Document:

exv10w4

 

EXHIBIT 10.4

HERBALIFE LTD.

2005 STOCK INCENTIVE PLAN

STOCK APPRECIATION RIGHT AWARD AGREEMENT

     STOCK
APPRECIATION RIGHT AGREEMENT (this “Agreement”) dated as of April 4, 2008 (the
“Grant Date”) between HERBALIFE LTD., an entity organized under the laws of the Cayman
Islands (the “Company”), and Gregory L. Probert (“Participant”).

     WHEREAS, pursuant to the Herbalife Ltd. 2005 Stock Incentive Plan (the “Plan”), the
Committee designated under the Plan (or an officer of the Company to who the authority to grant
Awards has been delegated), desires to grant to Participant an award of stock appreciation rights;
and

     WHEREAS, Participant desires to accept such award subject to the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, the Company and Participant, intending to be legally bound, hereby agree as
follows:

1. Grant.

     (a) The Company hereby grants to the Participant an Award of 151,580 Stock Appreciation Rights
(the “Award”) in accordance with Section 8 of the Plan and subject to the terms and
conditions set forth herein and in the Plan (each as amended from time to time). Each Stock
Appreciation Right represents the right to receive, upon exercise of the Stock Appreciation Right
pursuant to this Agreement, from the Company, a payment, paid in Common Shares, par value $.002 per
share, of the Company (the “Common Shares”), equal to (i) the excess of the Fair Market
Value, on the date of exercise, of one Common Share (as adjusted from time to time pursuant to
Section 12 of the Plan) over the Base Price (as defined below) of the Stock Appreciation Right,
divided by (ii) the Fair Market Value, on the date of exercise, of one Common Share, subject to
terms and conditions set forth herein and in the Plan (each as amended from time to time).

     (b) The “Base Price” for the Stock Appreciation Right shall be $50.00 per share
(subject to adjustment as set forth in Section 12 of the Plan).

     (c) Except as otherwise defined herein, capitalized terms used herein shall have the meanings
set forth in the Plan.

2. Time for Exercise.

     (a) Subject to Section 2(c) and Participant’s continued employment with the Company and/or its
Subsidiaries (or as otherwise provided in Section 2(b)), the Award shall become vested and
exercisable on the fourth anniversary of the Grant Date (the period between the Grant Date and the
fourth anniversary of the Grant Date the “Performance Period”) provided
that during the Performance Period the Company’s Common Shares closed at a price for thirty
(30) consecutive trading days that is equal to or greater than $80.43 per share (the “Price
Performance Standard”).

 

 

     (b) Notwithstanding anything herein or in the Plan to the contrary,

     (i) upon the occurrence of a Change of Control in which either (A) the Price
Performance Standard or the Alternate Price Performance Standard (as defined below) has been
satisfied prior to the date of such Change of Control or (B) the price per Common Share
received by the Company’s shareholders in connection with such Change of Control transaction
(as determined in good faith by the Committee as in existence immediately prior to the
Change of Control) is equal to or greater than the Alternate Price Performance Standard (as
defined below), the vesting of the Award shall be accelerated such that 100% of the then
unvested portion of the Award shall become vested and exercisable as of the date of the
Change of Control; and

     (ii) in the event that Participant’s employment with the Company and/or its
Subsidiaries (or their respective successors) is terminated by the Company without “Cause”
or by Participant for “Good Reason” (each as defined below), or in the event of
Participant’s death or disability (as such term is defined in Section 22(e) of the Code) and
either (A) the Price Performance Standard has been satisfied as of the date of such event or
(B) during the period between the Grant Date and the date of such event, the Company’s
Common Shares closed at a price for thirty (30) consecutive trading days that is equal to or
greater than $60.82 per share (the “Alternate Price Performance Standard”), the
Award shall become immediately and fully vested and exercisable.

     (c) Participant acknowledges and agrees that he shall be deemed to be subject to Section 304
of the Sarbanes-Oxley Act of 2002.

3. Expiration.

     (a) The Award shall expire on the seventh (7th) anniversary of the Grant Date;
provided, however, that the Award may earlier terminate as provided
in this Paragraph 3 and/or Paragraph 6 (b).

     (b) Subject to Section 3(c) hereof, in the event that the Price Performance Standard is not
achieved during the Performance Period, the Award shall expire on the fourth (4th)
anniversary of the Grant Date.

     (c) Upon termination of Participant’s employment with the Company, that portion of the Award
that is vested and exercisable, and any portion of the Award that becomes vested and exercisable in
accordance with Paragraph 2(b), will terminate in accordance with the following:

     (i) if Participant’s employment with the Company is terminated for Cause, the vested
and exercisable portion of the Award will terminate on the date of such termination;

2

 

     (ii) if Participant’s employment with the Company is terminated by reason of
Participant’s resignation without Good Reason, the vested and exercisable portion of the
Award will terminate on the date that is thirty days immediately following the date of such
termination;

     (iii) if Participant’s employment with the Company is terminated by reason of
Participant’s death or disability (as such term is defined in Section 22(e) of the Code),
the vested and exercisable portion of the Award will terminate on the date that is one year
immediately following the date of such termination; and

     (iv) if Participant’s employment with the Company is terminated by the Company without
Cause or by reason of Participant’s resignation for Good Reason, the vested and exercisable
portion of the Award will terminate on the date that is two years immediately following the
date of such termination, unless the Award became vested and exercisable solely due to the
achievement of the Alternate Price Performance Standard (and not the Price Performance
Standard), in which event the Award will terminate on the date that is 90 days immediately
following the date of such termination.

     (d) Notwithstanding anything herein to the contrary, if Participant’s employment with the
Company is terminated for any reason other than a termination by the Company for Cause, and at any
time during the permitted exercise period following the effective date of such termination of
employment Participant is subject to a “trading blackout” or “quiet period” with respect to the
Common Shares or if the Company determines, upon the advice of legal counsel, that Participant may
not to trade in the Common Shares due to Participant’s possession of material non-public
information, the Company shall extend the period during which Participant may exercise his then
remaining vested portion of this Award until the later of (i) the expiration date of the Award
determined pursuant to Paragraph 3(c) and (ii) the date that is thirty days following the first
date on which Participant is no longer subject to such restrictions on trading with respect to the
Common Shares.

     (e) For purposes hereof, the terms “Cause” and “Good Reason” shall have the
meaning set forth in the employment agreement by and between the Company and Participant dated as
of October 10, 2006, as amended.

4. Method of Exercise. The Award may be exercised by delivery to the Company (attention:
Secretary) of a notice of exercise in the form specified by the Company specifying the number of
shares with respect to which the Award is being exercised.

5. Fractional Shares. No fractional shares may be purchased upon any exercise.

6. Adjustments of Shares and Awards.

     (a) Subject to Section 12(a) of the Plan, in the event of any change in the outstanding Shares
by reason of an acquisition, spin-off or reclassification, recapitalization or merger, combination
or exchange of Common Shares or other corporate exchange, Change of Control or similar event, the
Committee shall adjust appropriately the number or kind of shares or securities subject to the
Award and Base Prices related thereto and make such other revisions to the Award as it deems are
equitably required. Any adjustments made pursuant to this Section 6 shall be
implemented in accordance with Section 409A of the Internal Revenue Code of 1986, as amended.

3

 

     (b) Notwithstanding anything in the Plan to the contrary, with respect to any merger or
consolidation of the Company into another corporation, the sale or exchange of all or substantially
all of the assets of the Company, a Change of Control or the recapitalization, reclassification,
liquidation or dissolution of the Company or any other similar fundamental transaction involving
the Company or any of its Subsidiaries (any of the foregoing, a “Qualifying Event”), the
Committee shall provide either: (i) that the Award cannot be exercised after such Qualifying Event,
provided that, subject to the satisfaction of the provisions of Section 2(b)(i) hereof, the Award
shall be immediately and fully vested immediately prior to the consummation of any such Qualifying
Event, and provided further that nothing in this Paragraph 6(b) shall prohibit Participant from
exercising any then exercisable portion of the Award (including any portion thereof which will
become exercisable by virtue of such Qualifying Event and/or the provisions of Section 2(b)(i))
prior to, or simultaneously with, the occurrence of such Qualifying Event and that, upon the
occurrence of such Qualifying Event, the Award will terminate and be of no further force or effect
and no longer be outstanding; (ii) that the Award will remain outstanding after such Qualifying
Event, and from and after the consummation of such Qualifying Event, subject to the satisfaction of
the provisions of Section 2(a) or 2(b) hereof, the Award will be exercisable for the kind and
amount of securities and/or other property receivable as a result of such Qualifying Event by the
holder of a number of Common Shares for which the Award could have been exercised immediately prior
to such Qualifying Event; or (iii) the Award will be cancelled in its entirety and repurchased by
the Company at a specific aggregate price equal to the excess, if any, of the Fair Market Value of
the relevant underlying Common Shares less the applicable Base Price multiplied by then exercisable
portion of the Award (including any portion thereof which will become exercisable by virtue of such
Qualifying Event and/or the provisions of Section 2(b)(i)) and that, upon the occurrence of such
Qualifying Event, the Award will terminate and be of no further force or effect and no longer be
outstanding. In the event of any conflict or inconsistency between the terms and conditions of
this Paragraph 6(b) and the terms and conditions of Sections 12(b) and/or 13 of the Plan, the terms
and condition of this Paragraph 6(b) shall control. The Committee’s election pursuant to this
Paragraph 6(b) will be applied in the same manner to all other holders of the Company’s stock
options and stock appreciation rights whose award agreements contain a similar provision. The
Committee may only elect the alternatives specified in clauses (i) or (iii) of the first sentence
of this Paragraph 6(b) in connection with any Qualifying Event described in clauses (iii)(A) or
(iii)(C) of the definition of “Change of Control” (as such term is defined in the Plan).

7. Compliance With Legal Requirements.

     (a) The Award shall not be exercisable and no Common Shares shall be issued or transferred
pursuant to this Agreement or the Plan unless and until the Tax Withholding Obligation (as defined
below), and all legal requirements applicable to such issuance or transfer have, in the opinion of
counsel to the Company, been satisfied. Such legal requirements may include, but are not limited
to, (i) registering or qualifying such Common Shares under any state or federal law or under the
rules of any stock exchange or trading system, (ii) satisfying any applicable law or rule relating
to the transfer of unregistered securities or demonstrating the availability of an exemption from
applicable laws, (iii) placing a restricted legend on the
Common Shares issued pursuant to the exercise of the Award, or (iv) obtaining the consent or
approval of any governmental regulatory body.

4

 

     (b) Participant understands that the Company is under no obligation to register for resale the
Common Shares issued upon exercise of the Award. The Company may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and manner of any exercise
of the Award and/or any resales by Participant or other subsequent transfers by Participant of any
Common Shares issued as a result of the exercise of the Award, including without limitation
(i) restrictions under an insider trading policy, (ii) restrictions that may be necessary in the
absence of an effective registration statement under the Securities Act of 1933, as amended,
covering the Award and/or the Common Shares underlying the Award and (iii) restrictions as to the
use of a specified brokerage firm or other agent for exercising the Award and/or for such resales
or other transfers. The sale of the shares underlying the Award must also comply with other
applicable laws and regulations governing the sale of such shares.

8. Shareholder Rights. Participant shall not be deemed a shareholder of the Company with
respect to any of the Common Shares subject to the Award, except to the extent that such shares
shall have been purchased and transferred to Participant.

9. Withholding Taxes.

     (a) Participant is liable and responsible for all taxes owed in connection with the Award,
regardless of any action the Company takes with respect to any tax withholding obligations that
arise in connection with the Award. The Company does not make any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant, vesting or settlement
of the Award or the subsequent sale of Common Shares issuable pursuant to the Award. The Company
does not commit and is under no obligation to structure the Award to reduce or eliminate
Participant’s tax liability.

     (b) Prior to any event in connection with the Award (e.g., vesting or payment in respect of
the Award) that the Company determines may result in any domestic or foreign tax withholding
obligation, whether national, federal, state or local, including any social tax obligation (the
“Tax Withholding Obligation”), Participant is required to arrange for the satisfaction of
the amount of such Tax Withholding Obligation in a manner acceptable to the Company.

     (c) Participant shall notify the Company of Participant’s election to pay Participant’s Tax
Withholding Obligation by wire transfer, cashier’s check or by authorizing the Company to withhold
a portion of the Common Shares that would otherwise be issued to Participant in connection with the
Award or by tendering Common Shares (either actually or by attestation) previously acquired, or
other means permitted by the Company. In such case, Participant shall satisfy his or her tax
withholding obligation by paying to the Company on such date as it shall specify an amount that the
Company determines is sufficient to satisfy the expected Tax Withholding Obligation by (i) wire
transfer to such account as the Company may direct, (ii) delivery of a cashier’s check payable to
the Company, Attn: General Counsel, at the Company’s principal executive offices, or such other
address as the Company may from time to time direct, (iii) authorizing the Company to withhold a
portion of the Common Shares that would otherwise

5

 

be issued to Participant in connection with the Award or by tendering Common Shares (either
actually or by attestation) previously acquired, or (iv) such other means as the Company may
establish or permit. Participant agrees and acknowledges that prior to the date the Tax
Withholding Obligation arises, the Company will be required to estimate the amount of the Tax
Withholding Obligation and accordingly may require the amount paid to the Company under this
Paragraph 9(c) to be more than the minimum amount that may actually be due and that, if Participant
has not delivered or otherwise provided payment of a sufficient amount to the Company to satisfy
the Tax Withholding Obligation (regardless of whether as a result of the Company underestimating
the required payment or Participant failing to timely make the required payment), the additional
Tax Withholding Obligation amounts shall be satisfied such other means as the Committee deems
appropriate.

10. Assignment or Transfer Prohibited. The Award may not be assigned or transferred
otherwise than by will or by the laws of descent and distribution, and may be exercised during the
life of Participant only by Participant or Participant’s guardian or legal representative. Neither
the Award nor any right hereunder shall be subject to attachment, execution or other similar
process. In the event of any attempt by Participant to alienate, assign, pledge, hypothecate or
otherwise dispose of the Award or any right hereunder, except as provided for herein, or in the
event of the levy or any attachment, execution or similar process upon the rights or interests
hereby conferred, the Company may terminate the Award by notice to Participant, and the Award shall
thereupon become null and void.

11. Committee Authority. Any question concerning the interpretation of this Agreement or
the Plan, any adjustments required to be made under this Agreement or the Plan, and any controversy
that may arise under this Agreement or the Plan shall be determined by the Committee in its sole
and absolute discretion. All decisions by the Committee shall be final and binding.

12. Application of the Plan. The terms of this Agreement are governed by the terms of the
Plan, as it exists on the date of hereof and as the Plan is amended from time to time. In the
event of any conflict between the provisions of this Agreement and the provisions of the Plan, the
terms of the Plan shall control, except as expressly stated otherwise herein. As used herein, the
term “Section” generally refers to provisions within the Plan, and the term “Paragraph” refers to
provisions of this Agreement.

13. No Right to Continued Employment. Nothing in the Plan, in this Agreement or any other
instrument executed pursuant thereto or hereto shall confer upon Participant any right to continued
employment with the Company or any of its subsidiaries or affiliates.

14. Further Assurances. Each party hereto shall cooperate with each other party, shall do
and perform or cause to be done and performed all further acts and things, and shall execute and
deliver all other agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the purposes of this
Agreement and the Plan.

15. Entire Agreement. This Agreement and the Plan together set forth the entire agreement
and understanding between the parties as to the subject matter hereof and supersede all prior oral
and written and all contemporaneous or subsequent oral discussions, agreements and understandings
of any kind or nature.

6

 

16. Successors and Assigns. The provisions of this Agreement will inure to the benefit of,
and be binding on, the Company and its successors and assigns and Participant and Participant’s
legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person will have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	HERBALIFE LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 /s/
Gregory L. Probert

	 	 	 	By:	 	 /s/ Brett R. Chapman	 	 
	 

	 	 	 	 	 	 	 	 
	Gregory L. Probert

	 	 	 	 	 	Name: Brett R. Chapman	 	 
	 

	 	 	 	 	 	Title: General Counsel	 	 

7exv10w4

 

Exhibit 10.4

CHS Inc.

Deferred Compensation Plan

Master Plan Document
 

SECOND AMENDMENT

OF

CHS INC.

DEFERRED COMPENSATION PLAN

     WHEREAS, CHS Inc. (the “Company”) has heretofore established and maintains a nonqualified
deferred compensation plan which is embodied in a document effective December 30, 2004 and
entitled “CHS Inc. Deferred Compensation Plan, Master Plan Document, as amended by one amendment
(collectively, the “Plan document”);

     WHEREAS, the Company has reserved to itself the power to make further amendments of the Plan
document;

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

1. CHANGE IN CONTROL BENEFIT. Effective July 1, 2006, the Section 5.1 of the Plan
document is amended to read in full as follows:

	5.1.	 	Change in Control Benefit. The provisions of this Change in Control Benefit
Article, which are hereby implemented effective July 1, 2006, shall be subject to such
conditions and limitations as the Committee may prescribe from time to time for
administrative convenience and to comply with the provisions of Code Section 409A. Each
Participant, in connection the implementation of this provision (or for any future
Participant, in connection with his or her commencement of participation in the Plan), shall
irrevocably elect on an Election Form whether to (i) receive a Change in Control Benefit upon
the occurrence of a Change in Control, which shall be equal to the Participant’s vested
Account Balance, calculated as of the close of business on or around the Participant’s
Benefit Distribution Date, as determined by the Committee in its sole discretion, or (ii) to
have his or her Account Balance remain in the Plan upon the occurrence of a Change in Control
and to have his or her Account Balance remain subject to the terms and conditions of the
Plan. If a Participant does not make any election with respect to the payment of the Change
in Control Benefit, then such Participant’s Account Balance shall remain in the Plan upon a
Change in Control and shall be subject to the terms and conditions of the Plan.

2. APPENDIX B — SUPPLEMENTAL SAVINGS PLAN ACCOUNTS. Effective July 1, 2006, the Plan document is
amended by the addition of the Appendix B attached hereto.

3. APPENDIX C — SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ACCOUNTS. Effective July 1, 2006, the Plan
document is amended by the addition of the Appendix C attached hereto.

 

 

CHS Inc.

Deferred Compensation Plan

Master Plan Document
 

CHS
INC.

DEFERRED COMPENSATION PLAN

APPENDIX B

Supplemental Savings Plan Accounts

	 	 	Except where expressly defined in this Appendix, the capitalized terms used herein shall
have the same meanings as the same terms in the Plan document.
	 
	1.1	 	History. Since January 1, 1999, the Company has sponsored the CHS Inc. Supplemental
Savings Plan (the “SSP”) for the purpose of allowing a select group of management and highly
compensated employees to voluntarily defer compensation. The Company has determined to
discontinue voluntary deferrals under the SSP effective July 1, 2006.
	 
	1.2	 	Conversion of Account Balances. Effective July 1, 2006, voluntary deferrals
previously deferred pursuant to the terms of the SSP shall become part of the Participant’s
Deferral Account balance under this Plan. Following the conversion, the Participant’s SSP
Account shall no longer be credited with interest income under the terms of the SSP, but shall
instead be credited or debited with earnings, gains or losses under one or more Measurement
Funds elected by the Participant, in accordance with Section 3.9 of the Plan. Notwithstanding
the foregoing, the following special rules shall apply:

	 	(a)	 	Amounts deferred under the SSP pursuant to an election providing one or more
scheduled payments, all of which are to be paid in full no later than December 31,
2008, shall not become part of the Plan, but shall instead continue to be governed by
the terms of the SSP until such amounts, and any earnings thereon, are paid in full.
	 
	 	(b)	 	Amounts deferred under the SSP which are in pay status as of July 1, 2006
but which are not scheduled to be paid in full on or before December 31, 2008, shall
become part of the Plan but shall be paid in accordance with the schedule elected
under the SSP. Unpaid amounts shall be credited or debited with earnings, gains or
losses in accordance with Section 3.9 of the Plan.
	 
	 	(b)	 	Amounts deferred under the SSP by any SSP Participant who is an employee of
Cofina Financial, LLC as of July 1, 2006 shall not become part of this Plan, but
rather, shall become part of the Participant’s Deferral Account balance under the
Cofina Financial, LLC Deferred Compensation Plan.

	1.3	 	Payment Elections. With respect to each Participant in the SSP who first becomes a
Participant in this Plan when his or her SSP Account becomes part of the Deferral Account
balance under this Plan, on or prior to July 1, 2006, such Participant must complete a
Retirement Benefit election in accordance with Article 6 and a Disability Benefit election
in accordance with Article 8 (other than with respect to benefits in pay status under
Section 1.2(b) above). Such Participant may also (but need not) irrevocably elect to receive
a single lump sum Change in

B-1

 

CHS Inc.

Deferred Compensation Plan

Master Plan Document
 

	 	 	Control Benefit upon the occurrence of a Change in Control in accordance with Article 5 of
the Plan. With respect to each Participant in the SSP who is a Participant in this Plan when
his or her SSP benefits become part of the Deferral Account balance under this Plan, such
Participant’s prior payment elections with respect to the Participant’s Deferral Account
shall apply to the SSP benefits.

 

 

CHS Inc.

Deferred Compensation Plan

Master Plan Document
 

CHS INC.

DEFERRED COMPENSATION PLAN

APPENDIX C

Supplemental Executive Retirement Plan Savings Accounts

	 	 	Except where expressly defined in this Appendix, the capitalized terms used herein shall
have the same meanings as the same terms in the Plan document.
	 
	1.1	 	History. Since January 1, 1999, the Company has sponsored the CHS Inc. Supplemental
Executive Retirement Plan (the “SERP”) for the purpose of providing deferred compensation to
a select group of management and highly compensated employees. The Company has determined,
effective July 1, 2006, to discontinue making restorative matching and non-elective credits
to the Savings Plan Accounts of Participants under Section 4.3 of the SERP.
	 
	1.2	 	Conversion of Account Balances. Effective July 1, 2006, a Participant’s Savings Plan
Account under the SERP, if any, shall become part of the Participant’s Company Contribution
Account balance under this Plan. Following the conversion, the Participant’s SERP Savings Plan
Account shall no longer be credited with interest income under the terms of the SERP, but
shall instead be credited or debited with earnings, gains or losses under one or more
Measurement Funds elected by the Participant, in accordance with Section 3.9 of the Plan.
	 
	1.3	 	Payment Elections. With respect to each Participant in the SERP who first becomes a
Participant in this Plan when his or her SERP Savings Plan Account becomes part of the
Company Contribution Account balance under this Plan, on or prior to July 1, 2006, such
Participant must complete a Retirement Benefit election in accordance with Article 6, a
Disability Benefit election in accordance with Article 8. Such Participant may also (but need
not) irrevocably elect to receive a single lump sum Change in Control Benefit upon the
occurrence of a Change in Control in accordance with Article 5 of the Plan. With respect to
each Participant in the SERP who is a Participant in this Plan when his or her SERP Savings
Plan Account becomes part of the Company Contribution Account balance under this Plan, such
Participant’s prior payment elections with respect to the Participant’s Company Contribution
Account shall apply to the SERP Savings Plan Accounts.
	 
	1.4	 	Company Contribution Amount. In addition to such Company Contribution Amounts as may
be made under Section 3.5 of the Plan, for each Plan Year, the Company Contribution Account
of each Participant who qualifies as an Active Participant under the SERP shall be credited
with a Company Contribution Amount determined under this Section 1.4. Such Company
Contribution Amount for any Plan Year shall be the difference, if any, between:

	 	(a)	 	the amount of the Active Participant’s “discretionary contribution” which
would have been credited under the CHS Inc. Savings Plan for the Plan Year if: (i) the
limitations on benefits imposed by Sections 401(a)(17) and 415 of the Code were
disregarded; and

C-1

 

CHS Inc.

Deferred Compensation Plan

Master Plan Document
 

	 	 	 	(ii) compensation deferred upon the election of the Participant under this Plan were
taken into account as includible compensation under the Savings Plan (except that
amounts deferred or paid under any mandatory deferral portion of any long-term
incentive compensation program maintained by the Company or any Employer shall be
disregarded for this purpose); and
	 
	 	(b)	 	the actual amount of discretionary contribution that is allocated on
behalf of such Participant under the provisions of the Savings Plan for such Plan Year

	1.5	 	Company Restoration Matching Amounts. In addition to such Company Restoration
Matching Amounts as may be made under Section 3.6 of the Plan, for each Plan Year, the
Company Restoration Matching Account of each Participant who qualifies as an Active
Participant under the SERP shall be credited with a Company Restoration Matching Amount in
determined under this Section 1.5. Such Company Restoration Matching Amount for any Plan Year
shall be the difference, if any, between:

	 	(a)	 	the amount of the Active Participant’s “matching contribution” which would have
been credited under the CHS Inc. Savings Plan for the Plan Year if: (i) the limitations
on benefits imposed by Sections 401 (a)(17), 402(g) and 415 of the Code were
disregarded; (ii) compensation deferred upon the election of the Participant under this
Plan were taken into account as includible compensation under the Savings Plan (except
that amounts deferred or paid under any mandatory deferral portion of any long-term
incentive compensation program maintained by the Company or any Employer shall be
disregarded for this purpose); and (iii) for such Plan Year, the Participant made a
“before tax contribution” (as defined in the Savings Plan) of the lesser of: (A) six
percent (6%) of the Participant’s includible compensation as revised under (i) and (ii)
above, or (B) the maximum before-tax contribution, stated as a percentage of such
compensation, which is permitted under the Savings Plan to be made by such Participant
for that Plan Year, and
	 
	 	(b)	 	the actual amount of matching contribution that is allocated on behalf of
such Participant under the provisions of the Savings Plan for such Plan Year (not in
excess of the maximum dollar limit in effect for such Plan Year under Section 402(g)
of the Code).

     IN WITNESS WHEREOF, CHS Inc. has caused its name to be hereunto subscribed on this
30th day of May, 2006.

	 	 	 	 	 
	 	CHS INC.

 	 
	 	By  	/s/ John D Johnson
 	 
	 	 	Its 	President & CEO 	 
	 	 	 	 
	 

C-2

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