Document:

EX-10.4

Exhibit 10.4

H&R BLOCK, INC.

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

(Amended and Restated Effective December 31, 2008)

Purpose

          H&R Block, Inc. (the “Company”) amended and restated the H&R Block, Inc. Deferred Compensation
Plan for Executives effective as of July 1, 2002. This amendment and restatement is effective
December 31, 2008, and is intended to comply with the requirements of section 409A of the Code.

          The purpose of this Plan is to provide specified benefits to a select group of management or
highly compensated employees who contribute materially to the continued growth, development and
future business success of the Company and its Affiliates, if any, that sponsor this Plan. This
Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

          Notwithstanding any provision in the Plan to the contrary, pursuant to IRS Notice 2007-86, all
amounts accrued under the Plan for a Participant as of December 31, 2008 will be paid in a lump sum
on April 11, 2009, unless the Participant elects to defer Salary and Bonus earned in 2009 in
accordance with Article 3. If a Participant elects to defer for 2009, the Participant may elect
one time and form of payment for all amounts attributable to pre-2009 deferrals, as well as a time
and form of payment for deferrals for 2009 and subsequent years. For Participants in pay status on
or before December 31, 2008 (i) payments of pre-2004 deferrals shall be paid according to the Plan
as grandfathered under Code §409A, and (ii) payments of deferrals made after 2004 shall be governed
by the Participant’s payment elections and the terms of the Amended and Restated Plan.

          The H&R Block, Inc. Deferred Compensation Trust Agreement, dated December 13, 1988, is hereby
revoked, effective December 31, 2008, in accordance with §2.03. The H&R Block, Inc. Deferred
Compensation Trust Agreement is reinstated, effective December 31, 2008 except that §§2.02-3 and
2.02-4 are deleted in the entirety.

ARTICLE 1

Definitions

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

	1.1	 	“Account Balance” means, with respect to a Participant, a credit on the records of the
Employer equal to the sum of the Participant’s Deferral Account balance, the Company Matching
Account balance, and the Discretionary Company Contributions Account balance. The Account
Balance, and each other specified account balance, shall be a bookkeeping entry only and shall
be utilized solely as a device for the measurement and determination of the amounts to be paid
to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

 

	1.2	 	“Affiliate” or “Affiliates” means a group of entities, including the Company, which
constitutes a controlled group of corporations (as defined in section 414(b) of the Code), a
group of trades or businesses (whether or not incorporated) under common control (as defined
in section 414(c) of the Code).
	 
	1.3	 	“Annual Company Matching Contributions” means for any one Plan Year, the amount determined in
accordance with Section 4.1.
	 
	1.4	 	“Annual Contributions” means the Participant’s Annual Deferral Amount plus Annual Company
Matching Contributions for any one Plan Year.
	 
	1.5	 	“Annual Deferral Amount” means that portion of a Participant’s Salary and Bonus that a
Participant defers in accordance with Section 3.1(a) for any one Plan Year. In the event of a
Participant’s Unforeseeable Financial Emergency (if deferrals are revoked in accordance with
Section 6.1), Disability (if deferrals cease in accordance with Section 8.1), death, or a
Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount
shall be the actual amount withheld prior to such event.
	 
	1.6	 	“Beneficiary” means one or more persons, trusts, estates or other entities, designated by a
Participant in accordance with Section 10.2, or in the absence of such designation, the
persons specified in Section 10.3, that are entitled to receive benefits under this Plan upon
the death of a Participant.
	 
	1.7	 	“Beneficiary Designation Form” means the form (which may be digital and require electronic
transmission) established from time to time by the Committee by which a Participant designates
one or more Beneficiaries in accordance with the Committee’s procedures.
	 
	1.8	 	“Board” means the Board of Directors of the Company, as constituted at the relevant time.
	 
	1.9	 	“Bonus” means performance-based compensation paid under the Employer’s short-term incentive
plan (or other annual incentive program) which is contingent on the satisfaction of
pre-established organizational or individual performance criteria over the Company’s
12-consecutive month Fiscal Year; but excluding any amounts paid under an incentive program
that will be paid regardless of performance or based upon a level of performance that is
substantially certain to be met at the time the criteria is established.
	 
	1.10	 	“Claimant” shall have the meaning set forth in Section 14.1.
	 
	1.11	 	“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.
References to a Code section shall be deemed to be to that section or any successor to that
section.
	 
	1.12	 	“Committee” means the Compensation Committee of the Board.
	 
	1.13	 	“Company” means H&R Block, Inc., a Missouri corporation, and any successor to all or
substantially all of its assets or business.
	 
	1.14	 	“Company Matching Account” means (i) the sum of all of a Participant’s Annual Company
Matching Contributions, plus (ii) amounts credited in accordance with all the applicable
crediting and debiting provisions of this Plan that relate to the Participant’s Company
Matching Account, less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant’s Company Matching Account.
	 
	1.15	 	“Deferral Account” means (i) the sum of all of a Participant’s Annual Deferral Amounts, plus
(ii) amounts credited in accordance with all the applicable crediting and debiting

 

 

	 	 	provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to his or her Deferral Account.
	 
	1.16	 	“Disability” or “Disabled” means a Participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income replacement benefits
under the group long-term disability insurance program maintained by the Participant’s
Employer, and shall be deemed to be incurred on the date as of which such income replacement
benefits commence.
	 
	1.17	 	“Discretionary Company Contributions” means the amount credited to an Employee in accordance
with Section 4.2.
	 
	1.18	 	“Discretionary Company Contributions Account” means the (i) sum of all of a Participant’s
Discretionary Company Contributions, plus (ii) amounts credited in accordance with all the
applicable crediting and debiting provisions of the Plan that relate to the Participant’s
Discretionary contributions Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to the Plan that relate to the Participant’s Discretionary
Company Contributions Account.
	 
	1.19	 	“Disability Benefit” means the benefit set forth in Article 8.
	 
	1.20	 	“Election Form” means the form (which form or forms may be in a digital format and require
electronic transmission) established from time to time by the Committee by which a Participant
makes elections under the Plan in accordance with the Committee’s procedures.
	 
	1.21	 	“Eligibility Committee” means the Chief Executive Officer of the Company, the Chief Financial
Officer of the Company, and the senior officer of the Company responsible for human resources.
	 
	1.22	 	“Employee” means a person who is an employee of any Employer.
	 
	1.23	 	“Employer” means the Company and/or any of its Affiliates (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and have
agreed to participate in the Plan.
	 
	1.24	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as it may be amended from
time to time. References to an ERISA section shall be deemed to be to that section or any
successor to that section.
	 
	1.25	 	“In-Service Distribution” means a date-based distribution as set forth in Section 7.1
providing for distribution no earlier than the third Plan Year after the Plan Year for which
the Annual Contributions are made.
	 
	1.26	 	“Installment Method” means installment payments over a number of years selected by the
Participant in accordance with this Plan. Each installment payment shall be calculated by
multiplying the Account Balance of the Participant by a fraction, the numerator of which is
one and the denominator of which is the remaining number of payments due the Participant. For
purposes of this calculation, the Account Balance of the Participant (or the appropriate
portion thereof) shall be calculated as of the close of business on or around the date of the
Participant’s payment.
	 
	1.27	 	“Measurement Fund” means one or more investment funds which may, but need not, include the
investment funds provided under the H&R Block Retirement Savings Plan (including Company
stock) available as a measuring standard for crediting earnings and

 

 

	 	 	losses to a Participant’s Account Balance. Notwithstanding any other provision in this
Plan that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any Measurement Fund, the
allocation to his or her Account Balance thereto, the calculation of additional amounts and
the crediting or debiting of such amounts to a Participant’s Account Balance shall not be
considered or construed in any manner as an actual investment of his or her Account Balance
in any Measurement Fund.
	 
	1.28	 	“Open Enrollment” means, with respect to the deferral of Salary for a Plan Year, such period
as established by the Committee ending before the beginning of such Plan Year. With respect
to the deferral of a Bonus, such period as established by the Committee ending before the date
that is no later than 6 months prior to the expiration of the performance period with respect
to such Bonus.
	 
	1.29	 	“Participant” means any Employee (i) who is selected to participate in the Plan, (ii) who
elects to participate in the Plan, (iii) who executes an Election Form in a form acceptable to
the Committee, (iv) who commences participation in the Plan, and (v) whose participation has
not terminated. A spouse or former spouse of a Participant shall not be treated as a
Participant in the Plan or have an account balance under the Plan, even if he or she has an
interest in the Participant’s benefits under the Plan as a result of applicable law or
property settlements resulting from legal separation or divorce.
	 
	1.30	 	“Payment Date” means the date during a month on which payments under this Plan are made, as
selected by the Committee from time to time.
	 
	1.31	 	“Plan” means the H&R Block, Inc. Deferred Compensation Plan for Executives, which shall be
evidenced by this instrument as it may be amended from time to time and Participant’s Election
Forms.
	 
	1.32	 	“Plan Year” means a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.
	 
	1.33	 	“Qualified Plan” means the H&R Block Retirement Savings Plan or any successor plan that is
intended to satisfy the requirements of section 401 of the Code.
	 
	1.34	 	“Salary” means the total salary and wages , including fee based earnings and commissions paid
by all Affiliates to a Participant relating to services performed during any Plan Year,
excluding any other remuneration paid by Affiliates such as Bonuses, other bonuses, overtime,
incentive pay, stock options, distributions of compensation previously deferred, restricted
stock, severance pay, allowances for expenses (such as relocation, travel, and automobile
allowances), non-monetary awards and fringe benefits (cash or noncash). Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or non-qualified plans of any Affiliate and shall be
calculated to include amounts not otherwise included in the Participant’s gross income under
Code Sections 125, or 402(e)(3) pursuant to plans established by any Affiliate; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Participant.
	 
	1.35	 	“Survivor Benefit” means the benefit set forth in Article 9.
	 
	1.36	 	“Termination Benefit” means the benefit set forth in Section 7.4.
	 
	1.37	 	“Termination of Employment” means a separation from service within the meaning of Code §409A.
A Participant who is an employee will generally have a Termination of Employment if the
Participant voluntarily or involuntarily terminates employment with

 

 

	 	 	the Employer. A termination of employment occurs if the facts and circumstances indicate
that the Participant and the Employer reasonably anticipate that no further services will
be performed after a certain date or that the level of bona fide services the Participant
will perform after such date (whether as an employee, director or other independent
contractor) for the Employer will decrease to no more than 20 percent of the average level
of bona fide services performed (whether as an employee, director or other independent
contractor) over the immediately preceding 36-month period (or full period of services if
the Participant has been providing services for less than 36 months). Notwithstanding the
foregoing, the employment relationship is treated as continuing while the Participant is on
military leave, sick leave or other bona fide leave of absence if the period does not
exceed 6 months, or if longer, so long as the Participant retains the right to reemployment
with an Employer under an applicable statute or contract. When a leave of absence is due
to any medically determinable physical or mental impairment that can be expected to result
in death or to last for a period of at least 6 months and such impairment causes the
Participant to be unable to perform duties of his or her position or any substantially
similar position, a 29-month maximum period of absence shall be substituted for the 6-month
maximum period described in the preceding sentence.
	 
	1.38	 	“Trust” means one or more trusts established with respect to the Plan between the Company and
the trustee named therein, as amended from time to time.
	 
	1.39	 	“Unforeseeable Financial Emergency” means a severe financial hardship to the Participant
resulting from (i) an illness or accident of the Participant, a Beneficiary or a dependent (as
defined in Code §152, without regard to §152(b)(1), (b)(2), and (d)(1)(B)) of the Participant,
(ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee consistent with the
requirements of Code Section 409A.

ARTICLE 2

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to a select group
of management or highly compensated Employees, as determined by the Committee or if the
Committee so directs, the Eligibility Committee. The Eligibility Committee will report to the
Compensation Committee not less frequently than annually the individuals it selects for
participation.
	 
	2.2	 	Enrollment Requirements. As a condition to a selected Employee’s participation, the
Committee must receive, in accordance with the Committee’s procedures, an Election Form during
Open Enrollment or within thirty (30) days after he or she is first selected for participation
in the Plan. In addition, the Committee may establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary. Notwithstanding the
foregoing, an Employee shall be deemed to satisfy the enrollment requirements with respect to
Discretionary Company Contributions by approval of a Discretionary Company Contribution for
the Participant in accordance with Section 4.2.
	 
	2.3	 	Eligibility; Commencement of Participation. Provided an Employee selected to
participate in the Plan has met all enrollment requirements set forth in this Plan and
required by the Committee, the Employee shall commence participation in the Plan on the first
day of the month following the month in which the Employee executes all enrollment
requirements
or such later date as the Committee shall determine in its sole discretion with respect to
compensation paid for services performed after the election. If

 

 

	 	 	an Employee fails to meet
all such requirements within the period required, in accordance with Section 2.2, that
Employee shall not be eligible to participate in the Plan until the first day of the Plan
Year following the delivery to and acceptance by the Committee of the required documents;
provided, however, that such Employee must continue to be eligible to participate in the
Plan as determined by the Committee in its sole discretion.
	 
	2.4	 	Termination of Participation. Subject to Section 2.6, once an Employee has become a
Participant in the Plan, his or her participation shall continue until the earlier of (i)
payment in full of all benefits to which the Participant or his or her Beneficiary is entitled
under the Plan or (ii) the occurrence of an event specified in Section 2.5 which results in
loss of benefits. Except as otherwise specified in the Plan, the Company may not terminate an
individual’s participation in the Plan.
	 
	2.5	 	Missing Persons. If the Company is unable to locate a Participant or his or her
Beneficiary for purposes of making a distribution, the amount of the Participant’s benefits
under this Plan that would otherwise be considered as non-forfeitable, shall be forfeited
effective four (4) years after (i) the last date a payment of said benefit was made, if at
least one such payment was made, or (ii) the first date a payment of said benefit was to be
made pursuant to the terms of the Plan, if no payments had been made. If such person is
located after the date of such forfeiture, the benefits for such Participant or Beneficiary
shall not be reinstated hereunder.
	 
	2.6	 	Changes in Employment Status. If a Participant has a change in his or her employment
responsibilities, title, compensation, and/or performance, such that the Participant would not
qualify for initial participation in the Plan, as determined by the Committee in its sole
discretion, (i) the Participant shall continue to defer his or her Annual Deferral Amount in
accordance with the Participant’s election for the Plan Year during which the change in
employment responsibilities, title, compensation, and/or performance occurs, (ii) the
Participant shall not be eligible to elect an Annual Deferral Amount or to be credited with a
Discretionary Company Contribution in Plan Years following the Plan Year during which the
change in employment responsibilities, title, compensation, and/or performance occurs unless
and until the Participant again is selected to elect an Annual Deferral Amount, as determined
by the Committee in its sole discretion, and (iii) the Participant shall otherwise continue to
participate in the Plan.
	 
	2.7	 	Participation upon Reemployment. If a Participant terminates employment with all
Affiliates and later becomes reemployed by an Affiliate, such reemployment shall not suspend
or delay benefit payments such Participant is receiving or is eligible to receive under the
Plan as a result of the Termination of Employment. Upon reemployment, the Participant shall
not be eligible to make deferrals unless and until the Participant again qualifies for initial
participation as determined by the Committee.

ARTICLE 3

Open Enrollment/ Annual Elections

	3.1	 	Elections. A Participant shall complete an election for Salary and Bonus by
completing and delivering an Election Form to the Committee during Open Enrollment for the
Plan Year in the case of Salary and for the applicable performance period in the case of
Bonus. The Participant shall be entitled to elect the following:

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect,
subject to withholding described in Section 5.2(a), to defer Salary and Bonus
according to the following schedule:

 

 

	 	 	 	 	 	 	 	 	 
	Deferral	 	Minimum

 Percentage	 	Maximum

 Percentage
	Salary
	 	 	0 	%	 	 	100 	%
	Bonus
	 	 	0 	%	 	 	100 	%

	 	 	 	Timely receipt of an Election Form by the Committee is a condition to
deferral of either Salary or Bonus. If no Election Form is timely
received by the Committee, the applicable deferral percentage shall be
zero.
	 
	 	(b)	 	Measurement Funds. A Participant may elect one or more Measurement
Fund(s) to be used to determine the amounts to be credited or debited to his or her
Account Balance. If a Participant does not elect any Measurement Funds, the
Participant’s Annual Deferral Amount shall be allocated according to the Participant’s
most recent election. If a Participant has not previously elected any Measurement
Fund, amounts will be credited or debited according to a default Measurement Fund as
determined by the Committee, in its sole discretion.
	 
	 	(c)	 	Time and Form of Payment. During the Open Enrollment for a Plan
Year, a Participant may make a payment election designating the time of commencement
of payment of the portion of the Participant’s Account Balance attributable to his
Annual Deferral Amount and Annual Company Matching Contributions for the Plan Year,
and the form of payment (either lump sum or installments) for such portion according
to the permissible distribution events provided under the Plan which may include any
distribution or payment options provided for under Article 7. The time and form of
payment of any Discretionary Company Contribution for an Employee for a Plan Year
shall be established by the Committee at the time any such Discretionary Company
Contribution is authorized.

	3.2	 	Effect of Elections/Changes to Elections.

	 	(a)	 	Irrevocable Deferral Elections. Once a Plan Year has commenced, a
Participant may not elect to change his or her deferral election that is in effect for
that Plan Year, except if and to the extent permitted by the Committee and made in
accordance with the provisions of Section 3.2(c) and Code section 409A specifically
relating to a change and/or revocation of deferral elections related to a
Participant’s Disability or an Unforeseeable Financial Emergency or a hardship
distribution under the Qualified Plan.
	 
	 	(b)	 	Allocations to Measurement Funds. The Participant may add, delete or
change allocations to one or more Measurement Funds used to determine the amounts to
be credited or debited to his or her Account Balance by submitting an Election Form
that is accepted by the Committee. Allocations may be made in one percent (1%)
increments. Election changes will be applied as follows:

	 	(i)	 	Changes. Changes to allocations for future deferrals will
be applied to the next contribution period following the date of the election.
	 
	 	(ii)	 	Exchanges. Exchanges to allocations to Measurement Funds
shall be applied at the close of the next market day following the date the
election is received by the Committee.

 

 

	 	 	 	Notwithstanding this Section 3.2(b) allocations made to the Company Stock Fund
shall be limited to 25% of the Participant’s entire Account Balance and shall be
irrevocable.
	 
	 	(c)	 	Subsequent changes to Time and Form of Payment. A Participant may
elect one time to change the time or form of payment elected for his Deferral Account
attributable to Annual Deferral Amounts for any Plan Year, and for his Company
Matching Account attributable to Company Matching Contributions for any Plan Year,
only in accordance with this Section 3.2(c). Any election under this Section 3.2(c)
must comply with Code Section 409A and the regulations and other guidance thereunder.
Except as permitted under this Plan with respect to an Unforeseeable Financial
Emergency or as described in Section 7.5, a Participant may not elect to accelerate
the date payment is to be made or commenced. A Participant may elect to delay the
time payment is to be made or commenced, and may change the form of payment from lump
sum to installments, or vice versa, only if the following conditions are met:

	 	(i)	 	the election is received by the Committee not less
than twelve (12) months before the date payment would have otherwise
been made or commenced without regard to this election;
	 
	 	(ii)	 	the election shall not take effect until at least
twelve (12) months after the date on which the election is received
by the Committee; and
	 
	 	(iii)	 	except in the case of payment on account of death or
Disability, payment pursuant to the election shall not be made or commenced
sooner than five (5) years from the date payment would have otherwise been
made or commenced without regard to this election.

	 	 	 	For these purposes, installment payments shall be treated as a single payment, with
the result that an election to change from installments to a lump sum will require
that the lump sum be postponed until a date which is at least five (5) years after
the scheduled payment date of the first installment.

ARTICLE 4

Company Contribution Amounts/Vesting

	4.1	 	Annual Company Matching Contributions. A Participant’s Annual Company Matching
Contributions for any Plan Year shall be determined by the Participant’s Employer. In
order to receive Annual Company Matching Contributions with respect to a Plan Year, the
Participant shall have contributed through elective compensation deferrals in the Qualified
Plan, an amount equal to the maximum deferral permitted under the Qualified Plan for the
Plan Year, and shall be an Employee as of the last day of the Plan Year. If the Participant
fulfills these requirements with respect to a Plan Year, the Annual Company Matching
Contributions shall be equal to (i) the Employer matching contribution that would have been
provided to the Participant in the Qualified Plan, assuming that the Annual Deferral Amount
had been included in the definition of compensation in the Qualified Plan, and assuming
further that the limitations of IRC Sections 401(a)(17), 402(g)(1) and 415 did not apply,
minus (ii) the amount of the Employer matching contribution provided to the Participant
during such Plan Year under the Qualified Plan. The amount so credited to a Participant
under this Plan shall be the

 

 

	 	 	Annual Company Matching Contributions for that Plan Year and
shall be credited to the Participant’s Company Matching Account on a date or dates to be
determined by the Committee, in its sole discretion.
	 
	4.2	 	Discretionary Company Contributions. Apart from the Annual Company Matching
Contribution, the Committee may make discretionary contributions for any Participant under
this Plan at the times and in the amount(s) designated by the Participant’s Employer, in its
sole discretion. Amounts so credited to a Participant under this Plan shall be credited to
the Participant’s Discretionary Company Contributions Account.
	 
	4.3	 	Vesting.

	 	(a)	 	Participant Contributions. A Participant shall at all times be 100% vested
in his or her Deferral Account.
	 
	 	(b)	 	Annual Company Matching Contributions. A Participant’s Company Matching
Contributions Account shall be vested to the same extent as the Participant’s matching
contributions account under the Qualified Plan.
	 
	 	(c)	 	Discretionary Company Contributions. Unless otherwise determined by the
Committee prior to awarding any Discretionary Company Contributions, amounts credited
to a Participant’s Discretionary Company Contributions Account shall be vested to the
same extent as the Participant’s matching contributions account under the Qualified
Plan.

ARTICLE 5

Crediting/Taxes

	5.1	 	Crediting/Debiting of Account Balances. Subject to the rules and procedures that are
established from time to time by the Committee, amounts shall be credited or debited to a
Participant’s Account Balance in accordance with the performance of the Measurement Funds
selected by the Participant under Sections 3.1(b) and 3.2(b). The performance of such
Measurement Funds (either positive or negative) shall be determined by the Committee in its
sole discretion.
	 
	5.2	 	Employer-Provided Benefits, FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer shall
withhold from that portion of the Participant’s Salary and Bonus, that are not
being deferred, in a manner determined by the Employer, the Participant’s share of
any Employer-provided welfare and fringe benefits elected by the Participant and/or
FICA or other employment taxes on such Annual Deferral Amount, as determined by the
Committee in its sole discretion. If necessary, the Committee may reduce the
Annual Deferral Amount in order to satisfy the Participant’s election with respect
to Employer-provided welfare and fringe benefits and the Employer’s obligation to
withhold FICA and other employment taxes.
	 
	 	(b)	 	Company Matching Account. When a Participant becomes vested in a
portion of his or her Company Matching Account the Participant’s Employer shall
withhold from the Participant’s Salary and Bonus that are not being deferred, in a
manner determined by the Employer, the Participant’s share of FICA and/or other
employment taxes, as determined by the Committee in its sole discretion. If
necessary, the Committee may reduce the vested portion of the Participant’s

 

 

	 	 	 	Company
Matching Account, as applicable, in order to comply with this Section 5.2.
	 
	 	(c)	 	Distributions. A Participant’s Employer, or the trustee of the
Trust, shall withhold from any payments made to the Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer, or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer, or
the trustee of the Trust.

ARTICLE 6

Unforeseeable Financial Emergencies

	 	 	If the Participant experiences an Unforeseeable Financial Emergency, the Participant may
petition the Committee (i) to revoke deferrals of Salary and/or Bonus elected by such
Participant or (ii) to revoke deferrals of Salary and Bonus elected by such Participant and
receive a partial or full payout from the Plan. Any such payout shall not exceed the
lesser of the Participant’s vested Account Balance, calculated as if such Participant were
receiving a Termination Benefit, or the amount reasonably needed to satisfy the
Unforeseeable Financial Emergency. A Participant may not receive a payout from the Plan to
the extent that the Unforeseeable Financial Emergency is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship or (iii) by revocation of deferrals under this Plan.

ARTICLE 7

Distributions/Payments

	7.1	 	In-Service Date-Based Distribution.

	 	(a)	 	Annual Contributions. In connection with each election to defer
Annual Contributions, a Participant may elect to receive an In-Service Distribution
from the Plan with respect to all or a portion of such Annual Deferral Amounts
credited for such Plan Year. The In-Service Distribution shall be a lump sum payment
in an amount that is equal to the portion of the Annual Deferral
Amounts that the Participant elected to have distributed as an In-Service
Distribution, plus amounts credited or debited in the manner provided in
Section 5.1 on that amount, calculated as of the close of business on or around the
date on which the In-Service Distribution becomes payable, as determined by the
Committee in its sole discretion.
	 
	 	(b)	 	Payment of In-Service Distributions. Subject to the other terms and
conditions of this Plan, each In-Service Distribution elected shall be paid out on the
first Payment Date commencing immediately after the date designated by the
Participant.
	 
	 	(c)	 	Other Benefits Take Precedence Over In-Service Distributions. Should
an event occur that triggers a benefit under this Article 7, Article 8 or Article 9,
any Annual Deferral Amounts, plus amounts credited or debited thereon, that is subject
to an In-Service Distribution election under Section 7.1 shall not be paid in
accordance with Section 7.1 but shall be paid in accordance with the other applicable
Article or Section.

 

 

	7.2	 	Disability Benefit. A Participant may elect to receive a Disability Benefit equal to
the Account Balance attributable to Annual Contributions for the Plan Year in one of the
following forms: (i) a single lump sum payment, or (ii) installment payments over one (1) to
fifteen (15) years according to the Installment Method. If the Participant fails to make an
election as to the time and form of payment for a Disability Benefit, the election shall
default to a single lump sum payment.
	 
	7.3	 	Termination Benefit. A Participant may elect to receive a Termination Benefit equal
to the vested Account Balance attributable to Annual Contributions for the Plan Year in one of
the following forms: (i) a single lump sum payment, or (ii) installment payments over one (1)
to fifteen (15) years according to the Installment Method. If the Participant fails to make
an election as to the time and form of payment for a Termination Benefit, the election shall
default to a single lump sum payment. Unless otherwise delayed according to Section 7.5, a
Termination Benefit shall not be made before the date that is six (6) months after the date of
the Participant’s Termination of Employment (or, if earlier, the date of death of the
Participant).
	 
	7.4	 	Delay of Payment. Notwithstanding any other provision in the Plan, the payment of
amounts deferred under the Plan shall will be delayed as follows:

	 	(a)	 	Application of Code section 162(m). If the Company reasonably
anticipates that any portion of the benefit payable under the Plan to any Participant
could be nondeductible under Code section 162(m) (or cause other amounts payable by
the Company to be nondeductible under Code section 162(m)), then the payment of such
portion of the benefit to such Participant shall be delayed until the earliest date on
which the Company reasonably anticipates that the deduction will not be limited or
eliminated by application of Code section 162(m), provided that where any scheduled
payment to the Participant in the Company’s taxable year is delayed in accordance with
this paragraph, the delay in payment will be treated as a subsequent deferral election
unless all scheduled payments to that Participant that could be delayed in accordance
with this paragraph are also delayed. Where the payment is delayed to a date on or
after the Participant’s Termination of Employment, the payment will be considered a
Termination Benefit payable at the time provided in Section 7.4. No election may be
provided to a Participant with respect to the timing of the payment under this Section
7.5(a).
	 
	 	(b)	 	Other Event Permitted by Section 409A. If the Committee so
determines, payment of amounts under the Plan may be delayed as permitted under Code
section 409A, as if stated in the Plan, for example, if the Company reasonably
anticipates that making a payment will violate a term of any Company loan agreement,
jeopardize the ability of the Company to continue as a going concern if paid as
scheduled or the payment may violate securities laws (or other applicable law).

	7.6	 	Acceleration of Payment. Notwithstanding any other provision in the Plan, the
payment of amounts deferred under the Plan will be accelerated as follows:

	 	(a)	 	De Minimis Payments. Notwithstanding the foregoing, if at the time
of the Participant’s Termination of Employment, the Participant’s vested Account
Balance, and the Participant’s entire interest under all other arrangements required
to be aggregated with this Plan pursuant to Treasury Regulation section
1.409A-1(c)(2), is less than the applicable dollar amount under Code Section
402(g)(1)(B) ($15,500 for 2008), then the Participant’s Account Balance shall be

 

 

	 	 	 	paid
in a lump sum on the Payment Date of the seventh month after such Termination of
Employment (or, if earlier, the date of death).
	 
	 	(b)	 	Other Events Permitted by Section 409A. If the Committee so
determines, in its sole discretion (without any direct or indirect election on the
part of any Participant), the Committee may accelerate the date of distribution or
commencement of distributions hereunder, or accelerate installment payments by paying
the vested Account Balance in a lump sum or pursuant to a Installment Method using
fewer years, to the extent permitted under Code section 409A (such as, for example, as
provided in Section 1.409A-3(j)(4) of the Treasury regulations, to comply with
domestic relations orders or certain conflict of interest rules, to pay employment
taxes, to make a lump sum cashout of certain de minimis amounts that are less than the
applicable dollar amount under Code section 402(g)(1)(B), or to make payments upon
income inclusion under Code section 409A).

ARTICLE 8

Disability Waiver and Benefit

	8.1	 	Disability Waiver.

	 	(a)	 	Cancellation of Deferral. Subject to Section 409A, if it is
determined that a Participant is suffering from a Disability, such Participant’s
deferrals shall thereupon be cancelled by the later of the end of the Plan Year or the
fifteenth day of the third month following the date the Participant incurs a
Disability.
	 
	 	(b)	 	Return to Work. If a Participant returns to employment with the
Employer after a Disability ceases, the Participant may elect to defer an Annual
Deferral Amount for the Plan Year following his or her return to employment and for
every Plan Year thereafter while a Participant in the Plan, provided such deferral
elections are otherwise allowed and an Election Form is delivered to and accepted by
the Committee for each such election in accordance with Section 3.1 above.

	8.2	 	Disability Benefit. Upon a determination that a Participant is Disabled, Participant
shall receive payments according to the Participant’s election for Disability Benefit under
Section 7.2. Unless otherwise delayed according to Section 7.5, a Disability Benefit shall
commence on the first regular payment date following a forty-five (45) day period
following the date the Participant incurred a Disability.

ARTICLE 9

Survivor Benefit

	9.1	 	Survivor Benefit. A Participant’s Beneficiary(ies) shall receive a benefit upon the
Participant’s death which will be equal to (i) the Participant’s vested Account Balance,
determined as of the date before the applicable Payment Date, if the Participant dies prior to
his or her Termination of Employment or Disability, or (ii) the Participant’s unpaid
Termination Benefit or Disability Benefit, determined as of the date before the applicable
Payment Date, if the Participant dies before his or her Termination Benefit or Disability
Benefit is paid in full (the “Survivor Benefit”).
	 
	9.2	 	Payment of Survivor Benefit. The Survivor Benefit shall be paid to the Participant’s
Beneficiary(ies) in a lump sum payment on the first Payment Date after a 45-day period
following the date on which the Company is provided with proof that the satisfactory to the
Committee of the Participant’s death.

 

 

ARTICLE 10

Beneficiary Designation

	10.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive benefits payable under
the Plan upon the death of such a Participant. The Beneficiary designated under this Plan may
be the same as or different from the Beneficiary designated under any other plan of an
Employer in which the Participant participates.
	 
	10.2	 	Beneficiary Designation; Change of Beneficiary Designation. A Participant shall
designate his or her Beneficiary by completing and delivering the Beneficiary Designation Form
to the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing and delivering a new Beneficiary Designation Form to the Committee.
Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by the Committee
prior to his or her death. No designation or change in designation of a Beneficiary shall be
effective until received by the Committee or its designated agent. In the event a Participant
becomes divorced or legally separated from his or her spouse, any Beneficiary Designation Form
designating such spouse as a beneficiary shall automatically be null and void as of the date
of such divorce or legal separation; provided, however, that the Participant may designate
such spouse (or former spouse) as a beneficiary under a new Beneficiary Designation Form.
	 
	10.3	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 10.1 and 10.2 above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s Beneficiary shall be his or her surviving spouse. If the Participant has no
surviving spouse, the Participant’s
Survivor Benefit shall be payable to the executor or personal representative of the
Participant’s estate.
	 
	10.4	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
with respect to a Participant, the Committee shall have the right, exercisable in its
discretion, to withhold payments until this matter is resolved to the Committee’s
satisfaction.

ARTICLE 11

Leave of Absence

	11.1	 	Paid Leave of Absence. If a Participant is on a paid leave of absence authorized by
the Participant’s Employer, (i) the Participant shall continue to be considered eligible for
the benefits provided in Articles 6, 7 or 8 in accordance with the provisions of those
Articles, and (ii) the Annual Deferral Amount subject to a deferral election shall continue to
be withheld during such paid leave of absence in accordance with Section 3.1.
	 
	11.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s
Employer to take an unpaid leave of absence from the employment of the Employer for any
reason, such Participant shall continue to be eligible for the benefits provided in Articles
6, 7 or 8 in accordance with the provisions of those Articles. However, the Participant shall
be excused from fulfilling the Annual Deferral Amount commitment that would otherwise have
been withheld during the remainder of the Plan Year in which the unpaid leave of absence is
taken. During the unpaid leave of absence, the Participant shall not be allowed to make any
additional deferral elections. However, if the Participant returns to active

 

 

	 	 	employment, the
Participant may make deferral elections during the next Open Enrollment provided the
Participant is selected by the Committee as eligible to make a deferral election and an
Election Form is delivered to and accepted by the Committee for each such election in
accordance with Section 3.1 above.

ARTICLE 12

Termination, Amendment or Modification

	12.1	 	Termination. Although the Company anticipates that it will continue the Plan for an
indefinite period of time, there is no guarantee that the Company will continue the Plan or
will not terminate the Plan at any time in the future. Accordingly, the Company reserves the
right to terminate and liquidate the Plan in the event of a corporate dissolution, change in
control, or other event in accordance with Treas. Reg. §1.409A-3(j)(4)(ix).
	 
	12.2	 	Amendment. The Company may, at any time, amend or modify the Plan in whole or in
part by the action of the Board; provided, however, that: (i) no amendment or modification
shall be effective to decrease or restrict the value of a Participant’s vested Account Balance
in existence at the time the amendment or modification is made, calculated as if the
Participant had experienced a Termination of Employment as of the effective date of the
amendment or modification; and (ii) no amendment or modification of this Section 12.2 shall be
effective. The amendment or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under the Plan as of the date
of the amendment or modification.
	 
	12.3	 	Release. Any payment of benefits to or for the benefit of a Participant or
Beneficiaries that is made in good faith by the Company in accordance with the Company’s
interpretation of its obligations hereunder shall be in full satisfaction of all claims
against the Company for benefits under this Plan to the extent of such payment.
	 
	12.4	 	Amendment to Ensure Proper Characterization of the Plan. Notwithstanding the
previous Sections of this Article 12, the Plan may be amended at any time, retroactively if
determined by the Committee to be necessary, in order to conform the Plan to the provisions of
Code Section 409A and to ensure that amounts under the Plan are not considered to be taxed to
a Participant under the Federal income tax laws prior to the Participant’s receipt of the
amounts or to conform the Plan and the Trust to the provisions and requirements of any
applicable law (including ERISA and the Code).

ARTICLE 13

Administration

	13.1	 	Administration. Except as otherwise provided herein, the Plan shall be administered
by the Committee.
	 
	13.2	 	Powers of the Committee. In addition to the other powers granted under the Plan, the
Committee shall have all powers necessary to administer the plan, including without
limitation, powers:

	 	(a)	 	to interpret the provisions of this Plan;
	 
	 	(b)	 	to establish and revise the method of accounting for the Plan and to maintain
the Accounts; and
	 
	 	(c)	 	to establish rules for the administration of the Plan and to prescribe any
forms required to administer the Plan.

 

 

	 	 	Not in limitation, but in amplification of the foregoing and of the authority conferred
upon the Committee in Section 13.1, the Company specifically intends that the Committee
have the greatest permissible discretion to construe the terms of the Plan and to determine
all questions concerning eligibility, participation and benefits. Any such decision made
by the Committee is intended to be subject to the most deferential standard of judicial
review. Such standard of review is not to be affected by any real or alleged conflict of
interest on the part of the Company or any member of the Committee.
The Committee may, in its sole discretion, discontinue, substitute or add a Measurement
Fund. Each such action will take effect as of the first day of the first calendar quarter
that begins at least thirty (30) days after the day on which the Committee gives
Participants advance written notice of such change.
	 
	13.3	 	Delegation. The Committee, or any officer of the Company designated by the Committee,
shall have the power to delegate specific duties and responsibilities to officers or other
employees of the Company or other individuals or entities. Any delegation may be rescinded by
the Committee at any time. Each person or entity to whom a duty or responsibility has been
delegated shall be responsible for the exercise of such duty or responsibility and shall not
be responsible for any act or failure to act of any other person or entity.
	 
	13.4	 	Binding Effect of Decisions. The decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation and
application of the Plan and the
rules and regulations promulgated hereunder shall be final, conclusive and binding upon all
persons having or claiming to have any interest or right in the Plan.
	 
	13.5	 	Indemnity of Committee. The Company shall indemnify and hold harmless the members of
the Committee and any employee of an Affiliate or entity to whom the duties of the Committee
may be delegated against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such employee or entity.
	 
	13.6	 	Employer Information. To enable the Committee to perform its functions, the Company
and each Employer shall supply full and timely information to the Committee on all matters
relating to the compensation of its Participants, the date and circumstances of the
Disability, death or Termination of Employment of its Participants, and such other pertinent
information as the Committee may reasonably require.
	 
	13.7	 	Reports and Records. The Committee and those to whom the Committee has delegated
duties under the Plan, shall keep records of all of their proceedings and actions, and shall
maintain books of account, records, and other data as shall be necessary for the proper
administration of the Plan and for compliance with applicable law.

ARTICLE 14

Claims Procedures

	14.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts the Claimant
believes are distributable to him or her from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within sixty (60) days
after such notice was received by the Claimant. All other claims must be made

 

 

	 	 	within 180 days
of the date on which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the Claimant.

	14.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than ninety (90) days after receiving the claim. If the
Committee determines that special circumstances require an extension of time for processing
the claim, written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall notify the
Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or
	 
	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any
part of it;
	 
	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;
	 
	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why
such material or information is necessary;
	 
	 	(iv)	 	an explanation of the claim review procedure set forth in
Section 14.4 below; and
	 
	 	(v)	 	a statement of the Claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on
review.

	14.3	 	Review of a Denied Claim. On or before sixty (60) days after receiving notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies
of, all documents, records and other information relevant to the claim for benefits;
	 
	 	(b)	 	may submit written comments or other documents; and/or
	 
	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may
grant.

	14.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than sixty (60) days after the Committee receives the Claimant’s written request for
a review of the denial of the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the extension shall
be furnished to the Claimant prior to the termination of the initial sixty (60) day period.
In no event shall such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render the benefit
determination. In rendering its decision, the Committee shall take into account all comments,
documents, records and other information submitted by the Claimant relating

 

 

	 	 	to the claim,
without regard to whether such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;
	 
	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the
decision was based;
	 
	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and
	 
	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a).

	14.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this
Article 14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with
respect to any claim for benefits under this Plan. No
legal action with respect to any claim for benefits under this Plan may be commenced more
than one year after a final decision on review of the claim.

ARTICLE 15

Funding

	15.1	 	Source of Benefits. All benefits under the Plan shall be paid when due by the
Company out of its assets or by a trustee from a trust established by the Company for that
purpose. The Company may, but shall have no obligations to, make such advance provision for
the payment of such benefit as the Board may from time to time consider appropriate.
	 
	15.2	 	Trust.

	 	(a)	 	Establishment of the Trust. In order to provide assets from which to
fulfill the obligations to the Participants and their Beneficiaries under the Plan,
the Company may establish a Trust by a trust agreement with a third party trustee, to
which each Employer may, in its discretion, contribute cash or other property,
including securities issued by the Company, to provide for the benefit payments under
the Plan.
	 
	 	(b)	 	Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Participant’s Election Forms shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of a Trust shall govern
the rights of the Employers, Participants and the creditors of the Employers to the
assets transferred to the Trust. Each Employer shall at all times remain liable to
carry out its obligations under the Plan.
	 
	 	(c)	 	Distributions From the Trust. Each Employer’s obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the terms of a Trust,
and any such distribution shall reduce the Employer’s obligations under this Plan.

	15.3	 	No Claim on Specific Assets. No Participant shall be deemed to have, by virtue of
being a Participant in the Plan, any claim on any specific assets of the Company such that the
Participant would be subject to income taxation on his or her benefits under the Plan prior

 

 

	 	 	to
distribution, and the rights of Participants and Beneficiaries to benefits to which they are
otherwise entitled under the Plan shall be those of an unsecured creditor of the Company.
	 
	15.4	 	Unfunded. This Plan is unfunded and payable solely from the general assets of the
Company. The Participants and Beneficiaries shall be unsecured creditors of the Company with
respect to their interests in the Plan.

ARTICLE 16

Miscellaneous

	16.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
	 
	16.2	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan. An Employer shall have no obligation to a Participant under the
Plan except as expressly provided in the Plan.
	 
	16.3	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise, except as provided in Section 16.14.
	 
	16.4	 	Withholding. The Company may withhold from any payment of benefits under the Plan
such amounts as the Company determines are reasonably necessary to pay any taxes (and interest
thereon) required to be withheld or for which the Company may become liable under applicable
law. Any amounts withheld pursuant to this Section 16.4 in excess of the amount of taxes due
(and interest thereon) shall be paid to the Participant or Beneficiary upon final
determination, as determined by the Company, of such amount. No interest shall be payable by
the Company to any Participant or Beneficiary by reason of any amounts withheld pursuant to
this Section 16.4.
	 
	16.5	 	Section 409A Compliance. To the extent provisions of this Plan do not comply with
409A of the Code, the non-compliant provisions shall be interpreted and applied in the manner
that complies with 409A of the Code and implements the intent of this Plan as closely as
possible.
	 
	16.6	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the

 

 

	 	 	right to be retained in the service of any
Employer or to interfere with the right of any Employer to discipline or discharge the
Participant at any time.
	 
	16.7	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
	 
	16.8	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.
	 
	16.9	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.
	 
	16.10	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Missouri without regard to its
conflicts of laws principles.
	 
	16.11	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

H&R Block, Inc.

Attn: Corporate Secretary

One H&R Block Way

Kansas City, MO 64105

	 	 	Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for registration
or certification.
	 
	 	 	Any notice or filing required or permitted to be given to a Participant under this
Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the
last known address of the Participant.
	 
	16.12	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.
	 
	16.13	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse or former
spouse of a Participant who has predeceased the Participant shall automatically pass to the
Participant and shall not be transferable by such spouse in any manner, including but not
limited to such spouse’s will, nor shall such interest pass under the laws of intestate
succession.
	 
	16.14	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.
	 
	16.15	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of

 

 

	 	 	handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.
	 
	16.16	 	Court Order. The Committee is authorized to make any payments directed by court
order in any action in which the Plan or the Committee has been named as a party. In
addition, if a court determines that a spouse or former spouse of a Participant has an
interest in the Participant’s benefits under the Plan in connection with a property settlement
or otherwise, the Committee, in its sole discretion,
shall have the right, notwithstanding any election made by a Participant, to immediately
distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the
Plan to that spouse or former spouse.
	 
	16.17	 	Distribution in the Event of Taxation. If, for any reason, all or any portion of a
Participant’s benefits under this Plan becomes taxable to the Participant prior to receipt, a
Participant may petition the Committee for a distribution of that portion of his or her
benefit that has become taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld, an Employer shall distribute, or shall cause the Trustee to distribute,
to the Participant immediately available funds in an amount equal to the taxable portion of
his or her benefit (which amount shall not exceed a Participant’s unpaid vested Account
Balance under the Plan). If the petition is granted, the distribution of that portion of his
or her benefit that has become taxable shall be made within 90 days of the date when the
Participant’s petition is granted. Such a distribution shall affect and reduce the benefits
to be paid under this Plan.
	 
	16.18	 	Insurance. An Employer, on its own behalf or on behalf of the trustee of a Trust,
and, in its sole discretion, may apply for and procure insurance on the life of the
Participant, in such amounts and in such forms as it may choose. An Employer or the trustee
of a Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance.
No Participant shall have any interest whatsoever in any such policy or policies, and at the
request of an Employer or trustee desiring to purchase such insurance a Participant shall
submit to medical examinations and supply such information and execute such documents as may
be required by the insurance company or companies to whom the Employer or trustee have applied
for insurance.
	 
	16.19	 	Aggregation of Employers. If the Company is a member of a controlled group of
corporations or a group of trades or business under common control (as described in Code
Section 414(b) or (c), but substituting a fifty percent (50%) ownership level for the eighty
percent (80%) level set forth in those Code Sections), all members of the group shall be
treated as a single Company for purposes of whether there has occurred a Termination of
Employment and for any other purposes under the Plan as Section 409A shall require.
	 
	16.20	 	Aggregation of Plans. If the Company offers other account balance deferred
compensation plans in addition to the Plan, those plans together with the Plan shall be
treated as a single plan to the extent required under Section 409A for purposes of determining
whether an Employee may make a deferral election pursuant to Section 3.3(a) within thirty
(30) days of becoming eligible to participate in the Plan and for any other purposes under the
Plan as Section 409A shall require.

 

 

	16.21	 	USERRA. Notwithstanding anything herein to the contrary, any deferral or
distribution election provided to a Participant as necessary to satisfy the requirements of
the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended, shall be
permissible hereunder.exv10w1

Exhibit 10.1

NOTE: Performance restricted stock unit awards made to members of the Management Committee
(“Participants”) of U.S. Bancorp (the “Company”) after December 31, 2008 will have the terms and
conditions set forth in (a) each Participant’s award summary (the “Award Summary”), which can be
accessed on the Citigroup/Smith Barney Benefit Access Website at www.benefitaccess.com, and (b) the
form of Exhibit A hereto (which will be completed to include all information called for therein)
(the “Completed Exhibit A”) provided to such Participant as soon as administratively feasible
following the date on which the award is made. The Award Summary may be viewed at any time on this
Website, and the Award Summary may also be printed out. In addition to the individual terms and
conditions set forth in the Award Summary and the Completed Exhibit A, each performance restricted
stock unit award will have the terms and conditions set forth in the form of Performance Restricted
Stock Unit Award Agreement below. As a condition of each performance restricted stock unit award,
Participant accepts the terms and conditions of the Performance Restricted Stock Unit Award
Agreement, the Award Summary and the Completed Exhibit A.

U.S. BANCORP

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT, together with the Award Summary and the Completed Exhibit A which are incorporated
herein by reference (collectively, the “Agreement”), sets forth the terms and conditions of a
performance restricted stock unit award representing the right to receive shares of common stock of
the Company, par value $0.01 per share (the “Common Stock”). The Agreement is issued pursuant to
the Plan and is subject to its terms. Capitalized terms that are not defined in the Agreement
shall have the meaning ascribed to such terms in the Plan.

The Company and Participant agree as follows:

1. Award

Subject to the terms and conditions of the Plan and the Agreement, the Company grants
to Participant a performance restricted stock unit award entitling Participant to the
number of performance restricted stock units (the “Units”) equal to the “Target Award
Number” set forth in Participant’s Award Summary (such number of units, the “Target
Award Number”). The Target Award Number shall be adjusted upward or downward as
provided in the Completed Exhibit A. The number of Units that Participant will
receive under this Agreement, after giving effect to such adjustment, is referred to
herein as the “Final Award Number.” Each Unit represents the right to receive one
share of Common Stock, subject to the vesting requirements and distribution provisions
of this Agreement and the terms of the Plan. The shares of Common Stock distributable
to Participant with respect to the Units granted hereunder are referred to as the
“Shares.” Participant’s Award Summary sets forth the date of grant of this award (the
“Grant Date”). The Completed Exhibit A sets forth (a) the performance period over
which the Final Award Number will be determined (the “Performance Period”), and (b)
the date on which the Final Award Number will be determined (the “Determination
Date”).

 

 

2. Vesting; Forfeiture

	 	(a)	 	Time Based Vesting Conditions. Subject to the terms and conditions of the
Agreement, the Units shall vest in installments on the dates set forth in the
Participant’s Award Summary (each such date, a “Scheduled Vesting Date”), if the
Participant remains continuously employed by the Company or an Affiliate of the Company
until any such Scheduled Vesting Date. Except as otherwise provided in the Agreement,
if Participant ceases to be an employee of the Company or any Affiliate prior to
vesting of any Units in accordance with the Award Summary, all of Participant’s
unvested Units shall be immediately and irrevocably forfeited.
	 
	 	(b)	 	Continued Vesting Upon Termination of Employment due to Retirement or
Disability. If Participant ceases to be an employee of the Company or any Affiliate by
reason of Disability (as defined below) or Retirement (as defined below), the Units
shall not be forfeited, but shall continue to vest on the Scheduled Vesting Dates in
accordance with Participant’s Award Summary as though such termination of employment
had never occurred, so long as the Participant has at all times since the Grant Date
complied with the terms of any confidentiality and non-solicitation agreement between
the Company or an Affiliate and the Participant. For purposes of this Agreement, (i)
“Retirement” means termination of employment (other than for gross and willful
misconduct) by a Participant who is age 59 1/2 or older and has had 10 or more years of
employment with the Company or its Affiliates following such Participant’s most recent
date of hire by the Company or its Affiliates, and (ii) “Disability” means leaving
active employment and qualifying for and receiving disability benefits under the
Company’s long-term disability programs as in effect from time to time.
	 
	 	(c)	 	Acceleration of Vesting Upon Death. If Participant ceases to be an employee by
reason of death, or if Participant dies after termination of employment with the
Company or an Affiliate due to Disability or Retirement but prior to any Scheduled
Vesting Date, then the Units will become vested in accordance with this Section 2(c).
If such death occurs prior to the last day of the Performance Period, a number of Units
equal to the Target Award Number will vest upon Participant’s death. If the death
occurs on or after the last day of the Performance Period, then a number of Units equal
to the Final Award Number will vest upon Participant’s death. Notwithstanding the
foregoing, such accelerated vesting shall occur only if the Participant has at all
times since the Grant Date complied with the terms of any confidentiality and
non-solicitation agreement between the Company or an Affiliate and the Participant.
	 
	 	(d)	 	Acceleration of Vesting Upon Qualifying Termination. Notwithstanding the
vesting provisions contained in Sections 2(a) through (c) above, but subject to the
other terms and conditions of this Agreement, if Participant has been continuously
employed by the Company or any Affiliate of the Company until the date of a

2

 

	 	 	 	Qualifying Termination (as defined below), then immediately upon such Qualifying
Termination, Participant shall be vested in the number of Units determined in
accordance with this Section 2(d). If the Qualifying Termination occurs prior to
the last day of the Performance Period, a number of Units equal to the Target Award
Number will vest upon such Qualifying Termination. If the Qualifying Termination
occurs on or after the last day of the Performance Period, a number of Units equal
to the Final Award Number will vest upon such Qualifying Termination. For purposes
of this Section 2(d), the following terms shall have the following definitions:

	 	(i)	 	“Announcement Date” shall mean the date of the public
announcement of the transaction, event or course of action that results in a
Change in Control.
	 
	 	(ii)	 	“Cause” shall mean (A) the continued failure by Participant to
substantially perform Participant’s duties with the Company or any Affiliate
(other than any such failure resulting from Participant’s Disability (as
defined in Section 2(c)), after a demand for substantial performance is
delivered to Participant that specifically identifies the manner in which the
Company believes that Participant has not substantially performed Participant’s
duties, and Participant has failed to resume substantial performance of
Participant’s duties on a continuous basis, (B) gross and willful misconduct
during the course of employment (regardless of whether the misconduct occurs on
the Company’s premises), including, without limitation, theft, assault,
battery, malicious destruction of property, arson, sabotage, embezzlement,
harassment, acts or omissions which violate the Company’s rules or policies
(such as breaches of confidentiality), or other conduct which demonstrates a
willful or reckless disregard of the interests of the Company or its Affiliates
or (C) Participant’s conviction of a crime (including, without limitation, a
misdemeanor offense) which impairs Participant’s ability substantially to
perform Participant’s duties with the Company.
	 
	 	(iii)	 	Change in Control” shall mean any of the following events
occurring after the date of this Agreement (but only if such event also
constitutes a change in ownership or effective control of the Company, or a
change in the ownership of a substantial portion of the assets of the Company,
within the meaning of Section 409A of the Code):

	 	(A)	 	The acquisition by any Person (as defined in
Section 2(b)(vi)) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 35% or more of either (1)
the then outstanding shares of Common Stock (the “Outstanding Company
Common Stock”) or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”);
provided, however, 

3

 

	 	 	 	that, for
purposes of this clause (A), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from
the Company, (ii) any acquisition by the Company, (iii) any
acquisition by a subsidiary of the Company or any employee benefit
plan (or related trust) sponsored or maintained by the Company or a
subsidiary of the Company (a “Company Entity”) or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clause (i), (ii) or (iii) of this clause (A); or

	 	(B)	 	Individuals who, as of the Grant Date,
constitute the Company’s Board of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of
Directors (except as a result of the death, retirement or disability of
one or more members of the Incumbent Board); provided,
however, that any individual becoming a director subsequent to
the date of this Agreement whose election, or nomination for election
by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, (1) any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board,
(2) any director designated by or on behalf of a Person who has entered
into an agreement with the Company (or which is contemplating entering
into an agreement) to effect a Business Combination (as defined in
Section 2(b)(iv)(C)) with one or more entities that are not Company
Entities or (3) any director who serves in connection with the act of
the Board of Directors of increasing the number of directors and
filling vacancies in connection with, or in contemplation of, any such
Business Combination; or
	 
	 	(C)	 	Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a “Business Combination”), in each case,
unless, following such Business Combination, (1) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock or the
combined voting power of the then outstanding voting securities
entitled to vote generally in the 

4

 

	 	 	 	election of directors, as the case
may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any Company Entity or such corporation resulting
from such Business Combination) beneficially owns, directly or
indirectly, 35% or more of, respectively, the then outstanding shares
of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (3) at least
a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors, providing for
such Business Combination; or

	 	(D)	 	Approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.

	 	(iv)	 	“Notice of Termination” shall mean a written notice which sets
forth the date of termination of Participant’s employment.
	 
	 	(v)	 	“Person” shall be defined as defined in Sections 13(d)(3) and
14(d)(2) of the Exchange Act.
	 
	 	(vi)	 	“Qualifying Termination” shall mean: (A) a termination of
Participant’s employment with the Company or its Affiliates by the Company for
any reason other than Cause within 12 months following a Change in Control;
provided, however, that any such termination shall not be a
Qualifying Termination if Participant has been notified in writing more than 30
days prior to the Announcement Date that Participant’s employment with the
Company is not expected to continue for more than 12 months following the date
of such notification, but only if Participant’s employment with the Company is
terminated within such 12 month period; and provided further,
however, that any such termination shall not be a Qualifying
Termination if Participant has announced in writing, prior to the date the
Company provides Notice of Termination to Participant, the intention to
terminate employment, subject to the condition that any such termination by the
Company prior to Participant’s stated termination date shall be deemed to be
termination by Participant on such stated date unless termination by the
Company is for Participant’s gross and willful 

5

 

	 	 	 	misconduct; (B) a termination of
Participant’s employment with the
Company or its Affiliates as a result of Disability within 12 months
following a Change in Control; or (C) a termination of Participant’s
employment with the Company or its Affiliates (other than a termination by
the Company for Cause) within 12 months following a Change in Control, if,
at the time of the Change in Control, such Participant is age 59 1/2 or
older and has had 10 or more years of employment with the Company or its
Affiliates following such Person’s most recent date of hire by the Company
or its Affiliates.

	 	(e)	 	Forfeiture on Termination of Employment for Cause and on Breach of
Confidentiality Agreement. If Participant violates the terms of any confidentiality
and non-solicitation agreement between the Company or an Affiliate and the Participant,
all of Participant’s unvested Units shall be immediately and irrevocably forfeited. If
Participant’s employment with the Company is terminated for Cause, all of Participant’s
unvested Units shall be immediately and irrevocably forfeited. Upon forfeiture,
Participant shall have no rights relating to the forfeited Units (including, without
limitation, any rights to receive a distribution of Shares with respect to the Units
and the right to receive dividend equivalents).

3. Restriction on Transfer

Except for transfers by will or the applicable laws of descent and distribution, the Units
cannot be sold, assigned, transferred, gifted, pledged, or in any manner encumbered,
alienated, attached or disposed of, and any purported sale, assignment, transfer, gift,
pledge, alienation, attachment or encumbrance shall be void and unenforceable against the
Company. No such attempt to transfer the Units, whether voluntary or involuntary, by
operation of law or otherwise, shall vest the purported transferee with any interest or
right in or with respect to the Units or the Shares issuable with respect to the Units.

4. Distribution of Shares with Respect to Units

Subject to the restrictions in this Section 4, following the vesting of Units and following
the payment of any applicable withholding taxes pursuant to Section 8 of this Agreement, the
Company shall cause to be issued and delivered to Participant a certificate or certificates
evidencing Shares registered in the name of Participant or in the name of Participant’s
legal representatives, beneficiaries or heirs, as the case may be, as follows:

	 	(a)	 	Scheduled Vesting Date Distributions. As soon as administratively feasible
following each Scheduled Vesting Date (but in no event later than 60 days following
such Scheduled Vesting Date), all Shares issuable pursuant to Units that become vested
as of such Scheduled Vesting Date (and with respect to which Shares have not been
distributed previously) shall be distributed to Participant, or in the event of
Participant’s death, to the representatives of Participant or to any Person to whom the
Units have been transferred by will or the applicable laws of descent and distribution.

6

 

	 	(b)	 	Qualifying Termination Distributions. As soon as administratively feasible
following a Separation From Service (as defined below) in connection with a
Qualifying Termination (but in no event later than 60 days following such Separation
from Service), all Shares issuable pursuant to Units that become vested as a result
of such Qualifying Termination (and with respect to which Shares have not been
distributed previously) shall be distributed to Participant. For purposes of this
Agreement, “Separation From Service” shall mean a Participant’s separation from
service with the Company and its affiliates, as determined under Treasury Regulation
section 1.409A-1(h)(1), provided, that the term “affiliate” shall mean a
business entity which is affiliated in ownership with the Company and that is
treated as a single employer under the rules of section 414(b) and (c) of the Code
(applying the eighty percent common ownership standard). Notwithstanding the
foregoing, any Shares issuable to a Specified Employee (as defined below) as a
result of a Separation From Service in connection with a Qualifying Termination will
not be delivered to such Specified Employee until the date that is six months and
one day after the date of the Separation From Service. For purposes of the
preceding sentence, “Specified Employee” shall mean any Participant who is a
specified employee for purposes of section 1.409A-1(i) of the U.S. Treasury
Regulations, determined in accordance with the rules set forth in the separate
document entitled “U.S. Bank Specified Employee Determination.”
	 
	 	(c)	 	Distributions Following Retirement or Disability. If a Participant’s
employment with the Company or its Affiliates is terminated due to Retirement or
Disability (so long as such termination is not a Qualifying Termination), the
distribution of Shares with respect to Units will not be accelerated and Shares will be
distributed following the Scheduled Vesting Dates (but in no event later than 60 days
following any such Scheduled Vesting Date).
	 
	 	(d)	 	Distributions Following Death. As soon as administratively feasible following
the death of a Participant (but in no event later than 90 days following such death)
all Shares issuable pursuant to Units that become vested pursuant to Section 2(c) (and
with respect to which Shares have not been distributed previously) shall be distributed
to Participant.
	 
	 	(e)	 	No Fractional Shares. In the event that the number of Shares distributable
pursuant to this Section 4 is a number that is not a whole number, then the number of
Shares distributed shall be rounded down to the nearest whole number.

5. Securities Law Compliance

The delivery of all or any of the Shares in accordance with this Award shall be effective
only at such time that the issuance of such Shares will not violate any state or federal
securities or other laws. The Company is under no obligation to effect any registration of
the Shares under the Securities Act of 1933 or to effect any state registration or
qualification of the Shares. The Company may, in its sole discretion, delay the delivery of
the Shares or place restrictive legends on such Shares in order to ensure that the issuance
of any Shares will be in compliance with federal or state securities laws and the rules of
the New York Stock Exchange or any other exchange upon which the Company’s Common Stock is
traded.

7

 

6. Rights as Shareholder; Dividend Equivalents

Prior to the distribution of Shares with respect to Units pursuant to Section 4, Participant
shall not have ownership or rights of ownership of any Shares underlying the Units.
Notwithstanding the foregoing, Participant shall be entitled to receive cash dividend
equivalents on the Shares underlying Units, whether such Units are vested or unvested, if
cash dividends are declared by the Company’s Board of Directors on the Common Stock on or
after the Determination Date. Participant shall be entitled to dividend equivalents with
respect to a number of Units equal to the Final Award Number. Such dividend equivalents
will be in an amount of cash per Unit equal to the cash dividend paid with respect to a
share of outstanding Common Stock. Dividend equivalents will be paid to Participant on the
same payment dates as dividends to holders of the Common Stock are paid. Participant shall
not be entitled to dividend equivalents with respect to dividends declared prior to the
Determination Date. Dividend equivalents paid with respect to dividends declared before the
delivery of the Shares underlying the Units will be treated as compensation income for tax
purposes and will be subject to income and payroll tax withholding by the Company.

7. Distributions and Adjustments

The Award shall be subject to adjustment, in accordance with Section 4(c) of the Plan, in
the event that any distribution, recapitalization, reorganization, merger or other event
covered by Section 4(c) of the Plan shall occur.

8. Income Tax Withholding

In order to comply with all applicable federal or state income tax laws or regulations, the
Company may take such action as it deems appropriate to ensure that all applicable federal
or state payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of Participant, are withheld or collected from Participant. Participant may
satisfy any applicable tax withholding obligations arising from the receipt of Shares, or
lapse of restrictions relating to the Units, by check payable to the Company. In addition,
Participant may, at Participant’s election, satisfy any such obligations that arise at the
time of delivery of Shares by electing to have the Company withhold a portion of the Shares
otherwise to be delivered with a Fair Market Value (as such term is defined in the Plan)
equal to the amount of such taxes. The election must be made on or before the date that the
amount of tax to be withheld is determined.

9. Miscellaneous

	 	(a)	 	This Agreement is issued pursuant to the Plan and is subject to its terms. The
Plan is available for inspection during business hours at the principal office of the
Company. In addition, the Plan may be viewed on the U.S. Bancorp Intranet Website in
the Human Resources, Compensation section of such website.
	 
	 	(b)	 	This Agreement shall not confer on Participant any right with respect to
continuance of employment with the Company or any Affiliate, nor will it 

8

 

	 	 	 	interfere in
any way with the right of the Company or any Affiliate to terminate such employment at
any time.

	 	(c)	 	Participant acknowledges that the grant, vesting or any payment with respect to
this Award, and the sale or other taxable disposition of the Shares issued with respect
to the Units hereunder may have tax consequences pursuant to the Code or under local,
state or international tax laws. Participant acknowledges that Participant is relying
solely and exclusively on Participant’s own professional tax and investment advisors
with respect to any and all such matters (and is not relying, in any manner, on the
Company or any of its employees or representatives). Participant understands and
agrees that any and all tax consequences resulting from the Award and its grant,
vesting or any payment with respect thereto, and the sale or other taxable disposition
of the Shares acquired pursuant to the Award, is solely and exclusively the
responsibility of Participant without any expectation or understanding that the Company
or any of its employees or representatives will pay or reimburse Participant for such
taxes or other items.

	 	(d)	 	It is intended that the Plan and the Agreement shall comply with Section 409A
of the Code and Department of Treasury regulations and other interpretive guidance
issued thereunder and the provisions of this Agreement shall be construed and
administered accordingly.

	 	(e)	 	Notwithstanding anything to the contrary set forth in this Agreement, the
Company shall not pay or accrue any compensation under this Agreement (which shall
include, without limitation, the making of any distribution of Shares to Participant
hereunder), to the extent that such payment or accrual is prohibited under the American
Recovery and Reinvestment Act of 2009, any Treasury Regulations promulgated thereunder
or any other laws or regulations.

10. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State
of Minnesota.

MC Performance RSU Award Agreement

9

 

EXHIBIT A

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

This Exhibit A to the Performance Restricted Stock Unit Award Agreement sets forth the manner in
which the Final Award Number will be determined for each Participant.

Definitions

Capitalized terms used but not defined herein shall have the same meanings assigned to them in the
Plan, the Performance Restricted Stock Unit Award Agreement and Participant’s Award Summary. The
following terms used in the text of this Exhibit A and in the ROE Performance Matrix shall have the
meanings set forth below:

“Company ROE Maximum” means      %.

“Company ROE Minimum” means      %.

“Company ROE Result” means the ROE achieved by the Company during the Performance Period.

“Company ROE Target” means      %.

“Determination Date” means the date on which the Final Award Number is determined, which
date shall not be later than 45 days after the last day of the Performance Period.

“Final Award Number” means the “Final Award Number” determined in accordance with this
Exhibit A.

“Peer Group Companies” means the following companies:                                         .

“Peer Group ROE Ranking Maximum” means the       percentile.

“Peer Group ROE Ranking Minimum” means the       percentile.

“Peer Group ROE Ranking Target” means the       percentile.

“Peer Group ROE” means the ROE achieved by the Peer Group Companies during the Performance
Period.

“Peer Group ROE Ranking” means the percentile rank of the Company ROE Result relative to
Peer Group ROE.

“Performance Period” means the year ending December 31,      .

“ROE” means (a) net income of a company during the Performance Period, divided by (b) total
shareholders’ equity as of the last day of the Performance Period.

“ROE Performance Matrix” means the ROE Performance Matrix set forth in this Exhibit A.

“Target Award Number” means the “Target Award Number” set forth in a Participant’s Award
Summary.

“Target Award Number Percentage” means the “Target Award Number Percentage” determined in
accordance with the ROE Performance Matrix and the related rules set forth in this Exhibit A.

Determination of Final Award Number

Each Participant has been granted a number of Units equal to the Target Award Number. The Target
Award Number will be adjusted upward or downward depending on (a) whether the Company ROE Result is
greater or less than the Company ROE Target, and (b) the Peer Group ROE Ranking. The Final Award
Number for each Participant will be determined by multiplying (i) the Target Award Number
Percentage by (ii) the Target Award Number. The Target Award Number Percentage will be determined
in accordance with the following ROE Performance Matrix and the related rules below:

 

ROE PERFORMANCE MATRIX

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	Target Award Number Percentage
	Company 

ROE 

	 	 	Company ROE Maximum or more
	 	___%
	 	___%%
	 	___%
	Result

	 	 	Company ROE Target
	 	___%
	 	___%
	 	___%
	
(Vertical
 Axis)

	 	 	Company ROE Minimum or less
	 	___%
	 	___%
	 	___%

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Peer Group	 	Peer Group	 	Peer Group
	 	 	 	 	ROE Ranking	 	ROE	 	ROE Ranking
	 	 	 	 	Minimum	 	Ranking	 	Maximum
	 	 	 	 	or below	 	Target	 	or above
	 	 	 	 	Peer Group ROE Ranking
	 
	 	 	 	 	(Horizontal Axis)
	 

	 	 	 	 
	 	 
	 	 

In determining the Target Award Number Percentage in accordance with the ROE Performance Matrix,
the following rules will apply:

	 	•	 	If the Company ROE Result is greater than the Company ROE Minimum and less than the
Company ROE Target, the Target Award Number Percentage on the vertical axis will be
determined by interpolation of the Company ROE Result between the Company ROE Minimum and
the Company ROE Target.
	 
	 	•	 	If the Company ROE Result is greater than the Company ROE Target and less than the
Company ROE Maximum, the Target Award Number Percentage on the vertical axis will be
determined by interpolation of the Company ROE Result between the Company ROE Target and
the Company ROE Maximum.
	 
	 	•	 	If the Peer Group ROE Ranking is greater than the Peer Group ROE Ranking Minimum and
less than the Peer Group ROE Ranking Target, the Target Award Number Percentage on the
horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between
the Peer Group ROE Minimum and the Peer Group ROE Target.
	 
	 	•	 	If the Peer Group ROE Ranking is greater than the Peer ROE Group Ranking Target and less
than the Peer Group ROE Ranking Maximum, the Target Award Number Percentage on the
horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between
the Peer Group ROE Target and the Peer Group ROE Maximum.
	 
	 	•	 	After the Target Award Number Percentage on each of the vertical axis and horizontal
axis has been determined, the actual Target Award Number Percentage will be determined by
interpolation of the data points (i.e., the percentages) set forth in the ROE Performance
Matrix.
	 
	 	•	 	In no event shall the Target Award Number Percentage be less than 25.0%.
	 
	 	•	 	In no event shall the Target Award Number Percentage be greater than 150.0%.

A-2

 

The Final Award Number for each Participant shall be determined by the Committee on the
Determination Date. The Award Summary of each Participant shall be amended to reflect the Final
Award Number as soon as administratively feasible after the Final Award Number for such Participant
is determined.

Committee Determinations

The Committee shall make all determinations necessary to arrive at the Final Award Number for each
Participant. The Committee shall determine the Company ROE Result by reference to the Company’s
audited financial statements as of and for the year ending on the last day of the Performance
Period. The Committee shall determine the Peer Group ROE Ranking by reference to publicly
available financial information regarding the Peer Companies. Any determination by the Committee
pursuant to this Exhibit A will be binding upon each Participant and the Company.

No Fractional Units

In the event the Final Award Number is a number of Units that is not a whole number, then the Final
Award Number shall be rounded down to the nearest whole number.

A-3

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