Document:

EX-10.15

EXHIBIT 10.15

TITANIUM ASSET MANAGEMENT CORP.

“NONQUALIFIED DEFERRED COMPENSATION PLAN”

MASTER PLAN DOCUMENT

 

 

“NONQUALIFIED DEFERRED COMPENSATION PLAN”

MASTER PLAN DOCUMENT

     By execution of the Adoption Agreement attached hereto, Titanium Asset Management Corp.,
the Service Recipient, hereinafter referred to as (the “Plan Sponsor”), hereby establishes this
Nonqualified Deferred Compensation Plan (the “Plan”) for the benefit of certain Employees or
Independent Contractors, the Service Provider, hereinafter referred to as (“Participants”), that
the Plan Sponsor designates pursuant to the terms set forth herein.

PREAMBLE

     The Plan Sponsor intends that the Plan shall at all times be administered and interpreted
in such a manner as to constitute an unfunded nonqualified deferred compensation plan for tax
purposes and for purposes of Title I of ERISA and may be: (i) a plan maintained “primarily for
the purposes of providing deferred compensation for a select group of management or highly
compensated employees” (“top-hat plan”); or (ii) a plan for Independent Contractors. The Plan
Sponsor in the Adoption Agreement will specify such Plan terms as will apply to all Participants
uniformly or as may apply to a given Participant. The Plan Sponsor need not provide the same
Plan benefits or apply the same Plan terms and conditions to all Participants, even as to
Participants who are of similar pay, title, and/or other status of the Plan Sponsor. The Plan
Sponsor intends that the Plan shall at all times be administered and interpreted in accordance
with Code Section 409A, as added under The American Jobs Creation Act of 2004, and the Treasury
Regulations or any other authoritative guidance issued under that Section.

ARTICLE 1

Definitions

     DEFINITION OF TERMS. Certain words and phrases are defined when first used in later
Articles of this Plan. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they
would so apply; and
whenever any words are used herein in the singular or in the plural, they shall be construed as
though they were used in the plural or the singular, as the case may be, in all cases where they
would so apply. For the purpose of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated meanings:

     1.1 “Account(s)” shall mean a book account reflecting amounts credited to a Participants
Account(s). To the extent that it is considered necessary or
appropriate, the Plan Administrator
shall maintain separate subaccounts for each source of contribution under this Plan or shall
otherwise provide a means for determining that portion of an Account attributable to each
contribution source.

     1.2 “Adoption Agreement” shall mean the written agreement executed by the Plan Sponsor to
establish the Plan.

     1.3 “Aggregated Plans” shall mean this Plan and any other like-type plan or arrangement
(account balance plan) of the Plan Sponsor in which a Participant participates and to which the
Plan or Applicable Guidance requires the aggregation of all such nonqualified Deferred
Compensation in applying §409A and associated regulations.

     1.4 “Applicable Guidance” shall mean, as the context requires, §409A and Section 83,
Final Treasury Regulations Section 1.409A, and Treasury Regulations 1.83, or other written
Treasury or IRS guidance regarding or affecting §409A or §83. Applicable Guidance also includes,
through December 31, 2007, Notice 2005-1, Notice 2006-79, and Notice 2006-100.

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

     1.6 “Beneficiary” shall mean the person or persons, natural or otherwise,
designated in writing by a Participant before his or her death to receive Plan benefits in the
event of the Participant’s death.

     1.7 “Bonus” shall mean any compensation, in addition to Base Salary and Sales
Commission, relating to services performed during any Taxable Year of the Plan Sponsor,
whether or not paid in such Taxable Year or included on the Federal Income Tax Form W-2 for
such Taxable Year, payable to a Participant as an Employee under the Plan Sponsor’s bonus
plans, excluding stock options. Bonus shall be calculated before reduction for compensation
voluntarily deferred or contributed by the Participant pursuant to all qualified or
nonqualified
plan(s) of the Plan Sponsor and shall be calculated to include amounts not otherwise
included
in the Participant’s gross income under §§125, 402(e)(3), 402(h), or 403(b) of the Code
pursuant
to Plans established by the Plan Sponsor. A Bonus also may be Performance-Based

Compensation as defined under the terms of the Plan.

     1.8 “Cause” shall mean any of the following acts or circumstances: (i) willful
destruction by the Participant of property of the Plan Sponsor having a material value to the
Plan Sponsor; (ii) fraud, embezzlement, theft, or comparable dishonest activity committed by
the Participant (excluding acts involving a de minimis dollar value and not related to the Plan
Sponsor); (iii) the Participant’s conviction of or entering a plea of guilty or nolo contendere
to
any crime constituting a felony or any misdemeanor involving fraud, dishonesty, or moral
turpitude (excluding acts involving a de minimis dollar value and not related to the Plan
Sponsor); (iv) the Participant’s breach, neglect, refusal, or failure to materially discharge the
Participant’s duties (other than due to physical or mental illness) commensurate with the
Participant’s title and function or the Participant’s failure to comply with the lawful
directions
of a senior managing officer of the Plan Sponsor in any such case that is not cured within
fifteen (15) days after the Participant has received written notice thereof from such senior
managing officer; or (v) any willful misconduct by the Participant which may cause substantial
economic or reputation injury to the Plan Sponsor, including, but not limited to, sexual
harassment.

     1.9 “Change in Control” shall mean the occurrence of a Change in Control event within the
meaning of Treasury Regulations §1.409A-3(i)(5) and described in any of subparagraph (a), (b), or
(c), (collectively referred to as “Change in Control Events”), or any combination of the Change
in Control Events. To constitute a Change in Control Event with respect to the Participant or
Beneficiary, the Change in Control Event must relate to: (i) the corporation for whom the
Participant is performing services at the time of the Change in Control Event; (ii) the
corporation that is liable for the Payment of the Deferred Compensation (or all corporations
liable for the Payment if more than one corporation is liable); or (iii) a corporation that is a
majority shareholder of a corporation identified in clause (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 clause (i) or (ii).

     (a)
Change in Ownership. A Change in Ownership occurs if a person, or a group
of persons acting together, acquires more than fifty percent (50%) of the stock of

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the corporation, measured by voting power or value. Incremental increases in ownership by a person
or group that already owns fifty percent (50%) of the corporation do not result in a Change of
Ownership, as defined in Treasury Regulations §1.409A-3(i)(5)(v).

     (b)
Change in Effective Control. A Change in Effective Control occurs if, over a twelve
(12) month period: (i) a person or group acquires stock representing thirty percent (30%) of the
voting power of the corporation; or (ii) a majority of the members of the board of directors of the
ultimate parent corporation is replaced by directors not endorsed by the persons who were members
of the board before the new directors’ appointment, as defined in Treasury Regulations
§1.409A-3(i)(5)(vi).

     (c)
Change
in Ownership of a Substantial Portion of Corporate Assets. A Change in Control
based on the sale of assets occurs if a person or group acquires forty percent (40%) or more of the
gross fair market value of the assets of a corporation over a twelve (12) month period, No change
in control results pursuant to this Article (c) if the assets are transferred to certain entities
controlled directly or indirectly by the shareholders of the transferring corporation, as defined
in Treasury Regulations § 1.409A-3(i)(5)(vii).

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

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

     1.12 “Compensation” shall mean the total cash remuneration, including regular
Base Salary, Sales Commission, Bonus, and/or Performance-Based Compensation paid by the
Plan Sponsor to an Eligible Individual with respect to his or her services performed for the Plan
Sponsor. Compensation with respect to an Independent Contractor means all Payments by the
Plan Sponsor to the Independent Contractor for services during a Taxable Year.

     1.13 “Deemed Investment Election” shall mean the elections made by a Participant specifying the
manner in which the Participant Account(s) will be hypothetically invested in the Deemed Investment
Options in accordance with the terms of the Plan.

     1.14 “Deemed Investment Options” shall mean the hypothetical Investment Options offered by the Plan
Sponsor, from time to time, that are used to determine the Earnings on the Participant Account(s).

     1.15 “Deferred Compensation” shall mean the Participant’s Account attributable to Elective
Deferrals (if any), Nonelective Matching Contributions (if any), Nonelective Discretionary
Contributions (if any), and Earnings on such contributions. The “Deferral of Compensation” is
Compensation that the Participant or the Plan Sponsor has deferred under the Plan. Compensation is
deferred if: (i) under the terms of the Plan and the relevant facts and circumstances, the
Participant has a Legally Binding Right to Compensation during a Taxable Year; and (ii) such
Compensation is or may be payable to (or on behalf of) the Participant in a later Taxable Year. An
amount generally is payable at the time the Participant has a right to currently receive a transfer
of cash or property, including a transfer of property includable in income under Code §83.

     1.16 “Disability or Disabled” shall mean a condition of the Participant whereby he or she either:
(i) is unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (iii) is, by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health plan covering
employees of the Plan Sponsor. The Plan Administrator will determine whether a Participant has
incurred a Disability based on its own good faith determination and may requite a Participant to
submit to reasonable physical and mental examinations for this purpose. A Participant will also be
deemed to have incurred a Disability if determined to be

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totally disabled by the Social Security Administration, Railroad Retirement Board, or in accordance
with a disability insurance program, provided that the definition of disability applied under such
disability insurance program complies with the requirements of Treasury Regulation §1.409A-3(i)(4) and authoritative guidance.

     1.17 “Earnings” shall mean, the Plan’s actual or notional income, attributable to an amount of
Deferral of Compensation, (in accordance with Code §31.3121(v)(2) -l(d)(2)) and in accordance with
the terms of the Plan. For purposes of this Plan, Earnings on an amount deferred generally includes
an amount credited on behalf of a Participant that reflects a rate of return that does not exceed
either: (i) the rate of return on a predetermined actual investment or, (ii) if the income does not
reflect a rate of return on a predetermined actual investment, a reasonable rate of interest, in
accordance with Treasury Regulation §1.409A- 1(o).

     1.18 “Effective Date” shall be the date set forth in the Adoption Agreement.

     1.19 “Election Form” shall mean the form(s) established, from time to time, by the Plan
Administrator on which the Participant makes certain designations as required under the terms of
the Plan. The Participant Election Form may take the form of an electronic communication followed
by appropriate confirmation according to specifications established by the Plan Administrator.

     1.20 “Elective Deferral” shall mean the amount of Compensation a Participant elects to defer into
the Participant’s Elective Deferral Account and/or Scheduled
Withdrawal Account under the Plan.

     1.21
“Elective Deferral Account” shall mean: (i) the sum of the Participant’s Elective Deferral
that may be allocated, in whole or in part, by a Participant pursuant to his or her deferral
election to his or her Elective Deferral Account for each Plan Year, plus (ii) Earnings thereon,
less (iii) all distributions made to, or withdrawals by, the Participant and his or her
Beneficiary, and tax withholding amounts which may have been deducted from the Participant’s
Elective Deferral Account.

     1.22 “Eligible Individual” shall mean for any Plan Year (or applicable portion of a Plan Year), an
Employee or an Independent Contractor who is determined by the Plan Sponsor, or its designee, to be
a Participant under the Plan. If the Plan Sponsor determines that an Employee or Independent
Contractor first becomes an Eligible Individual during a Plan Year, the Plan Sponsor shall notify
the individual in writing of its determination and of the date during the Plan Year on which the
individual shall first become a Plan Participant.

     1.23 “Employee” shall mean a person or entity (in accordance with Treasury Regulations
§1.409A-1(f)(1) which is on the cash basis method of accounting for Federal income tax purposes)
providing services to the Plan Sponsor in the capacity of a common law Employee of the Plan
Sponsor.

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

     1.25 “Fiscal Year Compensation” shall mean that in the case where the Plan Sponsor’s taxable year
is a non-calendar year, a Participant may elect to defer Bonus Compensation by making an election
no later than the close of the Plan Sponsor’s taxable year which precedes the Plan Sponsor’s taxable year in
which the Participant performs services for which the Compensation is payable. Fiscal Year
Compensation includes Compensation relating to a period of service coextensive with one or more
consecutive taxable years of the Plan Sponsor, of which no amount is paid or payable during the
Plan Sponsor’s taxable year or years constituting the period of service in accordance with Treasury
Regulation §1.409A-2(a)(6) and Applicable Guidance.

     1.26
“Independent Contractor” shall mean a person or entity (as described in Treasury Regulations
§1.409A-1(f)(1) that is on the cash basis method of accounting for Federal income tax purposes)
that is providing management services to the Plan Sponsor and who is

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not an Employee. For purposes of this Plan, an Independent Contractor excludes a contractor
providing significant services to at least two unrelated entities and one that is not related to
the Plan Sponsor (see Treasury Regulations §1.409A-1(f)((2) for description of Independent
Contractors specifically excluded from coverage under IRC Section 409A).

     1.27 “Legally Binding Right” shall mean, with respect to Compensation: (i) the Participant’s right
to such Compensation, granted by the Plan Sponsor, after the Participant has performed the services
which created the Legally Binding Right, and (ii) where Compensation may not be reduced
unilaterally or eliminated by the Plan Sponsor or any other person after the services creating the
right to Compensation has been performed. The Plan Sponsor, based on the facts and circumtances,
will determine whether a Legally Binding Right exists or does not exist with respect to
Compensation, in accordance with Treasury Regulation
§1.409A-1(b)(1).

     1.28 “Life Annuity” shall mean, with respect to the definition of Payments for purposes of
subsequent changes in the time and form of Payment, a series of substantially equal periodic
Payments, payable not less frequently than annually, for the life (or life expectancy) of the
Participant, or a series of substantially equal periodic Payments, payable not less frequently than
annually, for the life (or life expectancy) of the Participant, followed upon the death or end of
the life expectancy of the Participant by a series of substantially equal periodic Payments,
payable not less frequently than annually, for the life (or life expectancy) of the Participant’s
designated Beneficiary (if any).

     1.29 “New Payment Election for Plans in Existence on or Before December 31, 2008.” Subject to the
requirements of Code § 409A and Applicable Guidance under Notice
2007-86, the Plan Sponsor shall specify in the Adoption Agreement whether the Plan Sponsor and/or
an active Employee will have a one-time opportunity in 2007 and/or 2008 to make a new election with
respect to the time and/or form of payment of any unpaid amounts previously credited under the
Plan. Such an election (if made) will not be treated as a change in the time or form of payment
under Code §409A(a)(4) or an acceleration of a payment under Code §409A(3). The Plan Sponsor and/or
a Participant may change the form of payment of a previous election made with respect to Separation
from Service, death, Disability, or a Change in Control. The Participant may change the time and/or
form of payment for a previously established Schedule Withdrawal Account by making a New Payment
Election on or before December 31, 2008. If the election is made on or after January 1, 2007 and on
or before December 31, 2007, the election may only apply to amounts that would not be otherwise
payable in 2007 and may not cause an amount to be paid in 2007 that would not be otherwise payable
in 2007. If the election is made on or after January 1, 2008 and on or before December 31, 2008,
the election may only apply to amounts that would not be otherwise payable in 2008 and may not
cause an amount to be paid in 2008 that would not be otherwise
payable in 2008.

     1.30 “Nonelective Discretionary Contribution” shall mean the Compensation deferred in respect of a
Participant at the Plan Sponsor’s sole discretion for any one Plan Year.

     1.31 “Nonelective Discretionary Contribution Account” shall mean: (i) the sum of the Plan Sponsor
Nonelective Discretionary Contribution amounts (if any), plus (ii) Earnings thereon, less (iii) all
distributions made to the Participant or his or her Beneficiary that relate to the Participant’s
Nonelective Discretionary Contribution Account, and tax withholding amounts deducted (if any) from
said Account.

     1.32 “Nonelective Matching Contribution” shall mean a discretionary or fixed Plan Sponsor
contribution made with respect to a Participant’s Elective Deferral for any one Plan Year. The Plan
Sponsor shall determine in the Adoption Agreement whether the contribution will be fixed or
discretionary.

     1.33
“Nonelective Matching Contribution Account” shall mean: (i) the sum of the Nonelective
Matching Contribution amounts, plus (ii) Earnings thereon, less (iii) all distributions made to the
Participant or his or her Beneficiary that relate to the Participant’s Nonelective Matching
Contribution Account, and tax withholding amounts deducted (if any) from said Account.

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     1.34 “Participant” shall mean any Eligible Individual: (i) who is selected to participate in this
Plan, (ii) who elects to participate in this Plan by signing a Participation Agreement, (iii) who
completes and signs certain Election Form(s) required by the Plan
Administrator, and (iv) whose
signed Election Form(s) are accepted by the Plan Administrator or, (v) a former Eligible Individual
who continues to be entitled to a benefit under this Plan.

     1.35 “Participation Agreement” shall mean the agreement executed by the Eligible Individual and
Plan Administrator whereby the Eligible Individual agrees to participate in the Plan.

     1.36 “Payment” shall mean, for purposes of subsequent changes in the time or form of Payment, each
separately identified amount to which a Participant is entitled under the Plan, on a determinable
date, and includes amounts paid for the benefit of the Participant. An amount is “separately
identified” only if the amount may be objectively determined under a nondiscretionary formula. For
purposes of this Definition, a Payment includes the provision of any taxable benefit, including
Payment in cash or in kind. A Payment includes, but is not limited to, the transfer, cancellation,
or reduction of an amount of Deferred Compensation in exchange for benefits under a welfare benefit
plan, a fringe benefit excludible under Code §119 or §132, or any other benefit that is excludible
from gross income.

     1.37 “Performance-Based Compensation” shall mean that portion of a Participant’s Compensation, if
any, that is contingent on the satisfaction of pre-established organizational or individual
performance criteria relating to a performance period of at least 12 consecutive months.
Organizational or individual performance criteria are considered pre-established if established in
writing by not later than 90 days after the commencement of the period of service to which the
criteria relates, provided that the outcome is substantially uncertain at the time the criteria are
established. Performance-Based Compensation may include Payments based on performance criteria that
are not approved by a compensation committee of the board of directors (or similar entity in the
case of a non-corporate Plan Sponsor) or by the stockholders or members of the Plan Sponsor.
Performance-Based Compensation does not include any amount or portion of any amount that will be
paid either regardless of performance, or based upon a level of performance that is substantially
certain to be met at the time the criteria is established. Compensation may be Performance-Based
Compensation where the amount will be paid regardless of satisfaction of the performance criteria
due to the Participant’s death, Disability, or a Change in Control event (as defined in Treasury
Regulations §l.409A-3(i)(5)(i)), provided that a Payment made under such circumstances without
regard to the satisfaction of the performance criteria will not constitute Performance-Based
Compensation. For purposes of this Article, a disability refers to any medically determinable
physical or mental impairment resulting in the Participant’s inability to perform the duties of his
or her position or any substantially similar position, where such impairment can be expected to
result in death or can be expected to last for a continuous period of not less than six (6) months.
Performance-Based Compensation includes Payments based upon subjective performance criteria,
provided that: (i) the subjective performance criteria are bona fide and relate to the performance
of the Participant, a group of Participants that includes the Participant, or a business unit for
which the Participant provides services (which may include the entire
organization); and (ii) the
determination that any subjective performance criteria have been met is not made by the Participant
or a family member of the Participant (as defined in Section 267(c)(4) applied as if the family of
an individual includes the spouse of any member of the family), or a person under the effective
control of the Participant or such a family member, and no amount of the Compensation of the person
making such determination is effectively controlled in whole or in part by the Participant or such
a family member.

     1.38 “Permissible Payment Events” shall mean one or more of the following six (6) conditions,
specified by the Plan Sponsor in the Adoption Agreement, under which Payment may be made to a
Participant or his or her Beneficiary under the terms of the Plan: (i) the Participant’s Separation
from Service, (ii) the Participant’s death, (iii) the Participant’s Disability, (iv) a Change in
Ownership or effective control of the Plan Sponsor, or in the ownership of a substantial portion of
the assets of the Plan Sponsor, (v) upon the occurrence of

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an Unforesceeable Emergency, or (vi) a time or a fixed schedule specified under the Plan, in
accordance with Treasury Regulation §1.409A-3(a).

     1.39 “Plan” shall mean this Nonqualified Deferred Compensation Plan of the Plan
Sponsor established by and including the Master Plan Document, the Adoption Agreement, the
Participation Agreement, all Election Form(s), and the Trust, (if any). For purposes of applying
Code § 409A requirements, this Plan is an account balance plan under Treasury Regulation
§1.409A-1(c)(2)(i)(A).

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

     1.41 “Plan Sponsor” shall mean the person or entity: (i) receiving the services of the Participant;
(ii) with respect to whom the Legally Binding Right to Compensation arises; and (iii) all persons
with whom such person or entity would be considered a single employer under Code §414(b) or
§414(c).

     1.42
“Plan Year” shall mean, for the first Plan Year, the period beginning on the Effective Date of
the Plan and ending December 31 of such calendar year, and thereafter, a twelve (12) month period
beginning January 1 of each calendar year and continuing through December 31 of such calendar year.

     1.43 “Sales Commission Compensation” shall mean Compensation or portions of Compensation earned by
the Participant if: (i) a substantial portion of the services provided by the Participant to the
Plan Sponsor consists of the direct sale of a product or service to an unrelated customer; (ii) the
Compensation paid by the Plan Sponsor to the Participant consists of either a portion of the
purchase price for the product or service or an amount calculated solely by reference to the volume
of sales; and (iii) Payment of the Compensation is contingent upon the Plan Sponsor receiving
Payment for the product or services from a customer who is unrelated to the Plan Sponsor or to the
Participant. A customer is related if treated as related under Treasury Regulations §1.409A-2(a)(l2)(i).

     1.44 “Scheduled Withdrawal Account” shall mean an Account established for determining the amount
payable to a Participant at a Specified Time or pursuant to a Fixed Schedule under the terms of the
Plan.

     1.45 “Section 409A” shall mean Section 409A of the Code and the Treasury Regulations and other
Applicable Guidance issued under that Section.

     1.46 “Separation from Service” shall mean:

(a) Employee Participants. The occurrence of a Participant’s death, retirement, or “other
termination of employment” (as defined in Treasury Regulations §1.409A-l(h)(1))
with the Plan Sponsor (as defined in Treasury Regulations §l.409A-1(h)(3)).

(i) Effect of Leave. A Participant does not incur a Separation from Service if the
Participant is on military leave, sick leave, or other bona fide leave of absence if the period of
such leave does not exceed six (6) months or, if longer, the period for which a statute or contract
provides the Participant with the right to reemployment with the Plan Sponsor. If a Participant’s
leave exceeds six (6) months but the Participant is not entitled to reemployment under a statute or
contract, the Participant incurs a Separation from Service on the next day following the expiration
of such six (6) month period.

(ii) Termination of Employment. A Participant will have incurred a Separation from Service
where the Plan Sponsor and the Participant reasonably

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anticipated that no further services would be performed after a certain date. Notwithstanding the
above, a Participant is presumed to have Separated from Service (whether as an Employee or an
Independent Contractor), when the level of bona fide services performed decreases to a level equal
to or less than twenty percent (20%) of the services performed by the Participant during the
immediately preceding 36-month period (or the full period of services to the employer if the
Participant has been providing services to the Plan Sponsor for less than 36 months). A Participant
will be presumed not to have Separated from Service where the level of bona fide services performed
continues at a level that is fifty percent (50%) or more of the average level of service performed
by the Participant during the immediately preceding 36-month period (or the full period of services
to the employer if the Participant has been providing services to the Plan Sponsor for less than 36
months).

(b) Independent Contractor Participants. A Separation from Service will occur upon the
expiration of the contract (or in the case of more than one contract, all contracts) under which
services are performed for the Plan Sponsor (as defined in Treasury Regulations §1.409A-1(h)(3)),
if the expiration constitutes a good-faith and complete termination of the contractual
relationship. The Plan is considered to satisfy the requirement with respect to a amount payable to
an Independent Contractor upon a Separation from Service if: (i) no amount will be paid to the
Participant before a date at least twelve (12) months after the day on which the contract expires
under which the Participant performs services for the Plan Sponsor (or, in the case of more than
one contract, all such contracts expire); and (ii) no amount payable to the Participant on that
date will be paid to the Participant if, after the expiration of the contract (or contracts) and
before that date, the Participant performs services for the Service Recipient as an Independent
Contractor or an Employee.

     1.47 “Series of Separate Payments” shall mean Payment of a series of substantially equal periodic
amounts to be paid over a predetermined number of years, except to the extent that any increase in
the Payment amounts reflect reasonable Earnings through the date of Payment.

     1.48 “Service Year” shall mean a Participant’s Taxable Year in which the Participant performs
services which give rise to Compensation.

     1.49 “Specified Employee” shall mean a Participant who is a key employee as defined in Code §416(i)
(without regard to Section 416(i)(5)). However, a Participant is not a Specified Employee unless
any stock of the Plan Sponsor is publicly traded on an established securities market or otherwise,
as defined in Code §1.897-1(m). If a Participant is a key employee at any time during the twelve
(12) months ending on the identification date, the Participant is a Specified Employee for the
twelve (12) month period commencing on the first day of the fourth month following the
identification date. For purposes of this Article, the identification
date is December 31. The Plan
Sponsor, in determining whether this Article and all related Plan provisions apply, will determine
whether the Plan Sponsor has any publicly traded stock as of the date of a Participant’s Separation
from Service,

     1.50 “Specified Time or Fixed Schedule” shall mean, with respect to a Payment of Deferred
Compensation, if objectively determinable: (i) the amount payable; and (ii) the Payment date or
dates that are nondiscretionary. For purposes of this Article, an amount is objectively
determinable if the amount is specifically identified or if the amount may be determined at the
time the Payment is due pursuant to an objective, nondiscretionary formula specified at the time
the amount is deferred and in accordance with Treasury Regulations §1.409A-3(i)(1)(i).

     1.51 “Taxable Year” shall mean the twelve (12) consecutive month period ending each December 31.

Page 9 of 28

 

     1.52 “Treasury Regulations” shall mean regulations promulgated by the Internal Revenue Service for
the United States Department of the Treasury, as they may be amended from time to time.

     1.53 “Trust” shall mean one or more trusts that may be established in accordance with the terms of
this Plan.

     1.54 “Unforesceeable Emergency” shall mean: (i) a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s spouse, the
Participant’s Beneficiary, or the Participant’s dependents (as defined in Code §152 (a)); (ii) loss
of the Participant’s property due to casualty; or (iii) other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.
The Plan Sponsor will determine whether a Participant incurs an Unforeseeable Emergency based on the
relevant facts and circumstances and in accordance with Treasury Regulations §1.409A-3(a)(6)(i)(3)
or Applicable Guidance. However, in any case, Payment on account of an Unforeseeable Emergency may
not be made to the extent that such emergency is or may be relieved: (i) through reimbursement or
compensation from insurance or otherwise; (ii) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not cause severe financial hardship; or (iii) by the
cessation of deferrals under this Plan. The amount of any Payment based on an Unforeseeable
Emergency is limited to the amount that is reasonably necessary to satisfy the emergency need,
which may include amounts necessary to pay any Federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution. The determination as to the amount of
Payment must take into account any additional compensation that is available to the Participant if
he or she cancels a deferral election in accordance with terms of the Plan. If the Plan Sponsor in
the Adoption Agreement elects to permit Payment based on an Unforeseeable Emergency, the Plan shall
provide for Payment upon all Unforeseeable Emergencies, provided that any event upon which a
Payment may be made qualifies as an Unforeseeable Emergency.

     1.55 “Valuation Date” shall mean the date through which Earnings are credited/debited to a
Participant Account(s). The Valuation Date shall be as close to the payout or other event
triggering valuation as is administratively feasible. The Valuation date for purposes of the
Article shall be interpreted as each day at the close of business of the New York Stock Exchange
(currently 4:00 p.m. Eastern Time), on days that the New York Stock Exchange (NYSE) is open for
trading or any other day on which there is sufficient trading in securities of the applicable fund
to materially affect the unit value of the fund and the corresponding unit value of the
Participant’s Deemed Investment Option(s). If the NYSE extends its closing beyond 4:00 p.m. Eastern
Time, and continues to value after the time of closing, the Plan Administrator reserves the right
to treat communications received after 4:00 p.m. Eastern Time as being received as of the beginning
of the next day.

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

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

ARTICLE 2

Selection, Enrollment, Eligibility

     2.1 Selection by Plan Sponsor. Participation in this Plan shall be limited to a select group
of management or highly compensated employees or Independent Contractors of the Plan Sponsor, as
determined by the Plan Sponsor in its sole and absolute discretion. The initial group of Eligible
Individuals shall become Participants on the Effective Date. Any Eligible

Page 10 of 28

 

Individual selected as a Plan Participant after the Effective Date, shall become a Participant on a
date determined by the Plan Sponsor.

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

     2.3 Enrollment Requirements. As a condition of participation in this Plan, each selected
Plan Participant shall complete, execute, and return to the Plan Administrator a Participation
Agreement and Election Form within the time specified by the Plan Administrator. In addition, the
Plan Administrator shall establish such other enrollment requirements as it determines necessary or
advisable. All elections to defer Compensation with respect to a Plan Year shall be irrevocable,
except as permitted under a subsequent Article.

     2.4 Termination of Participation. If the Plan Administrator determines that; (i) a
Participant who has not experienced a Separation from Service no longer qualifies as a member of a
select group of management or highly compensated employees; or (ii) a Participant’s participation
in the Plan could jeopardize the status of this Plan as “unfunded” and “maintained by the Plan
Sponsor primarily for the purpose of providing Deferred Compensation for a select group of
management or highly compensated employees,” then the Plan Sponsor may in its sole and absolute
discretion prevent the Participant from making future deferral elections and receiving nonelective
contributions to the Plan.

ARTICLE 3

Deferral of Compensation

     3.1 Minimum and Maximum Elective Deferral Limits. For each Plan Year, a Participant may
elect to defer Compensation in fixed dollar amounts or percentages subject to the minimums or
maximums (if any) established by the Plan Sponsor and communicated to the Participant in his or her
Election Form. If a deferral election is made for less than the minimum amount, or if no deferral
election is made, the amount deferred for such Plan Year shall be zero. If a deferral election is
made for more than the stated maximum amount, then the amount deferred shall default to the maximum
amount. The Plan Sponsor may at any time establish an aggregate limit on the amount of Compensation
that any Participant may elect to defer under the Plan, provided that such limit shall not reduce a
Participant’s Elective Deferral for the Plan Year under any Election Form in effect at the time the
limit is established, Once such a limit is in effect, the Elective Deferral specified by each of
the Participant’s Election Forms shall be limited so that the aggregate of the Participant’s
Elective Deferral does not exceed the maximum.

     3.2 Election to Defer Compensation.

     (a) In General. Except as otherwise provided below, an Eligible Individual shall make an
election to defer Compensation, on the Election Form provided by the Plan Sponsor, not later than
the last business day of the Plan Year ending before the first Plan Year in which services relating
to such Compensation are performed; provided that Base Salary payable for a regular payroll period
that ends after the last day of the Service Year shall be treated as relating to services performed
in the next Service Year. Thus, a deferral election generally must be made by the last business day
in December before the Service Year to which the election relates. The Plan Administrator, however,
may establish an earlier deadline for the completion and delivery of Election Form. If no such
Election Form is timely delivered for a Plan Year, the Elective Deferral amount shall be zero for
that Plan Year. An election to defer Compensation may include an election as to both the time and
form of Payment. An Election Form, to be valid, must be completed and signed by the Participant and
accepted by the Plan Administrator. An election to defer Compensation shall be irrevocable and
shall continue in effect for the entire Plan Year with respect to which it is made, except as
otherwise provided in the Plan. An election to defer may be changed or revoked up to the last day
for delivery of the Election Form. Accordingly, an election to defer Compensation will not be

Page 11 of 28

 

considered as having been made until such time, at which time the Election Form shall become
irrevocable.

     (b) First Year of Eligibility. If an Employee or Independent Contractor first becomes an
Eligible Individual after the beginning of a Plan Year, and if he or she has not in any prior Plan
Year become eligible to participate in any nonqualified deferred compensation plan of the Plan
Sponsor with which the Plan would be aggregated for purposes of Treasury Regulations
§l.409A-2(a)(6), he or she may make an initial deferral election within thirty (30) days after the
date he or she first becomes an Eligible Individual, with respect to Compensation paid for services
to be performed subsequent to the election. In the event an election of deferral is made with
respect to a Bonus in the first year of eligibility, but after the beginning of a service period,
the deferral election will apply to the portion of the bonus paid for services performed subsequent
to the election and will be calculated based on the total bonus for the service period multiplied
by the ratio of the number of days remaining in the service period to the total days in the service
period. Where an Eligible Individual has ceased being eligible to participate in the Plan (other
than the accrual of Earnings), regardless of whether all amounts deferred under the plan have been
paid, and subsequently becomes eligible to participate in the plan again, the Employee may be
treated as being initially eligible to participate in the plan If the said Employee had not been
eligible to participate in the plan (other than the accrual of Earnings) at any time during the
twenty-four (24) month period ending on the date the Employee again becomes eligible to participate
in the plan. Under such circumstances, the rules of this Article will again apply.

     (c) Initial Deferral Election with Respect to Performance-Based Compensation. Notwithstanding anything in the Articles above to the contrary, to the extent that the Plan
Administrator determines that an Eligible Individual’s Bonus constitutes Performance-Based
Compensation, (as defined in Treasury Regulations §l.409A-l(e)), the Plan Administrator, in its
sole discretion, may permit an Eligible Employee to elect to defer such Performance-Based
Compensation on or before the date that is six months before the end of the performance period,
provided that the Participant performs services continuously from the later of: (i) the beginning
of the performance period; or (ii) the date the performance criteria are established through the
date an election is made under this Article; (iii) and provided further that in no event may an
election to defer Performance-Based Compensation be made after such Compensation has become readily
ascertainable, If the Performance-Based Compensation is a specified or calculable amount, the
Compensation is readily ascertainable if and when the amount is first substantially certain to be
paid. If the Performance-Based Compensation is not a specified or calculable amount because, for
example, the amount may vary based upon the level of performance, the Compensation, or any portion
of the Compensation, is readily ascertainable when the amount is first both calculable and
substantially certain to
be paid. For this purpose, the Performance-Based Compensation is bifurcated between the portion
that is readily ascertainable and the amount that is not readily ascertainable. Accordingly, in
general, any minimum amount that is both calculable and substantially certain to be paid will be
treated as readily ascertainable.

     (d) Initial Deferral Election with Respect to Sales Commission Compensation. For purposes
of the deferral election timing rules, a Participant earning
Sales Commission Compensation shall be deemed to provide the services to which such Sales
Commissions relate in the Taxable Year in which the customer remits Payment to
the Plan Sponsor.

     (e) Initial Deferral Election with Respect to Certain Forfeitable Amounts. If Payment of
Deferred Compensation is subject to a condition requiring the Participant to continue to provide
service for a period of at least twelve (12) months from the date the Participant obtains a Legally
Binding Right to avoid forfeiture of Payment, an election to defer Compensation may be made on or
before the 30th day after the Participant obtains a Legally Binding Right to the Compensation,
provided that the Participant makes the election at least twelve (12) months prior to the earliest
date at

Page 12 of 28

 

which the forfeiture condition could lapse.

     (f) Initial Deferral Election with Respect to a Fiscal Year Bonus Compensation. Fiscal Year
Bonus Compensation may be deferred at the Participant’s election only if the election to defer such
Compensation is made no later than the end of the Plan Sponsor’s fiscal year immediately preceding
the first fiscal year of the Plan Sponsor in which any services are performed for which such
Compensation is payable.

     (g) Terminations of Deferral Elections Following Financial Hardship. If a Participant faces
an Unforeseeable Emergency and/or receives a hardship distribution in accordance with Section
1.401(K)-1(d)(3) of the Treasury Regulations, the Participant may petition the Plan Administrator to
cancel his or her deferral election for the remainder of the Plan Year, Whether a Participant is
faced with an Unforeseeable Emergency shall be determined by the Plan Administrator in accordance
with Treasury Regulations §1.409A-3(g)(3). A Participant whose deferral election is canceled
pursuant to this Article may again elect to defer Compensation for any succeeding Plan Year, in
accordance with the terms of the Plan.

     (h) Cancellation of Deferral Elections Due to Disability. Upon the occurrence of a “Disability” the
Participant may petition the Plan Administrator to cancel his or her deferral election, where such
cancellation occurs by the later of: (a) the end of the taxable year of the Participant; or (b) the
15th day of the third month following the date the Participant incurs a disability. For purposes of
this Article, a “Disability” refers to any medically determinable physical or mental impairment
resulting in the Participant’s inability to perform the duties of his or her position or any
substantially similar position, where such impairment can be expected to result in death or can be
expected to last for a continuous period of not less than six (6) months.

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

     3.4 Nonelective Matching Contributions. The Plan Sponsor will specify in the Adoption
Agreement whether the Plan Sponsor will or may make matching contributions to Elective Deferrals.

     3.5 Nonelective Discretionary Contributions. The Plan Sponsor will specify in the Adoption
Agreement whether the Plan Sponsor will or may make discretionary contributions from time to time.
The Plan Sponsor shall direct that any such contributions be allocated to those Participants that
it may select in its sole and absolute discretion. The amount so credited on behalf of a
Participant may be smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero. No Participant shall have a right
to compel the Plan Sponsor to make a Nonelective Discretionary Contribution and no Participant
shall have the right to share in any such contribution for any Plan Year unless selected by the
Plan Sponsor in its sole and absolute discretion.

ARTICLE 4

Earnings on Account(s)

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

Page 13 of 28

 

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

     4.2 Allocation of Deemed Earnings or Losses on Accounts. Subject to the following Article,
each Participant shall have the right to direct the Plan Administrator as to how the Participant’s
Elective Deferrals, and/or Nonelective Discretionary Contributions, and/or Nonelective Matching
Contributions shall be deemed to be invested, subject to any operating rules and procedures imposed
from time to time by the Plan Administrator. As of each Valuation Date, the Participant’s
Account(s) will be credited or debited to reflect the Participant’s Deemed Investment Elections.

     4.3 Deemed Investment Elections of Participants. A Participant’s Deemed Investment
Elections for his or her Account(s) shall be subject to the following rules:

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

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

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

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

     (e) A Participant’s election must total one hundred percent (100%). If the Plan Administrator
possesses (or is deemed to possess, as provided above) at any time
Deemed Investment Elections of less than 100% of a Participant’s Account(s), the Participant shall
be deemed to have directed that the undesignated portion of the said
Account(s) be deemed to be invested in a money market or similar fund made available under this
Plan as determined by the Plan Administrator.

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

Page 14 of 28

 

ARTICLE 5

Vesting of Benefits

     5.1 Elective Accounts. A Participant shall at all times be 100% vested in his or her
Elective Deferral Account(s) and/or Scheduled Withdrawal Account(s), if any.

     5.2 Nonelective Matching and Discretionary Contribution Accounts. The Plan Sponsor will
specify in the Participation Agreement of the Participant or Adoption Agreement any vesting
schedule applicable to a
Participant’s Nonelective Matching Contribution Account(s) and/or Nonelective Discretionary
Account(s).

     5.3 Accelerated Vesting on Specified Events. The Plan Sponsor will specify in the Adoption
Agreement the extent to which vesting will be accelerated for a Participant’s
Nonelective Account(s) (if any) upon: (i) the Participant’s attainment of a specified age; (ii)
Separation from Service after a specified age; (iii) the Participant’s death; (iv) the
Participant’s
Disability; or (v) upon a Change in Control event.

ARTICLE 6

Taxes and Withholdings

     6.1 Federal Insurance Contribution Act (FICA). Deferred Compensation amounts, in accordance
with Code §3121(v)(2), are taken into account as wages for FICA tax purposes as of the later of:
(i) when the services are performed; or (ii) when there is no substantial risk of forfeiture with
respect to the Employee’s right to receive the deferred amounts in a later calendar year. Amounts
are subject to FICA taxes at the time of the deferral, unless the Employee is required to perform
substantial future services in order for the Employee to have a legal right to the future
Compensation. If the Employee is required to perform future services in order to have a vested
right to the future Payment, the deferred amounts (plus Earnings up to the date of vesting) are
subject to FICA taxes when all the required services have been
performed. FICA taxes only apply up
to the annual wage base for Social Security taxes and without withholding limitations for Medicare
taxes. For each Plan Year in which an Elective Deferral is being withheld from an Employee, the
Plan Sponsor shall withhold from that portion of the Employee’s Compensation that is not being
deferred, the Participant’s share of FICA on such Elective Deferral amounts. If necessary, the Plan
Sponsor may reduce all or a portion of the Elective Deferral in order to comply with this Article.

     6.2 Federal Unemployment Tax Act (FUTA). Deferred Compensation amounts are taken into
account for FUTA purposes at the later of: (i) when services are
performed; or (ii) when there is no
substantial risk of forfeiture with respect to the Employee’s right to receive the deferred amounts
up to the FUTA wage base.

     6.3 Self-Employment Contributions Act (SECA). For non-employees such as Independent
Contractors and directors, SECA taxes apply up to the amount of the Social Security wage base.

     6.4 Income Tax Withholding. The Plan Sponsor will withhold from any Payment made under
this Plan, and from any amount taxable under Code § 409A, all applicable taxes, and any and all
other amounts required to be withheld under Federal, state, or local law, and other Applicable
Guidance.

ARTICLE 7

Entitlement to Payment of Benefits

     7.1
Payments in General. The Plan Sponsor will specify in the Adoption Agreement whether
or not the Participant is permitted to select the time and form of Payment, with respect to his or
her Account(s). Additionally, the Plan Sponsor may indicate whether or not a

Page 15 of 28

 

Participant will be permitted to make subsequent changes in the time or form of a prior Payment
election. If the Participant is not granted such permission(s), the
time and form of Payments with respect to a Participant’s Accounts, will be determined by the Plan Sponsor, and
stipulated in the Adoption Agreement.

     (a) Payment Election. If the Participant is permitted to select for each Plan Year the time
and form of Payment, the Payment election must be made before the beginning of the period for which
the right to the compensation arises. If the Participant is not permitted to select the time and
form of Payment, the Plan Sponsor must make an initial Payment election no later than the time the
Participant obtains a Legally Binding Right to the Compensation.

     (b) Installment Payments and Life Annuities. A life annuity, for purposes of Code Section
409A, is treated as a single Payment. A change in the form of Payment from one type of life annuity
to another before any annuity Payment has been made is not subject to the subsequent changes in the
time or form of Payment, as provided below, provided that the annuities are actuarially equivalent
applying reasonable actuarial assumptions. The Plan Sponsor in the Adoption Agreement will elect
whether to treat a series of installment Payments that is not a life annuity as a single Payment or
as a series of separate Payments. If Payment is to be made through installment Payments, the
Participant’s Account(s) shall be calculated as of the Valuation Date of said event. Installment
Payments (if applicable) made after the first Payment shall be paid on or about the applicable
modal anniversary of the first Payment date until all required installments have been paid. The
amount of each Payment shall be determined by dividing the value of the Participant’s Account(s)
immediately prior to such Payment by the number of Payments remaining
to be paid. Any unpaid
Account(s) shall continue to be credited or debited with Earnings, in which case any deemed income,
gain, loss, or expenses shall be reflected in the actual Payments. The final installment Payment
shall be equal to the balance of the Account(s), calculated as of the applicable modal anniversary.

     (c) Subsequent Changes in the Time or Form of Payment. If permitted by the Plan Sponsor in
the Adoption Agreement, a Participant and/or the Plan Sponsor may elect to change the time or form
of Payments (collectively, “Payment elections”), provided the following conditions are met:

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

     (ii) If the change of Payment election relates to a Payment based on Separation from Service or on
a Change in Control, or if the Payment is at a Specified Time or pursuant to a Fixed Schedule, the
change of Payment election must result in Payment being deferred for a period of not less than five
(5) years from the date such Payment would otherwise have been paid (or in the case of a life
annuity or installment Payments treated as a single Payment, five (5) years from the date the first
amount was scheduled to be paid);

     (iii) If the change of Payment election relates to a Payment at a Specified Time or pursuant to a
Fixed Schedule, the Participant or Plan Sponsor must make the change of Payment election not less
than twelve (12) months before the date the Payment is scheduled to be paid (or in the case of a
life annuity or installment Payments treated as a single Payment, twelve (12) months before the
date the first amount was scheduled to be paid).

     (d) Multiple Permissible Payment Events. If the Plan permits multiple Permissible Payment
events, the subsequent changes in the time or form of Payment shall apply separately as to each
Payment due upon each Payment event. The addition of a Permissible Payment event to Deferred
Compensation previously deferred is subject

Page 16 of 28

 

to the provisions of the above Article where the additional event may cause a change in the time or
form of Payment.

     7.2 Payment Events. The Plan Sponsor will make payments to the Participant or the
Participant’s beneficiary on the first to occur of the following Permissible Payment Events
designated by the Plan Sponsor in the Adoption Agreement:

     (a) Payment Following Separation from Service. If permitted by the Plan Sponsor in the
Adoption Agreement, the Plan will pay the Participant’s Account(s) following a Separation from
Service. Amounts shall be paid in accordance with the Participant or Plan Sponsor Payment election,
with Payment or Payments being made or commencing within ninety (90) days following the event.

     (i) Payment to Specified Employees upon Separation from Service. Notwithstanding anything
contrary in the Plan or in the Payment election of a Participant or the Plan Sponsor, the Plan may
not make Payment to any Participant who is a Specified Employee as of the date of a Separation from
Service, earlier than six (6) months after the date of Separation from Service (or, if earlier than
the end of the six-month period, the date of death of the Specified Employee), in accordance with
Treasury Regulations §1.409A-(i)(2)(i). This Article does not apply to a Payment made on account
of: (i) a domestic relations order, as described in Treasury Regulations §l.409A-3(j)(4)(ii); (ii)
a conflict of interest, as described in Treasury Regulations §1.409A-3(j)(4)(iii), or (iii)
Payment of employment taxes, described in Treasury Regulations §1.409A-3(j)(4)(vi).

     (b) Payment(s) Following Death. If Payment is in the form of a lump sum, the Plan will pay
to the Participant’s designated Beneficiary: (i) the Participant’s vested Account(s) following the
Participant’s death; and/or (b) a specified and/or formula dollar amount stated in the
Participation Agreement. If the Plan allows for installment Payments the Plan Sponsor will indicate
the treatment of remaining installments (if any) in the Adoption Agreement. Payment or Payments
following a Participant’s death will be made or commence within ninety (90) days following the
valid proof of the Participant’s death.

     (c) Payment Following Disability. If permitted by the Plan Sponsor in its Adoption
Agreement, the Plan will pay the Participant’s vested Account(s) following a qualifying Disability.
Amounts shall be paid in accordance with the Participant or Plan Sponsor Payment election with
Payment or Payments being made or commencing within ninety (90) days following the event.

     (d) Payment Following Change in Control. If permitted by the Plan Sponsor in the Adoption
Agreement, the Plan will pay the Participant’s vested Account(s) following a Change in Control
event. A Participant shall be paid his or her vested Account(s) following a Change in Control with
Payments being made or commencing within ninety (90) days following the Change in Control event but
only to the extent such Payment(s) complies with regulations and other guidance issued by the
United States Secretary of the Treasury or Internal Revenue Service with respect to Section
409A(a)(2)(A)(v) of the Code.

     (e)
Payment in the Event of an Unforeseeable Emergency. If
permitted by the Plan Sponsor in the Adoption Agreement, the
Participant may petition the Plan Administrator for Payment of an
amount from his or her vested Account(s) to meet such Unforeseeable
Emergency. If the Plan Administrator approves a Participant’s
petition for such a Payment then the Participant shall receive said
Payment, in a lump sum, as soon as administratively feasible after
such approval.

     (f)
Payment at a Specified Time Pursuant to Schedule Withdrawal
Accounts. If permitted by the Plan Sponsor in the Adoption
Agreement, the Plan will pay benefits to a Participant at a Specified
Time. The Participant shall make an election on the Participant
Election Form at the time of making a deferral to receive a scheduled

Page 17 of 28 

 

distribution from the Account established by the Participant for such purpose, including Earnings
credited thereon. The Participant may elect to receive the scheduled distribution(s) on January 1st
of any future Plan Year, provided that the scheduled distribution shall be no earlier than the
stated number of years subsequent to the deferral election, as specified in the Adoption Agreement.
A Scheduled Withdrawal Account shall be paid (or commence to be paid) within sixty (60) days after
the selected scheduled distribution date. Amounts shall be distributed in a single lump sum or in
installments over a period of up to five (5) years as selected by the Participant in their election
forms, at the time the deferral of Compensation is made. The Participant may elect to allocate
additional deferrals to an existing Scheduled Withdrawal Account in subsequent Participant Election
Forms but may only change a scheduled distribution date for an existing Account in accordance with
the provision of the Plan. The Participant may establish up to five (5) separate Scheduled
Withdrawal Accounts with different schedule distribution dates but shall not establish a sixth
(6th) such Account until all of the funds in one of the first Scheduled Withdrawal Accounts have
been paid out.

     (g) Payment at a Specified Age. Notwithstanding the foregoing Articles, if the Plan Sponsor
elects in the Adoption Agreement to distribute the vested Account(s) upon a Specified Age, the
Participant’s vested Account(s) shall be calculated as of the Valuation Date. The Participant’s
vested Account(s) shall be paid in accordance with the Participant or Plan Sponsor Payment election
with Payment or Payments being made or commencing within sixty (60) days following the event.

     7.3 Effect
of Other Permissible Payment Events. Should an event occur that triggers a
Payment under Separation from Service, death, Disability, or a Change in Control, any Account
balances subject to Scheduled Withdrawal Account(s) that have not yet been paid shall not be paid
under the election as to time and form of the Account(s), but instead shall be paid, in time and
form, in accordance with the event that triggers the distribution.

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

     (a) Domestic Relations Order. Direct Payment of a Participant’s vested
Account Balance may be made to an individual other than a Participant as necessary to fulfill a
domestic relations order, as defined in Section 4l4(p)(l)(B) of the Code.

     (b) Conflicts of Interest. 

     (i) Compliance with ethics agreements with the Federal government may allow an acceleration
of a Payment under the plan to the extent necessary for any Federal officer or employee in the
executive branch to comply with an ethics agreement with the Federal government.

     (ii) Compliance with ethics laws or conflicts of interest laws may allow an acceleration of
the time or schedule of a Payment under the plan, to the extent reasonably necessary to avoid the
violation of an applicable Federal, state, local, or foreign ethics law or conflicts of interest
law (including where such Payment is reasonably necessary to permit the Participant to participate
in activities in the normal course of
his or her position in which the Participant would otherwise not be able to participate under an
applicable rule). A Payment is reasonably necessary to avoid the violation of a Federal, state,
local, or foreign ethics law or conflicts of interest law if the Payment is a necessary part of a
course of action that results in compliance with a Federal, state, local, or foreign

Page 18 of 28

 

ethics law or conflicts of interest law that would be violated absent such course of action,
regardless of whether other actions would also result in compliance with the Federal, state, local,
or foreign ethics law or conflicts of interest law. For this purpose, a provision of foreign law is
considered applicable only to foreign earned income (as defined under Section 911(b)(1) without
regard to Section 91l(b)(1)(B)(iv) and without regard to the requirement that the income be
attributable to services performed during the period described in Section 911(d)(1)(A) or (B))
from sources within the foreign country that promulgated such law.

     (c) Limited Cashouts. The time of Payment to a Participant may be accelerated, provided
that: (i) the Payment accompanies the termination in the entirety of the Participant’s
interest in
this Plan and all arrangements which would be aggregated with this Plan under 409A Regulations; and
(ii) the Payment is not greater than the limitation on elective deferrals in a “Qualified Plan”
(the Applicable Dollar Amount under IRS Section 402(g)(1)(B)) in the calendar year of acceleration.

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

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

     7.5 Unsecured General Creditor Status of Participant: 

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

     (b) In the event that the Plan Sponsor purchases an insurance policy or policies insuring the life
of a Participant or employee, to allow the Plan Sponsor to recover or meet the cost of providing
benefits, in whole or in part, hereunder, no Participant or Beneficiary shall have any rights
whatsoever in said policy or the proceeds therefrom. The Plan Sponsor or the Trustee of the Trust
(if any) shall be the primary owner and beneficiary of any such insurance policy or property and
shall possess and may exercise all incidents of ownership therein. No insurance policy with regard
to any director, “highly compensated employee”, or
“highly compensated individual” as defined in IRS Section 101(j) shall be acquired before satisfying
the Section 101(j) “Notice and Consent” requirements.

Page 19 of 28

 

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

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

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

     7.7 Excise Tax Limitation. In the event that any Payment or benefit (within the meaning of
Code §280G(b)(2) of the Code) to the Participant or for the Participant’s benefit paid or payable
or distributed or distributable (including, but not limited to, the acceleration of the time for
the vesting or Payment of such benefit or Payment) pursuant to the terms of this Plan or otherwise
in connection with, or arising out of, the Participant’s employment with the Plan Sponsor or any of
its Affiliates or a Change in Control within the meaning of Code
§280G of the Code (a “Payment” or “Payments”), would be
 subject to the excise tax imposed by Code §4999 of
the Code (the “Excise Tax”), then the Payments shall be reduced (but not below zero) but only to the extent necessary that
no portion thereof shall be subject to the excise tax imposed by Code §4999 (the “Section 4999
Limit’). Unless the Participant shall have given prior written notice specifying a different order
to the Plan Sponsor to effectuate the limitations described in the preceding sentence, the Plan
Sponsor shall reduce or eliminate the Payments by first reducing or eliminating those Payments or
benefits which are not payable in cash and then by reducing or eliminating cash Payments, in each
case in reverse order beginning with Payments or benefits which are to be paid the farthest in
time. Any notice given by the Participant pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement, or agreement governing the Participant’s rights
and entitlements to any benefits or compensation.

     7.8 Delay in Payment by Plan Sponsor. 

     (a) A Payment may be delayed to a date after the designated Payment date under any of the
circumstances described below, and the provision will not fail to meet the requirements of
establishing a Permissible Payment event. The delay in the Payment will not constitute a subsequent
deferral election, so long as the Plan Sponsor treats all Payments to similarly situated
Participants on a reasonably consistent basis.

     (i) Payments subject to Section 162(m). A Payment may be delayed to the extent that the
Plan Sponsor reasonably anticipates that if the Payment were made as scheduled, the Plan Sponsor’s
deduction with respect to such Payment would not be permitted due to the application of Code §162(m). If a Payment is delayed, such Payment must be made either:

          (1) during the Participant’s first taxable year in which the Plan Sponsor 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 application of Code §162(m) or,

          (2) during the period beginning with the date of the Participant’s
Separation from Service and ending on the later of the last day of the Taxable
Year of the Plan Sponsor in which the Participant separates from service or the
fifteenth (15th) day of the third month following the Participant’s Separation from
Service. Where any scheduled Payment to a specific Participant in a Plan

Page 20 of 28

 

Sponsor’s Taxable Year is delayed in accordance with this Article, the delay in Payment will be
treated as a subsequent deferral election unless all scheduled Payments to that Participant that
could be delayed in accordance with this Article are also delayed. Where the Payment is delayed to
a date on or after the Participant’s Separation from Service, the Payment will be considered a
Payment upon a Separation from Service for purposes of the rules under Treasury Regulations
§l.409A-3(i)(2) (Payments to Specified Employees upon a Separation from Service) and, the six (6)
month delay rule wilt apply for Specified Employees.

     (ii) Payments that would violate Federal securities laws or other applicable law. A Payment
may be delayed where the Plan Sponsor reasonably anticipates that the making of the Payment will
violate Federal securities laws or other applicable law provided that the Payment is made at the
earliest date at which the Plan Sponsor reasonably anticipates that the making of the Payment will
not cause such violation. The making of a Payment that would cause inclusion in gross income or the
application of any penalty provision or other provision of the Internal Revenue Code is not treated
as a violation of applicable law.

     (iii) Other events and conditions. A Plan Sponsor may delay a Payment upon such other
events and conditions as the Commissioner of the IRS may prescribe.

     (iv)
Notwithstanding the above, a Payment may be delayed where the Payment would jeopardize the ability of the Plan Sponsor to continue as a going concern.

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

ARTICLE 8

Beneficiary Designation

     8.1 Designation of Beneficiaries.

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

     (b) In the absence of a valid Beneficiary designation, or if, at the time any benefit Payment is
due to a Beneficiary, there is no living Beneficiary validly named by the Participant, the Plan
Sponsor shall pay the benefit Payment to the Participant’s spouse, if then living, and if the
spouse is not then living to the Participant’s then living descendants, if any, per stirpes, and if
there are no living descendants, to the
Participant’s estate. In determining the existence or identity of anyone entitled to a

Page 21 of 28

 

benefit Payment, the Plan Sponsor may rely conclusively upon information supplied by the
Participant’s personal representative, executor, or administrator.

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

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

ARTICLE 9

Termination, Amendment, or Modification 

     9.1 Plan Termination. The Plan Sponsor reserves the right to terminate this Plan in
accordance with one of the following, subject to the restrictions imposed by Section 409A and
authoritative guidance:

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

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

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

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

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

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

     (i) All plans sponsored by the Plan Sponsor that would be aggregated
with any terminated arrangements under Treasury Regulations §1.409A-1(c) are
terminated;

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

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

Page 22 of 28

 

     (iv) Neither the Plan Sponsor nor any of its affiliates adopts a new plan that would be aggregated
with any terminated plan if the same Participant participated in both arrangements at any time
within three (3) years following the date of termination of this Plan.

     (v) The termination does not occur proximate to a downturn in the financial health of the Plan
Sponsor.

     9.2 Amendment. The Plan Sponsor reserves the right to amend this Plan at any time to comply
with Section 409A and other Applicable Guidance or for any other purpose, provided that such
amendment will not cause the Plan to violate the provisions of Section 409A. Except to the extent
necessary to bring this Plan into compliance with Section 409A: (i) no amendment or modification
shall be effective to decrease the value or vested percentage of a Participant’s Account(s) in
existence at the time an amendment or modification is made, and (ii) no amendment or modification
shall materially and/or adversely affect the Participant’s rights to be credited with additional
amounts on such Account(s), or otherwise materially and adversely affect the Participant’s rights
with respect to such Account(s).

ARTICLE 10

Administration

     10.1 Plan Administrator Duties. The Plan Administrator shall be responsible for the
management, operation, and administration of the Plan. The Plan Administrator shall act at meetings
by affirmative vote of a majority of its members. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a unanimous written consent to the action is
signed by all members and such written consent is filed with the minutes of the proceedings of the
Plan Administrator, provided, however that no member may vote or act upon any matter which relates
solely to himself or herself as a Participant. The Chair, or any other member or members of the
Plan Administrator designated by the Chair, may execute any certificate or other written direction
on behalf of the Plan Administrator. When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a Participant or the Plan
Sponsor. No provision of this Plan shall be construed as imposing on the Plan Administrator any
fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or
other law.

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

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

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

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

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

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

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

Page 23 of 28

 

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

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

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

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

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

     10.5 Plan Sponsor Information. To enable the Plan Administrator to perform its functions,
the Plan Sponsor shall supply full and timely information to the Plan Administrator, on all matters
relating to the Compensation of its Participants, the date and circumstances of the Disability,
death, or Separation from Service of its employees or Independent Contractors who are Participants,
and such other pertinent information as the Plan Administrator may reasonably require.

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

ARTICLE 11

Claims Procedures

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

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

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

     (i) The specific reasons for such denial;

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

Page 24 of 28

 

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

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

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

     (i) its decision;

     (ii) the specific reasons for the decision;

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

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

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

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

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

     (e) Failure of Plan to Follow Procedures. If the Plan Sponsor fails to follow the claims
procedure required by this Article, a Claimant shall be deemed to have exhausted the administrative
remedies available under this Plan and shall be entitled to pursue any available remedy under
Section 502(a) of ERISA on the basis that this Plan

Page 25 of 28

 

has
failed to provide a reasonable claims procedure that would yield a decision on the merits of
the claim.

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

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

ARTICLE 12

The Trust 

     12.1
Establishment of Trust. The Plan Sponsor may establish a grantor trust (the “Trust”),
of which the Plan Sponsor is the grantor, within the meaning of
subpart E, part I, subchapter J,
subtitle A of the Code, to pay benefits under this Plan. If the Plan Sponsor establishes a Trust,
all benefits payable under this Plan to a Participant shall be paid directly by the Plan Sponsor
from the Trust. To the extent such benefits are not paid from the Trust, the benefits shall be paid
from the general assets of the Plan Sponsor. The Trust, (if any), shall be a grantor trust which
conforms to the terms of the model trust as described in IRS Revenue Procedure 92-64, I.R.B.
1992-33, as same may be amended or modified from time to time. If the Plan Sponsor establishes a
Trust, the assets of the Trust will be subject to the claims of the
Plan Sponsor’s creditors in the
event of its insolvency. Except as may otherwise be provided under the Trust, the Plan Sponsor
shall not be obligated to set aside, earmark, or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and/or his or her designated Beneficiaries shall
not have any property interest in any specific assets of the Plan Sponsor other than the unsecured
right to receive Payments from the Plan Sponsor, as provided in this Plan.

     12.2
Interrelationship of the Plan and the Trust. The provisions of this Plan shall govern
the rights of a Participant to receive distributions pursuant to this Plan. The provisions of the
Trust (if established) shall govern the rights of the Participant and the creditors of the Plan
Sponsor to the assets transferred to the Trust. The Plan Sponsor and each Participant shall at all
times remain liable to carry out its obligations under this Plan. The Plan Sponsor’s obligations
under this Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust.

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

ARTICLE 13

Miscellaneous 

     13.1 Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan
shall be construed and enforced as if such illegal or invalid provision had never been inserted
herein. To the extent any provision of this Plan is determined by the Plan Administrator (acting

Page 26 of 28

 

in good
faith), the Internal Revenue Service, the United States Department of the Treasury, or a
court of competent jurisdiction to fail to comply with Section 409A of the Code or authoritative
guidance with respect to any Participant or Participants, such provision shall have no force or
effect with respect to such Participant or Participants.

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

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

     13.4 Unclaimed Benefits. In the case of a benefit payable on behalf of such Participant, if
the Plan Administrator is unable to locate the Participant or Beneficiary to whom such benefit is
payable, such Plan benefit may be forfeited to the Plan Sponsor upon the Plan Administrator’s
determination. Notwithstanding the foregoing, if, subsequent to any such forfeiture, the
Participant or Beneficiary to whom such Plan benefit is payable makes a valid claim for such Plan
benefit, such forfeited Plan benefit shall be paid by the Plan Administrator to the Participant or
Beneficiary, without interest, from the date it would have otherwise been paid.

     13.5 Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State indicated in the Adoption Agreement,
without regard to its conflicts of laws principles.

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

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

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

Page 27 of 28

 

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

SEE ADOPTION AGREEMENT ATTACHED HERETO

Page 28 of 28

 

AMENDED AND RESTATED

TITANIUM ASSET MANAGEMENT CORP.

NONQUALIFIED DEFERRED COMPENSATION PLAN

ADOPTION AGREEMENT

     THE ADOPTION AGREEMENT is hereby amended and restated as of this 1st day of June
2008 by Titanium Asset Management Corp., a corporation organized and existing under the laws of the
State of Delaware, hereinafter referred to as the “Plan Sponsor”.

     WHEREAS, the Plan Sponsor previously adopted the Plan on April 7, 2008, now wishes to amend
and restate the Adoption Agreement in accordance with Section 9.2 of the Master Plan Document. By
execution of this Amended and Restated Adoption Agreement, the Plan Sponsor hereby establishes this
Nonqualified Deferred Compensation Plan (the “Plan”) consisting of the Master Plan Document, this
Adoption Agreement, Election Forms, and all other documents to which they refer;

     WHEREAS, the Plan Sponsor desires to adopt the Plan as an unfunded nonqualified deferred
compensation Plan;

     NOW, THEREFORE, the Plan Sponsor hereby amends and restates the Adoption Agreement as of June
1, 2008 in accordance with the Master Plan Document and the terms and conditions set forth in this
Adoption Agreement:

(All capitalized terms in this Adoption Agreement shall have the same meaning given in the
Master Plan Document, unless some other meaning is expressly herein set forth. By the execution of
this Adoption Agreement, the Plan Sponsor hereby represents and warrants that the Plan has been
adopted upon proper authorization of this Adoption Agreement and agrees to be bound by the terms of
the Plan. This Adoption Agreement may only be used in connection with the
Nonqualified Deferred Compensation Plan. The Plan Sponsor hereby makes the following elections for
the purpose of this Plan.)

	1.	 	PLAN TYPE: The Plan Sponsor establishes this Account Balance Plan for the benefit of (choose
one of the following):

	 	þ	 	Selected Employees. A plan maintained primarily for the purposes of providing Deferred
Compensation for a “select group of management or highly compensated employees” and partially
exempt from Title I of ERISA, OR
	 
	 	o	 	Selected Independent Contractors. A plan benefiting Independent Contractors (non-employees), exempt from Title I of ERISA, but not otherwise exempt from IRC Section 409A.

	2.	 	PERMISSIBLE PAYMENT EVENTS: [SEE ARTICLES 1.38 & 7.2] The Plan Sponsor will provide Payment
of benefits under the Plan as follows: (choose all that apply)

	 	þ	 	Payment following Separation from Service. [SEE ARTICLE 1.46 & 7.2(a)]
	 
	 	þ	 	Payment following death. [SEE ARTICLE 7.2(b)]
	 
	 	þ	 	Payment following Disability. [SEE ARTICLES 1.15 & 7.2(c)]
	 
	 	o	 	Payment at a Specified Time: [SEE ARTICLE 7.2(f) & 7.2(g)] (choose one or more)

	 	o	 	Specified Age. At or commencing as of a Specified Age of ( )
	 
	 	o	 	Specified Time for Participant Deferrals. At a date specified by the Participant for
each Plan Year the Participant allocates Elective Deferrals to a Scheduled Withdrawal Account.
The date the Participant may select shall be no earlier than January 1st of the                     
(1st, 2nd, 5th, etc.) Plan Year following the year of deferral.
	 
	 	o	 	Specified Time for Plan Sponsor Contributions. At a date specified by the Participant
for each Plan Year the Plan Sponsor makes a contribution on behalf of a Participant. The date the
Participant may select shall be no earlier than January 1st of the                      (1st,
2nd, 5th, etc.) Plan Year following the year of contribution.

	 	þ	 	Payment following a Change in Control. [SEE ARTICLES 1.9 & 7.2(d)]
	 
	 	þ	 	Payment in the Event of an Unforeseeable Emergency. [SEE ARTICLES 1.54 & 7.2(f)]

	3.	 	ELECTIVE (VOLUNTARY) DEFERRALS BY PARTICIPANTS [SEE ARTICLES 1.20 & 3]

	 	o	 	Not Permitted. Participants may not make Elective Deferrals, OR
	 
	 	þ	 	Permitted. Participants may make Elective Deferrals with respect to the following
sources of Compensation. (Choose one or more of the following):

	 	þ	 	Annual Base Salary [SEE ARTICLE 1.5]
	 
	 	þ	 	Annual/Discretionary Bonus [SEE ARTICLE 1.7]

Page 1 of 3

 

	 	o	 	Sales Commissions [SEE ARTICLE 1.43]
	 
	 	o	 	Performance-Based Bonus [SEE ARTICLE 1.37]
	 
	 	o	 	Fiscal Year Bonus [SEE ARTICLE 1.25]

	4.	 	PLAN SPONSOR MATCHING CONTRIBUTIONS. [SEE ARTICLES 1.32 & 1.33]

The Plan Sponsor may make matching contributions as follows. (Choose only one
of the following):

	 	þ	 	None. The Plan Sponsor will not make Matching Contributions to the Plan, OR
	 
	 	o	 	Discretionary Amount. To be determined each Plan Year by the Plan Sponsor, including
zero.

	5.	 	PLAN SPONSOR DISCRETIONARY CONTRIBUTIONS. [SEE ARTICLES 1.20 & 1.21]

The Plan Sponsor may make discretionary contributions to the Nonelective Discretionary Contribution
Account of each Participant as follows. (Choose only one of the following):

	 	o	 	None. The Plan Sponsor will not make Discretionary Contributions to the Plan, OR
	 
	 	þ	 	Discretionary Amount. To be determined each Plan Year by the Plan Sponsor, including zero.

	6.	 	NOTIONAL EARNINGS. [SEE ARTICLES 1.13, 1.17 & 4] The Plan Sponsor will credit the
Participant’s Account(s) with: (choose only one of the following)

	 	þ	 	Earnings Based on Deemed Investment Options.

	 	þ	 	At the Participant’s Direction. As a result of the Participant’s selection of Deemed
Investment Options for his/her Account(s), OR
	 
	 	o	 	At the Plan Sponsor’s Direction. As a result of the Plan Sponsor selection of Deemed
Investment Options for the Account(s), OR

	 	o	 	Earnings based upon a Declared interest Rate/index. (Choose only one of the following):

	 	o	 	Discretionary Interest. Interest Rate declared by the Plan Sponsor, from time to
time, compounded daily on all Participant Accounts.
	 
	 	o	 	Index. (Please describe):   	 
	 
	 	o	 	Fixed Interest. Interest at the rate of        % per annum compounded daily on all
Participant Accounts.

	7.	 	ACCELERATED VESTING ON THE OCCURRENCE OF SPECIFIED EVENTS. [SEE ARTICLE 5.3] N/A
Complete
only if the vesting of a Participant’s Account(s) attributable to Plan Sponsor contributions
will be accelerated following certain events. (refer to Participation Agreement for Normal
Vesting Schedule and additional details):

	 	 	 	 	 
	Place an "X"	 	Specified Event Causing An Acceleration	 	Percent
	where applicable	 	Of Vesting	 	Vested
	 

	 	Attaining a Specified Age of:
(     )	 	 
	 

	 	Separation from Service after a Specified Age of:
(     )	 	 
	 

	 	Death	 	 
	 

	 	Change in Control	 	 
	 

	 	Disability	 	 

	8.	 	DURATION AND FORM OF PAYMENTS [SEE ARTICLE 7.1] The Plan will make periodic benefit
payments based on selections in the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DURATION OF PAYMENTS	 	FORM OF PAYMENTS
	 	 	Fixed # of	 	 	 	Range of	 	 	 	 	 	 	 	 	 	Lump
	Payment Event	 	Yrs Payable	 	OR	 	Yrs Payable	 	M	 	Q	 	S	 	A	 	Sum
	Separation from Service

	 	(     )
	 	 	 	2 to (10)
	 	 	 	 	 	 	 	X
	 	X
	Death

	 	(     )
	 	 	 	2 to (10)
	 	 	 	 	 	 	 	X
	 	X
	Disability

	 	(     )
	 	 	 	2 to (10)
	 	 	 	 	 	 	 	X
	 	X
	Change in Control

	 	(     )
	 	 	 	2 to (10)
	 	 	 	 	 	 	 	X
	 	X

	9.	 	BENEFIT PAYMENT ELECTIONS [SEE ARTICLE 7.1] (choose only one of the following):

	 	þ	 	The Plan Sponsor will make all elections as regards Time and Form of Benefit Payments as
described in table above, OR

Page 2 of 3

 

	 	o	 	The Participant will make all elections as regards Time and Form of Benefit Payments
as described in table above. (Choose only one of the following)

	 	o	 	For All Accounts (Participant Elective Accounts and Plan Sponsor
Discretionary Accounts), OR
	 
	 	o	 	For Participant Elective (Voluntary) Deferral Accounts Only

	10.	 	SUBSEQUENT CHANGE IN TIME AND/OR FORM OF PAYMENT [SEE ARTICLE 7.1(c)]

	 	(A)	 	Subsequent Changes in TIME of Payment:

	 	þ	 	Subsequent changes Not allowed, OR

	 	o	 	Participant may change the time of payment, OR
	 
	 	o	 	Plan Sponsor may change the time of payment.

	 	(B)	 	Subsequent Changes in FORM of Payment:

	 	þ	 	Subsequent changes Not allowed, OR

	 	o	 	Participant may change the form of payment, OR
	 
	 	o	 	Plan Sponsor may change the form of payment, AND/OR
	 
	 	o	 	Beneficiary may change the form of
payment. (The Plan permits a Beneficiary following the Participant’s
death to make a change in the form of payment.)

	11.	 	TREATMENT OF INSTALLMENT PAYMENTS FOLLOWING DEATH [SEE ARTICLE 7.2](b)] — (Choose only one of the following)

	 	þ	 	Benefits payable in a Lump Sum (or no benefits payable) — Installment Payments Do Not Apply
	 
	 	o	 	Continue remaining installment payments (if any) to named Beneficiary, OR
	 
	 	o	 	Commute remaining installment payments (if any) and pay Beneficiary a lump sum.

	12.	 	INSTALLMENT PAYMENTS [SEE ARTICLES 1.36 & 7.1(b)] — In the event the Plan allows for
benefits to be paid
in installments if the Participant or Plan Sponsor makes a subsequent change in either the
Time or
Form of such installment payments, such installment payments will be treated as: (Choose only one)

	 	þ	 	Not Applicable Installment Payments Not Allowed
	 
	 	o	 	A Single Payment (The change in payment election must result in Payment being
deferred for a period of not less than five (5) years from the date the first installment
amount was scheduled to be paid)
	 
	 	o	 	A Series of Separate Payments (The change in payment election must result in Payment
being deferred for a period of not less than five (5) years from the date the last
installment amount was scheduled to be paid)

     IN WITNESS WHEREOF, the Plan Sponsor agrees to the provisions of this Plan and by its duly
authorized officer, has executed this Amendment 1 to the Adoption Agreement effective June 1, 2008.

	 	 	 
	WITNESS	 	For: Titanium Asset Management Corp.
	 
	 	 
	
/s/ Laura S. Keisacker

	 	/s/ John Sauickie
	 

	 	 
	(Signature)

	 	(Signature)
	 
	 	 
	Laura S. Keisacker
	 	John Sauickie
	 

	 	 
	(Print Name)

	 	(Print Name)
	 
	 	 
	 

	 	M.D.
	 

	 	 
	 

	 	(Title)

Page 3 of 3EX-10.16

EXHIBIT 10.16

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

FOR

Titanium Incentive Plan, LLC

A Delaware Limited Liability Company

THIS LIMITED LIABILITY COMPANY AGREEMENT (the Agreement) is made and entered into this 2 day of Feb. 2007, by John Sauickie whom shall serve as the Managing Member of the company . The
intent of the company is to purchase then hold for distribution to the employees of Wood Asset
Management and Sovereign Advisers, shares of common stock of Titanium Asset Management Corp (“TAM”
herein) which will be granted to and held in capital accounts of the grantees, then will vest and
be owned by the employees listed below as “non-voting membership interest” holders whom shall own
one non-voting membership interest. All membership interest and non-voting membership interest
holders shall also be governed by this agreement and any agreement that is a party to this
agreement. The membership interest holders shall be known as and referred to as “members”, and the
non-voting membership interest holders shall be referred to as “non-voting members”.

Ownership of Voting and Non-Voting Membership Interests

Voting Membership Interest Holders: John and Lynne Sauickie, held as Joint Tenants by the
Entireties, and owning 500 Membership Interests

Non- Voting Membership Interest holders are listed below

As of this date the Members, through their agent, Harvard Business Services in Lewes, Delaware,
have formed the Limited Liability Company named above under the laws of the State of Delaware.
Accordingly, in consideration of the conditions contained herein, it is agreed as follows:

ARTICLE I

Company Formation and Registered Agent

1.1 FORMATION. This Limited Liability Company (“Company”) is subject to the provisions of the Limited Liability Company Act as currently in effect
as of this date. A Certificate of Formation shall be filed with the Secretary of State.

1.2 NAME. The name of the Company shall be: Titanium Incentive Plan, LLC (“TIP” herein).

 

 

1.3 REGISTERED OFFICE AND AGENT. The location of the registered office
of the Company shall be: Harvard Business Services, Lewes, Delaware.

1.4 TERM. The Company shall continue indefinitely, unless dissolved by its members.

(a) Members whose capital interest as defined in Article 2.2 exceeds 50 percent vote for
dissolution; or (b) Any event which makes it unlawful for the business of the Company to be carried
on by the Members; or
 (c) The death, resignation, expulsion, bankruptcy, retirement of a Member or
the occurrence of any other event that terminates the continued membership of a Member of the
Company.

1.5 CONTINUANCE OF COMPANY. Notwithstanding the provisions of ARTICLE 1.4, in the event of an occurrence described in ARTICLE 1.4(c), if
there are at least two remaining Members, said remaining Members shall have
the right to continue the business of the Company. Such right can be exercised
only by the unanimous vote of the remaining Members within ninety (90) days
after the occurrence of an event described in ARTICLE 1.4(c). If not so
exercised, the right of the Members to continue the business of the Company
shall expire.

1.6 BUSINESS PURPOSE. The purpose of the Company is to hold common stock of Titanium Asset Management Corp. (“TAM” herein) for its members
and non voting members, and engage in any lawful act or activity for which a
Limited Liability Company may be formed under the Limited Liability statutes of
the State of Delaware. The share grant to the employees of Wood and
Sovereign, shall be governed by the share agreement between the grantee
and the company.

1.7 PRINCIPAL PLACE OF BUSINESS. The location of the principal place of business of the Company shall be: 12516 Whitewater Place, Bradenton,
Florida 34202.

1.8 THE MEMBERS. The name and place of residence of each member are contained in Exhibit 2 attached to this Agreement.

1.9 ADMISSION OF ADDITIONAL MEMBERS. Except as otherwise expressly provided in the Agreement, no additional members may be admitted
to the Company through issuance by the company of a new interest in the
Company without the majority vote of company membership interest holders.

 

 

1.10 MEMBERSHIP INTERESTS. The initial membership interests shall be voting interests, and upon
the acceptance of the TAM share grants, the company will issue one non voting membership interest
to each grantee of TAM shares.

ARTICLE 2

Capital Contributions

2.1 INITIAL CONTRIBUTIONS. The Members initially shall contribute to the
Company capital as described in Exhibit 3 attached to this Agreement. The
agreed value of such property and cash is 3,500.

2.2 ADDITIONAL CONTRIBUTIONS. Except as provided in ARTICLE 6.2, no Member shall be obligated to make any additional contribution to the
Company’s capital, but the company may offer additional shares to its
members at anytime.

2.3 CHANGES/ AMENDMENTS. The voting membership holders shall have the right to change the Managing Member at anytime by the majority vote of
the membership interest holders. Also, this company may amend, make
changes to, or restate this Operating Agreement at anytime by a majority vote
of the Membership Interest holders.

ARTICLE 3

Profits, Losses and Distributions

3.1 PROFITS/LOSSES. For financial accounting and tax purposes the Company’s net profits or net losses shall be determined on an annual basis
and shall be allocated to the Members in proportion to each Member’s relative
capital interest in the Company as set forth in Exhibit 2 as amended from time
to time in accordance with Treasury Regulation 1.704-1. Each grantee of TAM
shares holding one non-voting membership interest of TIP shall bear their own
tax liability for any shareholdings they vest in the shares of TAM. TIP shall
have no tax responsibility on any of the shares granted to each grantee of
TAM shares.

3.2 DISTRIBUTIONS/ TAXES. The Members shall determine and distribute available funds annually or at more frequent intervals as they see fit. Available
funds, as referred to herein, shall mean the net cash of the Company available
after appropriate provision for expenses and liabilities, as determined by the
Managers. Distributions in liquidation of the Company or in liquidation of a
Member’s interest shall be made in accordance with the positive capital
account balances pursuant to Treasury Regulation 1.704-l(b)(2)(ii)(b)(2). To

 

 

the extent a Member shall have a negative capital account balance, there shall be a qualified
income offset, as set forth in Treasury Regulation 1.704-l(b)(2)(ii)(d). Each member, whether a
voting or non voting member shall bear its own tax liability and the distributive profits and tax
liability shall be borne by the owners of the company based upon their ownership, and Managing
Member shall distribute the tax liability according to the ownership of the company, except if a
non voting member has been granted shares of TAM, where that non voting member shall assume all tax
liability relating to their granted shares of TAM.

ARTICLE 4

Management

4.1 MANAGEMENT OF THE BUSINESS. The company shall be managed by John Sauickie, the Managing Member of TIP.

4.2 MEMBERS. The liability of the Members shall be limited as provided under the laws of the Delaware Limited Liability statutes. Non- voting
Members, or Members that are not the Managing Member and shall take no
part whatever in the control, management, direction, or operation of the
Company’s affairs and shall have no power to bind the Company. The
Managers may from time to time seek advice from the Members, but they need
not accept such advice, and at all times the Managers shall have the exclusive
right to control and manage the Company. No Member shall be an agent of any other Member of the Company solely by reason of being a Member.

4.3 POWERS OF MANAGING MEMBER. The Managing Member is
authorized on the Company’s behalf to make all decisions as to (a) the sale,
development lease or other disposition of the Company’s assets; (b) the
purchase or other acquisition of other assets of all kinds; (c) the management
of all or any part of the Company’s assets; (d) the borrowing of money and the
granting of security interests in the Company’s assets; (e) the pre-payment,
refinancing or extension of any loan affecting the Company’s assets; (f) the
compromise or release of any of the Company’s claims or debts; and, (g) the
employment of persons, firms or corporations for the operation and
management of the company’s business. In the exercise of their management
powers, the Managing Member is authorized to execute and deliver (a) all
contracts, conveyances, assignments leases, sub-leases, franchise
agreements, licensing agreements, management contracts and maintenance
contracts covering or affecting the Company’s assets; (b) all checks, drafts and
other orders for the payment of the Company’s funds; (c) all promissory notes,
loans, security agreements and other similar documents; (d) all other

 

 

instruments of any other kind relating to the Company’s affairs, whether like or unlike the
foregoing; and, (e) set up individual accounts for each member or non voting member to hold cash
or securities on behalf of the member.

4.4 MANAGING MEMBER. The Managing Member shall have primary
responsibility for managing the operations of the Company and for effectuating
the decisions and daily operations of the company as he sees fit.

4.5 NOMINEE. Title to the Company’s assets shall be held in the Company’s
name or in the capital account of its members. The Managing Member shall
have power to enter into a nominee agreement with any such person, and
such agreement may contain provisions indemnifying the nominee, except for
his willful misconduct.

4.6 COMPANY INFORMATION. Upon request and at the discretion of the Managing Member, he may shall supply to any member information regarding
the Company or its activities only to other Members of the company, unless
ordered to do so by court order. If permitted, the exercise of the rights
contained in this ARTICLE 4.6 shall be at the requesting Member’s expense.

4.7 EXCULPATION. Any act or omission of the Managing Member, the effect of which may cause damage to the company shall not subject the Managing
Member to any liability to the Members.

4.8 INDEMNIFICATION. The Company shall indemnify any person who was or is a party defendant or is threatened to be made a party defendant, pending
or completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Company) by
reason of the fact that he is or was a Member of the Company, Managing
Member, employee or agent of the Company, or is or was serving at the
request of the Company, for instant expenses (including attorney’s fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the Members
determine that he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the Company, and with respect
to any criminal action proceeding, has no reasonable cause to believe his/her
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of “no lo Contendere”
or its equivalent, shall not in itself create a presumption that the person did or
did not act in good faith and in a manner which he reasonably believed to be in
the best interest of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his/her conduct was lawful.

 

 

Under no circumstance shall the company address any liability of any member or non voting member,
and upon any lien placed upon the company, the company shall distribute the share grants from the
capital accounts owned by each member and non voting member. No lienholder or suit may restrict the
share ownership of each grantees holdings in TAM, and it shall be assumed for the ownership of the
TAM shares, that the non voting membership owner and grantee holds ownership of the shares in any
liquidation.

In addition, all members of the company, including the non-voting members, shall agree to release
and indemnify the Managing Member against all claims or suits against the Managing Member, and each
agree to release and not make a claim against the Managing member for any action or reason relating
to this company or action of the Managing Member. This release shall survive any restructuring, or
change in the capital structure or ownership change of the company.

4.9 RECORDS. The Managing Member shall cause the Company to keep at its principal place of
business all tax records and books of the company

ARTICLE 5

Compensation

5.1 MANAGEMENT FEE.The Managing Member may charge an annual fee
to the company for his services, equal to one percent of the total value of the
companies holdings.

5.2 REIMBURSEMENT. The Company shall reimburse the Managing Member for his out of pocket business expenses.

ARTICLE 6

Bookkeeping

6.1 BOOKS. The Managing Member shall maintain complete and accurate books of account of the Company’s affairs at the Company’s principal place of
business. Such books shall be kept on such method of accounting acceptable
to the company. The company’s accounting period shall be the calendar year.

6.2 MEMBER’S ACCOUNTS. The Managing Member shall maintain separate capital and distribution accounts for each member and non-voting member.
Each capital account shall be determined and maintained in the manner set
forth in Treasury Regulation 1.704-l(b)(2)(iv) and shall consist of his initial
capital contribution or share grant. Only upon the approval of the Managing
member may another member be added to the company, or by a majority vote

 

 

of the membership interest holders. Any share grant of TAM shall be restricted and vested as
outlined in the agreement between the company and the grantee. In addition, the number of shares
listed below in the non voting membership section are subject to any share reduction in the
ownership of TIP’s holdings of TAM, and will be reduced on a pro-rata basis for any reduction of
the shareholdings of TAM.

6.3 REPORTS. The Managing Member shall close the books of account after the close of each calendar
year, and shall prepare and send to each membership interest holder a statement of such Member’s
distributive share of income and expense for income tax reporting purposes.

ARTICLE 7

Transfers

7.1 ASSIGNMENT. If at any time a Member proposes to sell, assign or otherwise dispose of all or any part of his interest in the Company, such
Member shall first make a written offer to sell such interest to the other
Members at a price determined by mutual agreement. If such other Members
decline or fail to elect such interest within thirty (30) days, and if the sale or
assignment is made and the voting Membership Interest holders fail to
approve this sale or assignment unanimously then, pursuant to the Delaware
Limited Liability statutes, the purchaser or assignee shall have no right to
participate in the business and affairs of the Company. The purchaser or
assignee shall only be entitled to receive the share of the profits or other
compensation by way of income and the return of contributions to which that
Member would otherwise be entitled.

7.2 LEGAL/ JURISDICTION. This company shall be governed by the Limited Liability Laws of the State of Delaware, and jurisdiction for any dispute shall be
in Delaware.

	 	 	 	 	 	 	 
	Signed and Agreed this 2 day of Feb 2007. 
	 
	 	 	 	 	 	 
	/s/
John Sauickie

 

Member

	 	 	 	/s/ Lynne Sauickie

 

Member	 	 

 

 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT FOR

TITANIUM INCENTIVE PLAN LLC — LISTING OF MANAGERS

 

 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

FOR Titanium Incentive Plan, LLC

LISTING OF MEMBERS

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

FOR Titanium Incentive Plan, LLC

CAPITAL CONTRIBUTIONS

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