are under eighteen (18) years of age at the time of the placement.

     Notwithstanding the preceding, “Dependent” does not include any person who is not a citizen or
national of the United States unless he or she is a resident of the United States, Canada or
Mexico. However, the preceding sentence shall not apply to exclude a legally adopted child of the
Employee from the definition of Dependent, if, for the Participant’s tax year, the child is a
member of the Participant’s household whose principal place of abode is in the Participant’s home
and the Employee is a citizen or national of the United States.

     In addition, a Spouse or child will not qualify as an eligible Dependent if he or she is on
active duty in the armed forces of any country or is an Employee of the Employer.

2.16 “Effective Date” The date specified in the Adoption Agreement as of which the Employer’s
adoption of this Plan is effective.

2.17 “Employee” Any person employed by the Employer as a common law employee or independent
contractor, including, if the Employer is not a corporation, any owner of the Employer providing
bona fide services to the Employer; provided that, a sole proprietor shall not be an Employee
eligible to participate in the Plan.

2.18 “Employer” The entity adopting this Plan by execution of the Adoption Agreement, any
successors assuming the obligations created herein, and any predecessor and/or affiliate thereof
specifically defined as such in the Adoption Agreement.

2.19 “ERISA” The Employee Retirement Income Security Act of 1974 (P.L. 93-406) as amended.

2.20 “Key Employee” Any Employee who, at any time during the Plan Year or any preceding Plan Year,
is or was a key employee as defined in Section 416(i) of the Code.

4

 

2.21 “Insured Benefit” A Benefit provided under the Plan through the purchase by the Trustee of a
Policy or, with respect to an Insured Death Benefit, through the grant to the Trustee of an
Assigned Interest in a Policy and Policy Proceeds.

2.22 “Insured Death Benefit” A Death Benefit provided under the Plan through the grant to the
Trustee of an Assigned Interest in a Policy and Policy Proceeds.

2.23 “Insured Long-Term Care Benefit” A Long-Term Care Benefit provided under the Plan through the
purchase by the Trustee of a Policy.

2.24 “Insurer” Any insurance company issuing a Policy utilized to provide a Benefit (or in which an
Assigned Interest is utilized to provide a Benefit) under the Plan.

2.25 “Long-Term Care Benefit” A Benefit payable to a Payee by reason of the incurrence of expenses
for long-term care services for a chronically ill Participant and/or pursuant to a “per diem”
contract provision to provide payments on a daily or other periodic basis with respect to a
chronically ill Participant, regardless of the expenses for long-term care services actually
incurred.

2.26 “Named Fiduciary” The Employer which adopts the Plan and any other person described below in
(a), (b), or (c).

     (a) The person exercises any discretionary authority or discretionary control respecting
management of the Plan, or exercises any authority or control respecting management or disposition
of assets.

     (b) The person renders investment advice for a fee or other compensation, direct or indirect,
with respect to any assets of the Plan, or has any authority or responsibility to render such
advice even if not actually rendered.

     (c) The person has any discretionary authority or discretionary responsibility in the
administration of the Plan.

2.27 “Participant” Any Employee, former Employee, Spouse or Dependent who commences participation
pursuant to Article 3 and who retains the right to Benefits under the Plan.

2.28 “Participation Premium” The amount required to be paid to the Trustee by a Participant in
order to receive Death Benefit coverage under the Plan.

2.29 “Payee” The person, persons or other entity under the provisions of this Plan entitled to
receive a Long-Term Care Benefit payment upon the incurrence of expenses for long-term care
services, pursuant to a “per diem” Policy provision to provide payments on a daily or other
periodic basis and/or any other payment event under the terms of the Policy or Policies utilized to
provide Long-Term Care Benefits hereunder.

2.30 “Plan” The Insured Security Program Single Employer Welfare Benefit Plan herein contained and
Trust herein referenced. The governing documents for the Plan shall include this Plan document,
Trust document(s) and amendments hereto, the Adoption Agreement, any agreements with the Insurer
and Contract Administrator, any amendments to any such

5

 

agreements, and such applicable rules, regulations and standards promulgated by the Internal
Revenue Service and/or the U.S. Department of Labor consistent and in accordance with the terms
hereof and of the Adoption Agreement and tax and ERISA requirements.

2.31 “Plan Year” The twelve-month period beginning each January 1st and ending on the
following December 31st.

2.32 “Policy” With respect to an Insured Death Benefit provided to a Participant, an insurance
contract between the Policy Owner and the Insurer whereby the Insurer agrees, in return for premium
payments, to pay a death benefit upon the death of the Participant.

     With respect to an Insured Long-Term Care Benefit provided to a Participant, the term “Policy”
means an insurance contract between the Policy Owner and the Insurer whereby the Insurer agrees, in
return for premium payments, to make long-term care benefit payments, at such times as set forth in
the Policy, by reason of the incurrence of expenses for long-term care services for a chronically
ill Participant and/or pursuant to a “per diem” contract provision to provide payments on a daily
or other periodic basis with respect to a chronically ill Participant, regardless of the expenses
actually incurred. Under the terms of the Plan, the Trustee shall acquire and maintain the Policy
in order to provide the Insured Long-Term Care Benefit.

2.33 “Policy Proceeds” With respect to a Policy in which the Trustee is granted an Assigned
Interest in order to provide an Insured Death Benefit, any and all proceeds of any type of, from or
under the Policy.

2.34 “Policy Owner” The Policy Owner is the Participant unless specifically designated or otherwise
noted. Notwithstanding the preceding, the Policy Owner in respect of any Policy utilized to
provide a Long-Term Care Benefit is the Trustee.

2.35 “Policy Year” With respect to a Policy in which the Trustee is granted an Assigned Interest in
order to provide an Insured Death Benefit, each annual twelve (12) month period of insurance
coverage under the Policy.

2.36 “Post-Retirement Death Benefit” A Death Benefit available under the Plan for Participants who
incur a Termination of Employment and who satisfy any applicable age and/or Years of Participation
conditions set forth in the Adoption Agreement.

2.37 “Post-Retirement Medical Benefit” A Benefit payable under Article 6 by reason of a Qualified
Medical Care Expense incurred by a Participant after retirement.

2.38 “Post-Retirement Medical Benefit Reserve” A reserve described in Section 419A(c)(2) of the
Code which is funded over the working lives of Employees covered under the Post-Retirement Medical
Benefit provisions of the Plan and which is actuarially determined on a level basis (using
assumptions that are reasonable in the aggregate) as necessary for Post-Retirement Medical Benefits
to be provided to covered Employees (determined on the basis of current medical costs).

2.39 “Qualified Asset Account” An account described in Section 419A(a) of the Code consisting of
assets set aside under the Trust to provide for the payment of Post-Retirement Medical Benefits.

6

 

2.40 “Qualified Asset Account Limit” The limit described in Section 419A(c) of the Code on
Qualified Asset Account additions which may be taken into account in determining the Trust’s
“qualified cost” under Section 419(c)(1)(B) of the Code for any taxable year, including any
Post-Retirement Medical Benefit Reserve established under the Plan. There shall be an actuarial
calculation of the Qualified Asset Account Limit under the Plan for each taxable year in which
additions are made to a Qualified Asset Account.

2.41 “Qualified Medical Care Expense” An expense incurred by a Participant or his or her Spouse or
Dependent that:

     (a) is not covered, paid or reimbursed under any other health plan coverage; and

     (b) qualifies as an expense for “medical care” (as defined in Section 213(d) of the Code).

2.42 “Spouse” A Participant’s wife or husband. With respect to Death Benefits under the Plan, the
term “Spouse” shall be limited to the Participant’s wife or husband who was lawfully married to the
Participant on the Participant’s date of death.

2.43 “Termination of Employment” The date the Employee ceases to perform services for the Employer
as a common law employee or independent contractor.

2.44 “Trust” The Welfare Benefit Trust, as amended and in effect from time to time.
Notwithstanding anything in the Plan or governing Trust document(s) to the contrary, the Plan may,
but is not required to, have separate Trusts, one in respect of any Death Benefits under the Plan,
one in respect of any Long-Term Care Benefits under the Plan and one in respect of any
Post-Retirement Medical Benefits under the Plan, in which case the term Trust shall refer
collectively to all Trusts, unless the context indicates otherwise. The Trust shall be governed by
and maintained pursuant to this Plan, the Adoption Agreement, any amendments of this Plan or the
Adoption Agreement, and any further agreements between the Employer and a Trustee, including any
amendments to any such agreements.

2.45 “Trustee” The person(s) or entity(ies) identified in the governing Trust document as the
Trustee or any successor or successors thereto, to hold and administer the Trust.

2.46 “Trust Fund” The corpus of the Trust, including, without limitation, all sums of money and
other property contributed to the Trust pursuant to the Plan and held under the Trust, together
with all earnings, income and increments thereon.

2.47 “Valuation Date” The date on which the Trust Fund is valued, including December 31 of each
year and the last day of any month as may be designated by the Contract Administrator in written
notice to the Trustee, as the Contract Administrator in its sole discretion may consider necessary
or advisable to assure the orderly and equitable administration of the Plan.

2.48 “Year of Participation” A Participant will be credited with a Year of Participation upon the
completion of a twelve (12) consecutive month period (Computation Period as defined herein) during
which the Participant is an Employee is credited with at least one thousand (1,000) hours of
service (as reasonably calculated by the Contract Administrator). For each

7

 

Participant, the Computation Period shall be the twelve (12) consecutive month period commencing on
the date such Participant first completed an hour of service and on an each anniversary of such
date. However, hours of service credited prior to the date the Participant began participation
under the Plan shall be disregarded. In addition, if a Participant ceases to be eligible due to a
change in his employment status, hours of service completed while in such ineligible status, shall
be disregarded.

ARTICLE 3

Eligibility

Section 3.1 Eligibility.

     (a) Except as otherwise provided in the Adoption Agreement, each Employee shall be eligible to
participate on the first day of the payroll period following his satisfaction of the eligibility
requirements set forth in the Adoption Agreement and his completion of any enrollment procedures
reasonably required by the Contract Administrator.

     (b) If and to the extent the Employer so elects in the Adoption Agreement, an eligible Spouse
and/or Dependent of an Employee or former Employee may participate in the Plan in the following
circumstances:

          (i) If the Employer elects in the Adoption Agreement to permit survivorship or “second-to-die”
Death Benefit coverage under the Plan, upon the death of an Employee or former Employee who, at the
time of his death, was a Participant under the Plan, any Spouse or Dependent of the Participant
entitled to receive survivorship or “second-to-die” Death Benefit coverage under the terms of the
Adoption Agreement and Section 4.5, shall become eligible for continued Death Benefit coverage at
the level previously provided to the deceased Participant at the time of the Participant’s death.

          (ii) If the Employer elects in the Adoption Agreement to permit Spouse and/or Dependent
Long-Term Care Benefit coverage under the Plan, any Spouse and/or Dependent of a Participant who is
an Employee shall be entitled to receive Long-Term Care Benefit coverage under the Plan through and
only through such Participant.

     (c) If and to the extent the Employer so elects in the Adoption Agreement, a Participant may
receive Post-Retirement Death Benefit and/or Post-Retirement Medical Benefit coverage under the
Plan provided he or she satisfies any additional age and/or Years of Participation requirements set
forth in the Adoption Agreement; provided, however, that no Post-Retirement Death Benefit and/or
Post-Retirement Medical Benefits shall be provided under the Plan unless such Benefit provisions of
the Plan satisfy the nondiscrimination requirements of Section 505(b) of the Code. If the Employer
elects in the Adoption Agreement to permit Spouse and/or Dependent Post-Retirement Medical Benefit
coverage under the Plan, any Spouse and/or Dependent of a Participant who is receiving
Post-Retirement Medical Benefit coverage shall be entitled to receive Post-Retirement Medical
Benefit coverage under the Plan through and only through such Participant. In addition, the
surviving Spouse and/or Dependent of a deceased Key Employee Participant may participate in the
Post-Retirement Medical Benefit provisions of the Plan to the extent provided under the Adoption
Agreement and in Section 6.4(c).

8

 

Section 3.2 Termination of Participation.

     (a) Participation by an Employee or former Employee in the Plan shall terminate on the
earliest of the following dates (provided, however, that the termination of Long-Term Care Benefit
coverage may be limited by Code section 7702B, as described in Article 5):

          (i) The day on which the Employee or former Employee dies;

          (ii) The day on which the Employee incurs a Termination of Employment for any reason other
than death, unless the Employee has satisfied the requirements set forth in the Adoption Agreement
for Post-Retirement Death Benefit and/or Post-Retirement Medical Benefits (provided, however, that
no Post-Retirement Death Benefits or Post-Retirement Medical Benefits shall be provided under the
Plan unless such Benefits satisfy the nondiscrimination requirements of Section 505(b) of the
Code);

          (iii) The day on which the Employee or former Employee ceases to satisfy the eligibility
requirements set forth in the Adoption Agreement (including, with respect to participation in any
Death Benefit coverage provisions of the Plan, the requirement that the Employee or former Employee
pay the Participation Premium);

          (iv) The day on which all Benefits, or the applicable Benefit(s), are terminated by amendment
of the Plan, by whole or partial termination of the Plan or by discontinuance of contributions by
the Employer; or

          (v) With respect to participation in any Insured Benefit, the day on which the Policy Owner
surrenders the Policy utilized (or, with respect to an Insured Death Benefit, the Assigned Interest
in which is utilized) to provide the Insured Benefit.

     (b) Participation by a Spouse or Dependent of an Employee or former Employee in any applicable
survivorship or “second-to-die” Death Benefit coverage provisions of the Plan shall terminate on
the earliest of the following dates:

          (i) The day on which the Spouse or Dependent dies;

          (ii) The day on which the Spouse or Dependent ceases to satisfy the eligibility requirements
set forth in the Adoption Agreement for survivorship or “second-to-die” Death Benefit coverage
(including the requirement that the Spouse or Dependent pay the Participation Premium);

          (iii) To the extent required under the Adoption Agreement, the last day of the period for
which the Spouse or Dependent reimburses the Employer for the Employer’s contributions under the
Plan in order to provide the continued Death Benefit coverage;

          (iv) The day on which survivorship or “second-to-die” Death Benefit coverage under the Plan is
terminated by amendment of the Plan, by whole or partial termination of the Plan or by
discontinuance of contributions by the Employer; or

9

 

          (v) With respect to any survivorship or “second-to-die” coverage under an Insured Death
Benefit, the day on which the Policy Owner surrenders the Policy the Assigned Interest in which is
utilized to provide the Insured Death Benefit.

     (c) Participation by a Spouse or Dependent of an Employee or former Employee in any applicable
Spouse or Dependent Long-Term Care Benefit or Post-Retirement Medical Benefit coverage provisions
of the Plan shall terminate on the earliest of the following dates (provided, however, that such
termination may be limited by Code section 7702B, as described in Article 5):

          (i) The day on which the Spouse or Dependent dies;

          (ii) The day on which the Employee or former Employee through whom the coverage is provided
dies;

          (iii) The day on which the Employee incurs a Termination of Employment for any reason other
than death (except with respect to Post-Retirement Medical Benefit coverage);

          (iv) The day on which the Employee through whom the coverage is provided ceases to satisfy the
eligibility requirements set forth in the Adoption Agreement;

          (v) The day on which all Spouse or Dependent Long-Term Care or Post-Retirement Medical
Benefits are terminated by amendment of the Plan, by whole or partial termination of the Plan or by
discontinuance of contributions by the Employer; or

          (vi) With respect to participation in any Insured Long-Term Care Benefit provided to a Spouse
or Dependent, the day on which the Policy Owner surrenders the Policy utilized to provide the
Insured Long-Term Care Benefit.

Section 3.3 Eligibility for Benefit Payment(s). An individual who satisfies the
requirements set forth in Section 3.1, above, shall be eligible to participate in the Plan.
However, the Participant shall not be eligible to receive a Benefit (payable to Participant’s
Beneficiary in the case of Death Benefits, or the Participant’s Payee in the case of Long-Term Care
Benefits) unless the following conditions are satisfied:

     (a) The Participant has met any applicable reasonable health standards established by the
Contract Administrator and, with respect to any Insured Benefit, the underwriting standards of the
Insurer. Such standards shall be applied in a uniform and nondiscriminatory manner so that all
Participants are treated similarly in similar circumstances;

     (b) The Participant continues to be a Participant as of the date(s) on which the Benefit
entitlement event(s) occur; and

     (c) With respect to any Insured Benefit, the insurance Policy or Policies utilized (or, with
respect to any Insured Death Benefit, the Assigned Interest(s) in which are utilized) to provide
the Benefit are issued and in force prior to the event(s) triggering the Benefit payment(s).

     Notwithstanding anything in this Plan to the contrary, if an Employee incurs a Termination of
Employment prior to satisfying any age and/or Years of Participation

10

 

requirements set forth in the Adoption Agreement for Post-Retirement Death Benefit and/or
Post-Retirement Medical Benefit coverage, neither the Employee nor (if applicable) the Employee’s
Spouse or Dependents shall be entitled to receive any Post-Retirement Death Benefits or
Post-Retirement Medical Benefits under the Plan.

ARTICLE 4

Death Benefits

Section 4.1 General.

     (a) Each eligible Participant (including, to the extent permitted in the Adoption Agreement,
an eligible Spouse or Dependent of a deceased Participant) who pays the required Participation
Premium set forth in the Adoption Agreement shall receive Death Benefit coverage under the Plan in
accordance with the elections made by the Employer in the Adoption Agreement.

     (b) The Participation Premium required under the Adoption Agreement shall be paid by the
Participant to the Trustee for the Trustee’s remission to the Contract Administrator, or, if
directed by the Contract Administrator, directly to the Insurer issuing the Policy the Assigned
Interest in which is utilized to provide the Insured Death Benefit. The Participation Premium
shall be applied towards the cost of the Participant’s Death Benefit coverage.

     (c) Following the Participant’s Termination of Employment for any reason other than death, the
Participant shall receive Post-Retirement Death Benefit coverage, but only if the Participant
satisfies the age and/or Years of Participation conditions set forth in the Adoption Agreement and
pays the required Participation Premium set forth in the Adoption Agreement. Notwithstanding
anything in the Plan to the contrary, no Post-Retirement Death Benefits shall be provided under the
Plan unless the Post-Retirement Death Benefit provisions of the Plan satisfy the nondiscrimination
requirements of Section 505(b) of the Code.

     (d) Death Benefit coverage provided under the Plan shall consist solely of current protection.
The Employer’s contributions under the Plan for the purpose of providing Death Benefit coverage
for a given Plan Year, plus the Participation Premiums required for the Plan Year, shall be limited
to the actuarially determined fair market value of current Death Benefit protection for that Plan
Year.

     (e) If the requirements of Section 3.3 are satisfied, the Participant’s Death Benefit shall be
paid following the Participant’s death:

          (i) to the Participant’s Beneficiary determined under Section 4.4; or

          (ii) if the conditions set forth in Section 4.5 are satisfied, in the form of continued Death
Benefit coverage to the Participant’s Spouse or Dependent at the level previously provided to the
deceased Participant at the time of the Participant’s death.

     (f) Except as provided in Section 4.2(b) and/or Section 4.3(h)(iii), all Death Benefits
provided under the Plan shall be Insured Death Benefits and, therefore, shall be provided solely
through the Assigned Interest(s) granted to the Trustee, as described under Section 4.3.

11

 

Section 4.2 Amount of Death Benefit. Except as provided in Section 4.5, each Participant
who dies while eligible to receive a Death Benefit under the Plan shall be provided with a Death
Benefit payable to his Beneficiary. Such Death Benefit shall be in an amount equal to:

     (a) If the Death Benefit is an Insured Death Benefit and the Policy in which the Trustee is
granted an Assigned Interest is issued and in force as of the date of the Participant’s death, the
single sum amount payable by the Insurer to the Trustee in accordance with and subject to the terms
of the Death Benefit Option Agreement; or

     (b) If the Death Benefit is not an Insured Death Benefit and/or would be an Insured Death
Benefit but for the fact that the Participant’s death occurs prior to the date the Policy in which
the Trustee otherwise would be granted an Assigned Interest is issued and/or in force, the sum(s)
actually contributed to Trust to pay the cost of the Insured Death Benefit.

Section 4.3 Life Insurance Policies. With respect to each Insured Death Benefit provided
under the Plan, the Policy Owner shall acquire and retain at all times equitable title to a Policy
on the life of the Participant. The term death benefit payable under the Policy shall be at least
equal to the Death Benefit set forth in the Adoption Agreement.

     (a) With respect to each Insured Death Benefit, the Contract Administrator shall direct the
Trustee to enter into a Death Benefit Option Agreement with each Policy Owner and thereby acquire
an Assigned Interest the Policy and Policy Proceeds.

     (b) The Trustee shall have no legal, equitable or beneficial right, title, or interest in the
Policy or Policy Proceeds, except to the extent of the Assigned Interest. Any interests in the
Policy and Policy Proceeds exceeding the Trustee’s Assigned Interest will be retained by the Policy
Owner. Notwithstanding the preceding, if the Policy has a cash surrender value, in no event shall
the Policy Owner be entitled to access such cash surrender value while the individual covered by
the Policy is a Participant. Under no circumstances will the Trustee be entitled to obtain loans
or withdrawals from the Policy.

     (c) As described in the Death Benefit Option Agreement, each Policy Year in which the Death
Benefit Option Agreement is in effect:

          (i) the Contract Administrator shall direct the Trustee to pay to the Contract Administrator,
or, if directed by the Contract Administrator, directly to the Insurer, an amount equal to the
Trustee’s portion of the total annual Policy premium which the Insurer anticipates will be paid
each Policy Year, including the Participation Premium paid to the Trustee by the Participant for
the Plan Year;

          (ii) the Policy Owner shall pay to the Contract Administrator the remainder of the total
annual Policy premium which the Insurer anticipates will be paid each Policy Year;

          (iii) the Contract Administrator shall remit the amounts received by it from the Trustee and
the Policy Owner to the Insurer.

     (d) In order to pay any Insured Death Benefit payable to a Beneficiary upon a Participant’s
death, the Trustee shall collect the portion of the Policy Proceeds to which it is entitled

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pursuant to its Assigned Interest (such portion described in the Death Benefit Option
Agreement as the “Trustee Total Death Benefit”) and shall distribute such amounts as directed by
the Contract Administrator. Alternatively, the Trustee may direct the Insurer to pay the Trustee
Total Death Benefit directly to the named Beneficiary. In doing so, the Trustee and the Insurer
may conclusively rely that the Plan’s Insured Death Benefit obligations will be completely
satisfied by such direct payment and shall fully discharge the Insurer and Trustee from all claims,
suits and demands of all persons whatsoever.

     (e) The Contract Administrator shall direct the Policy Owner to adjust the amount of term
death benefit coverage provided under the Policy as of each Anniversary Date to ensure ongoing
conformance with the amount of the Insured Death Benefit set forth in the Adoption Agreement.
However, no such adjustment will be placed into effect unless the amount of such adjustment is in
excess of $10,000 of insurance coverage.

     (f) The Insured Death Benefit shall be provided solely through the grant to the Trustee of an
Assigned Interest in a Policy and Policy Proceeds. The Trustee will only purchase Assigned
Interests in Policy(ies) and Policy Proceeds in accordance with the Contract Administrator’s
direction. The Trustee shall not interfere with the Participant’s ownership rights over any Policy
for which the Trustee holds an Assigned Interest, except to the extent provided under the terms of
the Death Benefit Option Agreement and Assignment of Policy for Collateral Security.

     (g) The Insured Death Benefit of a Participant shall be payable in full only as long as the
Employer makes contributions that are sufficient to keep the Assigned Interest in force. If the
Employer ceases to make such contributions or payments, the Contract Administrator shall direct the
Trustee to take any action authorized by Section 8.1(a).

     (h) If a Participant is found by the Insurer to be a non-standard underwriting risk, the
Contract Administrator must, in its sole discretion, elect one of the following:

          (i) Elect to pay any additional premium necessary to place such Policy into effect;

          (ii) Elect to acquire an Assigned Interest in a Policy of a lesser amount, with a premium
equal to the premium that would have been paid if the Participant were a standard underwriting
risk; or

          (iii) Elect to acquire no insurance on any Participant’s life if such Participant is only
insurable at rates in excess, by a predetermined amount, of standard rates. The Contract
Administrator will determine this amount in its sole discretion.

Section 4.4 Designation of Beneficiary. Each Participant shall have the right to
designate, in a revocable or irrevocable manner and in a form acceptable to the Contract
Administrator, a Beneficiary to receive the Death Benefit provided under this Plan. The
Participant may change revocable designations at any time.

If a Participant shall fail to designate a Beneficiary, or if such a designation is ineffective, or
if no revocable Beneficiary shall survive the Participant, the Contract Administrator shall direct
the Trustee to pay the Participant’s Death Benefit as follows, in the following priority:

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          (i) to his surviving Spouse, if any;

          (ii) if there is no surviving Spouse, to his descendants (including legally adopted children
or their descendants) per stirpes;

          (iii) if there is neither a surviving Spouse nor surviving descendants, to the duly appointed
and qualified executor or other personal representative of the Participant to be distributed in
accordance with the Participant’s will or applicable intestacy law; or

          (iv) in the event there shall be no such representative duly appointed and qualified within
six (6) months after the date of death of such deceased Participant, then to such persons
designated by the Contract Administrator as, at the date of the Participant’s death, would be
entitled to share in the distribution of such deceased Participant’s personal estate under the
provisions of the applicable statute then in force governing the descent of intestate property, in
the proportions specified in such statute.

Section 4.5 Survivorship or “Second-to-Die” Death Benefit Coverage. The Employer may elect
under the Adoption Agreement to permit survivorship or “second-to-die” Death Benefit coverage under
the Plan.

     (a) If survivorship or “second-to-die” Death Benefit coverage is elected by the Employer in
the Adoption Agreement, upon the death of an Employee or former Employee who, at the time of his
death, was a Participant under the Plan, any Spouse or Dependent of the Participant entitled to
receive survivorship or “second-to-die” Death Benefit coverage under the terms of the Adoption
Agreement shall receive continued Death Benefit coverage at the level previously provided to the
deceased Participant at the time of the Participant’s death, as long as the Spouse or Dependent
pays the Participation Premium required under the Adoption Agreement.

     (b) If so required in the Adoption Agreement, in addition to requiring that the covered Spouse
or Dependent pay the Participation Premium in order to receive the continued Death Benefit
coverage, the Employer may elect in the Adoption Agreement to require the Spouse or Dependent to
reimburse the Employer for the contributions made by the Employer under the Plan in order to fund
the continued Death Benefit coverage.

     (c) If survivorship or “second-to-die” Death Benefit coverage is provided to the Spouse or
Dependent of a deceased Participant, such coverage shall be in lieu of payment of a Death Benefit
to the deceased Participant’s Beneficiary; instead, a Death Benefit shall be payable to the
Beneficiary of the covered Spouse or Dependent, provided the Spouse or Dependent satisfies the
requirement of Section 3.3.

Section 4.6 Forfeiture of Death Benefit; Post-Retirement Death Benefit. No Death Benefit
is payable on the behalf of any current or former Participant whose death occurs on or after such
Participant’s Termination of Employment unless the conditions set forth in the Adoption Agreement
to receive a Post-Retirement Death Benefit are fulfilled. Notwithstanding anything in the Plan to
the contrary, no Post-Retirement Death Benefits shall be provided under the Plan unless the
Post-Retirement Death Benefit provisions of the Plan satisfy the nondiscrimination requirements of
Section 505(b) of the Code.

14

 

Section 4.7 Time of Distribution. The Beneficiary of a Participant’s Death Benefit shall
commence receipt of such Benefit on the first day of the month following the date the Trust is in
receipt of the Policy proceeds.

Section 4.8 Method of Distribution. The payment of Death Benefits shall be made in one
lump-sum.

ARTICLE 5

Long-Term Care Benefits

Section 5.1 Long-Term Care Benefit.

     (a) Each eligible Participant (including, to the extent permitted under the Adoption
Agreement, an eligible Spouse or Dependent of a Participant who is an Employee) shall receive
Long-Term Care Benefit coverage under the Plan in accordance with the elections made by the
Employer in the Adoption Agreement.

     (b) Long-Term Care Benefit coverage provided under the Plan shall consist solely of current
protection. The Employer’s contributions under the Plan for the purpose of providing Long-Term
Care Benefit coverage for a given Plan Year shall be limited to the actuarially determined fair
market value of current Long-Term Care Benefit protection for that Plan Year.

     (c) The type(s) of Long-Term Care Benefit coverage (e.g., comprehensive coverage,
facility-only coverage, home-health only coverage) to be offered to eligible Employees and their
Dependents shall be as set forth in the Policy or Policies utilized to provide the Long-Term Care
Benefit coverage.

     (d) Any Long-Term Care Benefit provided under the Plan shall be provided solely through the
purchase of long-term care insurance, as described below under Section 5.3.

     (e) Except as otherwise provided in the Plan, the Adoption Agreement and/or the Policy or
Policies utilized to provide a Long-Term Care Benefit hereunder, the Payee with respect to the
Long-Term Care Benefit shall be the Participant.

Section 5.2 Amount of Long-Term Care Benefit.

     (a) When an event triggering a Long-Term Care Benefit payment occurs, the Payee of the
Long-Term Care Benefit shall receive the 
amount(s) set forth in the Policy or Policies utilized to
provide the Long-Term Care Benefit that are held in force by the Plan at the time of the Benefit
entitlement event, such amount(s) to be paid at such time(s) as provided in the Policy or Policies.

     (b) A Long-Term Care Benefit shall not be available under the Plan unless and until the Policy
utilized to provide the Long-Term Care Benefit is issued and in force.

Section 5.3 Long-Term Care Policy(ies). The Plan shall acquire and maintain insurance
Policies in order to provide the Long-Term Care Benefit(s) set forth in the Adoption Agreement, as
provided below.

15

 

     (a) At the direction of the Contract Administrator, the Trustee shall enter into one or more
Policies with one or more insurance companies for the purpose of providing Long-Term Care Benefits
under the Plan. If so directed by the Contract Administrator, the Trustee shall replace any of
such insurance companies from time to time.

     (b) Long-Term Care Benefits shall be provided solely through the purchase of one or more
qualified long-term care insurance contracts within the meaning of Code section 7702B(b). To the
extent any provision of the Plan relating to the Policy or Policies utilized to provide Long-Term
Care Benefits hereunder is contrary to the requirements of Code section 7702B, any guidance issued
thereunder and/or any updates thereto (including, to the extent incorporated into Code section
7702B, updates to the long-term care model act and long-term care model regulation promulgated by
the National Association of Insurance Commissioners), such contrary Plan provision shall be
inoperative.

          Subject at all times to the provisions of Code section 7702B, and any guidance issued
thereunder and/or updates thereto, a qualified long-term care insurance contract is any insurance
contract which:

          (i) provides only coverage of qualified long-term care services, as defined in Code section
7702B(c) as necessary diagnostic, preventative, therapeutic, curing, treating, mitigating, and
rehabilitative services, and maintenance or personal care services, which are required by a
chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed
health care practitioner (a contract shall not fail to satisfy this requirement by reason of
payments being made on a per diem or other periodic basis without regard to the expenses incurred
during the period to which the payments relate);

          (ii) does not pay or reimburse expenses for services or items to extent that such expenses are
reimbursable under Medicare or would be so reimbursable but for the application of a deductible or
coinsurance amount (except where Medicare is a secondary payor, or the contract makes per diem or
other periodic payments without regard to expenses incurred during the period to which the payments
relate);

          (iii) is guaranteed renewable;

          (iv) applies all refunds of premiums, and all policyholder dividends or similar amounts, under
the contract as a reduction in future premiums or to increase future benefits; provided, however,
that this rule shall not apply with respect to a refund, upon the death of the insured or a
complete cancellation or surrender of the contract, of the aggregate premiums paid under the
contract (which aggregate premiums shall, upon a refund on a complete cancellation or surrender of
the contract, be includible in gross income to the extent that any deduction or exclusion was
allowable with respect to the premiums);

          (v) except as provided in (iv), above, does not provide for a cash surrender value or other
money that can be paid, assigned, or pledged as collateral for a loan, or borrowed;

          (vi) satisfies the consumer protection requirements of Code section 7702B(g) (including
requirements relating to disclosure, nonforfeitability, guaranteed renewal or noncancellability,
prohibitions on limitations and exclusions, extension of benefits, continuation

16

 

or conversion with respect to group policies, discontinuance and replacement of group
policies, unintentional lapse, post-hospitalization, etc.)

          Notwithstanding (iv), above, amounts shall be payable under this Article solely in accordance
with the Policy or Policies utilized to provide Long-Term Care Benefits hereunder. Therefore, for
example, no Participant or Payee shall have any right to payments from the Trust except to the
extent the Trust receives proceeds from the Policy upon the incurrence of qualified long-term care
expenses, pursuant to a “per-diem” Policy provision to provide payments on a daily or other
periodic basis or, in certain cases (e.g., the death of the insured) due to a refund of premiums.

     (c) The Trustee will only purchase insurance contracts in accordance with the Contract
Administrator’s direction. To the extent permitted under Code section 7702B (including the
nonforfeiture requirements thereof), the Long-Term Care Benefits provided by the Plan shall consist
only of current protection to each Insured, and the premium payments made in a given year under the
Plan to the Policy or Policies utilized to provide the Long-Term Care Benefits shall not exceed the
cost of that year’s Long-Term Care Benefits coverage. Notwithstanding the preceding, upon a
Participant’s cessation of participation in the Plan, the Contract Administrator shall, at the
Participant’s election, caused to be transferred to the Participant all ownership rights and
premium payment obligations with respect to the Policy or Policies utilized by the Plan to provide
the Long-Term Care Benefit; provided, however, that any Plan contributions which, at the date of
the transfer, have not been applied as premium payments to the Policy or Policies shall remain with
the Trust.

     (d) The Trustee shall be the Policy Owner with respect to all Policies utilized by the Plan to
provide Long-Term Care Benefits and shall be entitled to receive the proceeds of any such Policy.
Neither the Participant nor, if different, the Payee shall possess any ownership rights in any
Policy utilized to provide a Long-Term Care Benefit hereunder while the Participant’s participation
in the Plan continues. Upon an event triggering a Long-Term Care Benefit payment under the Plan,
the Trustee shall collect the amount(s) to which it is entitled under the Policy, at such time(s)
as provided in the Policy, and shall distribute such amounts to the appropriate Payee as directed
by the Contract Administrator, whose direction the Trustee may conclusively presume carries out the
terms of the Plan. Alternatively, to the extent permitted under Code section 7702B, the Trustee
may direct the Insurer to pay the proceeds directly to the Payee. In doing so, the Trustee and the
Insurer may conclusively rely that the Plan’s Long-Term Care Benefit obligations will be satisfied
to the extent of such payment, and the Insurer and Trustee shall be discharged to the extent of
such payment from all claims, suits and demands of all persons whatsoever.

     (e) To the extent permitted under Code section 7702B, the Contract Administrator shall adjust
the amount of long-term care insurance for each Participant as of each Anniversary Date to ensure
ongoing conformance with the amount of Long-Term Care Benefit set forth in the Adoption Agreement.

     (f) To the extent permitted under Code section 7702B (including the nonforfeiture requirements
thereof), a Long-Term Care Benefit under the Plan shall be available only as long as the Employer
makes contributions that are sufficient to keep the Policy utilized to provide the Long-Term Care
Benefit in force. If the Employer ceases to make such contributions or

17

 

payments, the Contract Administrator shall direct the Trustee to take such actions described
in Section 8.1(b).

Section 5.4 Forfeiture of Long-Term Care Benefit. To the extent permitted under Code
section 7702B (including the nonforfeiture requirements thereof), no Long-Term Care Benefit is
available with respect to an Employee, or his or her Spouse or Dependent(s), after such Employee’s
Termination of Employment.

Section 5.5 Time of Distribution. The Payee of a Participant’s Long-Term Care Benefit
shall receive each Long-Term Care Benefit payment made under the Policy or Policies utilized to
provide the Long-Term Care Benefit on the first day of the month following the date the Trust is in
receipt of the Policy proceeds in respect of such payment.

Section 5.6 Method of Distribution. The payment of Long-Term Care Benefits shall be made
in accordance with the method set forth in the Adoption Agreement and the Policy or Policies
utilized to provide the Benefits.

ARTICLE 6

Post-Retirement Medical Benefits

Section 6.1 Post-Retirement Medical Benefit.

     (a) Each eligible Participant shall receive Post-Retirement Medical Benefit coverage under the
Plan in accordance with the elections made by the Employer in the Adoption Agreement.

     (b) Those eligible Participants covered under the Post-Retirement Medical Benefit coverage
provisions of the Plan shall receive payments in cash as reimbursement for Qualified Medical Care
Expenses incurred after retirement.

     (c) Notwithstanding any provision in the Plan to the contrary, only those Qualified Medical
Care Expenses incurred after retirement and while the retiree is a Participant for purposes of the
Post-Retirement Medical Benefit provisions of the Plan are subject to reimbursement.

     (d) In order to receive Post-Retirement Medical Benefits under the Plan, an eligible
Participant must submit a valid written claim for such Benefits to the Contract Administrator.
Unless the Contract Administrator designates a later date, requests for reimbursement under this
Section must be submitted by the ninetieth (90th) day following the end of the Plan Year
during which the Qualified Medical Care Expense is incurred. Any payment shall fully discharge the
Plan, the Contract Administrator, the Employer, the Trustee and the Trust Fund to the extent of
such payment. In such claim, the Participant must declare that all other health insurance sources
were exhausted prior to submitting a claim to the Plan.

18

 

Section 6.2 Amount of Post-Retirement Medical Benefit.

     (a) The amount of Post-Retirement Medical Benefit an eligible Participant may receive under
this Article shall be the flat dollar amount or percentage of Compensation set forth in the
Adoption Agreement, subject to (b) and (c).

     (b) Notwithstanding the preceding, the amount of Post-Retirement Medical Benefit an eligible
Participant who is a Key Employee may receive under this Article shall be the lesser of the amount
described in (a), above, or the amount in the Participant’s separate account described in Section
6.4.

     (c) The amount of Post-Retirement Medical Benefit an eligible Participant may receive under
this Article shall be determined after the Participant has been reimbursed by all insurance sources
available to him or her, including all employer and Participant funded health insurance coverage,
and only if the Participant has declared this fact when applying for Post-Retirement Medical
Benefits under the Plan.

Section 6.3 Qualified Asset Account.

     (a) Post-Retirement Medical Benefits under the Plan shall be paid from a Qualified Asset
Account established under the Trust to provide Post-Retirement Medical Benefits. As part of this
Qualified Asset Account, there shall be established a Post-Retirement Medical Benefit Reserve
meeting the requirements of Section 419A(c)(2) of the Code.

     (b) Notwithstanding anything herein to the contrary, it is intended (and the Plan shall be so
interpreted) that additions to the Qualified Asset Account each taxable year qualify as part of the
Trust’s “qualified cost” for the taxable year within the meaning of Section 419(c) of the Code. No
additions shall be made to the Qualified Asset Account to the extent such additions results in the
amount in the Qualified Asset Account exceeding the Qualified Asset Account Limit, including the
Post-Retirement Medical Benefit Reserve.

Section 6.4 Separate Accounts for Key Employees.

     (a) To the extent required under Section 419A(d) of the Code, beginning in the first taxable
year for which the Post-Retirement Medical Benefit Reserve is taken into account for purposes of
determining the Qualified Asset Account Limit and for all subsequent taxable years:

          (i) a separate account shall be established under the Trust for any Post-Retirement Medical
Benefits provided with respect to a Key Employee after retirement; and

          (ii) any Post-Retirement Medical Benefits provided with respect to such a Key Employee after
retirement may only be paid from such separate account; and

          (iii) for purposes of Section 415 of the Code, any amount attributable to Post-Retirement
Medical Benefits allocated to such a separate account shall be treated as an annual addition to a
defined contribution plan for purposes of Section 415(c) of the Code; provided, however, that
Subparagraph (B) of Section 415(c)(1) of the Code (the percentage of compensation limitation on
annual additions) shall not apply to any amount treated as an annual addition under this provision.

19

 

     (b) If and to the extent permitted by the Contract Administrator, Key Employee Participants,
once attaining the requirements set forth in the Adoption Agreement for Post-Retirement Medical
Benefit coverage, may suggest an investment for the funds in his or her separate account described
in (a), above, if applicable. These choices are limited to those investment alternatives approved
by the Contract Administrator. In the event no option is selected, the Contract Administrator
shall direct the investment into one or more funds utilized by the Trust for the general Trust
Fund.

          Any separate account balances described above, and all income attributed thereto, shall be
held in the account for the exclusive benefit of each account-holding Participant and his or her
Beneficiaries. All such amounts shall not be subject to the claims of the Employer’s creditors.

          Neither the Employer, Contract Administrator, Trustee nor the Trust Fund shall be responsible
for the investment performance of such investment choices made by Key Employee Participants.

          Each separate account is responsible for any income taxes owed as a result of income earned on
the investments selected. Neither the Participant nor his Beneficiaries may look to the Trust
Fund, the Trustee, the Contract Administrator or the Employer for funds to pay taxes due on income
from a taxable account. The Contract Administrator shall direct the Trustee on the payment of tax
in such situations.

          The assets of such separate account are not subject to any claim or lien by Participants,
Beneficiaries, creditors of Participants and their Beneficiaries. The Participant and his or her
Beneficiary shall have exclusive right to receive the Benefits payable from the segregated account
established under the Plan.

     (c) To the extent permitted under applicable law and as elected by the Employer in the
Adoption Agreement, upon the death of a Participant prior to the payment of all amounts in his or
her account described above, any remaining amounts shall be available to pay for Post-Retirement
Medical Benefits for the deceased Participant’s surviving Spouse, if any. If there is no surviving
Spouse, or upon the death of the surviving Spouse, any remaining amounts shall be available to pay
for Post-Retirement Benefits for the Participant’s other Dependents, if any. If there is no
surviving Spouse or other Dependents, or if the Employer does not elect in the Adoption Agreement
to allow the surviving Spouse or other Dependents to so use the remaining amounts, the remaining
amounts shall be used for administrative purposes or other purposes of the Trust subject to the
direction of the Contract Administrator, including funding of additional Benefits, if any.

Section 6.5 Nondiscrimination Requirements. Notwithstanding anything herein to the
contrary, no Post-Retirement Medical Benefits shall be provided unless the Post-Retirement Medical
Benefit provisions of the Plan satisfy the nondiscrimination requirements of Section 505(b) of the
Code, to the extent applicable.

20

 

ARTICLE 7

Claims Procedures

Section 7.1 Claim for Benefits. No Benefits shall be paid by this Plan prior to the
receipt, and approval, of a valid written claim for such Benefits submitted on the Beneficiary’s
(or Payee’s) behalf. Any payment shall fully discharge the Plan, the Contract Administrator, the
Employer, the Trustee, the Trust Fund and the Insurer to the extent of such payment.

     (a) All applications for Benefits under this Plan shall be submitted to the Employer, on forms
prescribed by the Contract Administrator, and must be signed by the Participant or legal
representative or the Beneficiary (or Payee) or legal representative

     (b) The forms should then be forwarded to the Contract Administrator for approval or
disapproval.

Section 7.2 Claims Procedures. The remaining Sections of Article are based on final
regulations issued by the Department of Labor and published in the Federal Register on November 21,
2000 and codified at 29 C.F.R. §2560.503-1. If any provision of this Article conflicts with the
requirements of those regulations, the requirements of those regulations will prevail.
Notwithstanding any provision of this Article to the contrary, for any claim for a benefit under
the Plan that is not subject to ERISA, the claims procedures that apply for benefits other than
health benefits will apply, except that any requirement to provide notice about any right that may
apply under ERISA will not apply to such a claim.

Section 7.3 Initial Claim. If a Participant or a Participant’s spouse, dependent or
beneficiary (referred to in this Article as a “Claimant”) is denied any Benefit under this Plan,
the Claimant may file a claim with the Administrator, or Insurer, if applicable (referred to in
this Article as the “Reviewer”). The Reviewer shall review the claim itself or appoint an
individual or an entity to review the claim.

     (a) Non-Health Benefit Claims. In the case of a claim for a benefit other than a
health benefit, the Claimant shall be notified within ninety (90) days after the claim is filed
whether the claim is allowed or denied, unless the Claimant receives written notice from the
Reviewer or appointee of the Reviewer before the end of the ninety (90) day period stating that
special circumstances require an extension of the time for decision, such extension not to extend
beyond the day which is one hundred eighty (180) days after the day the claim is filed.

     (b) Health Benefit Claims.

          (i) Urgent Care Claims. If the Claimant’s claim is for urgent care health benefits,
the Reviewer shall notify the Claimant of the Plan’s benefit determination (whether adverse or not)
as soon as possible, taking into account the medical exigencies, but not later than seventy-two
(72) hours after receipt of the claim by the Plan, unless the Claimant fails to provide sufficient
information to determine whether, or to what extent, benefits are covered or payable under the
Plan. In the case of such a failure, the Reviewer shall notify the Claimant as soon as possible,
but not later than twenty-four (24) hours after receipt of the claim by the Plan, of the specific
information necessary to complete the claim. The notice may be oral unless written notice is
requested by the Claimant. The Claimant shall be afforded a reasonable amount of

21

 

time, taking into account the circumstances, but not less than 48 hours, to provide the
specified information. The Reviewer shall notify the Claimant of the Plan’s determination as soon
as possible, but in no case later than 48 hours after the earlier of (1) the Plan’s receipt of the
specified additional information or (2) the end of the period afforded the Claimant to provide the
specified additional information.

          A health benefits claim is considered an urgent care claim if the application of the time
periods for making non-urgent care determinations could seriously jeopardize the life or health of
the Claimant or the ability of the Claimant to regain maximum function or, in the opinion of a
physician with knowledge of the Claimant’s medical condition, would subject the Claimant to severe
pain that could not be adequately managed without the care or treatment which is the subject of the
claim.

          (ii) Concurrent Care Claims. If the Plan has previously approved an ongoing course of
health care treatment to be provided over a period of time or number of treatments, any reduction
or termination by the Plan of the previously approved course of treatment (other than by Plan
amendment or termination) before the approved time period or number of treatments shall constitute
an adverse initial benefit determination. These determinations shall be known as concurrent care
decisions. In such a case, the Reviewer shall notify the Claimant of the adverse concurrent care
decision at a time sufficiently in advance of the reduction or termination to allow the Claimant to
appeal and obtain a determination on review of that adverse benefit determination before reduction
or termination of the benefit.

          Any request by a Claimant to extend a course of urgent care treatment beyond the approved
period of time or number of treatments shall be decided as soon as possible, taking into account
the medical exigencies, and the Reviewer shall notify the Claimant of the benefit determination,
whether adverse or not, within twenty-four (24) hours after receipt of the claim by the Plan,
provided that any such claim is made to the Plan at least twenty-four (24) hours before the
expiration of the prescribed period of time or number of treatments.

          (iii) Other Health Benefit Claims. In the case of a health benefit claim not
described above:

               (A) In the case of a pre-service health benefit claim, the Reviewer shall notify the Claimant
of the Plan’s benefit determination (whether adverse or not) within a reasonable period of time
appropriate to the medical circumstances, but not later than fifteen (15) days after receipt of the
claim by the Plan. If, due to matters beyond the control of the Plan, the Reviewer needs
additional time to process a claim, the Claimant will be notified, within fifteen (15) days after
the Reviewer receives the claim, of those circumstances and of when the Reviewer expects to make
its decision. Under no circumstances may the Reviewer extend the time for making its decision
beyond thirty (30) days after receiving the claim. If such an extension is necessary due to a
failure of the Claimant to submit the information necessary to decide the claim, the notice of
extension must specifically describe the required information, and the Claimant shall be afforded
at least forty-five (45) days from receipt of the notice within which to provide the specified
information.

               A health benefit claim is considered a pre-service claim if the claim requires approval, in
part or in whole, in advance of obtaining the health care in question.

22

 

               (B) In the case of a post-service health benefit claim, the Reviewer shall notify the Claimant
of the Plan’s adverse benefit determination within a reasonable period of time, but not later than
thirty (30) days after receipt of the claim. If, due to matters beyond the control of the Plan,
the Reviewer needs additional time to process a claim, the Claimant will be notified, within thirty
(30) days after the Reviewer receives the claim, of those circumstances and of when the Reviewer
expects to make its decision. Under no circumstances may the Reviewer extend the time for making
its decision beyond forty-five (45) days after receiving the claim. If such an extension is
necessary due to the failure of the Claimant to submit the information necessary to decide the
claim, the notice of extension shall specifically describe the required information, and the
Claimant shall be afforded at least forty-five (45) days from receipt of the notice within which to
provide the specified information.

               A health benefit claim is considered a post-service claim if it is a request for payment for
services which the Claimant has already received.

     (c) Manner and Content of Denial of Initial Claims. If the Reviewer denies a claim,
it must provide to the Claimant a written or electronic notice that includes:

          (i) a description of the specific reasons for the denial;

          (ii) a reference to any Plan provision or insurance contract provision upon which the denial
is based;

          (iii) a description of any additional information or material that the Claimant must provide
in order to perfect the claim;

          (iv) an explanation of why such additional material or information is necessary;

          (v) a statement that the Claimant has a right to request a review of the claim denial and
information on the steps to be taken if the Claimant wishes to request a review of the claim
denial; and

          (vi) a statement of the participant’s right to bring a civil action under ERISA §502(a)
following a denial on review of the initial denial.

          In addition, in the case of a denial of health benefits, the following must be provided:

          (i) a copy of any rule, guideline, protocol, or other similar criterion relied upon in making
the adverse determination (or a statement that the same will be provided upon request by the
Claimant and without charge); and

          (ii) if the adverse determination is based on a medical necessity requirement, an experimental
treatment exclusion or a similar restriction, either an explanation of the scientific or clinical
judgment applying the restriction to the Claimant’s medical circumstances or a statement that an
explanation will be provided upon request and without charge.

23

 

          In the case of an adverse benefit determination concerning a health claim involving urgent
care, the information described in this Section may be provided to the Claimant orally within the
permitted time frame, provided that a written or electronic notice in accordance with this Section
is furnished not later than three (3) days after the oral notice.

Section 7.4 Review Procedures.

     (a) Non-Health Benefit Claims. Except for claims for health benefits, a request for
review of a denied claim must be made in writing to the Reviewer within sixty (60) days after
receiving notice of denial. The decision upon review will be made within sixty (60) days after the
Reviewer’s receipt of a request for review, unless special circumstances require an extension of
time for processing, in which case a decision will be rendered not later than one hundred twenty
(120) days after receipt of a request for review. A notice of such an extension must be provided
to the Claimant within the initial sixty (60) day period and must explain the special circumstances
and provide an expected date of decision.

          The reviewer shall afford the Claimant an opportunity to review and receive, without charge,
all relevant documents, information and records and to submit issues and comments in writing to the
Reviewer. The reviewer shall take into account all comments, documents, records and other
information submitted by the Claimant relating to the claim regardless of whether the information
was submitted or considered in the initial benefit determination.

     (b) Health Benefit Claims. A request for review of a denial of an initial claim for
health benefits must be submitted in writing to the Reviewer no later than one hundred eighty (180)
days after the Claimant receives the notice of denial of the initial claim. In addition to
providing the Claimant the right to review documents and submit comments as described in (a) above,
a review pursuant to such a request will meet the following requirements:

          (i) The Plan will provide a review that does not afford deference to the initial adverse
benefit determination and that is conducted by an appropriate named fiduciary of the Plan who did
not make the initial determination that is the subject of the appeal, nor is a subordinate of the
individual who made the determination.

          (ii) The appropriate named fiduciary of the Plan will consult with a health care professional
who has appropriate training and experience in the field of medicine involved in the medical
judgment before making a decision on review of any adverse initial determination based in whole or
in part on a medical judgment, including determinations with regard to whether a particular
treatment, drug or other item is experimental, investigational or not medically necessary or
appropriate. The professional engaged for purposes of a consultation in the preceding sentence
shall be an individual who was neither an individual who was consulted in connection with the
initial determination that is the subject of the appeal, nor the subordinate of any such
individual.

          (iii) The Plan will identify to the Claimant the medical or vocational experts whose advice
was obtained on behalf of the Plan in connection with the review, without regard to whether the
advice was relied upon in making the benefit review determination.

24

 

          (iv) In the case of a requested review of a denied initial claim involving urgent health care,
the review process shall meet the expedited deadlines described below. The Claimant’s request for
such an expedited review may be submitted orally or in writing by the Claimant and all necessary
information, including the Plan’s determination on review, shall be transmitted between the Plan
and the Claimant by telephone, facsimile or other available similarly expeditious method.

     (c) Deadline for Review Decisions.

          (i) Urgent Health Benefit Claims. In case of urgent care health claims, the Reviewer
shall notify the Claimant of the Plan’s determination on review as soon as possible, taking into
account the medical exigencies, but not later than seventy-two (72) hours after receipt of the
Claimant’s request for review of the initial adverse determination by the Plan.

          (ii) Other Health Benefit Claims.

               (A) In the case of a pre-service health claim, the Reviewer shall notify the Claimant of the
Plan’s determination on review within a reasonable period of time appropriate to the medical
circumstances, but in no event later than thirty (30) days after receipt by the Plan of the
Claimant’s request for review of the initial adverse determination.

               (B) In the case of a post-service health claim, the Reviewer shall notify the Claimant of the
Plan’s benefit determination on review within a reasonable period of time, but in no event later
than sixty (60) days after receipt by the Plan of the Claimant’s request for review of the initial
adverse determination.

     (d) Manner and Content of Notice of Decision on Review. Upon completion of its review
of an adverse initial claim determination, the Reviewer will provide the Claimant a written or
electronic notice that includes:

          (i) a description of its decision;

          (ii) an explanation of the specific reasons for the decision;

          (iii) a reference to any relevant Plan provision or insurance contract provision on which its
decision is based;

          (iv) a statement that the Claimant is entitled to receive, upon request and without charge,
reasonable access to, and copies of, all documents, records and other information in the Plan’s
files which is relevant to the Claimant’s claim for benefits;

          (v) a statement describing the Claimant’s right to bring an action for judicial review under
ERISA §502(a);

          (vi) if an internal rule, guideline, protocol or other similar criterion was relied upon in
making the adverse determination on review, a statement that a copy of the rule, guideline,
protocol or other similar criterion will be provided without charge to the Claimant upon request;
and

25

 

          (vii) if the adverse determination on review is based on a medical necessity requirement, an
experimental treatment exclusion or a similar restriction, either an explanation of the scientific
or clinical judgment on which the determination was based, applying the terms of the Plan to the
Claimant’s medical circumstances, or a statement that an explanation will be provided without
charge upon request.

Section 7.5 Failure of Plan to Follow Procedures. If the Plan fails to follow the claims
procedures required by this Section, a Claimant shall be deemed to have exhausted the
administrative remedies available under the Plan and shall be entitled to pursue any available
remedy under ERISA section 502(a) on the basis that the Plan has failed to provide a reasonable
claims procedure that would yield a decision on the merits of the claim.

Section 7.6 Failure of Claimant to Follow Procedures. A Claimant’s compliance with the
foregoing provisions of this Section is a mandatory prerequisite to the Claimant’s right to
commence any legal action with respect to any claim for Benefits under the Plan.

Section 7.7 Preemption of State Law. With respect to any insured Benefit under this Plan,
nothing in this Article shall be construed to supercede any provision of any applicable State law
that regulates insurance, except to the extent that such law prevents application of this Article.

ARTICLE 8

Contributions

Section 8.1 Contributions. The Benefits of this Plan shall be funded exclusively through
contributions of the adopting Employer and, with respect to Death Benefit coverage, if any,
provided under the Plan, Participation Premiums.

     (a) With respect to any Insured Death Benefit, the sole obligation of the Employer, which may
be terminated at any time, is to make contributions that are necessary to fund, along with the
required Participation Premiums, the level of Insured Death Benefits selected by the Employer in
the Adoption Agreement. Should an Employer make a contribution to the Plan that, when combined
with the Participation Premiums, is less than necessary to fund the Insured Death Benefits, the
Contract Administrator shall direct the Trustee to:

          (i) Cause such Insured Death Benefits to lapse or be canceled; or

          (ii) Direct the Trustee to take whatever action the Contract Administrator deems to be
appropriate with respect to the disposition of such Policies or security interests in such
Policies.

          Should a Participant fail to make a Participation Premium required under the Employer’s
Adoption Agreement in any Plan Year, the Contract Administrator shall direct the Trustee to remove
the Assignment of Policy for Collateral Security, if any, from safekeeping and return the document
to the Participant, and terminate the Participant’s Insured Death Benefit.

     (b) With respect to any Long-Term Care Benefit, the sole obligation of the Employer, which may
be terminated at any time, is to make contributions that are necessary to fund the

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Policy or Policies utilized to provide the level of Insured Long-Term Care Benefits selected
by the Employer in the Adoption Agreement. Should an Employer make a contribution to the Plan that
is less than necessary to fund such Policy or Policies, to the extent permitted under Code section
7702B (including the nonforfeiture requirements and any assignment restrictions thereof), the
Contract Administrator shall direct the Trustee, at the Participant’s election, to transfer to the
Participant all ownership rights and premium payment obligations with respect to such Policy or
Policies. In doing so, the Employer and the Trustee shall be discharged from all claims, suits and
demands of all persons whatsoever with respect to the Long-Term Care Benefit.

     (c) With respect to any Post-Retirement Medical Benefit, the sole obligation of the Employer,
which (subject to Section 11.1(c)) may be terminated at any time, is to make contributions to the
Trust in such amounts as are necessary to provide the level of Post-Retirement Medical Benefits
selected by the Employer in the Adoption Agreement; provided, however, that the Post-Retirement
Medical Benefit Reserve must be funded over the working lives of Employees covered under the
Post-Retirement Medical Benefit provisions of the Plan in a manner consistent with Section
419A(c)(2) of the Code.

Section 8.2 Direction of Benefit Investment. The Contract Administrator shall prescribe
the amount of contributions used to purchase Policies provided by the Insurer or Assigned Interests
in Policy proceeds. The Contract Administrator shall also select the Insurer and the insurance
products to be used to provide the Benefit. The Trustee shall have no liability for these
selections.

Section 8.3 Irrevocability of Contributions. Contributions to the Trust are made solely
for the purpose of funding the Benefits provided herein. The Employer shall have no right or title
to its contributions made to the Trust. The Employer shall not retain any interest in its Trust
contributions. No part of the Trust Fund, nor any income attributable thereto, may ever revert to
the Employer or be used for, or be diverted to, purposes other than for the exclusive benefit of
the Participants or for the payment of taxes and expenses of administration of the Trust. No
Participant has any right, title, or interest in and to any contributions to the Trust by the
Employer, portion of the Trust Fund, nor any portion of any income attributable thereto, except to
the extent of the Benefits payable as provided herein.

Section 8.4 Limitation on Liability. Notwithstanding any provisions of this Plan to the
contrary, neither the Employer, the Contract Administrator (other than the legal obligation to
ensure that contributions are made) nor the Trustee shall have any liability for the payment of any
Benefit provided under this Plan beyond the assets in the Trust Fund. Any provision of this Plan
to the contrary notwithstanding, the Trustee shall have no liability to any Participant,
Beneficiary or Payee with respect to any shortfall in any Benefits provided hereunder.

ARTICLE 9

Provision of Benefits

Section 9.1 Provision of Benefits. All Benefits available under this Plan shall be paid or
provided in accordance with the terms of the insurance Policies and other provisions included in
the Adoption Agreement.

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Section 9.2. Benefits Not Subject to Legal Process. No Benefits under the Plan shall in
any manner or to any extent be subject to attachment, garnishment or other legal process.

Section 9.3 Facility of Payment. Whenever, in the Administrator’s opinion, a person who is
entitled to receive any payment of a Benefit is incapacitated in any way so as to be unable to
manage his financial affairs, the Contract Administrator may direct the Trustee to make payments to
such person’s legal representative. Any payment of a Benefit or installment thereof in accordance
with the provisions of this Section shall be a complete discharge of any liability or the making of
such payment under the provisions of the Plan.

Section 9.4 Unpaid Benefit Payments. In the event any Benefit payment shall remain
unclaimed for a period of three years, such unclaimed payment shall be returned to the Trust.

ARTICLE 10

Administration of the Plan

Section 10.1 Allocation or Delegation of Duties and Responsibilities. The Employer shall
have and exercise all discretionary and other authority and manage the operation and administration
of the Plan, except such authority as is specifically allocated otherwise by the terms of the Plan,
provided, that the Employer, by executing the Adoption Agreement, delegates the following duties
and responsibilities to the Contract Administrator:

          (i) Application of rules determining eligibility for participation or Benefits;

          (ii) Preparation of reports required by government agencies;

          (iii) Preparation of Employee Summary Plan Description;

          (iv) Application of contributions as provided in the Plan;

          (v) Preparation of reports concerning Employees’ Benefits;

          (vi) Directing the Trustee to make distributions under the Plan.

     (a) The Employer may delegate such other duties and functions relating to the operation and
administration of the Plan by employing agents to carry out fiduciary responsibilities (other than
trustee responsibilities as defined in section 405(c)(3) of ERISA) as it shall from time to time
direct and set forth in writing, including in the Adoption Agreement.

Section 10.2 Indemnification. The Employer agrees to indemnify and reimburse, to the
fullest extent permitted by law, the members of the Board and the employees of the Employer, and
all such former participants and employees, for any and all expenses, liabilities, or losses
arising out of any act or omission relating to the rendition of services for or the management and
administration of the Plan.

The Employer shall indemnify, defend and hold the Trustee and its directors, officers, employees
and agents harmless from and against any liability, claim, action, suit, damage, loss or cost of
expense, including without limitation, attorneys’ fees and costs of court arising from or in

28

 

connection with any of the following matters: (i) following or carrying out directions of either
the Employer or the Contract Administrator given pursuant to the terms of the Plan or Trust; (ii)
carrying out or executing any of its responsibilities in connection with the Plan or Trust,
including, without limitation, any responsibilities performed pursuant to the direction of any
party; (iii) the payment of any tax due with respect to or levied upon the Trust by any federal,
local or state taxing authority, to the extent assets held by the Trust are insufficient to pay
such tax; or (iv) any action or omission of the Trustee taken or omitted, in good faith, in
connection with the Plan or Trust which the Trustee is authorized or permitted to perform or omit.
The first sentence of this paragraph notwithstanding, in no event shall the indemnification
provided by this paragraph require that the Trustee be indemnified for any action taken or omitted
which constitutes gross negligence, breach of fiduciary duty, or willful misconduct.

Section 10.3 Liability for Breach by Co-Fiduciary. The Board, the Contract Administrator,
or the Trustee shall not be liable or responsible for the acts or omissions of another fiduciary
unless (a) such person knowingly participated or knowingly attempted to conceal the act or omission
of another fiduciary and knew such act or omission was a breach of fiduciary duty by the other
fiduciary; or (b) such person has knowledge of a breach by the other fiduciary and fails to make
reasonable efforts to remedy the breach; or (c) such person’s breach of his own fiduciary
responsibility permits another fiduciary to breach its fiduciary duty. For purposes of this
Agreement, a person shall be deemed to have knowledge of, or to know something, only if such person
has actual knowledge of it. In addition, in the event there are separate Contract Administrators
and/or separate Trustees with respect to the Death Benefit and Long-Term Care Benefit provisions of
the Plan, in no event shall the Contract Administrator and/or Trustee with respect to solely the
Death Benefit provisions of the Plan be liable for the acts or omissions of any other party which
relate solely to the Long-Term Care Benefit provisions of the Plan and in no event shall the
Contract Administrator and/or Trustee with respect to solely the Long-Term Care Benefit provisions
of the Plan be liable for the acts or omissions of any other party which relate solely to the Death
Benefit provisions of the Plan.

Section 10.4 Liability of the Contract Administrator to Participants. Notwithstanding
anything in this Plan to the contrary, neither the Contract Administrator nor the Trustee shall be
liable to any Participant, Beneficiary or Payee with respect to decisions it made with respect to
the use of funds in the Trust to supplement, in whole or in part, or not to supplement at all, a
Participant’s Benefit, provided that any action taken by either the Contract Administrator or the
Trustee is authorized hereunder nor shall the Employer be obligated to provide any of the Benefits
provided by this Plan, except to the extent there are assets in the Trust Fund sufficient to pay
such Benefits. Any obligation for such Benefits shall be determined solely by the terms of the
Plan.

Section 10.5 Expenses of the Plan. The expenses of administering the Plan and the
compensation of all employees, agents or counsel, including the Trustee’s fees, shall be paid by
the Employer.

Section 10.6 Adequacy of the Trust Fund. Any Benefits payable pursuant to the terms of
this Plan to a Participant, Beneficiary or Payee shall be paid or provided solely from the assets
of the Trust Fund, and neither the Contract Administrator, the Insurer nor the Trustee assumes any
liability or responsibility for the adequacy thereof.

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ARTICLE 11

Amendment and Termination

Section 11.1 Right to Amend or Terminate the Plan. Subject to the provisions of the
Adoption Agreement addressing “owner” participation, the Employer and the Contract Administrator
shall have the right by mutual consent to amend this Plan from time to time. Plan
amendments shall be as set forth in an instrument in writing executed by the necessary parties.
Any amendment may be current, retroactive or prospective, in each case as provided therein.
Provided, however, that no amendment shall:

     (a) Cause any of the assets of the Trust to be used for or diverted to purposes other than for
the exclusive benefit of Participants and their beneficiaries.

     (b) Have any retroactive effect so as to deprive any Participant or his Beneficiary or Payee
of any accrued Benefit, except that such changes may be made as are required by the Internal
Revenue Service or the Department of Labor in order for the plan to be qualified as a welfare
benefit plan to which contributions may be deductible and from which Death Benefits may be
excludible.

     (c) Cause the previously delegated duty to manage and control the Plan to revert to the
Employer.

Permanency — It is the expectation of the Employer that this Plan and the Trust, and
the payment of contributions hereunder, will be continued indefinitely but
continuance of this Plan and the Trust is not assumed as a contractual obligation of
the Employer. This Plan may be amended or terminated only as provided in this
Article.

Termination — Subject to the provisions of the Adoption Agreement addressing
“owner” participation, the Employer shall have the right to terminate the Plan by
delivering written notice to termination to the Trustee or in the case of a Plan
providing Post-Retirement Medical Benefit, by delivering writing notice of the
termination to the Trustee, upon the occurrence of one of the following events: at
any time; provided, however, in no event shall any assets remaining in the Trust
upon a Plan termination revert to the Employer. Except as provided below, any assets
reminding in the Trust upon a Plan termination shall be allocated among Participants
within two and one-half (21/2) months after the last day of the Plan Year in which
the Plan termination occurs.

	 	(i)	 	Adverse Business Conditions: The Employer is considered to
have incurred Adverse Business Conditions when one of the following events
occur:

	 	(A)	 	Financial straits of the Employer
where it reasonably follows that the Employer will be unable to
pay its debts when due and still continue its business; or

30

 

	 	(B)	 	If the Employer has filed either
Chapter 7 bankruptcy liquidation or Chapter 11 bankruptcy
reorganization or a similar state insolvency proceeding; or
	 
	 	(C)	 	Where it can be shown that the
costs of the Plan have become unreasonably burdensome solely as
a result of a decline in the workforce which is comprised of
these Employees of the Employer covered as Participants in the
Plan.

	 	(ii)	 	Death of any Majority Shareholder of the Employer. For
purposes of this Section, a Majority Shareholder is defined as any individual
who owns 80% of the controlling interest of a partnership or an individual who
owns at least 80% of all voting common stock of the Employer adopting the Plan,
with the constructive ownership rules of Code Section 1563(e) determining the
ownership interest;
	 
	 	(iii)	 	Sale by a Majority Shareholder of his or her stock of the
Employer to an unrelated Third Party;
	 
	 	(iv)	 	The complete termination of normal and customary business
operations by the Employer;
	 
	 	(v)	 	There are no remaining Plan participants or assets;
	 
	 	(vi)	 	Any other event occurring subsequent to the adoption of the
terminated Plan provisions which renders the maintenance of the terminated Plan
provisions impossible (within the meaning of General Signal Corp. v. Comm., 81
AFTR 2d 98-1763 (142 F.3d 546), 4/14/1998).

Except as provided below, any assets remaining in the Trust upon a Plan termination
shall be allocated among Participants within two and one-half (21/2) months after the
last day of the Plan Year in which the Plan termination occurs.

Notwithstanding the preceding, or anything else in the Plan to the contrary, if and
to the extent the Post-Retirement Medical Benefit provisions of the Plan are
terminated: (i) any amounts held in a Qualified Asset Account on behalf of
then-retired Participants shall continue to be used only for Qualified Medical Care
Expense reimbursements to the retired Participants (and/or their Spouses or
Dependents); and (ii) any other amounts held in a Qualified Asset Account shall be
applied, as directed by the Contract Administrator, to reduce the Employer’s cost of
providing any remaining Benefits under the Plan (or, if there are no remaining
Benefits, shall be allocated among Participants as provided in the preceding
paragraph). Notwithstanding anything herein to the contrary, in accordance with
Section 6.4(a)(ii), any Post-Retirement Medical Benefits provided with respect to a
Key Employee retiree may only be paid from the separate account established for that
Key Employee under Section 6.4.

31

 

Section 11.2 The Contract Administrator. The Contract Administrator may resign due to lack
of performance of obligation under the Plan and Trust or other reasonable reason at any time upon
ninety (90) days’ notice in writing to the Employer.

Upon such resignation of the Contract Administrator, the Employer shall appoint a successor to the
Contract Administrator within sixty (60) days of the Administrator’s removal or resignation and
that successor shall have the same powers and duties as those conferred upon the Contract
Administrator hereunder.

Section 11.3 Failure to Pay Fees. If an Employer fails to pay any Fees due the Contract
Administrator, or the Trustee, either may resign or cause such fees to be paid from the Trust. If
the Trustee resigns, the Employer shall be deemed to have transferred the Plan and Trust with an
authorized officer as successor trustee.

ARTICLE 12

Agreements of Trust

Section 12.1 Trustee. In order to implement the Plan, the Employer has entered into a
Trust Agreement with the Trustee to the end that such funds as may be irrevocably contributed from
time to time for the payment of all or any part of the Benefits under the Plan which shall be
segregated from the Employer’s own assets and held in trust by the Trustee for the exclusive
benefit of the Participants and their beneficiaries who may, in accordance with the terms of the
Plan and such Trust Agreement, be entitled to participate thereunder

Section 12.2 Trust Funds are for Exclusive Benefit of Participants of the Plan and Their
Beneficiaries. All contributions made by the Employer shall be irrevocable, and no part of the
corpus of the Trust Fund or any income therefrom shall revert to the Employer or be used for or
directed to purposes other than for the exclusive benefit of Participants and their beneficiaries,
provided, however, that in the case of a contribution made by the Employer by mistake of fact, such
contribution may be returned to the Employer within one year after the payment.

ARTICLE 13

Miscellaneous

Section 13.1 Titles are for Reference Only. The titles are for reference only. In the
event of a conflict between a title and the content of a Section, the content of the Section shall
control.

Section 13.2 Construction. Except to the extent pre- empted by federal law, the provisions
of the Plan shall be interpreted in accordance with the Laws of the State of California.

Section 13.3 Gender and Number. The masculine pronoun whenever used shall include the
feminine pronoun and the singular number shall include the plural number unless the context of the
Plan requires otherwise.

Section 13.4 Transfer of Assets to or from Other Trusts. Anything in this Plan to the
contrary notwithstanding, the Contract Administrator, upon the written instruction of the

32

 

Employer, may direct the Trustee to transfer funds of that Employer to or from another single
employer welfare benefit plan, which has the same fundamental purpose as this Plan and which
preserves any Benefits entitled under this Plan, or direct the Trustee to receive funds from
another welfare benefit fund; provided that Arrowhead Trust, Incorporated, as successor trustee,
expressly does not assume or incur any liability by reason of, or have any duty or responsibility
to inquire into or take any action with respect to, any acts performed or omitted to be performed
by said original trustee prior to the effective date hereof.

The Trustee shall have no liability to the Contract Administrator, the Employer or the transferring
Employer’s Participants for following the Contract Administrator’s directions under this Section
13.4.

Section 13.5 Agent for Service of Process. The Employer is hereby designated as Agent for
Service and process for all disputes arising from the Plan.

Section 13.6 No Guarantees against Losses in the Trust. Neither the Contract
Administrator, Trustee, Insurer, nor the Employer guarantees or assures the Trust against losses
and/or depreciation of its values, nor the payment of amounts which may become due to any person,
unless and until the timely and valid claim therefore has been perfected and the funds within the
Trust therefore, in fact, exist and are available for payment thereof without jeopardizing any of
the Benefits due and payable to any other legitimate claimant.

33

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