Document:

Document

Exhibit 4.2

DESCRIPTION OF CAPITAL STOCK 
        The following description of the capital stock of Mission Produce, Inc.  (the “Company,” “we,” “us,” and “our”)  is not complete and may not contain all the information you should consider before investing in our capital stock. This description is summarized from, and qualified in its entirety by reference to, our amended and restated certificate of incorporation, which has been publicly filed with the Securities and Exchange Commission (“SEC”). 
Our authorized capital stock consists of:
•1,000,000,000 shares of common stock, par value $0.001 per share; and 
•100,000,000 shares of preferred stock, par value $0.001 par value. 

Common Stock

Voting Rights

Holders of our common stock are entitled to one vote per share of common stock. Holders of shares of common stock vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders. We have not provided for cumulative voting for the election of directors in our certificate of incorporation.

Economic Rights

Dividends. Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and only then at the times and in the amounts that our board of directors may determine. Any dividend or distributions paid or payable to the holders of shares of common stock shall be paid pro rata, on an equal priority, pari passu basis.

Right to Receive Liquidation Distributions. Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our shareholders shall be distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Preferred Stock

Under the terms of our certificate of incorporation, our board of directors is authorized to direct us to issue shares of preferred stock in one or more series without shareholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from seeking to acquire, a majority of our outstanding voting stock. There are currently no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock

Anti-takeover Provisions

Classified Board of Directors and Removal of Directors

Our certificate of incorporation provides that our board of directors be comprised of three classes of directors, with each class serving three-year staggered terms. The classification of directors has the effect of making it more difficult for shareholders to change the composition of our board.

Our certificate of incorporation and our bylaws provide that a director may be removed only for cause. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.

Shareholder Action; Special Meeting of Shareholders

Our bylaws provide that any action required or permitted to be taken by our shareholders must be effected at a duly called annual or special meeting of such shareholders and may not be effected by any consent in writing by such shareholders. Our certificate of incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of our shareholders can only be called by our board of directors.

Authorized But Unissued Shares

The authorized but unissued shares of our common stock and preferred stock are available for future issuance without shareholder approval, subject to any limitations imposed by the listing standards of the Nasdaq Global Select Market. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

The foregoing provisions of our certificate of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority shareholders.

In addition, we are subject to Section 203 of the Delaware General Corporation Law ( “DGCL”). Subject to exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested shareholder” for three years following the date that the person became an interested shareholder, unless the interested shareholder attained such status with the approval of our board of directors or unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested shareholder” and the sale of more than 10% of our assets. In general, an “interested shareholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.

Registration Rights

In connection with our initial public offering (the “IPO”) in October 2020, we entered into an amended and restated stockholders’ agreement (the “Stockholders’ Agreement”) with the holders of our common stock prior to the IPO (the “Pre-IPO Shares”) granting such parties specified rights to require us to register all or a portion of their Pre-IPO Shares under the Securities Act of 1933, as amended (the “Securities Act”).  Pursuant to the Stockholders’ Agreement, the holders of at least a majority of Pre-IPO Shares can request in writing that we register the offer and sale of all or a portion of their Pre-IPO Shares on a maximum of one effective registration statement, provided that the anticipated aggregate price to the public is at least $50.0 million.

In addition, if we determine to register any of our securities under the Securities Act (subject to certain exceptions), either for our own account or for the account of other security holders, the holders of Pre-IPO Shares will be entitled to certain “piggyback” registration rights allowing the holders to include their Pre-IPO Shares in one such registration, subject to certain marketing and other limitations. As a result, if we propose to file a registration statement under the Securities Act, other than with respect to a registration related to employee benefit plans, convertible debt securities, or certain other transactions, the holders of these Pre-IPO Shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their Pre-IPO Shares in the registration. In an underwritten offering, the managing underwriter, if any, has the right to limit the number of Pre-IPO Shares such holders may include.

Choice of Forum

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative form, the Chancery Court (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (1) any derivative action, suit or proceeding brought on our behalf; (2) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders owed to us or our stockholders; (3) any action, suit or proceeding asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated 

certificate of incorporation or our bylaws (as either may be amended from time to time); or (4) any action, suit or proceeding asserting a claim against us governed by the internal affairs doctrine.

 Our amended and restated certificate of incorporation provides that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. If any such foreign action is filed in a court other than the courts in the State of Delaware in the name of any stockholder, such stockholder shall be deemed to have consented to (a) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce such actions and (b) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder. Our amended and restated certificate of incorporation also provides that any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this choice of forum provision. It is possible that a court of law could rule that the choice of forum provision contained in our certificate of incorporation is inapplicable or unenforceable if it is challenged in a proceeding or otherwise. This choice of forum provision has important consequences for our shareholders. 

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust, LLC. The address of the transfer agent and registrar is 59 Maiden Lane, Plaza Level, New York NY 10038.

Listing

Our common stock is listed on the Nasdaq Global Select Market under the symbol “AVO.”missionproducedcpandadop

                    Mission Produce  Deferred Compensation Plan        Effective as of September 1, 2016              IMPORTANT NOTE    This document has not been approved by the Department of Labor, Internal  Revenue Service or any other governmental entity.  An adopting Employer must  determine whether the Plan is subject to the Federal securities laws and the  securities laws of the various states.  An adopting Employer may not rely on this  document to ensure any particular tax consequences or to ensure that the Plan is  “unfunded and maintained primarily for the purpose of providing deferred  compensation to a select group of management or highly compensated  employees” under Title I of the Employee Retirement Income Security Act of  1974, as amended, with respect to the Employer’s particular situation.  Fidelity  Employer Services Company, its affiliates and employees cannot provide you  with legal advice in connection with the execution of this document.  This  document should be reviewed by the Employer’s attorney prior to execution.    

 

   i  TABLE OF CONTENTS      PREAMBLE  ARTICLE 1 – GENERAL  1.1 Plan  1.2 Effective Dates  1.3 Amounts Not Subject to Code Section 409A      ARTICLE 2 – DEFINITIONS  2.1 Account  2.2 Administrator  2.3 Adoption Agreement  2.4 Beneficiary  2.5 Board or Board of Directors  2.6 Bonus  2.7 Change in Control  2.8 Code  2.9 Compensation  2.10 Director  2.11 Disability  2.12 Eligible Employee  2.13 Employer  2.14 ERISA  2.15 Identification Date  2.16 Key Employee  2.17 Participant  2.18 Plan  2.19 Plan Sponsor  2.20 Plan Year  2.21 Related Employer  2.22 Retirement  2.23 Separation from Service  2.24 Unforeseeable Emergency  2.25 Valuation Date  2.26 Years of Service      ARTICLE 3 – PARTICIPATION  3.1 Participation  3.2 Termination of Participation      

 

   ii  ARTICLE 4 – PARTICIPANT ELECTIONS  4.1 Deferral Agreement  4.2 Amount of Deferral  4.3 Timing of Election to Defer  4.4 Election of Payment Schedule and Form of Payment    ARTICLE 5 – EMPLOYER CONTRIBUTIONS  5.1 Matching Contributions  5.2 Other Contributions      ARTICLE 6 – ACCOUNTS AND CREDITS  6.1 Establishment of Account  6.2 Credits to Account      ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS  7.1 Investment Options  7.2 Adjustment of Accounts      ARTICLE 8 – RIGHT TO BENEFITS  8.1 Vesting  8.2 Death  8.3 Disability      ARTICLE 9 – DISTRIBUTION OF BENEFITS  9.1 Amount of Benefits   9.2 Method and Timing of Distributions  9.3 Unforeseeable Emergency  9.4 Payment Election Overrides  9.5 Cashouts of Amounts Not Exceeding Stated Limit  9.6 Required Delay in Payment to Key Employees  9.7 Change in Control  9.8 Permissible Delays in Payment  9.9 Permitted Acceleration of Payment      

 

   iii  ARTICLE 10 – AMENDMENT AND TERMINATION  10.1 Amendment by Plan Sponsor  10.2 Plan Termination Following Change in Control or Corporate Dissolution   10.3 Other Plan Terminations    ARTICLE 11 – THE TRUST  11.1 Establishment of Trust  11.2 Rabbi Trust  11.3 Investment of Trust Funds    ARTICLE 12 – PLAN ADMINISTRATION  12.1Powers and Responsibilities of the Administrator  12.2Claims and Review Procedures  12.3Plan Administrative Costs      ARTICLE 13 – MISCELLANEOUS  13.1 Unsecured General Creditor of the Employer  13.2 Employer’s Liability  13.3 Limitation of Rights  13.4 Anti-Assignment  13.5 Facility of Payment  13.6 Notices  13.7 Tax Withholding  13.8 Indemnification  13.9 Successors  13.10 Disclaimer  13.11 Governing Law              

 

     PREAMBLE      The Plan is intended to be a “plan which is unfunded and is maintained by an  employer primarily for the purpose of providing deferred compensation for a  select group of management or highly compensated employees” within the  meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement  Income Security Act of 1974, as amended, or an “excess benefit plan” within the  meaning of Section 3(36) of the Employee Retirement Income Security Act of  1974, as amended, or a combination of both.  The Plan is further intended to  conform with the requirements of Internal Revenue Code Section 409A and the  final regulations issued thereunder and shall be interpreted, implemented and  administered in a manner consistent therewith.        

 

  1-1  ARTICLE 1 – GENERAL      1.1 Plan.  The Plan will be referred to by the name specified in the Adoption  Agreement.    1.2 Effective Dates.    (a) Original Effective Date.  The Original Effective Date is the date as  of which the Plan was initially adopted.    (b) Amendment Effective Date.  The Amendment Effective Date is the  date specified in the Adoption Agreement as of which the Plan is  amended and restated.  Except to the extent otherwise provided  herein or in the Adoption Agreement, the Plan shall apply to  amounts deferred and benefit payments made on or after the  Amendment Effective Date.    (c) Special Effective Date.  A Special Effective Date may apply to any  given provision if so specified in Appendix A of the Adoption  Agreement.  A Special Effective Date will control over the Original  Effective Date or Amendment Effective Date, whichever is  applicable, with respect to such provision of the Plan.      

 

  2-1  ARTICLE 2 – DEFINITIONS      Pronouns used in the Plan are in the masculine gender but include the feminine  gender unless the context clearly indicates otherwise.  Wherever used herein,  the following terms have the meanings set forth below, unless a different  meaning is clearly required by the context:    2.1 “Account” means an account established for the purpose of recording  amounts credited on behalf of a Participant and any income, expenses,  gains, losses or distributions included thereon.  The Account shall be a  bookkeeping entry only and shall be utilized solely as a device for the  measurement and determination of the amounts to be paid to a Participant or  to the Participant’s Beneficiary pursuant to the Plan.      2.2 “Administrator” means the person or persons designated by the Plan  Sponsor in Section 1.05 of the Adoption Agreement to be responsible for  the administration of the Plan.  If no Administrator is designated in the  Adoption Agreement, the Administrator is the Plan Sponsor.    2.3 “Adoption Agreement” means the agreement adopted by the Plan  Sponsor that establishes the Plan.    2.4 “Beneficiary” means the persons, trusts, estates or other entities entitled  under Section 8.2 to receive benefits under the Plan upon the death of a  Participant.    2.5 “Board” or “Board of Directors” means the Board of Directors of the  Plan Sponsor.    2.6 “Bonus” means an amount of incentive remuneration payable by the  Employer to a Participant.    2.7 “Change in Control” means the occurrence of an event involving the  Plan Sponsor that is described in Section 9.7.    2.8 “Code” means the Internal Revenue Code of 1986, as amended.    2.9 “Compensation” has the meaning specified in Section 3.01 of the  Adoption Agreement.    2.10 “Director” means a non-employee member of the Board who has been  designated by the Employer as eligible to participate in the Plan.      

 

  2-2  2.11 “Disability”  means a determination by the Administrator that the  Participant is either (a) unable to engage in any substantial gainful activity  by reason of any medically determinable physical or mental impairment  which can be expected to result in death or can be expected to last for a  continuous period of not less than 12 months, or (b) is, by reason of any  medically determinable physical or mental impairment which can be  expected to result in death or last for a continuous period of not less than  twelve months, receiving income replacement benefits for a period of not  less than three months under an accident and health plan covering  employees of the Employer.  A Participant will be considered to have  incurred a Disability if he is determined to be totally disabled by the Social  Security Administration or the Railroad Retirement Board.    2.12 “Eligible Employee” means an employee of the Employer who satisfies  the requirements in Section 2.01 of the Adoption Agreement.    2.13 “Employer” means the Plan Sponsor and any other entity which is  authorized by the Plan Sponsor to participate in and, in fact, does adopt  the Plan.  2.14 “ERISA” means the Employee Retirement Income Security Act of 1974,  as amended.  2.15 “Identification Date” means the date as of which Key Employees are  determined which is specified in Section 1.06 of the Adoption Agreement.  2.16 “Key Employee” means an employee who satisfies the conditions set  forth in Section 9.6.  2.17  “Participant” means an Eligible Employee or Director who commences  participation in the Plan in accordance with Article 3.  2.18 “Plan” means the unfunded plan of deferred compensation set forth herein,  including the Adoption Agreement and any trust agreement, as adopted by  the Plan Sponsor and as amended from time to time.   2.19 “Plan Sponsor” means the entity identified in Section 1.03 of the  Adoption Agreement or any successor by merger, consolidation or  otherwise.  2.20 “Plan Year” means the period identified in Section 1.02 of the Adoption  Agreement.   2.21 “Related Employer” means the Employer and (a) any corporation that is  a member of a controlled group of corporations as defined in Code  Section 414(b) that includes the Employer and (b) any trade or business  that is under common control as defined in Code Section 414(c) that  includes the Employer.  

 

  2-3  2.22 “Retirement” has the meaning specified in 6.01(f) of the Adoption  Agreement.  2.23 “Separation from Service” means the date that the Participant dies,  retires or otherwise has a termination of employment with respect to all  entities comprising the Related Employer.  A Separation from Service  does not occur if the Participant is on military leave, sick leave or other  bona fide leave of absence if the period of leave does not exceed six  months or such longer period during which the Participant’s right to re- employment is provided by statute or contract.  If the period of leave  exceeds six months and the Participant’s right to re-employment is not  provided either by statute or contract, a Separation from Service will be  deemed to have occurred on the first day following the six-month period.   If the period of leave is due to any medically determinable physical or  mental impairment that can be expected to result in death or can be  expected to last for a continuous period of not less than six months, where  the impairment causes the Participant to be unable to perform the duties  of his or her position of employment or any substantially similar position of  employment, a 29 month period of absence may be substituted for the six  month period.  Whether a termination of employment has occurred is based on whether  the facts and circumstances indicate that the Related Employer and the  Participant reasonably anticipated that no further services would be  performed after a certain date or that the level of bona fide services the  Participant would perform after such date (whether as an employee or as  an independent contractor) would permanently decrease to no more than  20 percent of the average level of bona fide services performed (whether  as an employee or an independent contractor) over the immediately  preceding 36 month period (or the full period of services to the Related  Employer if the employee has been providing services to the Related  Employer for less than 36 months).    An independent contractor is considered to have experienced a  Separation from Service with the Related Employer upon the expiration of  the contract (or, in the case of more than one contract, all contracts) under  which services are performed for the Related Employer if the expiration  constitutes a good-faith and complete termination of the contractual  relationship.   If a Participant provides services as both an employee and an  independent contractor of the Related Employer, the Participant must  separate from service both as an employee and as an independent  contractor to be treated as having incurred a Separation from Service.  If a  Participant ceases providing services as an independent contractor and  begins providing services as an employee, or ceases providing services  as an employee and begins providing services as an independent  

 

  2-4  contractor, the Participant will not be considered to have experienced a  Separation from Service until the Participant has ceased providing  services in both capacities.   If a Participant provides services both as an employee and as a member  of the board of directors of a corporate Related Employer (or an  analogous position with respect to a noncorporate Related Employer), the  services provided as a director are not taken into account in determining  whether the Participant has incurred a Separation from Service as an  employee for purposes of a nonqualified deferred compensation plan in  which the Participant participates as an employee that is not aggregated  under Code Section 409A with any plan in which the Participant  participates as a director.  If a Participant provides services both as an employee and as a member  of the board of directors of a corporate related Employer (or an analogous  position with respect to a noncorporate Related Employer), the services  provided as an employee are not taken into account in determining  whether the Participant has experienced a Separation from Service as a  director for purposes of a nonqualified deferred compensation plan in  which the Participant participates as a director that is not aggregated  under Code Section 409A with any plan in which the Participant  participates as an employee.    All determinations of whether a Separation from Service has occurred will  be made in a manner consistent with Code Section 409A and the final  regulations thereunder.    2.24  “Unforeseeable Emergency” means a severe financial hardship of the  Participant resulting from an illness or accident of the Participant, the  Participant’s spouse, the Participant’s Beneficiary, or the Participant’s  dependent (as defined in Code Section 152, without regard to Code  section 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.    2.25 “Valuation Date” means each business day of the Plan Year that the  New York Stock Exchange is open.  2.26 “Years of Service” means each one year period for which the Participant  receives service credit in accordance with the provisions of Section  7.01(d) of the Adoption Agreement.    

 

  3-1    ARTICLE 3 – PARTICIPATION      3.1 Participation.  The Participants in the Plan shall be those Directors and  employees of the Employer who satisfy the requirements of Section 2.01  of the Adoption Agreement.  3.2 Termination of Participation.  The Administrator may terminate a  Participant’s participation in the Plan in a manner consistent with Code  Section 409A.  If the Employer terminates a Participant’s participation  before the Participant experiences a Separation from Service the  Participant’s vested Accounts shall be paid in accordance with the  provisions of Article 9.    

 

  4-1    ARTICLE 4 – PARTICIPANT ELECTIONS      4.1 Deferral Agreement.  If permitted by the Plan Sponsor in accordance with  Section 4.01 of the Adoption Agreement, each Eligible Employee and  Director may elect to defer his Compensation within the meaning of  Section 3.01 of the Adoption Agreement by executing in writing or  electronically, a deferral agreement in accordance with rules and  procedures established by the Administrator and the provisions of this  Article 4.    A new deferral agreement must be timely executed for each Plan Year  during which the Eligible Employee or Director desires to defer  Compensation.  An Eligible Employee or Director who does not timely  execute a deferral agreement shall be deemed to have elected zero  deferrals of Compensation for such Plan Year.      A deferral agreement may be changed or revoked during the period  specified by the Administrator.  Except as provided in Section 9.3 or in  Section 4.01(c) of the Adoption Agreement, a deferral agreement  becomes irrevocable at the close of the specified period.    4.2 Amount of Deferral.  An Eligible Employee or Director may elect to defer  Compensation in any amount permitted by Section 4.01(a) of the Adoption  Agreement.    4.3 Timing of Election to Defer.  Each Eligible Employee or Director who  desires to defer Compensation otherwise payable during a Plan Year must  execute a deferral agreement within the period preceding the Plan Year  specified by the Administrator.  Each Eligible Employee who desires to  defer Compensation that is a Bonus must execute a deferral agreement  within the period preceding the Plan Year during which the Bonus is  earned that is specified by the Administrator, except that if the Bonus can  be treated as performance based compensation as described in Code  Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within  the period specified by the Administrator, which period, in no event, shall  end after the date which is six months prior to the end of the period during  which the Bonus is earned, provided the Participant has performed  services continuously from the later of the beginning of the performance  period or the date the performance criteria are established through the  date the Participant executed the deferral agreement and provided further  that the compensation has not yet become ‘readily ascertainable’ within  the meaning of Reg. Sec 1.409A-2(a)(8).  In addition, if the Compensation  qualifies as ‘fiscal year compensation’ within the meaning of Reg. Sec.  1.409A-2(a)(6), the deferral agreement may be made not later than the  

 

  4-2  end of the Employer’s taxable year immediately preceding the first taxable  year of the Employer in which any services are performed for which such  Compensation is payable.    Except as otherwise provided below, an employee who is classified or  designated as an Eligible Employee during a Plan Year or a Director who  is designated as eligible to participate during a Plan Year may elect to  defer Compensation otherwise payable during the remainder of such Plan  Year in accordance with the rules of this Section 4.3 by executing a  deferral agreement within the thirty (30) day period beginning on the date  the employee is classified or designated as an Eligible Employee or the  date the Director is designated as eligible, whichever is applicable, if  permitted by Section 4.01(b)(ii) of the Adoption Agreement.  If  Compensation is based on a specified performance period that begins  before the Eligible Employee or Director executes his deferral agreement,  the election will be deemed to apply to the portion of such Compensation  equal to the total amount of Compensation for the performance period  multiplied by the ratio of the number of days remaining in the performance  period after the election becomes irrevocable and effective over the total  number of days in the performance period.  The rules of this paragraph  shall not apply unless the Eligible Employee or Director can be treated as  initially eligible in accordance with Reg. Sec. 1.409A-2(a)(7).    4.4 Election of Payment Schedule and Form of Payment.    All elections of a payment schedule and a form of payment will be made in  accordance with rules and procedures established by the Administrator  and the provisions of this Section 4.4.    (a) If the Plan Sponsor has elected to permit annual distribution  elections in accordance with Section 6.01(h) of the Adoption Agreement  the following rules apply.  At the time an Eligible Employee or Director  completes a deferral agreement, the Eligible Employee or Director must  elect a distribution event (which includes a specified time) and a form of  payment for the Compensation subject to the deferral agreement from  among the options the Plan Sponsor has made available for this purpose  and which are specified in 6.01(b) of the Adoption Agreement.  Prior to the  time required by Reg. Sec. 1.409A-2, the Eligible Employee or Director  shall elect a distribution event (which includes a specified time) and a form  of payment for any Employer contributions that may be credited to the  Participant’s Account during the Plan Year. If an Eligible Employee or  Director fails to elect a distribution event, he shall be deemed to have  elected Separation from Service as the distribution event.  If he fails to  elect a form of payment, he shall be deemed to have elected a lump sum  form of payment.    

 

  4-3  (b) If the Plan Sponsor has elected not to permit annual distribution  elections in accordance with Section 6.01(h) of the Adoption Agreement  the following rules apply.  At the time an Eligible Employee or Director first  completes a deferral agreement but in no event later than the time  required by Reg. Sec. 1.409A-2, the Eligible Employee or Director must  elect a distribution event (which includes a specified time) and a form of  payment for amounts credited to his Account from among the options the  Plan Sponsor has made available for this purpose and which are specified  in Section 6.01(b) of the Adoption Agreement.  If an Eligible Employee or  Director fails to elect a distribution event, he shall be deemed to have  elected Separation from Service in the distribution event.  If the fails to  elect a form of payment, he shall be deemed to have elected a lump sum  form of payment.        . 

 

  5-1    ARTICLE 5 – EMPLOYER CONTRIBUTIONS      5.1 Matching Contributions.  If elected by the Plan Sponsor in Section 5.01(a)  of the Adoption Agreement, the Employer will credit the Participant’s  Account with a matching contribution determined in accordance with the  formula specified in Section 5.01(a) of the Adoption Agreement.  The  matching contribution will be treated as allocated to the Participant’s  Account at the time specified in Section 5.01(a)(iii) of the Adoption  Agreement.  5.2 Other Contributions.  If elected by the Plan Sponsor in Section 5.01(b) of  the Adoption Agreement, the Employer will credit the Participant’s Account  with a contribution determined in accordance with the formula or method  specified in Section 5.01(b) of the Adoption Agreement.  The contribution  will be treated as allocated to the Participant’s Account at the time specified  in Section 5.01(b)(iii) of the Adoption Agreement.      

 

  6-1    ARTICLE 6 – ACCOUNTS AND CREDITS      6.1 Establishment of Account.  For accounting and computational purposes  only, the Administrator will establish and maintain an Account on behalf of  each Participant which will reflect the credits made pursuant to Section  6.2, distributions or withdrawals, along with the earnings, expenses, gains  and losses allocated thereto, attributable to the hypothetical investments  made with the amounts in the Account as provided in Article 7.  The  Administrator will establish and maintain such other records and accounts,  as it decides in its discretion to be reasonably required or appropriate to  discharge its duties under the Plan.    6.2 Credits to Account.  A Participant’s Account will be credited for each  Plan Year with the amount of his elective deferrals under Section 4.1 at  the time the amount subject to the deferral election would otherwise have  been payable to the Participant and the amount of Employer contributions  treated as allocated on his behalf under Article 5.    

 

  7-1  ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS      7.1 Investment Options.  The amount credited to each Account shall be  treated as invested in the investment options designated for this purpose  by the Administrator.    7.2 Adjustment of Accounts.  The amount credited to each Account shall be  adjusted for hypothetical investment earnings, expenses, gains or losses  in an amount equal to the earnings, expenses, gains or losses attributable  to the investment options selected by the party designated in Section 9.01  of the Adoption Agreement from among the investment options provided in  Section 7.1.  If permitted by Section 9.01 of the Adoption Agreement, a  Participant (or the Participant’s Beneficiary after the death of the  Participant) may, in accordance with rules and procedures established by  the Administrator, select the investments from among the options provided  in Section 7.1 to be used for the purpose of calculating future hypothetical  investment adjustments to the Account or to future credits to the Account  under Section 6.2 effective as of the Valuation Date coincident with or next  following notice to the Administrator.  Each Account shall be adjusted as  of each Valuation Date to reflect: (a) the hypothetical earnings, expenses,  gains and losses described above; (b) amounts credited pursuant to  Section 6.2; and (c) distributions or withdrawals.  In addition, each  Account may be adjusted for its allocable share of the hypothetical costs  and expenses associated with the maintenance of the hypothetical  investments provided in Section 7.1.      

 

  9-1  ARTICLE 8 – RIGHT TO BENEFITS      8.1 Vesting.  A Participant, at all times, has a 100% nonforfeitable interest in  the amounts credited to his Account attributable to his elective deferrals  made in accordance with Section 4.1.    A Participant’s right to the amounts credited to his Account attributable to  Employer contributions made in accordance with Article 5 shall be  determined in accordance with the relevant schedule and provisions in  Section 7.01 of the Adoption Agreement. Upon a Separation from Service  and after application of the provisions of Section 7.01 of the Adoption  Agreement, the Participant shall forfeit the nonvested portion of his  Account.    8.2 Death.  The Plan Sponsor may elect to accelerate vesting upon the death  of the Participant in accordance with Section 7.01(c) of the Adoption  Agreement and/or to accelerate distributions upon Death in accordance  with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement.  If the  Plan Sponsor does not elect to accelerate distributions upon death in  accordance with Section 6.01(b) or Section 6.01(d) of the Adoption  Agreement, the vested amount credited to the Participant’s Account will be  paid in accordance with the provisions of Article 9.     A Participant may designate a Beneficiary or Beneficiaries, or change any  prior designation of Beneficiary or Beneficiaries in accordance with rules  and procedures established by the Administrator.    A copy of the death notice or other sufficient documentation must be filed  with and approved by the Administrator.  If upon the death of the  Participant there is, in the opinion of the Administrator, no designated  Beneficiary for part or all of the Participant’s vested Account, such amount  will be paid to his estate (such estate shall be deemed to be the  Beneficiary for purposes of the Plan) in accordance with the provisions of  Article 9.    8.3 Disability.  If the Plan Sponsor has elected to accelerate vesting upon the  occurrence of a Disability in accordance with Section 7.01(c) of the  Adoption Agreement and/or to permit distributions upon Disability in  accordance with Section 6.01(b) or Section 6.01(d) of the Adoption  Agreement, the determination of whether a Participant has incurred a  Disability shall be made by the Administrator in its sole discretion in a  manner consistent with the requirements of Code Section 409A.     

 

  9-2    ARTICLE 9 – DISTRIBUTION OF BENEFITS      9.1 Amount of Benefits.  The vested amount credited to a Participant’s  Account as determined under Articles 6, 7 and 8 shall determine and  constitute the basis for the value of benefits payable to the Participant  under the Plan.    9.2 Method and Timing of Distributions.  Except as otherwise provided in  this Article 9, distributions under the Plan shall be made in accordance with  the elections made or deemed made by the Participant under Article 4.   Subject to the provisions of Section 9.6 requiring a six month delay for  certain distributions to Key Employees, distributions following a payment  event shall commence at the time specified in Section 6.01(a) of the  Adoption Agreement.  If permitted by Section 6.01(g) of the Adoption  Agreement, a Participant may elect, at least twelve months before a  scheduled distribution event, to delay the payment date for a minimum  period of sixty months from the originally scheduled date of payment,  provided the election does not take effect for at least twelve months from  the date on which the election is made.  The distribution election change  must be made in accordance with procedures and rules established by the  Administrator.  The Participant may, at the same time the date of payment  is deferred, change the form of payment but such change in the form of  payment may not effect an acceleration of payment in violation of Code  Section 409A or the provisions of Reg. Sec. 1.409A-2(b).  For purposes of  this Section 9.2, a series of installment payments is always treated as a  single payment and not as a series of separate payments.      9.3 Unforeseeable Emergency.  A Participant may request a distribution due  to an Unforeseeable Emergency if the Plan Sponsor has elected to permit  Unforeseeable Emergency withdrawals under Section 8.01(a) of the  Adoption Agreement.  The request must be in writing and must be  submitted to the Administrator along with evidence that the circumstances  constitute an Unforeseeable Emergency. The Administrator has the  discretion to require whatever evidence it deems necessary to determine  whether a distribution is warranted, and may require the Participant to  certify that the need cannot be met from other sources reasonably  available to the Participant.   Whether a Participant has incurred an  Unforeseeable Emergency will be determined by the Administrator on the  basis of the relevant facts and circumstances in its sole discretion, but, in  no event, will an Unforeseeable Emergency be deemed to exist if the  hardship can be relieved:  (a) through reimbursement or compensation by  insurance or otherwise, (b) by liquidation of the Participant’s assets to the  extent such liquidation would not itself cause severe financial hardship, or  

 

  9-3  (c) by cessation of deferrals under the Plan.  A distribution due to an  Unforeseeable Emergency must be limited to the amount reasonably  necessary to satisfy the emergency need and may include any amounts  necessary to pay any federal, state, foreign or local income taxes and  penalties reasonably anticipated to result from the distribution.  The  distribution will be made in the form of a single lump sum cash payment.   If permitted by Section 8.01(b) of the Adoption Agreement, a Participant’s  deferral elections for the remainder of the Plan Year will be cancelled  upon a withdrawal due to an Unforeseeable Emergency.  If the payment of  all or any portion of the Participant’s vested Account is being delayed in  accordance with Section 9.6 at the time he experiences an Unforeseeable  Emergency, the amount being delayed shall not be subject to the  provisions of this Section 9.3 until the expiration of the six month period of  delay required by section 9.6.    9.4 Payment Election Overrides.  If the Plan Sponsor has elected one or  more payment election overrides in accordance with Section 6.01(d) of the  Adoption Agreement, the following provisions apply.  Upon the occurrence  of the first event selected by the Plan Sponsor, the remaining vested  amount credited to the Participant’s Account shall be paid in the form  designated to the Participant or his Beneficiary regardless of whether the  Participant had made different elections of time and /or form of payment or  whether the Participant was receiving installment payments at the time of  the event.     9.5 Cashouts Of Amounts Not Exceeding Stated Limit.  If the vested  amount credited to the Participant’s Account does not exceed the limit  established for this purpose by the Plan Sponsor in Section 6.01(e) of the  Adoption Agreement at the time he incurs a Separation from Service for  any reason, the Employer shall distribute such amount to the Participant at  the time specified in Section 6.01(a) of the Adoption Agreement in a single  lump sum cash payment following such Separation from Service  regardless of whether the Participant had made different elections of time  or form of payment as to the vested amount credited to his Account or  whether the Participant was receiving installments at the time of such  termination.  A Participant’s Account, for purposes of this Section 9.5,  shall include any amounts described in Section 1.3.    9.6 Required Delay in Payment to Key Employees.  Except as otherwise  provided in this Section 9.6, a distribution made on account of Separation  from Service (or Retirement, if applicable) to a Participant who is a Key  Employee as of the date of his Separation from Service (or Retirement, if  applicable) shall not be made before the date which is six months after the  Separation from Service (or Retirement, if applicable).  If payments to a  

 

  9-4  Key Employee are delayed in accordance with this Section 9.6, the  payments to which the Key Employee would otherwise have been entitled  during the six month period shall be accumulated and paid in a single  lump sum at the time specified in Section 6.01(a) of the Adoption  Agreement after the six month period elapses.    (a) A Participant is treated as a Key Employee if (i) he is employed by a  Related Employer any of whose stock is publicly traded on an established  securities market, and (ii) he satisfies the requirements of Code Section  416(i)(1)(A)(i), (ii) or (iii), determined without regard to Code Section  416(i)(5), at any time during the twelve month period ending on the  Identification Date.    (b) A Participant who is a Key Employee on an Identification Date shall be  treated as a Key Employee for purposes of the six month delay in  distributions for the twelve month period beginning on the first day of a  month no later than the fourth month following the Identification Date.  The  Identification Date and the effective date of the delay in distributions shall  be determined in accordance with Section 1.06 of the Adoption  Agreement.    (c) The Plan Sponsor may elect to apply an alternative method to identify  Participants who will be treated as Key Employees for purposes of the six  month delay in distributions if the method satisfies each of the following  requirements.  The alternative method is reasonably designed to include  all Key Employees, is an objectively determinable standard providing no  direct or indirect election to any Participant regarding its application, and  results in either all Key Employees or no more than 200 Key Employees  being identified in the class as of any date.  Use of an alternative method  that satisfies the requirements of this Section 9.6(c) will not be treated as  a change in the time and form of payment for purposes of Reg. Sec.  1.409A-2(b).    (d) The six month delay does not apply to payments described in Section  9.9(a), (b) or (d) or to payments that occur after the death of the  Participant.  If the payment of all or any portion of the Participant’s vested  Account is being delayed in accordance with this Section 9.6 at the time  he incurs a Disability which would otherwise require a distribution under  the terms of the Plan, no amount shall be paid until the expiration of the  six month period of delay required by this Section 9.6.  

 

  9-5      9.7 Change in Control.  If the Plan Sponsor has elected to permit  distributions upon a Change in Control, the following provisions shall  apply.  A distribution made upon a Change in Control will be made at the  time specified in Section 6.01(a) of the Adoption Agreement in the form  elected by the Participant in accordance with the procedures described in  Article 4.  Alternatively, if the Plan Sponsor has elected in accordance with  Section 11.02 of the Adoption Agreement to require distributions upon a  Change in Control, the Participant’s remaining vested Account shall be  paid to the Participant or the Participant’s Beneficiary at the time specified  in Section 6.01(a) of the Adoption Agreement as a single lump sum  payment.  A Change in Control, for purposes of the Plan, will occur upon a  change in the ownership of the Plan Sponsor, a change in the effective  control of the Plan Sponsor or a change in the ownership of a substantial  portion of the assets of the Plan Sponsor, but only if elected by the Plan  Sponsor in Section 11.03 of the Adoption Agreement.  The Plan Sponsor,  for this purpose, includes any corporation identified in this Section 9.7.  All  distributions made in accordance with this Section 9.7 are subject to the  provisions of Section 9.6.    If a Participant continues to make deferrals in accordance with Article 4  after he has received a distribution due to a Change in Control, the  residual amount payable to the Participant shall be paid at the time and in  the form specified in the elections he makes in accordance with Article 4  or upon his death or Disability as provided in Article 8.    Whether a Change in Control has occurred will be determined by the  Administrator in accordance with the rules and definitions set forth in this  Section 9.7.  A distribution to the Participant will be treated as occurring  upon a Change in Control if the Plan Sponsor terminates the Plan in  accordance with Section 10.2 and distributes the Participant’s benefits  within twelve months of a Change in Control as provided in Section 10.3.    (a) Relevant Corporations.  To constitute a Change in Control for  purposes of the Plan, the event must relate to (i) the corporation for  whom the Participant is performing services at the time of the  Change in Control, (ii) the corporation that is liable for the payment of  the Participant’s benefits under the Plan (or all corporations liable if  more than one corporation is liable) but only if either the deferred  compensation is attributable to the performance of services by the  Participant for such corporation (or corporations) or there is a bona  fide business purpose for such corporation (or corporations) to be  liable for such payment and, in either case, no significant purpose of  making such corporation (or corporations) liable for such payment is  

 

  9-6  the avoidance of federal income tax, or (iii) a corporation that is a  majority shareholder of a corporation identified in (i) or (ii), or any  corporation in a chain of corporations in which each corporation is a  majority shareholder of another corporation in the chain, ending in a  corporation identified in (i) or (ii).  A majority shareholder is defined  as a shareholder owning more than fifty percent (50%) of the total  fair market value and voting power of such corporation.    (b) Stock Ownership.  Code Section 318(a) applies for purposes of  determining stock ownership.  Stock underlying a vested option is  considered owned by the individual who owns the vested option (and  the stock underlying an unvested option is not considered owned by  the individual who holds the unvested option).  If, however, a vested  option is exercisable for stock that is not substantially vested (as  defined by Treasury Regulation Section 1.83-3(b) and (j)) the stock  underlying the option is not treated as owned by the individual who  holds the option.    (c) Change in the Ownership of a Corporation.  A change in the  ownership of a corporation occurs on the date that any one person or  more than one person acting as a group, acquires ownership of  stock of the corporation that, together with stock held by such person  or group, constitutes more than fifty percent (50%) of the total fair  market value or total voting power of the stock of such corporation.  If  any one person or more than one person acting as a group is  considered to own more than fifty percent (50%) of the total fair  market value or total voting power of the stock of a corporation, the  acquisition of additional stock by the same person or persons is not  considered to cause a change in the ownership of the corporation (or  to cause a change in the effective control of the corporation as  discussed below in Section 9.7(d)).  An increase in the percentage of  stock owned by any one person, or persons acting as a group, as a  result of a transaction in which the corporation acquires its stock in  exchange for property will be treated as an acquisition of stock.   Section 9.7(c) applies only when there is a transfer of stock of a  corporation (or issuance of stock of a corporation) and stock in such  corporation remains outstanding after the transaction.  For purposes  of this Section 9.7(c), persons will not be considered to be acting as  a group solely because they purchase or own stock of the same  corporation at the same time or as a result of a public offering.   Persons will, however, be considered to be acting as a group if they  are owners of a corporation that enters into a merger, consolidation,  purchase or acquisition of stock, or similar business transaction with  the corporation.  If a person, including an entity, owns stock in both  corporations that enter into a merger, consolidation, purchase or  acquisition of stock, or similar transaction, such shareholder is  

 

  9-7  considered to be acting as a group with other shareholders in a  corporation only with respect to ownership in that corporation prior to  the transaction giving rise to the change and not with respect to the  ownership interest in the other corporation.    (d) Change in the effective control of a corporation.  A change in the  effective control of a corporation occurs on the date that either (i) any  one person, or more than one person acting as a group, acquires (or  has acquired during the twelve month period ending on the date of  the most recent acquisition by such person or persons) ownership of  stock of the corporation possessing thirty percent (30%) or more of  the total voting power of the stock of such corporation, or (ii) a  majority of members of the corporation’s board of directors is  replaced during any twelve month period by directors whose  appointment or election is not endorsed by a majority of the  members of the corporation’s board of directors prior to the date of  the appointment or election, provided that for purposes of this  paragraph (ii), the term corporation refers solely to the relevant  corporation identified in Section 9.7(a) for which no other corporation  is a majority shareholder for purposes of Section 9.7(a).  In the  absence of an event described in Section 9.7(d)(i) or (ii), a change in  the effective control of a corporation will not have occurred.  A  change in effective control may also occur in any transaction in  which either of the two corporations involved in the transaction has a  change in the ownership of such corporation as described in Section  9.7(c) or a change in the ownership of a substantial portion of the  assets of such corporation as described in Section 9.7(e).  If any one  person, or more than one person acting as a group, is considered to  effectively control a corporation within the meaning of this Section  9.7(d), the acquisition of additional control of the corporation by the  same person or persons is not considered to cause a change in the  effective control of the corporation or to cause a change in the  ownership of the corporation within the meaning of Section 9.7(c).   For purposes of this Section 9.7(d), persons will or will not be  considered to be acting as a group in accordance with rules similar  to those set forth in Section 9.7(c) with the following exception.  If a  person, including an entity, owns stock in both corporations that  enter into a merger, consolidation, purchase or acquisition of stock,  or similar transaction, such shareholder is considered to be acting as  a group with other shareholders in a corporation only with respect to  the ownership in that corporation prior to the transaction giving rise  to the change and not with respect to the ownership interest in the  other corporation.    (e) Change in the ownership of a substantial portion of a  corporation’s assets.  A change in the ownership of a substantial  portion of a corporation’s assets occurs on the date that any one  

 

  9-8  person, or more than one person acting as a group (as determined in  accordance with rules similar to those set forth in Section 9.7(d)),  acquires (or has acquired during the twelve month period ending on  the date of the most recent acquisition by such person or persons)  assets from the corporation that have a total gross fair market value  equal to or more than forty percent (40%) of the total gross fair  market value of all of the assets of the corporation immediately prior  to such acquisition or acquisitions.  For this purpose, gross fair  market value means the value of the assets of the corporation or the  value of the assets being disposed of determined without regard to  any liabilities associated with such assets.  There is no Change in  Control event under this Section 9.7(e) when there is a transfer to an  entity that is controlled by the shareholders of the transferring  corporation immediately after the transfer.  A transfer of assets by a  corporation is not treated as a change in ownership of such assets if  the assets are transferred to (i) a shareholder of the corporation  (immediately before the asset transfer) in exchange for or with  respect to its stock, (ii) an entity, fifty percent (50%) or more of the  total value or voting power of which is owned, directly or indirectly, by  the corporation, (iii) a person, or more than one person acting as a  group, that owns, directly or indirectly, fifty percent (50%) or more of  the total value or voting power of all the outstanding stock of the  corporation, or (iv) an entity, at least fifty (50%) of the total value or  voting power of which is owned, directly or indirectly, by a person  described in Section 9.7(e)(iii).  For purposes of the foregoing, and  except as otherwise provided, a person’s status is determined  immediately after the transfer of assets.    9.8 Permissible Delays in Payment.  Distributions may be delayed beyond  the date payment would otherwise occur in accordance with the provisions  of Articles 8 and 9 in any of the following circumstances as long as the  Employer treats all payments to similarly situated Participants on a  reasonably consistent basis.      (a) The Employer may delay payment if it reasonably anticipates that its  deduction with respect to such payment would be limited or  eliminated by the application of Code Section 162(m).  Payment  must be made during the Participant’s first taxable year in which the  Employer reasonably anticipates, or should reasonably anticipate,  that if the payment is made during such year the deduction of such  payment will not be barred by the application of Code Section  162(m) or during the period beginning with the Participant’s  Separation from Service and ending on the later of the last day of the  

 

  9-9  Employer’s taxable year in which the Participant separates from  service or the 15th day of the third month following the Participant’s  Separation from Service.  If a scheduled payment to a Participant is  delayed in accordance with this Section 9.8(a), all scheduled  payments to the Participant that could be delayed in accordance with  this Section 9.8(a) will also be delayed.     (b) The Employer may also delay payment if it reasonably anticipates  that the making of the payment will violate federal securities laws or  other applicable laws provided payment is made at the earliest date  on which the Employer reasonably anticipates that the making of the  payment will not cause such violation.      (c) The Employer reserves the right to amend the Plan to provide for a  delay in payment upon such other events and conditions as the  Secretary of the Treasury may prescribe in generally applicable  guidance published in the Internal Revenue Bulletin.      9.9 Permitted Acceleration of Payment.  The Employer may permit  acceleration of the time or schedule of any payment or amount scheduled  to be paid pursuant to a payment under the Plan provided such  acceleration would be permitted by the provisions of Reg. Sec. 1.409A- 3(j)(4), including the following events:  (a) Domestic Relations Order.  A payment may be accelerated if  such payment is made to an alternate payee pursuant to and  following the receipt and qualification of a domestic relations order  as defined in Code Section 414(p).  (b) Compliance with Ethics Agreements and Legal Requirements.   A payment may be accelerated as may be necessary to comply  with ethics agreements with the Federal government or as may be  reasonably necessary to avoid the violation of Federal, state, local  or foreign ethics law or conflicts of laws, in accordance with the  requirements of Code Section 409A.  (c) De Minimis Amounts.  A payment will be accelerated if (i) the  amount of the payment is not greater than the applicable dollar  amount under Code Section 402(g)(1)(B), (ii) at the time the  payment is made the amount constitutes the Participant’s entire  interest under the Plan and all other plans that are aggregated with  the Plan under Reg. Sec. 1.409A-1(c)(2).   (d) FICA Tax.  A payment may be accelerated to the extent required to  pay the Federal Insurance Contributions Act tax imposed under  Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with  

 

  9-10  respect to compensation deferred under the Plan (the “FICA  Amount”).  Additionally, a payment may be accelerated to pay the  income tax on wages imposed under Code Section 3401 of the  Code on the FICA Amount and to pay the additional income tax at  source on wages attributable to the pyramiding Code Section 3401  wages and taxes.  The total payment under this subsection (d) may  not exceed the aggregate of the FICA Amount and the income tax  withholding related to the FICA Amount.   (e) Section 409A Additional Tax.  A payment may be accelerated if  the Plan fails to meet the requirements of Code Section 409A;  provided that such payment may not exceed the amount required to  be included in income as a result of the failure to comply with the  requirements of Code Section 409A.    (f) Offset.  A payment may be accelerated in the Employer’s  discretion as satisfaction of a debt of the Participant to the  Employer, where such debt is incurred in the ordinary course of the  service relationship between the Participant and the Employer, the  entire amount of the reduction in any of the Employer’s taxable  years does not exceed $5,000, and the reduction is made at the  same time and in the same amount as the debt otherwise would  have been due and collected from the Participant.  (g) Other Events.  A payment may be accelerated in the  Administrator’s discretion in connection with such other events and  conditions as permitted by Code Section 409A.        

 

  10-1  ARTICLE 10 – AMENDMENT AND TERMINATION      10.1 Amendment by Plan Sponsor.  The Plan Sponsor reserves the right to  amend the Plan (for itself and each Employer) through action of its Board  of Directors.  No amendment can directly or indirectly deprive any current  or former Participant or Beneficiary of all or any portion of his Account  which had accrued and vested prior to the amendment.    10.2 Plan Termination Following Change in Control or Corporate  Dissolution.  If so elected by the Plan Sponsor in 11.01 of the Adoption  Agreement, the Plan Sponsor reserves the right to terminate the Plan and  distribute all amounts credited to all Participant Accounts within the 30  days preceding or the twelve months following a Change in Control as  determined in accordance with the rules set forth in Section 9.7. For this  purpose, the Plan will be treated as terminated only if all agreements,  methods, programs and other arrangements sponsored by the Related  Employer immediately after the Change in Control which are treated as a  single plan under Reg. Sec. 1.409A-1(c)(2) are also terminated so that all  participants under the Plan and all similar arrangements are required to  receive all amounts deferred under the terminated arrangements within  twelve months of the date the Plan Sponsor irrevocably takes all  necessary action to terminate the arrangements. In addition, the Plan  Sponsor reserves the right to terminate the Plan within twelve months of a  corporate dissolution taxed under Code Section 331 or with the approval  of a bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A)  provided that amounts deferred under the Plan are included in the gross  incomes of Participants in the latest of (a) the calendar year in which the  termination and liquidation occurs, (b) the first calendar year in which the  amount is no longer subject to a substantial risk of forfeiture, or (c) the first  calendar year in which payment is administratively practicable.     10.3 Other Plan Terminations.  The Plan Sponsor retains the discretion to  terminate the Plan if (a) all arrangements sponsored by the Plan Sponsor  that would be aggregated with any terminated arrangement under  Code  Section 409A and Reg. Sec. 1.409A-1(c)(2) are terminated, (b) no  payments other than payments that would be payable under the terms of  the arrangements if the termination had not occurred are made within  twelve months of the termination of the arrangements, (c) all payments are  made within twenty-four months of the date the Plan Sponsor takes all  necessary action to irrevocably terminate and liquidate the arrangements,  (d) the Plan Sponsor does not adopt a new arrangement that would be  aggregated with any terminated arrangement under Code Section 409A  and the regulations thereunder at any time within the three year period  following the date of termination of the arrangement, and (e) the  termination does not occur proximate to a downturn in the financial health  

 

  10-2  of the Plan sponsor.  The Plan Sponsor also reserves the right to amend  the Plan to provide that termination of the Plan will occur under such  conditions and events as may be prescribed by the Secretary of the  Treasury in generally applicable guidance published in the Internal  Revenue Bulletin.    

 

  11-1  ARTICLE 11 – THE TRUST      11.1 Establishment of Trust.  The Plan Sponsor may but is not required to  establish a trust to hold amounts which the Plan Sponsor may contribute  from time to time to correspond to some or all amounts credited to  Participants under Section 6.2.  In the event that the Plan Sponsor wishes  to establish a trust to provide a source of funds for the payment of Plan  benefits, any such trust shall be constructed to constitute an unfunded  arrangement that does not affect the status of the Plan as an unfunded  plan for purposes of Title I of ERISA and the Code.  If the Plan Sponsor  elects to establish a trust in accordance with Section 10.01 of the Adoption  Agreement, the provisions of Sections 11.2 and 11.3 shall become  operative.  11.2 Rabbi Trust.  Any trust established by the Plan Sponsor shall be between  the Plan Sponsor and a trustee pursuant to a separate written agreement  under which assets are held, administered and managed, subject to the  claims of the Plan Sponsor’s creditors in the event of the Plan Sponsor’s  insolvency.  The trust is intended to be treated as a rabbi trust in  accordance with existing guidance of the Internal Revenue Service, and  the establishment of the trust shall not cause the Participant to realize  current income on amounts contributed thereto.  The Plan Sponsor must  notify the trustee in the event of a bankruptcy or insolvency.  11.3 Investment of Trust Funds.  Any amounts contributed to the trust by the  Plan Sponsor shall be invested by the trustee in accordance with the  provisions of the trust and the instructions of the Administrator.  Trust  investments need not reflect the hypothetical investments selected by  Participants under Section 7.1 for the purpose of adjusting Accounts and the  earnings or investment results of the trust need not affect the hypothetical  investment adjustments to Participant Accounts under the Plan.    

 

  12-1  ARTICLE 12 – PLAN ADMINISTRATION    12.1 Powers and Responsibilities of the Administrator.  The Administrator  has the full power and the full responsibility to administer the Plan in all of  its details, subject, however, to the applicable requirements of ERISA.   The Administrator’s powers and responsibilities include, but are not limited  to, the following:  (a) To make and enforce such rules and procedures as it deems  necessary or proper for the efficient administration of the Plan;  (b) To interpret the Plan, its interpretation thereof to be final, except as  provided in Section 12.2, on all persons claiming benefits under the  Plan;  (c) To decide all questions concerning the Plan and the eligibility of  any person to participate in the Plan;  (d) To administer the claims and review procedures specified in  Section 12.2;  (e) To compute the amount of benefits which will be payable to any  Participant, former Participant or Beneficiary in accordance with the  provisions of the Plan;  (f) To determine the person or persons to whom such benefits will be  paid;  (g) To authorize the payment of benefits;  (h) To comply with the reporting and disclosure requirements of Part 1  of Subtitle B of Title I of ERISA;  (i) To appoint such agents, counsel, accountants, and consultants as  may be required to assist in administering the Plan;  (j) By written instrument, to allocate and delegate its responsibilities,  including the formation of an Administrative Committee to  administer the Plan.     

 

  12-2  12.2 Claims and Review Procedures.  (a) Claims Procedure.      If any person believes he is being denied any rights or benefits  under the Plan, such person may file a claim in writing with the  Administrator.  If any such claim is wholly or partially denied, the  Administrator will notify such person of its decision in writing.  Such  notification will contain (i) specific reasons for the denial, (ii) specific  reference to pertinent Plan provisions, (iii) a description of any  additional material or information necessary for such person to  perfect such claim and an explanation of why such material or  information is necessary, and (iv) a description of the Plan’s review  procedures and the time limits applicable to such procedures,  including a statement of the person’s right to bring a civil action   following an adverse decision on review.  Such notification will be  given within 90 days (45 days in the case of a claim regarding  Disability) after the claim is received by the Administrator.  The  Administrator may extend the period for providing the notification by  90 days (30 days in the case of a claim regarding Disability) if  special circumstances require an extension of time for processing  the claim and if written notice of such extension and circumstance  is given to such person within the initial 90 day period (45 day  period in the case of a claim regarding Disability).  If such  notification is not given within such period, the claim will be  considered denied as of the last day of such period and such  person may request a review of his claim.  (b) Review Procedure.      Within 60 days (180 days in the case of a claim regarding  Disability) after the date on which a person receives a written  notification of denial of claim (or, if written notification is not  provided, within 60 days (180 days in the case of a claim regarding  Disability) of the date denial is considered to have occurred), such  person (or his duly authorized representative) may (i) file a written  request with the Administrator for a review of his denied claim and  of pertinent documents and (ii) submit written issues and comments  to the Administrator.  The Administrator will notify such person of its  decision in writing.  Such notification will be written in a manner  calculated to be understood by such person and will contain  specific reasons for the decision as well as specific references to  pertinent Plan provisions.  The notification will explain that the  person is entitled to receive, upon request and free of charge,  reasonable access to and copies of all pertinent documents and  has the right to bring a civil action following an adverse decision on  review.  The decision on review will be made within 60 days (45  

 

  12-3  days in the case of a claim regarding Disability).  The Administrator  may extend the period for making the decision on review by 60  days (45 days in the case of a claim regarding Disability) if special  circumstances require an extension of time for processing the  request such as an election by the Administrator to hold a hearing,  and if written notice of such extension and circumstances is given  to such person within the initial 60-day period (45 days in the case  of a claim regarding Disability).  If the decision on review is not  made within such period, the claim will be considered denied.    (c) Exhaustion of Claims Procedures and Right to Bring Legal Claim    No action at law or equity shall be brought more than one (1) year  after the Administrator’s affirmation of a denial of a claim, or, if  earlier, more than four (4) years after the facts or events giving  rising to the claimant’s allegation(s) or claim(s) first occurred.    12.3 Plan Administrative Costs.  All reasonable costs and expenses  (including legal, accounting, and employee communication fees) incurred  by the Administrator in administering the Plan shall be paid by the Plan to  the extent not paid by the Employer.    

 

  13-1    ARTICLE 13 – MISCELLANEOUS      13.1 Unsecured General Creditor of the Employer.  Participants and their  Beneficiaries, heirs, successors and assigns shall have no legal or equitable  rights, interests or claims in any property or assets of the Employer.  For  purposes of the payment of benefits under the Plan, any and all of the  Employer’s assets shall be, and shall remain, the general, unpledged,  unrestricted assets of the Employer.  Each Employer's obligation under the  Plan shall be merely that of an unfunded and unsecured promise to pay  money in the future.   13.2 Employer’s Liability.  Each Employer’s liability for the payment of benefits  under the Plan shall be defined only by the Plan and by the deferral  agreements entered into between a Participant and the Employer.  An  Employer shall have no obligation or liability to a Participant under the Plan  except as provided by the Plan and a deferral agreement or agreements.  An  Employer shall have no liability to Participants employed by other Employers.  13.3 Limitation of Rights.  Neither the establishment of the Plan, nor any  amendment thereof, nor the creation of any fund or account, nor the payment  of any benefits, will be construed as giving to the Participant or any other  person any legal or equitable right against the Employer, the Plan or the  Administrator, except as provided herein; and in no event will the terms of  employment or service of the Participant be modified or in any way affected  hereby.  13.4 Anti-Assignment.  Except as may be necessary to fulfill a domestic relations  order within the meaning of Code Section 414(p), none of the benefits or  rights of a Participant or any Beneficiary of a Participant shall be subject to  the claim of any creditor.  In particular, to the fullest extent permitted by law,  all such benefits and rights shall be free from attachment, garnishment, or any  other legal or equitable process available to any creditor of the Participant  and his or her Beneficiary.  Neither the Participant nor his or her Beneficiary  shall have the right to alienate, anticipate, commute, pledge, encumber, or  assign any of the payments which he or she may expect to receive,  contingently or otherwise, under the Plan, except the right to designate a  Beneficiary to receive death benefits provided hereunder.  Notwithstanding  the preceding, the benefit payable from a Participant’s Account may be  reduced, at the discretion of the administrator, to satisfy any debt or liability to  the Employer.  13.5 Facility of Payment.  If the Administrator determines, on the basis of medical  reports or other evidence satisfactory to the Administrator, that the recipient of  any benefit payments under the Plan is incapable of handling his affairs by  reason of minority, illness, infirmity or other incapacity, the Administrator may  

 

  13-2  direct the Employer to disburse such payments to a person or institution  designated by a court which has jurisdiction over such recipient or a person or  institution otherwise having the legal authority under State law for the care  and control of such recipient. The receipt by such person or institution of any  such payments therefore, and any such payment to the extent thereof, shall  discharge the liability of the Employer, the Plan and the Administrator for the  payment of benefits hereunder to such recipient.  13.6 Notices.  Any notice or other communication to the Employer or Administrator  in connection with the Plan shall be deemed delivered in writing if addressed  to the Plan Sponsor at the address specified in Section 1.03 of the Adoption  Agreement and if either actually delivered at said address or, in the case or a  letter, 5 business days shall have elapsed after the same shall have been  deposited in the United States mails, first-class postage prepaid and  registered or certified.  13.7 Tax Withholding.  If the Employer concludes that tax is owed with respect to  any deferral or payment hereunder, the Employer shall withhold such  amounts from any payments due the Participant or from amounts deferred, as  permitted by law, or otherwise make appropriate arrangements with the  Participant or his Beneficiary for satisfaction of such obligation.  Tax, for  purposes of this Section 13.7 means any federal, state, local or any other  governmental income tax, employment or payroll tax, excise tax, or any other  tax or assessment owing with respect to amounts deferred, any earnings  thereon, and any payments made to Participants under the Plan.  13.8 Indemnification. (a) Each Indemnitee (as defined in Section 13.8(e)) shall be  indemnified and held harmless by the Employer for all actions taken by him  and for all failures to take action (regardless of the date of any such action or  failure to take action), to the fullest extent permitted by the law of the  jurisdiction in which the Employer is incorporated, against all expense,  liability, and loss (including, without limitation, attorneys' fees, judgments,  fines, taxes, penalties, and amounts paid or to be paid in settlement)  reasonably incurred or suffered by the Indemnitee in connection with any  Proceeding (as defined in Subsection (e)).  No indemnification pursuant to  this Section shall be made, however, in any case where (1) the act or failure  to act giving rise to the claim for indemnification is determined by a court to  have constituted willful misconduct or recklessness or (2) there is a  settlement to which the Employer does not consent.  (b)   The right to indemnification provided in this Section shall include the right  to have the expenses incurred by the Indemnitee in defending any  Proceeding paid by the Employer in advance of the final disposition of the  Proceeding, to the fullest extent permitted by the law of the jurisdiction in  which the Employer is incorporated; provided that, if such law requires, the  payment of such expenses incurred by the Indemnitee in advance of the final  disposition of a Proceeding shall be made only on delivery to the Employer of  

 

  13-3  an undertaking, by or on behalf of the Indemnitee, to repay all amounts so  advanced without interest if it shall ultimately be determined that the  Indemnitee is not entitled to be indemnified under this Section or otherwise.  (c)  Indemnification pursuant to this Section shall continue as to an  Indemnitee who has ceased to be such and shall inure to the benefit of his  heirs, executors, and administrators.  The Employer agrees that the  undertakings made in this Section shall be binding on its successors or  assigns and shall survive the termination, amendment or restatement of the  Plan.  (d)  The foregoing right to indemnification shall be in addition to such other  rights as the Indemnitee may enjoy as a matter of law or by reason of  insurance coverage of any kind and is in addition to and not in lieu of any  rights to indemnification to which the Indemnitee may be entitled pursuant to  the by-laws of the Employer.  (e)  For the purposes of this Section, the following definitions shall apply:  (1)  "Indemnitee" shall mean each person serving as an Administrator (or any  other person who is an employee, director, or officer of the Employer) who  was or is a party to, or is threatened to be made a party to, or is otherwise  involved in, any Proceeding, by reason of the fact that he is or was performing  administrative functions under the Plan.  (2)  "Proceeding" shall mean any threatened, pending, or completed action,  suit, or proceeding (including, without limitation, an action, suit, or proceeding  by or in the right of the Employer), whether civil, criminal, administrative,  investigative, or through arbitration.  13.9 Successors.  The provisions of the Plan shall bind and inure to the benefit of  the Plan Sponsor, the Employer and their successors and assigns and the  Participant and the Participant’s designated Beneficiaries.  13.10 Disclaimer. It is the Plan Sponsor’s intention that the Plan comply with the  requirements of Code Section 409A.  Neither the Plan Sponsor nor the  Employer shall have any liability to any Participant should any provision of the  Plan fail to satisfy the requirements of Code Section 409A.  13.11 Governing Law.  The Plan will be construed, administered and enforced  according to the laws of the State specified by the Plan Sponsor in Section  12.01 of the Adoption Agreement.

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