Document:

Exhibit

Exhibit 10.36

SEVERANCE AGREEMENT
FOR EXECUTIVES
[Revised as of January 1, 2017]

THIS SEVERANCE AGREEMENT (this “Agreement”), dated as of _______________, is made by and between Bridgepoint Education, Inc., a Delaware corporation (the “Company”), and _________________ (“Executive”).
WITNESSETH:
WHEREAS, Executive is an executive of the Company and is expected to make major contributions to the short- and long-term profitability, growth and financial strength of the Company;
WHEREAS, the Company desires to assure itself of both the present and future continuity of management and desires to provide certain severance benefits to Executive pursuant to the Amended and Restated Bridgepoint Education, Inc. Executive Severance Plan dated May 12, 2015 (the “Plan”); 
WHEREAS, this Agreement is the Severance Agreement described in the Plan and enumerates the severance benefits that may be provided to Executive pursuant to Section II of the Plan; and
WHEREAS, the Compensation Committee of the Board has authorized the Company to enter into this Agreement in order for Executive to become a “Covered Employee” for purposes of the Plan.
NOW, THEREFORE, the Company and Executive agree as follows:
1.Certain Defined Terms.  In addition to terms defined elsewhere herein or in the Plan, the following terms have the following meanings when used in this Agreement with initial capital letters:
(a)    “Base Pay” means Executive’s annual base salary rate as in effect from time to time.
(b)    “Board” means the Board of Directors of the Company.
(c)    “Cause” means any of the following, each as determined in the discretion of the Board or the Company’s Chief Executive Officer, as applicable:
(i)    Executive’s conviction of, or a plea of guilty or nolo contendere to, a felony or other crime (except for misdemeanors which are not materially injurious to the business or reputation of the Company or any Company affiliate);
(ii)    Executive’s willful refusal to perform in any material respect his or her duties and responsibilities for the Company or any Company affiliate or Executive’s failure to comply in any material respect with the terms of this Agreement, any confidentiality agreement that Executive has entered into with the 

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Company or any Company affiliate (or may in the future enter into with the Company or any Company affiliate), or any Company policy or procedure of the Company or any Company affiliate at which Executive serves as an officer and/or director;
(iii)    Fraud or other illegal conduct in Executive’s performance of duties for the Company or a Company affiliate; or
(iv)    Conduct by Executive which is materially injurious to the Company or any Company affiliate or materially injurious to the business reputation of the Company or any Company affiliate.
Notwithstanding the foregoing, Executive’s employment shall not be deemed to have been terminated for “Cause” under clause (ii) above unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Board then in office at a meeting of the Board called and held for such purpose, after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel (if Executive chooses to have counsel present at such meeting), to be heard before the Board, finding that, in the good faith opinion of the Board, Executive had committed an act constituting “Cause” and specifying the particulars thereof in detail.  Nothing herein will limit the right of Executive or his/her beneficiaries to contest the validity or propriety of any such determination.
(d)    “Change In Control” means any of the following:
(i)    The acquisition by any individual, entity or group (other than the Company or any employee benefit plan of the Company or Warburg Pincus & Co.  and its affiliated entities and investment funds) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of securities representing more than fifty percent (50%) of the voting securities of the Company entitled to vote generally in the election of directors, determined on a fully-diluted basis (“Company Voting Securities”); provided, however, that such acquisition shall not constitute a Change In Control hereunder if a majority of the holders of Company Voting Securities immediately prior to such acquisition retain directly or through ownership of one or more holding companies, immediately following such acquisition, a majority of the voting securities entitled to vote generally in the election of directors of the successor entity;
(ii)    The sale, transfer or other disposition of fifty percent (50%) or more of the Company’s assets to one or more unaffiliated individual(s), entities or groups; or
(iii)    When a majority of the members of the Board no longer constitute “Company Directors.”  For purposes of this Agreement, “Company Directors” means (A) individuals who as of the effective date of the Plan are voting members of the Board, (B) individuals elected as directors of the Company subsequent to the effective date of the Plan for whose election proxies shall have been solicited by the Board, or (C) individuals elected or appointed to the Board subsequent to the effective date 

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of the Plan to fill vacancies of the Board caused by death or resignation (but not by removal) or to fill newly created directorships.
A transaction shall not constitute a Change In Control unless and until the transaction that would otherwise be considered a Change In Control closes.  In addition, a transaction shall not constitute a Change In Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions. 
(e)    “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(f)    “Code” means the Internal Revenue Code of 1986, as amended.
(g)    “Disability” means that Executive is classified as disabled under a long-term disability policy maintained by the Company or, if no such policy applies, Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.
(h)    “Employee Benefits” means any Company group health and dental benefit plans and basic life insurance provided to Executive as of the Termination Date.  For avoidance of doubt, Employee Benefits shall not include contributions made by the Company to any retirement plan, pension plan or profit sharing plan for the benefit of Executive in connection with amounts earned by Executive. 
(i)    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(j)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(k)    “Good Reason” means that one or more of the following have occurred without Executive’s written consent:
(i)    Executive has experienced a material diminution in Base Pay;
(ii)    Executive has experienced a material diminution in authorities, duties, responsibilities, or reporting structure;
(iii)    Executive has been notified that Executive will experience a material change in the geographic location at which he/she must perform his/her services to the Company; or
(iv)    The Company has materially breached this Agreement.
For purposes of this Agreement, Executive may resign his/her employment from the Company for “Good Reason” within ninety (90) days after the date that any one of the events shown above in clauses (i) through (iv) has first occurred without Executive’s written consent.  Failure to resign his/her employment within such ninety (90) day period shall mean that Executive has forever 

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waived his/her ability to resign for Good Reason with respect to the event in question.  Executive’s resignation for Good Reason will only be effective if the Company has not cured or remedied the Good Reason event within thirty (30) days after its receipt of written notice of such Good Reason event from Executive.  Such written notice must be provided to the Company within thirty (30) days of the initial existence of the purported Good Reason event and shall describe in detail the basis and underlying facts supporting Executive’s belief that a Good Reason event has occurred.  Failure to provide such written notice to the Company within such thirty (30) day period shall mean that Executive has consented to and forever waived his/her ability to resign for Good Reason with respect to the event in question. If the Company timely cures or remedies the Good Reason event, then Executive may either resign his/her employment without Good Reason or Executive may continue to remain employed subject to the terms of this Agreement.
(l)     “Qualifying Termination” means that Executive’s employment with the Company was terminated either by (i) Executive for Good Reason or (ii) the Company without Cause.  For avoidance of doubt, a termination of employment due to death or Disability shall not constitute a Qualifying Termination.
(m)    “Release” means the release of claims and covenant not to sue described in Section 2(f) of this Agreement.
(n)    “Termination Date” means Executive’s last day of employment with the Company (and any Company subsidiary or affiliate) as long as such last day of employment constitutes a “separation from service” within the meaning of the default rules of Section 409A of the Code.
2.    Termination.  Regardless of whether Executive signs the Release, as of the Termination Date, Executive shall be entitled to receive payment for his/her accrued but unpaid Base Pay and vacation through the Termination Date, reimbursement for any valid business expenses that were submitted in accordance with Company policies and procedures prior to the Termination Date, and the vested Employee Benefits, if any, to which Executive may be entitled pursuant to the express terms of any Company employee benefit plan in which he/she participates as of the Termination Date.  If Executive sustains a Qualifying Termination, and timely signs and does not revoke the Release, then as of the Termination Date, Executive shall be entitled to receive the following severance payments and benefits:
(a)    Cash payments in the aggregate that equal one year of Base Pay (determined as of the Termination Date), payable in substantially equal bi-weekly installments over the twelve (12) month period following the Termination Date, with the first installment due within fifteen (15) days following the effective date of the Release.  The amount of the first installment will cover the period of time from the Termination Date through the end of the bi-weekly period immediately preceding such first payment.
(b)    For the twelve (12) month period commencing with the month following the month of the Termination Date, the Company shall continue to provide Executive with Employee Benefits that are reasonably equivalent to the Employee Benefits provided to Executive immediately prior to the Termination Date, at the same cost to Executive had Executive continued as an active employee of the Company. Such Employee Benefits shall immediately cease if Executive is offered 

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or becomes eligible for employee benefits coverage in connection with new employment (Executive shall provide advance written notice to the Company informing the Company when Executive is offered or becomes eligible for other employee benefits in connection with new employment and, if requested by the Company, Executive will provide the Company with written confirmation that Executive has not been offered other employee benefits in connection with new employment). Executive shall pay Executive’s share of any such Employee Benefits premiums with after-tax income and any premium reimbursements or premiums paid by the Company pursuant to this Section 2(b) shall be taxable to Executive for federal and state tax purposes.  The continued coverage for any Employee Benefits subject to COBRA will be provided in accordance with COBRA, and the benefits continuation provided by this Section 2(b) shall run concurrently with the COBRA continuation coverage. Pursuant to federal health care reform legislation, penalties may be imposed on the Company if it provides discriminatory health benefits. If the Company determines in its sole and reasonable discretion that providing Employee Benefits pursuant to this Section 2(b) will subject the Company to any taxes, fines, penalties, or assessments under applicable health care reform legislation or otherwise, the Company will immediately discontinue the continuation of Employee Benefits described in this Section 2(b) and will in lieu thereof provide a taxable monthly payment to Executive in an amount equal to the monthly premium Executive would be required to pay to continue group health care coverage under COBRA as of the Termination Date, less the monthly portion of the premium that Executive was required to pay for comparable coverage immediately prior to the Termination Date, as long as making such monthly payments does not subject the Company to any taxes, fines, penalties, or assessments under applicable health care reform legislation or otherwise. For the avoidance of doubt, the payments described in the preceding sentence will be made regardless of whether Executive actually elects to continue group health care coverage pursuant to COBRA. 
(c)    A single lump sum cash payment equal to a pro rata portion (based on the number of days Executive was employed during the fiscal year) of the annual cash bonus Executive would have earned had he/she continued employment through the end of the fiscal year in which Executive’s Qualifying Termination occurred. Any annual cash bonus earned pursuant to this Section 2(c) shall be paid to Executive at the same time the Company pays annual cash bonuses to other members of senior management of the Company. 
(d)    If Executive’s Qualifying Termination occurs during the twenty-four (24) month period after a Change In Control, then, notwithstanding any provision in any applicable award agreement between the Company and Executive to the contrary: (i) all of the outstanding and unvested stock options granted to Executive prior to his/her Termination Date shall become fully vested and exercisable as of the effective date of the Release; and (ii) all of the outstanding and unvested time-based restricted stock units granted to Executive prior to his/her Termination Date shall become fully vested as of the effective date of the Release. In all other respects, the equity awards previously granted to Executive (including any performance stock units previously granted to Executive) will continue to be subject to the terms and conditions of the applicable Company stock plan and award agreement under which they were granted.
(e)    In the event that it is determined that any payment or distribution of any type to or for the benefit of Executive made by the Company, by any of its affiliates, by any person who acquires ownership or effective control of the Company or ownership of a substantial portion of 

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the Company’s assets (within the meaning of Section 280G of the Code, and the regulations thereunder) or by any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would subject Executive to excise taxes pursuant to Section 4999 of the Code or any interest or penalties with respect to such excise taxes (such excise taxes, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then the Total Payments shall be limited to the maximum amount that can be paid to Executive without the imposition of the Excise Tax (the “Capped Benefit”); provided, however, that the Total Payments shall be payable in full if the Total Payments, on an after-tax basis, minus the Excise Tax exceed the Capped Benefit, on an after-tax basis.  If the Total Payments are made to Executive, Executive shall be responsible for paying the Excise Tax that may be imposed on him/her pursuant to Section 4999 of the Code. Any reduction made to the Total Payments pursuant to this Section 2(e) shall occur in the following order: first, reduction of cash payments, which shall occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such Excise Tax will be the first cash payment to be reduced; and second, reduction of Employee Benefits, which shall occur in reverse chronological order such that the benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced.  All determinations made pursuant to this Section 2(e) (including, without limitation, any determinations as to whether the Total Payments are “parachute payments” within the meaning of Section 280G of the Code) shall be made immediately prior to the Change In Control by a nationally recognized independent audit firm not retained by the Company (the “Accountants”), who shall provide their determination, together with detailed supporting calculations regarding the amount of any relevant matters, both to the Company and to Executive within seven (7) business days of Executive’s Termination Date, if applicable, or such earlier time as is requested by the Company.  Such determination shall be made by the Accountants using reasonable good faith interpretations of the Code.  Any determination by the Accountants shall be binding upon the Company and Executive, absent manifest error.  The Company shall pay the fees and costs of the Accountants which are incurred in connection with this Section 2(e).
(f)    The severance payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement are conditioned on and subject to Executive’s continuing compliance with this Agreement and Executive’s timely execution (and non-revocation and effectiveness) of the Release substantially in the form attached hereto as Exhibit A (as may be modified by the Company in its reasonable discretion).  Executive shall receive the Release prior to, or within five (5) days following, the Termination Date. Executive shall not be entitled to receive the severance payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement unless and until such Release is effective.  Such Release must become effective within sixty (60) days after the Termination Date or else Executive will be deemed to have waived all rights to the severance payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement.  
(g)    As provided in Section III.G. of the Plan, any benefit provided under this Agreement shall be reduced by the amount of any similar benefit provided under any other severance, retention, change in control or other plan or agreement sponsored by the Company.  Any reduction made pursuant to this Section 2(g) shall be made in a manner that complies with Section 409A of the Code. 

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3.    Successors and Binding Agreement.
(a)    The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company.
(b)    This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.
(c)    This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 3(a) and 3(b).  Without limiting the generality or effect of the foregoing, Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution, and in the event of any attempted assignment, transfer or delegation contrary to this Section 3(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.
4.    No Retention Rights.  As provided in Section III.F. of the Plan this Agreement is not an employment agreement and Executive’s employment relationship may be terminated at any time, with or without Cause, or for any or no reason, at Executive’s option or at the option of the Company, with or without notice.
5.    Notices.  For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three (3) business days after having been sent by a nationally recognized overnight courier service such as FedEx or UPS addressed to the Company (to the attention of the General Counsel of the Company) at its principal executive office and to Executive at his/her principal residence that the Company has on file, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.
6.    Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise 

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illegal will be reformed to the extent (and only to the extent) necessary to make it valid, enforceable and legal.
7.    Dispute Resolution; Governing Law.  Any dispute between the parties must be resolved pursuant to the claims procedures and other processes articulated in the Plan.  This Agreement is governed by ERISA and, to the extent applicable, the laws of the State of Delaware, without reference to the conflict of law provisions thereof.
8.    Miscellaneous.
(a)    All provisions of this Agreement are subject to and governed by the terms of the Plan, which are incorporated herein by reference.  In the event of any conflict in terms between the Plan and this Agreement, the terms of the Plan shall prevail and govern. The Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede any and all prior agreements of the parties with respect to such subject matter. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 
(b)    No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by Executive and the Company. 
(c)    No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
(d)    To the maximum extent allowed by law and as provided in Section III.I of the Plan, the severance payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement may be subject to the Company’s compensation recoupment policy or policies that may be adopted by the Company from time-to-time. By signing this Agreement, Executive agrees to fully cooperate with the Company in assuring compliance with such policies and provisions of applicable law. 
9.    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.
10.    Section 409A.  This Company believes, but does not and cannot warrant or guaranty, that the severance payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement are exempt from the requirements of Section 409A of the Code.  Notwithstanding the foregoing, if the Company determines that the payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement are subject to Section 409A, then the provisions of Section III.J. of the Plan shall apply. This Agreement shall be operated in compliance with Section 409A of the Code or an exception thereto and each provision of this Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto.  Executive remains solely liable for any adverse tax consequences imposed on him/her by Section 409A of the Code.  

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11.    Withholding.  All payments and benefits made under this Agreement shall be subject to reduction to reflect any withholding taxes or other amounts required by applicable law or regulation.
12.    Restrictive Covenants. To receive the payments and benefits provided under Sections 2(a), 2(b), 2(c) and 2(d) of this Agreement, Executive must fully comply with the provisions specified in this Section 12. 
(a)    It is expressly understood and agreed that nothing contained in this Agreement, including, without limitation, this Section 12 and the Release, shall prohibit Executive from reporting possible violations of federal law or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or from participating in a resulting investigation or making other disclosures that are protected under the whistleblower provisions of federal law or regulation.  
(b)    Subject to the express caveat contained in Section 12(a) above, Executive will not disparage the Company, its directors, officers, employees, affiliates, subsidiaries, predecessors, successors or assigns in any written or oral communications to any third party.  Executive further agrees that he/she will not direct anyone to make any disparaging oral or written remarks about the Company, its directors, officers, employees, affiliates, subsidiaries, predecessors, successors or assigns to any third parties.  
(c)    During Executive’s employment with the Company and for six (6) months after the Termination Date, Executive shall not, directly or indirectly, either as an individual or as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, stockholder, investor, lender, or in any other capacity whatsoever, of any person, firm, corporation or partnership, solicit any of the Company’s employees or consultants to terminate their relationship with the Company.  
(d)    Subject to the express caveat contained in Section 12(a) above, notwithstanding any requirement that the Company may have to publicly disclose the terms of this Agreement pursuant to applicable law or regulations, Executive agrees to use reasonable efforts to maintain in confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Agreement Information”).  Executive also agrees to take every reasonable precaution to prevent disclosure of any Agreement Information to third parties, except for disclosures required by law or absolutely necessary with respect to Executive’s immediate family members or personal advisors who shall also agree to maintain the confidentiality of the Agreement Information.
(e)    Subject to the express caveat contained in Section 12(a) above, Executive shall not, except as required by any court or administrative agency, without the written consent of the Board or a person authorized thereby, disclose to any person, other than an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by Executive or his duties to the Company, any confidential information obtained by him while in the employ of the Company with respect to any of the Company’s inventions, processes, customers, methods of distribution, methods of manufacturing, attorney-client 

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communications, pending or contemplated acquisitions, other trade secrets, or any other material which the Company is obliged to keep confidential pursuant to any confidentiality agreement or protective order; provided, however, that confidential information shall not include any information: (i) that is now known or which becomes known generally to the public (other than as a result of an unauthorized disclosure by Executive); (ii) of a type not otherwise considered confidential by a person engaged in the same business or a business similar to that conducted by the Company; (iii) that becomes publicly known or made generally available after disclosure by the Company to Executive through no wrongful action or omission by Executive; or (iv) is in Executive’s rightful possession, without confidentiality obligations, at the time of disclosure by the Company as shown by Executive’s then contemporaneous written records.  
(f)    The parties hereto agree that, in the event of breach or threatened breach of any covenants herein, the damage or imminent damage shall be inestimable, and that therefore any remedy at law or in damages shall be inadequate.  Accordingly, the parties hereto agree that the Company and Executive shall be entitled to injunctive relief in the event of any breach or threatened breach of any of such provisions by Executive or the Company, in addition to any other relief (including damages) available to the Company or Executive under this Agreement or under law.  
13.    Return of Company Property.  On or before the Termination Date, Executive shall return to the Company all Company documents (in electronic, paper or any other form, as well as all copies thereof) and other Company property that Executive has had in his/her possession at any time, including, but not limited to, files, notes, drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information, tangible property, including, but not limited to, entry cards, credit and charge cards, and identification badges and keys, and any materials of any kind that contain or embody any proprietary or confidential information of the Company. Executive agrees to make a diligent search for all such property and to return any property not previously returned to the Company on or before the Termination Date.  
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.  By signing below, Executive acknowledges that he/she: (i) has received a copy of the Plan and its Summary Plan Description and understands the terms of the Plan and this Agreement; (ii) is voluntarily entering into this Agreement; and (iii) is agreeing to be bound by the terms of the Plan and this Agreement.  
	
			
	 
	BRIDGEPOINT EDUCATION, INC.

	 
	 
	 

	 
	By:
	 

	 
	Its:
	 

	Executive:
	 
	 

	 
	 
	 

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EXHIBIT A
[Revised as of January 1, 2017]
RELEASE OF CLAIMS AND COVENANT NOT TO SUE
THIS RELEASE OF CLAIMS AND COVENANT NOT TO SUE (the “Release”), dated as of [DATE], is made by and between Bridgepoint Education, Inc., a Delaware corporation (the “Company”), and _________________ (“Executive”).  This Release is effective only if: (i) it has been executed by Executive after his/her termination of employment with the Company; (ii) such executed Release has been provided to the Company on or before [DATE]; and (iii) the revocation period has expired without revocation as set forth in Section 5(c) below (the “Effective Date”).  The Company and Executive are collectively referred to herein as the “Parties.”
WITNESSETH:
WHEREAS, Executive was an employee of the Company and served as the Company’s [JOB TITLE];
WHEREAS, Executive is a participant in and “Covered Employee” under the Amended and Restated Bridgepoint Education, Inc. Executive Severance Plan dated May 12, 2015 (the “Plan”);
WHEREAS, pursuant to the Plan and the Severance Agreement executed by the Parties on [DATE] (the “Severance Agreement”), Executive is eligible for specified severance benefits upon the occurrence of certain events with such benefits conditioned upon, among other things, Executive’s execution and non-revocation of this Release;
WHEREAS, Executive’s employment was terminated [by the Company without Cause] [by Executive for Good Reason] (as defined in the Severance Agreement) on [DATE] (the “Separation Date”);
WHEREAS, the Parties acknowledge that Executive’s termination of employment on the Separation Date will result in Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h); and
 WHEREAS, pursuant to the terms of the Plan and Severance Agreement, the Company has determined to treat the termination of Executive’s employment as eligible for payment of certain separation benefits provided in the Severance Agreement in exchange for compliance with the terms of the Severance Agreement, including the requirement that Executive execute this Release.
NOW, THEREFORE, the Company and Executive agree as follows:
1.    Termination of Employment.  Executive acknowledges and agrees that Executive’s employment with the Company terminated as of the close of business on the Separation Date.  As of the Separation Date, Executive agrees that he/she is no longer an employee of the Company and no longer holds any positions or offices with the Company.  Executive further acknowledges the receipt of all wages, vested benefits, accrued vacation, expense reimbursement, and any other monies owed by the Company to Executive through the Separation Date.  Aside from the severance payments 

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and benefits described in Section 2 below, Executive acknowledges that Executive is not entitled to any additional future compensation from the Company. 
2.    Separation Benefits.  In consideration for the release of claims set forth in Section 5 below and the other obligations set forth in this Release, the Plan and the Severance Agreement and further provided that (i) this Release is signed by Executive and not revoked by Executive pursuant to Section 5(c) below and (ii) Executive remains in continuing compliance with all of the terms of this Release, the Plan and the Severance Agreement, including, without limitation, the restrictive covenants set forth in Section 12 of the Severance Agreement, Executive shall be entitled to receive the severance payments and benefits specified in Sections 2(a), 2(b), 2(c) and 2(d) of the Severance Agreement. Executive acknowledges that the Company’s provision of the severance payments and benefits specified in Sections 2(a), 2(b), 2(c) and 2(d) of the Severance Agreement shall fully satisfy the Company’s obligations to Executive pursuant to the Plan and the Severance Agreement. Executive further acknowledges that he/she will receive the severance payments and benefits specified in Sections 2(a), 2(b), 2(c) and 2(d) of the Severance Agreement only following the Effective Date. Executive understands that the severance payments and benefits are an additional benefit to which Executive would not be entitled if Executive did not sign this Release. 
3.    Integration.  This Release, the Plan and the Severance Agreement (and any agreements referenced therein) represent the entire agreement and understanding between the Parties as to the subject matter hereof and supersede all prior agreements whether written or oral. This Release is subject to all of the terms and conditions of the Plan and the Severance Agreement, which are incorporated herein by reference.
4.    Right to Advice of Counsel.  Executive acknowledges that Executive has had the opportunity to fully review this Release, the Severance Agreement and the Plan and, if Executive so chooses, to consult with counsel, and is fully aware of Executive’s rights and obligations under this Release, the Severance Agreement and the Plan.
5.    Executive’s Release of Claims.  Executive hereby expressly covenants not to sue and irrevocably and unconditionally releases and waives any and all claims, liabilities, demands, damages, penalties, debts, accounts, obligations, actions, grievances, and causes of action (“Claims”), whether now known or unknown, suspected or unsuspected, whether in law, in equity or in arbitration, of any kind or nature whatsoever, which Executive has or claims to have, now or hereafter, against the Company and its divisions, facilities, subsidiaries and affiliated entities, successors and assigns, or any of its or their respective past or present officers, directors, trustees, shareholders, agents, employees, attorneys, insurers, representatives (collectively, the “Releasees”), including, but not limited to, any Claims arising out of or relating in any way to any rights arising out of alleged violations of any contracts Executive may have entered into with the Company (including, but not limited to, the Severance Agreement and the Plan), express or implied, and Executive’s employment at the Company and the termination thereof. Without limiting the foregoing, Executive hereby acknowledges and agrees that the Claims released by this Release include, but are not limited to, Claims arising out of any tort, including defamation, or any legal restrictions on the Company’s right to terminate employees, or any federal, state or other governmental statute, regulation or ordinance, including without limitation: Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Federal Worker 

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Adjustment and Retraining Notification Act (or any similar state, local or foreign law), the Employee Retirement Income Security Act of 1974, as amended, the California Fair Employment and Housing Act, the Americans With Disabilities Act, the Fair Labor Standards Act (including the Equal Pay Act), the California Constitution, the California Labor Code, the Family Medical Leave Act, the California Family Rights Act, the Genetic Information Non-Discrimination Act, the National Labor Relations Act, the Lilly Ledbetter Fair Pay Act, the Fair Credit Reporting Act, the California Business and Professions Code, the Older Workers Benefit Protection Act (the “OWBPA”), California statutory or common law, the Orders of the California Industrial Welfare Commission regulating wages, hours, and working conditions, and federal statutory law, or any Claim for severance pay, bonus, sick leave, disability, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit.  Nothing in this Release shall limit in any way Executive’s right under California Workers’ Compensation laws to file or pursue any workers’ compensation claim.  Nothing herein shall release any rights to indemnification Executive may have in connection with Executive’s actions taken in the course of his/her duties with the Company.  This Release shall not apply to any Claims that may not be waived as a matter of applicable law.  Executive understands that Executive is not releasing or giving up any Claims for any events or actions that happen after his/her Separation Date. Executive acknowledges that he/she may participate in any manner in any investigation of a charge or complaint by any local, state, or federal agency. This Release also does not waive any right that may not be released by private agreement.
(a)    It is understood and agreed that this is a full, complete and final general release of any and all claims described above and that Executive agrees that it shall apply to all unknown, unanticipated, unsuspected and undisclosed claims, demands, liabilities, actions or causes of action, in law, equity or otherwise, as well as those which are now known, anticipated, suspected or disclosed.  As part of this general release, Executive expressly releases, waives and relinquishes all rights under Section 1542 of the California Civil Code which states:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
Executive hereby expressly waives and relinquishes all rights and benefits under any law or legal principle of similar effect to Section 1542 of the California Civil Code in any jurisdiction with respect to the release granted in this Release.  Executive acknowledges that he/she may later discover facts in addition to or different from those which Executive now knows, or believes to be true, with respect to any of the subject matters of this Release, but that it is nevertheless Executive’s intention to settle and release any and all Claims released herein.
(b)    Nothing in this Release shall be construed as prohibiting Executive from making a claim with or cooperating with the Equal Employment Opportunity Commission, the Securities and Exchange Commission, or any other state or federal agency. 
(c)    Executive expressly acknowledges, understands and agrees that this Release includes a waiver and release of all claims which Executive has or may have under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621, et seq. (“ADEA”).  The 

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following terms and conditions apply to and are part of the waiver and release of ADEA claims under this Release:
(i)    Executive acknowledges that this paragraph and this Release, the Severance Agreement, and the Plan are written in a manner calculated to be understood by Executive.
(ii)    The waiver and release of claims under the ADEA contained in this Release does not cover rights or claims that may arise after the date on which Executive signs this Release.
(iii)    Executive is advised to consult an attorney before signing this Release.
(iv)    Executive is granted twenty-one (21) days after he/she is presented with this Release to decide whether or not to sign this Release (although Executive may elect not to use the full twenty-one (21) day period).  Executive understands and agrees that this Release will be automatically withdrawn by the Company if Executive does not accept and deliver this Release to the General Counsel of the Company within the twenty-one (21) day period.
(v)    Executive will have the right to revoke the waiver and release of claims under the ADEA within seven (7) days of signing this Release.  In the event this Release is revoked, Executive understands that this Release will be null and void, and he/she will not be entitled to receive the severance payments and benefits specified in Sections 2(a), 2(b), 2(c) and 2(d) of the Severance Agreement.  If Executive wishes to revoke this Release, Executive shall deliver written notice to the General Counsel of the Company stating his/her intent to revoke this Release on or before 11:59 p.m. on the seventh (7th) day after he/she signs the Release.  Receipt by the General Counsel of proper and timely notice of revocation from Executive cancels and voids this Release. If Executive does not provide a timely notice of revocation, this Release will become effective, irrevocable, binding and enforceable on the eighth (8th) day after Executive signs the Release.
(vi)    Executive hereby acknowledges and agrees that he/she is knowingly and voluntarily waiving and releasing Executive’s rights and claims in exchange for consideration (something of value) in addition to anything of value to which he/she is already entitled.
(vii)    Nothing in this Release prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law.
6.    Labor Code Section 206.5.  Executive agrees that the Company has paid to Executive his/her salary and vacation accrued as of the Separation Date and that these payments represent all such monies due to Executive through the Separation Date.  In light of the payment 

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by the Company of all wages due, or to become due to Executive, California Labor Code Section 206.5 is not applicable.  That section provides in pertinent part as follows: 
“NO EMPLOYER SHALL REQUIRE THE EXECUTION OF ANY RELEASE OF ANY CLAIM OR RIGHT ON ACCOUNT OF WAGES DUE, OR TO BECOME DUE, OR MADE AS AN ADVANCE ON WAGES TO BE EARNED, UNLESS PAYMENT OF SUCH WAGES HAS BEEN MADE.”
7.    No Admission of Liability.  It is understood and agreed that this Release and the Severance Agreement are not an admission of liability and shall not be used or construed as such in any proceeding.
8.    Severability.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it valid, enforceable and legal.
9.    No Representations.  Executive has not relied upon any representations or statements made by the Company in deciding whether to execute this Release.
10.    Voluntary Execution of Release.  This Release is executed voluntarily by Executive and without any duress or undue influence and with the full intent of releasing all claims. Executive acknowledges that:
(a)    Executive has read this Release;
(b)    Executive has been represented in the preparation, negotiation, and execution of this Release by legal counsel of his/her own choice or that he/she has voluntarily declined to seek such counsel;
(c)    Executive understands the terms and consequences of this Release and of the releases it contains; and
(d)    Executive is fully aware of the legal and binding effect of this Release.
By signing this Release before the twenty-one (21) day period described in Section 5(c)(iv) expires, Executive waives Executive’s right under the ADEA and the OWBPA to twenty-one (21) days to consider the terms of this Release.  In any case, however, Executive retains the right to revoke this Release within seven (7) days of signing this Release, as described above in Section 5(c)(v). 

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IN WITNESS WHEREOF, the Parties have caused this Release to be duly executed and delivered as of the date first above written.

	
			
	 
	BRIDGEPOINT EDUCATION, INC.

	 
	 
	 

	 
	By:
	 

	 
	Its:
	 

	Executive:
	 
	 

	 
	 
	 

A-6fmnb-ex104_567.htm

Exhibit 10.4 

Farmers National Banc Corp. Nonqualified Deferred Compensation Plan 
As Amended and Restated Effective January 1, 2016

 

Article I. Introduction and Purpose

Section 1.1Statement of Purpose. The primary purposes of the Plan are to (a) provide certain key employees of the Company and its participating subsidiaries with the opportunity to defer receipt of all or a portion of their eligible compensation before such compensation is earned and to nominally invest such amounts in certain mutual funds on a tax-deferred basis, thereby aligning more closely key employee compensation with the interests of the Company and its shareholders and (b) provide for a more competitive pay program to attract and retain key employee talent.  The Plan was originally adopted on February 2, 2015 and is hereby amended and restated effective January 1, 2016.

Section 1.2Top Hat Plan. The Company intends that the Plan constitute an unfunded “top hat” plan maintained for the purpose of providing deferred compensation to a select group of management or highly compensated employees, within the meaning of ERISA. 

Article II. Definitions 

Section 2.1Account means the bookkeeping account established and maintained by the Plan on behalf of each Participant to record such Participant’s benefit under the Plan. 

Section 2.2Affiliate means any entity that, along with the Company, would be considered a single employer under Code Sections 414(b) and 414(c). 

Section 2.3Aggregated Plan  means any nonqualified deferred compensation plan that is required to be aggregated and treated with the Plan as a single plan under Code § 409A.

Section 2.4Board means the Board of Directors of the Company. 

Section 2.5Change in Control means any occurrence that would be a change in control as that term is defined under the Farmers National Banc Corp. 2012 Equity Incentive Plan, provided that occurrence also would be a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation pursuant to Code Section 409A, without regard to any special rules. 

Section 2.6Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. 

Section 2.7Commission means:

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A.Investment Commissions earned by a Participant where: (i) a substantial portion of the services provided by the Participant for such Commission consists of sales of financial products or other direct customer services to an unrelated customer with respect to customer assets or customer asset accounts; (ii) the customer retains the right to terminate the customer relationship and may move or liquidate the assets or asset accounts without undue delay (which may be subject to a reasonable notice period); (iii) such Commission equals a portion of the value of the overall assets or asset account balance, an amount substantially all of which is calculated by reference to the increase in the value of the overall assets or account balance during a specified period, or both; and (iv) the value of the overall assets or account balance and Investment Commission is determined at least annually. For this purpose, a customer is treated as an unrelated customer only if the customer is not related (within the meaning of Code § 409A) to the Company, an Affiliate or the Participant. 

B.Sales Commissions earned by a Participant where: (i) a substantial portion of the services provided by the Participant for such Commission consists of the direct sale of a product or service to an unrelated customer; (ii) such Commission equals either a portion of the purchase price for the product or service or an amount substantially all of which is calculated by reference to the volume of sales; and (iii) payment of the Commission is either contingent upon the Company or an Affiliate receiving payment from an unrelated customer for the product or services or, if applied consistently to all similarly situated Participants, is contingent upon the closing of the sales transaction and such other requirements as may be specified by the Company or Affiliate before the closing of the sales transaction. For this purpose, a customer will be treated as an unrelated customer only if the customer is not related (within the meaning of Code § 409A) to the Company, any Affiliate or the Participant. 

Section 2.8Company means Farmers National Banc Corp., a one-bank holding company organized in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended. 

Section 2.9Deferral Agreement means the written or electronic deferral election form prescribed from time to time by the Plan Administrator, which must be completed by each Participant pursuant to Section 4.1. 

Section 2.10Disability means a physical or mental condition which qualifies a Participant for Social Security disability benefits or which qualifies such Participant to continue to receive benefits under the Company’s disability plan after having received such benefits for twelve (12) months. 

Section 2.11Distributable Event means an event entitling a Participant (or Beneficiary) to a payment of benefits under the Plan, which shall be: Separation from Service; death; Disability; the occurrence of an Interim Distribution Date; the occurrence of an Unforeseeable Emergency; Plan Termination; Domestic Relations Order; or Income Inclusion Under Code Section 409A.

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Section 2.12Effective Date means the effective date of this amendment and restatement January 1, 2016.  The original effective date of the Plan was February 2, 2015.

Section 2.13Eligible Compensation means a Participant’s Regular Salary, Incentive Compensation, Commissions and other compensation designated by the Company. 

Section 2.14Eligible Individual means any employee of the Company or a Participating Employer who is a management or highly compensated employee and who is designated by the Plan Administrator to be eligible to defer certain compensation in accordance with Article IV. 

Section 2.15ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations thereunder. 

Section 2.16Incentive Award means, with respect to an Eligible Individual, any incentive award that may become payable to such Eligible Individual pursuant to any annual incentive compensation plan of the Company or a Participating Employer, less any applicable withholding taxes and any reductions to such incentive compensation for contributions under any welfare plan or program sponsored by the Company or a Participating Employer.

Section 2.17Interim Distribution Date means a specific date (including attainment of a specific age) selected by a Participant for distribution of vested amounts credited to a Participant’s Account in connection with a Deferral Election.

Section 2.18Investment Options means the hypothetical investment vehicles in which a Participant’s deferrals are deemed invested pursuant to Article V. Investment Options are limited to those offered to participants in the Qualified Plan. 

Section 2.19Participant means any Eligible Individual who makes an election to participate in accordance with Section 4.1. Participant includes any former Eligible Individual who continues to have an Account maintained under the Plan. 

Section 2.20Participating Employer means an Affiliate that has adopted the Plan and has been authorized to participate in the Plan by the Board or a committee thereof. 

Section 2.21Plan means the Farmers National Banc Corp. Nonqualified Deferred Compensation Plan, as the same may be amended from time to time. 

Section 2.22Qualified Plan means the Farmers National Bank 401(k) Profit Sharing Retirement Savings Plan, or its successor, as it may be amended from time to time. 

Section 2.23Regular Salary means an Eligible Individual’s regular annual base salary, less any applicable withholding taxes and any reductions to base salary for contributions under any welfare plan or program sponsored by the Company or a Participating Employer. 

Section 2.24Separation from Service means the Participant’s separation from service as defined in Code Section 409A, without regard to any special rules.

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Section 2.25Specified Employee means a key employee (as defined in Code § 416(i) without regard to paragraph (5) thereof) of the Company or an Affiliate at any time during the 12- month period ending each December 31.  If a Participant is a key employee at any time during the 12-month period ending on such December 31, the Participant is treated as a Specified Employee for the 12-month period beginning on the following April 1. 

Section 2.26Trading Day means any day on which the New York Stock Exchange is open for trading.

Section 2.27Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant or the Participant’s Spouse, Beneficiary or dependent (as defined in Code §152 without regard to §§ 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Participant’s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. 

Section 2.28Valuation Date means the last Trading Day in each month and such other days designated by the Plan Administrator as Valuation Dates. 

Section 2.29Other Defined Terms.  The following terms are defined within the Plan: 

		
	
Term
	
Defined in:

	
Account Balance
	
Section 5.1

	
Adjustment
	
Section 5.1

	
Beneficiary
	
Section 8.3

	
Company Discretionary Contributions
	
Section 4.5

	
Company Matching Contributions
	
Section 4.4

	
Plan Administrator
	
Section 7.1

Article III.Eligibility 

Section 3.1Eligibility. Each Eligible Individual will be eligible to become a Participant in this Plan on the later of the Effective Date and the first day of the month following the date on which the individual is first notified that they have been designated as an Eligible Individual.  The Plan is intended to limit eligibility to a “select group of management or highly compensated employees” within the meaning of ERISA. 

Section 3.2Cessation of Eligibility. An individual will cease to be an Eligible Individual upon his or her Termination or upon ceasing to be employed in an eligible position. 

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Article IV.Contributions 

Section 4.1Time and Form of Elections.  In order to defer Compensation under the Plan for a given year, an Eligible Individual must make an irrevocable election under this Section 4.1 to defer up to one-hundred percent (100%) of the Participant’s Compensation.  All elections made under this Section 4.1 must be made by filing a Deferral Agreement with the Plan Administrator (or its designee).  The Deferral Agreement shall also specify the method of payment for benefits under the Plan and any Interim Distribution Date that shall apply with respect to amounts credited to the Participant’s Account for such Taxable Year.

Except as provided below, a Deferral Agreement must be completed and returned to the Plan Administrator prior to the first day of the calendar year in which services are performed for the Compensation deferred and shall be irrevocable except as otherwise provided hereunder. The last Deferral Agreement received on or before the election due date described below becomes irrevocable as of that date.

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

B.Former Participants With No Account Balance  If an Eligible Individual who is a former Participant has been paid all amounts deferred under the Plan and any Aggregated Plan and, on and before the date of the last payment, is not eligible to continue (or elect to continue) to participate in the Plan or any Aggregated Plan for periods after the last payment (other than through an election of a different time and form of payment with respect to the amounts paid), the Eligible Individual may be treated as initially eligible to participate in the Plan pursuant to Section 4.1(A) as of the first date following such last payment if the Eligible Individual again becomes eligible to participate in the Plan after that last payment.

C.Participants Ineligible for Two Years  If an Eligible Individual who is a Participant or former Participant ceases being eligible to participate in the Plan and any Aggregated Plan, regardless of whether all amounts deferred under such plans have been paid, and subsequently becomes eligible to participate in the Plan again, the Eligible Individual may be treated as being initially eligible to participate in the Plan pursuant to Section 4.1(A) if the Eligible Individual has not been eligible to participate in the Plan or an Aggregated Plan (other than through the accrual of earnings) at any time during the twenty-four (24) month period ending on the date the Eligible Individual again becomes eligible to participate in the Plan.

D.Performance-Based Compensation  A Deferral Agreement with respect to Incentive Compensation that qualified as performance-based compensation under Code Section 409A may be completed and returned to the Plan Sponsor no later than the date that is six 

5

 

months before the end of the performance period to which the Incentive Compensation relates, provided the Participant performs services continuously from the later of the beginning of the performance period or the date upon which the performance criteria are established through the date upon which the Participant makes an initial deferral election, and further provided that in no event may an election to defer Incentive Compensation be made with respect to any Compensation that has become readily ascertainable.

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

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

Section 4.2Subsequent Changes in Time and Form of Payment.  A Participant may elect to change the time or form of payment of amounts distributable upon a Separation from Service or elect to change the time of payment of amounts distributable upon an Interim Distribution Date, provided, however, that any such election shall be effective only if: 

A.the election does not accelerate the time or schedule of any payment within the meaning of Code § 409A;

B.the election does not take effect until at least twelve 12 months after the date on which the election is made;

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

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

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

Section 4.3Termination of Deferrals Due to Hardship Withdrawal. If an Eligible Individual receives a hardship distribution from any tax-qualified defined contribution plan sponsored by the Company or any of its Affiliates, then all deferrals under the Plan will automatically cease following the date of such hardship distribution. An otherwise Eligible Individual will not be eligible to elect to defer compensation to the Plan for six months following 

6

 

the date of such hardship distribution and any subsequent deferral election must comply with Section 4.1. 

Section 4.4Company Matching Contributions.  For each payroll period, the Company shall credit each Participant with matching contributions equal to 50% of the first 6% of Compensation deferred into the NQ Plan during that payroll period, but in no event shall the total annual matching contribution exceed 3% of such Participant’s total Compensation minus the maximum match available to such Participant under the Qualified Plan.  The matching contributions will be recalculated at least annually based on the total annual deferrals as a percentage of total Compensation. 

Section 4.5Company Discretionary Contributions.  The Company may make discretionary contribution credits for a Plan Year, which will be allocated among Participants who are employed on December 31 of the applicable Plan Year and who are Eligible Individuals on that date, based upon the ratio of (a) such Participant’s aggregate Compensation for such Plan Year, to (b) the aggregate Compensation for all such Participants for such Plan Year.  

Article V. Accounts 

Section 5.1Deferral Account. The Plan will establish and maintain Accounts (and subaccounts) on its books and records in the name of each Participant, which reflects the amount of actual deferrals, Company Matching Contribution and Company Discretionary Contribution credits pursuant to Article IV, plus any earnings and less any losses on such credits (the “Adjustment”) as described in Section 5.4 as an unfunded liability of the Plan to such Participant (a Participant’s actual deferrals plus or minus all Adjustments and less any amounts distributed to such Participant or his or her Beneficiary pursuant to Article VI are collectively referred to as the Participant’s “Account Balance”). Each Account will be designated by the name of the Participant for whom it is established. Participants are fully vested in their Account Balances at all times. 

Section 5.2Investment Options. Each Participant must elect the Investment Options in which the Participant’s Account will be deemed invested. A Participant’s Account may be allocated in one percent increments among one or more of the Investment Options.  If the Participant allocates less than 100% of his or her Account pursuant to this Section 5.2, any unallocated portion will be deemed to be allocated to the default investment option established under the Qualified Plan. 

Section 5.3Changing Investment Options. Each Participant will be able to reallocate the deemed investment of his Account and to elect the allocation of the deemed investment of future deferrals and Company contributions among the available Investment Options in one percent increments on terms and conditions established by the Plan Administrator and communicated to the Participants. 

Section 5.4Crediting a Participant Account. The Company will credit a Participant’s Account to reflect his or her deemed investment in the applicable Investment Options in respect 

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of the amounts deferred by such Participant as of, or as soon as practicable after, the date on which the Regular Salary, Incentive Award or other compensation would have otherwise been paid. The Company will debit a Participant’s Account to reflect the deemed liquidation of investments credited to his or her Account as of, or as soon as practicable after, the date of each distribution made pursuant to Article VI in respect of such Account. Each Account will be valued on each Valuation Date and reflects all Adjustments, additional deferrals and distributions since the previous Valuation Date. On each Valuation Date, the deemed investments reflected in a Participant’s Account will be credited and debited, if and as applicable, to reflect any reallocation of the Investment Options in which the Account Balance is deemed invested. The Plan Administrator must use the Participant’s Investment Option designations to calculate the Adjustment component of the Account Balance. The amount of the Adjustment equals the amount that the Participant’s Account Balance would have earned (or lost) for the period since the last Adjustment had the Account actually been invested in the investment vehicles represented by the Investment Options designated by the Participant for such period. For purposes of determining the number of units or other interests in Investment Options credited or debited to a Participant’s Account and/or the value of a Participant’s Account on any date, the Plan Administrator will value each Investment Option that is a mutual or collective fund based on the net asset value of such fund on such date.

Section 5.5Vesting. A Participant will always be fully vested in that portion of the Participant’s Account attributable to the Participant’s deferrals.  A Participant will vest in that portion of the Participant’s Account attributable to Company Matching Contributions and Company Discretionary Contributions in accordance with the following vesting schedule (based on years of service credited under the Qualified Plan):

		
	
Years of Service
	
Vested Percentage

	
Less than 2
	
0%

	
At least 2 but less than 3
	
20%

	
At least 3 but less than 4
	
40%

	
At least 4 but less than 5
	
60%

	
At least 5 but less than 6
	
80%

	
6 or more
	
100%

 

Notwithstanding the foregoing, the Participant shall become fully vested upon a Participant’s Separation from Service after attaining age 65, death or Disability or upon a Change in Control. 

Article VI. Distributions 

Section 6.1Distribution of Benefits. A Participant’s vested Account Balance will be paid (or commence) upon the first occurring Distributable Event.  All payments will be made in the form of a single lump sum payment, unless the Participant had timely elected on an applicable Deferral Election form to receive payments in the form of annual installments over a 

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period not to exceed 10 years.  Payments will commence no later than ninety (90) days after the occurrence of the Distributable Event.

 

Notwithstanding the foregoing, if the Distributable Event is the Participant’s Separation from Service and the Participant is a Specified Employee on the date of the Separation from Service, no payment will be made during the first six months following the date of such Separation from Service.  Any suspended payments will be paid in a single lump sum within ninety (90) days following the date that is six (6) months after the Separation from Service or, if earlier, within ninety (90) days following the Participant’s death. 

 

Notwithstanding the foregoing, if the Distributable Event is the Participant’s death or Disability or the occurrence of an Unforeseeable Emergency, all payments will be made in a single lump sum without regard to the participant’s elected form of payment and without regard to whether benefits are currently in pay status based on a prior Distributable Event. 

Section 6.2Distribution for Unforeseeable Emergency.  A Participant may request a distribution from his or her vested Account upon the occurrence of an Unforeseeable Emergency.  As a condition of receiving a distribution under this Section 6.2, the Participant must file a written application with the Plan Administrator specifying the nature of the Unforeseeable Emergency, the amount needed to address the Unforeseeable Emergency and supplying any other information the Plan Administrator, in its discretion, may need to ensure the conditions specified in this Section 6.2 are satisfied.  The Plan Administrator must, in its sole discretion, determine whether an Unforeseeable Emergency exists.  If the Plan Administrator determines that an Unforeseeable Emergency exists, the Plan may distribute an amount to the Participant that is not greater than the amount reasonably necessary in the Plan Administrator’s determination to satisfy the emergency need (which may include the amount necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated from the distribution) or, if less, the value of the Participant’s vested Account as of the Valuation Date immediately preceding the distribution date.  A distribution on account of an Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant’s assets, to the extent that the liquidation of such assets would not cause a severe financial hardship.  

Section 6.3Distribution Pursuant to a Domestic Relations Order.  The Plan may accelerate payment to an alternate payee of all or part of a Participant’s vested Account as necessary to comply with the terms of a domestic relations order, as defined in Code Section 414(p)(1)(B) and as permitted under Treasury Regulation Section 1.409A-3(j)(4)(ii).

Article VII. Plan Administration 

Section 7.1Plan Administrator.  The Plan will be administered by the Company’s Investment Review Committee, or its successor as designated by the Board (the “Plan Administrator”). 

9

 

Section 7.2Powers of The Plan Administrator. The Plan Administrator is charged with the operation and administration of the Plan in accordance with the Plan’s terms and has all the powers necessary to carry out the provisions of the Plan. Any and all determinations, actions or decisions of the Plan Administrator with respect to the administration of the Plan, including without limitation the determination of benefit eligibility and interpretation of Plan provisions, shall be final and conclusive and binding upon all parties having an interest in the Plan.  The Plan Administrator may delegate specific responsibilities, obligations, powers or duties as it deems appropriate. 

Section 7.3Indemnification. The Company shall indemnify and defend the Plan Administrator and all officers, employees or representatives of the Company to the greatest extent permitted by applicable law against any and all claims, losses, damages, expenses (including reasonable attorneys’ fees) and liability arising from any action or failure to act in connection with the administration of the Plan. 

Article VIII. Participants’ Rights 

Section 8.1Participant Rights in the Plan. Any liability of the Plan, the Company and any Participating Employer to any Participant with respect to any benefit will be based solely upon the contractual obligations created by the Plan and the Deferral Agreements. No such obligation is secured by any pledge or any encumbrance on any property of the Plan, Company or Participating Employer. The obligations under the Deferral Agreements and the Plan are unfunded and unsecured promises to pay for all purposes including federal income taxes and ERISA. No Participant or Beneficiary has any rights under the Plan other than those of a general unsecured creditor of the Company or Participating Employer. The Company or a Participating Employer may establish a rabbi trust for the benefit of Participants hereunder or otherwise segregate, identify or reserve assets for the purpose of paying benefits hereunder; provided, however, that assets segregated, identified or reserved for the purpose of paying benefits pursuant to the Plan remain general corporate assets subject to the claim of the Company’s, or applicable Participating Employer’s, creditors or in the case of assets held in a rabbi trust established by the Company or any Participating Employer, subject to the claims of general creditors to the extent provided in such trust. Neither the Plan nor the Deferral Agreements create a trust or fiduciary relationship between the Company and any Participant or Beneficiary. 

Section 8.2Restrictions Upon Assignments And Creditors’ Claims. No benefit payable under this Plan is subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge prior to actual receipt of the Plan benefits by the Participant or Beneficiary and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge prior to such receipt shall be void. No benefit payable under this Plan is subject to attachment, garnishment, execution, levy or other legal or equitable proceeding or process, and any attempt to do so shall be void. Neither the Company nor any Participating Employer is in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of any Participant or Beneficiary except as may be required by the tax withholding provisions of the Code or any state’s income tax laws. 

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Section 8.3Designation of Beneficiary. Each Participant may designate one or more individuals, trusts or other entity (the “Beneficiary”) to receive any benefits which may become or continue to be payable under the Plan upon or after such Participant’s death, by giving a designation in approved form to the Plan Administrator. Successive designations may be made and the last designation received by the Plan Administrator prior to the death of the Participant governs. If a Participant fails to designate a Beneficiary, if the Plan Administrator determines in its sole discretion that any such designation is illegal or ineffective for any reason, or if no designated Beneficiary survives the Participant, then the Participant’s benefits will be paid to the Participant’s estate.  If more than one designated Beneficiary survives the Participant, the Participant’s benefit shall be divided equally among all such Beneficiaries, unless otherwise provided in the applicable Beneficiary designation form.  

Article IX. The Company’s Reservation of Rights

Section 9.1Termination or Amendment of Plan. 

A.The Company retains the right, at any time and in its sole discretion, to amend or terminate the Plan, in whole or in part. Any amendment of the Plan must be approved by the Board or a committee thereof, must be in writing and must be executed by an officer of Company. Except as provided in Section 9.1(B) and (C), no amendment of the Plan may impair or curtail the Company’s or a Participating Employer’s contractual obligations arising from Deferral Agreements previously entered into for benefits accrued prior to such amendment. 

B.In the event of Plan termination, payment of vested Accounts will be made at the time and in the manner set forth in Article VI, unless the plan termination meets the requirements of Treasury Regulation 1.409A-3(j)(4)(ix). In the event that the Plan is terminated in connection with a change in control, as described in Treasury Regulation 1.409A-3(j)(4)(ix)(B), all vested Account Balances will be distributed in a single lump sum payment as soon as practicable after the plan termination is adopted. In the event that the Plan is terminated without replacement, as described in Treasury Regulation 1.409A-3(j)(4)(ix)(C), any vested Account Balances that have not been distributed pursuant to Article VI by the first anniversary of the Plan termination date will be distributed in a single lump sum payment not later than the second anniversary of such date. 

C.In the event of a change in law that would result in the Plan being deemed to be a funded plan for tax purposes or for purposes of ERISA, the Company retains the right to amend the Plan to the extent necessary to preserve the status of the Plan as an unfunded plan. 

Section 9.2Accelerated Distribution upon Loss of Tax Deferral. In the event that this Plan fails to satisfy the requirements of Code Section 409A and as a consequence Participant becomes subject to federal income tax on all or any portion of his or her vested Account Balance for which such Participant is not then scheduled to receive a distribution under the Plan, the Plan Administrator may accelerate the payment of that portion of the Participant’s 

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vested Account Balance which the Plan Administrator reasonably determines to be subject to such taxation in a lump sum payable on a date determined by the Plan Administrator. 

Article X. Claims for Benefits 

Section 10.1Claims Review. Any Participant, former Participant or Beneficiary who wishes to request a review of a claim for benefits or who wishes an explanation of a benefit or its denial may direct to the Plan Administrator a written request for such review within one hundred twenty (120) days of the denial. The Plan Administrator shall respond to the request by issuing a notice to the claimant as soon as possible, but in no event later than ninety (90) days (one hundred eighty (180) days in special cases) from the date of receipt of the request. This notice furnished by the Plan Administrator shall be written in a manner calculated to be understood by the claimant and shall include the following: 

A.The specific reason or reasons for any denial of benefits; 

B.The specific Plan provisions on which any denial is based; 

C.A description of any further material or information which is necessary for the claimant to perfect his or her claim and an explanation of why the material or information is needed; and 

D.An explanation of the Plan’s claim appeals procedure. 

If the Plan Administrator denies the claim or fails to respond to the claimant’s written request for a review within one hundred eighty (180) days of its receipt, the claimant shall be entitled to proceed to the claim appeals procedure described in Section 10.2. If the claimant does not respond to the notice, posted by first-class mail to the address of record of the claimant, within sixty (60) days from receipt of the notice, the claimant shall be considered satisfied in all respects. 

Section 10.2Appeals Procedure. In the event that the claimant wishes to appeal the claim review denial, the claimant or his or her duly authorized representative may submit to the Plan Administrator, within sixty (60) days of his or her receipt of the notice, a written notification of appeal of the claim denial. The notification of appeal of the claim denial shall permit the claimant or his or her duly authorized representative to utilize the following claim appeals procedures: 

A.To review pertinent documents; and 

B.To submit issues and comments in writing to which the Plan Administrator shall respond. 

The Plan Administrator shall furnish a final written decision on formal review not later than sixty (60) days after receipt of the notification of appeal, unless special circumstances require an extension of the time for processing the appeal. In no event, however, shall the Plan 

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Administrator respond later than one hundred twenty (120) days after a request for an appeal. The decision on the appeal shall be written in a manner calculated to be understood by the claimant, shall include specific reasons for the decision, and shall contain specific references to the pertinent Plan provisions on which the decision is based. 

Section 10.3Discretion Regarding Claims and Appeals. The Plan Administrator, or any individual or committee to whom responsibility for claims and appeals has been delegated, shall have complete discretion in deciding such claims and appeals and any such decision shall be final, conclusive and binding upon the claimant. 

Article XI. Miscellaneous Provisions 

Section 11.1Effect on Other Benefits. Except as otherwise required by applicable law, the salary deferred by a Participant will be included in the Participant’s annual compensation for purposes of calculating the Participant’s incentive bonuses, insurance and other employee benefits. Distributions made under the Plan will be excluded from compensation in years paid for purposes of calculating a Participant’s incentive bonuses, insurance and other employee benefits. 

Section 11.2Tax Withholding. The Company or Participating Employer will withhold from any payment made by it under the Plan such amount or amounts as may be required to be withheld by applicable federal, state or local laws. 

Section 11.3Participant’s Incapacity. In the event benefits become payable under the Plan after a Participant becomes incapacitated, such benefits will be paid to the Participant’s legal guardian or legal representative. 

Section 11.4Independence of Plan. Except as otherwise expressly provided, the Plan is independent of, and in addition to, any other employment agreement or benefit plan or rights that may exist from time to time between a Participant and the Company or any Participating Employer. The Plan is not deemed to constitute a contract of employment between a Participant and the Company or any Participating Employer, and no provision of the Plan restricts the right of the Company or any Participating Employer at any time to discharge a Participant, with or without assigning a reason therefor, or restricts the right of a Participant to terminate his or her employment with the Company or a Participating Employer. 

Section 11.5Responsibility for Legal Effect. Neither the Plan Administrator, the Company nor any Participating Employer makes any representations or warranties, express or implied, or assumes any responsibility concerning the legal, tax, or other implications or effects of the Plan. 

Section 11.6Successors, Acquisitions, Mergers, Consolidations. The terms and conditions of the Plan and each Deferral Agreement inures to the benefit of and bind the Company, each Participating Employer and the Participants, and their successors, assigns, and personal representatives. 

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Section 11.7Controlling Law. The Plan shall be governed by and construed in accordance with the internal laws, and not the law of conflicts, of the state of Ohio to the extent not preempted by laws of the United States of America. 

Section 11.8Captions. The captions of the various sections of the Plan are solely for convenience and do not control or affect the meaning or construction of the Plan. 

Section 11.9Administrative Fees and Expenses.  All reasonable costs, charges and expenses incurred by the Plan Administrator or any trustee in connection with the administration of the Plan or any trust shall be paid by the Company. If not so paid, such costs, charges and expenses shall be charged to the trust, if any, established in connection with the Plan. Notwithstanding the foregoing, no compensation, other than reimbursement for expenses, shall be paid to a Plan Administrator who is an employee of the Company.

 

 

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