Document:

exv10w7

Exhibit 10.7

First Amended and Restated Loan Agreement

     This First Amended and Restated Loan Agreement (“Agreement”) dated as of March 5, 2008, is
between The F&M Bank & Trust Company (“Lender”), American Locker Group, Incorporated, a Delaware
corporation (“Borrower”), and Altreco, Incorporated, a Delaware corporation (the “Guarantor”).

Recitals

     A. On or about March 5, 2007, at the request of Borrower and Guarantor, Lender extended to
Borrower a revolving line of credit loan (the “Loan”) in the principal amount of up to Seven
Hundred Fifty Thousand and No/100 Dollars ($750,000.00).

     B. The Loan has matured, and Borrower and Guarantor have requested Lender to renew, modify,
and extend the Loan for one additional year.

     C. As an accommodation to Borrower and Guarantor, Lender has agreed to renew, modify, and
extend the Loan for one additional year, subject to the following terms and conditions.

Agreements

     Now, Therefore, in consideration of the premises and the mutual covenants herein contained,
the parties hereto agree as follows:

1. Article

Definitions

     .1. Definitions. As used in this Agreement, the following terms have the following
meanings:

     (1) “Account Receivable” or “Accounts Receivable” means all of Borrower’s now owned and
hereafter acquired, accounts, accounts receivable (whether or not earned by performance), right to
payment of any kind, proceeds of any letters of credit naming Borrower as beneficiary, contract
rights, chattel paper, instruments, documents and all other forms of obligations at any time owing
to Borrower, all guaranties and other security therefor, whether secured or unsecured, all
merchandise returned to or repossessed by Borrower, and all rights of stoppage in transit and all
other rights or remedies of an unpaid vendor, lienor or secured party. Accounts Receivable include
all now owned or hereafter acquired accounts, instruments and general intangibles, all rights,
remedies, guaranties, security interests and liens, all records and other property evidencing any
and all proceeds which relating to or are associated with such Accounts Receivable.

     (2) “Affiliate” means any Person directly or indirectly controlling, controlled by, or under
common control with Borrower.

f&m bank 1\119la

First Amended and Restated Loan Agreement — Page 1

 

 

     (3) “Borrowing Base” means the sum of eighty percent (80%) of the aggregate amount of
Eligible Accounts Receivable, plus fifty percent (50%) of the book value of Inventory as
determined by GAAP.

     (4) “Borrowing Base Certificate” means the Borrowing Base Certificate shown on Exhibit “A”
attached hereto.

     (5) “Business Day” means a day when Lender is open for business.

     (6) “Collateral” has the meaning specified in Section 4.1.

     (7) “Debt” means for any Person: (i) all indebtedness, whether or not represented by bonds,
debentures, notes or other evidences of indebtedness, for the repayment of money borrowed; (ii) all
indebtedness representing deferred payment of the purchase price of property or assets; (iii) all
indebtedness under any lease which, in conformity with GAAP, is required to be capitalized for
balance sheet purposes; (iv) all indebtedness under guaranties, endorsements, assumptions or other
contingent obligations, in respect of, or to purchase or otherwise acquire, indebtedness to others;
and (v) all indebtedness secured by a Lien existing on property owned, subject to such Lien,
whether or not the indebtedness secured thereby shall have been assumed by the owner thereof.

     (8) “Deed of Trust” means the Deed of Trust, Security Agreement and Assignment of Rents,
Leases, Incomes and Agreements (Second Lien) executed by Guarantor and Borrower to J. Schaad Titus,
Trustee, for the benefit of Lender and encumbering, among other things, the certain real property
owned by Guarantor and situated in the City of Grapevine, Tarrant County, Texas, as more
particularly described on Exhibit “A” attached to said Deed of Trust, as the same may be amended,
supplemented or modified from time to time.

     (9) “Eligible Accounts Receivable” means Accounts Receivable arising in the ordinary course of
Borrower’s business from the sale of goods or rendition of services, which Lender, in its Permitted
Discretion, shall deem eligible based on such considerations as Lender may from time to time deem
appropriate. Without limiting the foregoing, an Account Receivable shall not be deemed to
be an Eligible Accounts Receivable if (i) the account debtor has failed to pay the Account
Receivable within a period of ninety (90) days after invoice date, to the extent of any amount
remaining unpaid after such period; (ii) the account debtor has failed to pay more than 25% of all
outstanding Accounts Receivable owed by it to Borrower within ninety (90) days after invoice date;
(iii) the account debtor is an Affiliate of Borrower; (iv) the goods relating thereto are placed on
consignment, guaranteed sale, “bill and hold,” “COD” or other terms pursuant to which payment by
the account debtor may be conditional; (v) the account debtor is not located in the United States
or Canada, unless the Account Receivable is supported by a letter of credit or other form of
guaranty or security, in each case in form and substance satisfactory to Lender; (vi) Borrower is
or may become liable to the account debtor for goods sold or services rendered by the account
debtor to Borrower; (vii) the account debtor’s total obligations to Borrower exceed 25% of all
Eligible Accounts Receivable, to the extent of such excess;
(vii) the account debtor disputes liability or makes any claim with respect thereto (up to the
amount of such liability or claim), or is subject to any insolvency or bankruptcy proceeding, or
becomes insolvent, fails or goes out of a material portion of its business; (ix) the amount thereof
consists of late charges or finance charges; (x) the amount thereof consists of a credit balance
more than ninety (90) days past due; ((xi) the invoice constitutes a progress billing on a project
not yet completed, except that the final billing at such time as

First Amended and Restated Loan Agreement — Page 2

 

 

the matter has been completed and delivered to the customer may be deemed an Eligible Accounts Receivable; (xii) the amount thereof
is not yet represented by an invoice or bill issued in the name of the applicable account debtor;
(xiii the amount thereof is denominated in or payable with any currency other than U.S. Dollars; or
(xiv) such Account Receivable is not at all times subject to Lender’s duly perfected first priority
security interest.

     (10) “EBITDA” means the earnings before interest expense, taxes, depreciation and
amortization, plus non-recurring professional fees and other non-recurring adjustments as
determined by Lender in its sole discretion.

     (11) “Equipment” means any tangible assets used in Borrower’s business including, but not
limited to equipment, machinery, electronics and tools.

     (12) “Event of Default” has the meaning specified in Section 9.1.

     (13) “Guaranty” means the Guaranty Agreement executed by Guarantor in favor of Lender,
executed in connection with the Loan, as the same may be amended, supplemented, or modified from
time to time.

     (14) “Inventory” means all of Borrower’s now owned and hereafter acquired goods, merchandise
or other personal property, wherever located, to be furnished under any contract of service or held
for sale or lease, all raw materials, work in process, finished goods and materials and supplies of
any kind, nature or description which are or might be used or consumed in Borrower’s business or
used in connection with the manufacture, packing, shipping, advertising, selling or finishing of
such goods, merchandise or other personal property, and all documents of title or other documents
representing them.

     (15) “Lien” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, or
conditional sale or title retention agreement, or any other interest in property designed to secure
the repayment of Debt or any other obligation, whether arising by agreement, operation of law, or
otherwise.

     (16) “Loan” means the loan in the original principal amount of up to Seven Hundred Fifty
Thousand and No/100 Dollars ($750,000.00), or so much thereof as may be advanced and outstanding
and unpaid, to be made by Lender to Borrower pursuant to Article 2.

     (17) “Loan Agreement Rider” means the Loan Agreement Rider executed by Borrower, Guarantor and
Lender executed in connection with the Loan, as the same may be amended, supplemented or modified
from time to time.

     (18) “Loan Documents” means this Agreement, the Note, the Guaranty, the Security Agreement,
the UCC-1 Financing Statement, the Deed of Trust, the Loan Agreement Rider, and all other
promissory notes, pledge agreements, guaranties, deeds of trust, security agreements, and other
instruments, documents and agreements executed and delivered by Borrower or Guarantor pursuant to
or in connection with this Agreement and any future amendments hereto or thereto. All such Loan
Documents shall be in form, substance and content in all respects satisfactory to Lender.

     (19) “Lockbox Account” means the bank account established under the Lockbox Agreement.

First Amended and Restated Loan Agreement — Page 3

 

 

     (20) “Lockbox Agreement” means an agreement between Lender and Borrower governing the
Lockbox Account with Lender titled in the name of Borrower which shall provide Lender with a
security interest in and exclusive domain and control over such lockbox (and/or any related
depository account) and all cash and other items received or deposited therein.

     (21) “Note” means the Revolving Line of Credit Promissory Note (Renewal) of even date
herewith, executed or to be executed by Borrower, payable to the order of Lender in the principal
amount of the Loan and all extensions, renewals and modifications thereof.

     (22) “Obligated Party” means Borrower, Guarantor and any Person who is or becomes party to any
agreement that guarantees or secures payment and performance of the Obligations or any part
thereof.

     (23) “Obligations” means all obligations, indebtedness and liabilities of any Obligated Party
to Lender, now existing or hereafter created, acquired or incurred, whether direct, indirect,
primary or secondary, related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, regardless of whether such present or future indebtedness,
obligations and liabilities may, prior to their acquisition by any Obligated Party, be or have been
in favor of some other person or have been acquired by Obligated Party in a transaction with one or
more borrowers, together with any and all renewals and extensions of such indebtedness, obligations
and liabilities, including, without limitation, the obligations, indebtedness and liabilities of
Borrower and/or Guarantor under this Agreement, the Note, the Term Note, and the other Loan
Documents, and all interest accruing thereon and all attorneys’ fees and other expenses incurred in
the enforcement or collection thereof.

     (24) “Permitted Discretion” means Lender’s judgment exercised in good faith based
upon its
consideration of any factor which Lender believes in good faith: (i) will or could materially
adversely affect the value of any Collateral, the enforceability or priority of Lender’s liens
thereon or the amount which Lender would be likely to receive (after giving consideration to delays
in payment and costs of enforcement) in the liquidation of such Collateral; (ii) suggests that any
collateral report or financial information delivered to Lender by any Person on behalf of the
Borrower is incomplete, inaccurate or misleading in any material respect; (iii) materially
increases the likelihood of a bankruptcy,
reorganization or other insolvency proceeding involving the Borrower, any Guarantor or any of the
Collateral, or (iv) creates or reasonably could be expected to create an Event of Default. In
exercising such judgment, Lender may consider such factors already included in or tested by the
definition of Eligible Account Receivables or Eligible Inventory, as well as any of the following:
(i) the financial and business climate of the Borrower’s industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to the Accounts
Receivable, (iii) changes in demand for, and pricing of, Inventory, (iv) changes in any
concentration of risk with respect to Receivables and/or Inventory, and (v) any other factors that
change the credit risk of lending to the Borrower on the security of the Receivables and Inventory.
The burden of establishing lack of good faith hereunder shall be on the Borrower

     (25) “Permitted Liens” means (i) security interests securing purchase money debt for the
acquisition or lease of equipment used in the ordinary course of Borrower’s business, not to exceed
$100,000.00 in the aggregate, and which do not affect any part of the real estate securing the
payment

First Amended and Restated Loan Agreement — Page 4

 

 

and performance of the Obligations, and (ii) liens or security interests arising for
non-delinquent taxes not yet due and payable.

     (26) “Person” means any individual, corporation, business trust, association, company,
partnership, joint venture or other entity.

     (27) “Reserves” means as of any date of determination, such amounts as Lender may from time
to time establish and revise in its Permitted Discretion reducing the loan limits which would
otherwise be available to Borrower: (a) to reflect events, conditions, contingencies or risks
which, as determined by Lender in good faith, do or may materially affect either (i) the Collateral
or any other property which is security for the Obligations or its value, (ii) the assets, business
or prospects of Borrower or any Guarantor or (iii) the security interests and other rights of
Lender in the Collateral (including the enforceability, perfection and priority thereof) or (b) to
reflect Lender’s good faith belief that any collateral report or financial information furnished by
or on behalf of Borrower or any Guarantor to Lender is or may have been materially incomplete,
inaccurate or misleading in any material respect or (c) in respect of any state of facts which
Lender determines in good faith constitutes an Event of Default or may, with notice or passage of
time or both, constitute an Event of Default.

     (28) “Security Agreement” means the Security Agreement executed by the Borrower in favor of
Lender in connection with the Loan, as the same may be amended, supplemented or modified from time
to time.

     (29) “Subsidiary” or “Subsidiaries” means any corporation, general partnership or limited
partnership of which more than fifty percent (50%) of the issued and outstanding securities or
partnership interests, as the case may be, having ordinary voting power for the election of a
majority of directors or managing partners, as the case may be, is owned or controlled, directly or
indirectly, by Borrower, Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.

     (30) “Term Loan Agreement” means the Loan Agreement Note dated March 7, 2007, by and between
Borrower, Guarantor and Lender executed in connection with and pertaining to the Term Note.

     (31) “Term Note” means the Promissory Note dated March 7, 2007, executed by Borrower, payable
to the order of Lender in the principal amount of $2,200,000.00, and all extensions, renewals and
modifications thereof.

     1..2. Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms defined. The words
“hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise
specified, all article and section references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with and determined by generally
accepted accounting principles (“GAAP”).

Article 2.

Loan

First Amended and Restated Loan Agreement — Page 5

 

 

     2..1. Advance Limit and Borrowing Base. Subject to the terms and conditions of this
Agreement Lender agrees to extend the Loan to Borrower in one or more advances from time to time
from the date hereof. Borrower must comply with all of the provisions in this Agreement,
including, without limitation, the provisions of Article 4. prior to Lender making an advance in
conjunction with the Loan. The outstanding principal balance of the Loan shall not exceed the
lesser of (i) the Borrowing Base or (ii) $750,000.00, subject to any Reserves. In the event
the outstanding principal balance of the Loan shall at any one time exceed the lesser of the
$750,000.00, or the Borrowing Base, in either case, after accounting for Reserves, Borrower agrees
to forthwith reduce the outstanding principal amount of the Note, within five (5) days after demand
is made by Lender, to bring such outstanding balance into compliance with the lesser of
$750,000.00, or the Borrowing Base. With each draw request Borrower shall execute and deliver
to Lender a Borrowing Base Certificate. Notwithstanding the forgoing to the contrary, Lender has
the right, but not the obligation, to make advances of principal under the Loan in excess of the
limits described above to pay any portion of the Obligations that may be due and owing at any time
under the Note or the Term Note.

     2..2. Repayment of Note. The obligation of Borrower to repay the Loan shall be
evidenced by the Note executed by Borrower, payable to the order of Lender, in the principal amount
of the Loan and dated the date of the making of the Loan.

     2..3. Revolving Indebtedness. It is contemplated that the Loan shall be revolving in
nature, in that principal amounts may be advanced thereunder, repaid and readvanced from time to
time during the term of the Loan. It is further contemplated by the parties that disbursements
will be made for working capital purposes of Borrower, repaid partially and readvanced as deposits
are made under the Lockbox Agreement and readvanced under the terms of the Agreement. It is the
intent of the parties that this Agreement and the other Loan Documents shall remain in full force
and effect and shall govern the agreements of the parties notwithstanding the fact that the Loan
may be paid down to a zero principal balance. It is understood and agreed that notwithstanding
such release, substitution and replacement of collateral, the Loan Documents shall remain in full
force and effect and unchanged.

     2..4. Use of Proceeds of Loan. The proceeds of the Loan shall be used by Borrower as
working capital for the Borrower’s business.

Article 3.

Payments

     3..1. Principal Payments. Except where evidenced by notes or other instruments issued
or made by Borrower to Lender specifically containing payment provisions which are in conflict with
this Section 3..1 (in which event the conflicting provisions of said notes or other instruments
shall govern and control), that portion of the Obligations consisting of principal payable on
account of the Loan shall be payable by Borrower to Lender immediately upon the earliest of (i) the
receipt by Lender or Borrower of any proceeds of or income from any of the Collateral, to the
extent of said proceeds, (ii) the occurrence of an Event of Default in consequence of which Lender
elects to accelerate the maturity and payment of such loans, (iii) any termination of this
Agreement; provided, however, that any overadvance or overline shall be payable on demand pursuant
to the provisions of Section 2..1. hereof., or (iv) when called for in the Loan Documents.

First Amended and Restated Loan Agreement — Page 6

 

 

     3..2. Interest Payments. Accrued but unpaid interest shall be due and payable as set
forth in the Note.

     3..3. Collections. Until Lender notifies Borrower in writing to the contrary, Borrower
may collect all Account Receivables directly from all account debtors. If Lender notifies Borrower
in writing that Lender requires all Account Receivables to be deposited directly into the LockBox
Account, Borrower shall then direct all of its account debtors, payors and other third parties to
remit all payments owing to Borrower directly to the Lockbox Account. In the event Borrower shall
nevertheless directly receive any payments or other financial proceeds of any Collateral after such
written notice from Lender, Borrower shall receive all payments in trust for Lender and immediately
deliver all payments to Lender in their original form as set forth below, duly endorsed in blank or
cause the same to be deposited into the Lockbox Account. Lender or its designee may, at any time,
notify account debtors that the Accounts Receivable have been assigned to Lender and of Lender’s
security interest therein, and may collect the Accounts Receivable directly and charge the
collection costs and expenses to Borrower’s loan account. Borrower agrees that, in computing the
charges under this Agreement, all items of payment shall be deemed applied by Lender on account of
the Obligations one (1) Business Day after receipt by Lender of good funds which have been finally
credited to Lender’s account, whether such funds are received directly from Borrower or from the
Lockbox Account, and this provision shall apply regardless of the amount of the Obligations
outstanding or whether any Obligations are outstanding; provided, that if any such good funds are
received after 12:00 p.m. noon ine(Dallas time) on any Business Day or at any time on any day not
constituting a Business Day, such funds shall be deemed received on the immediately following
Business Day. Lender is not, however, required to credit Borrower’s account for the amount of any
item of payment which is unsatisfactory to Lender in its Permitted Discretion and Lender may charge
Borrower’s loan account for the amount of any item of payment which is returned to Lender unpaid.

Article 4.

Collateral

     4..1. Collateral. To secure full and complete payment and performance of the
Obligations of Borrower, Borrower and Guarantor have executed or shall execute and deliver or cause
to be executed and delivered the Security Agreement covering the property and collateral described
in this Section 4.1. (which, together with any other property and collateral which may now or
hereafter secure the Obligations of Borrower or any part thereof, is sometimes herein called the
“Collateral”):

     a. All of the Borrower’s right, title and interest in and to all of the Borrower’s
Inventory, Equipment, materials, supplies, goods, general intangibles, money, instruments,
accounts, chattel paper, contract rights, accounts, Accounts Receivable, purchase orders received
and rights to payment of any kind (including, without limitation, such rights of payment arising
out of a sale, lease or other disposition of goods by the Borrower, out of a rendering of services
by the Borrower, out of a loan by the Borrower, whether such right to payment is or is not already
earned by performance, and howsoever such right to payment may be evidenced, together with all of
the rights and interest (including all liens and security interests) which the Borrower may at any
time have by law or agreement against any account debtor or other obligor obligate to make any such
payment or against any of the property of such account debtor

First Amended and Restated Loan Agreement — Page 7

 

 

or other obligor contract rights,
whether now owned or acquired later; all accessions, additions, replacements and substitutions or
any of the foregoing; all records of any kind relating to any of the foregoing; and all proceeds
(including insurance and accounts proceeds) and all products and proceeds of any of the foregoing,
and wherever located;

     4..2. Setoff. Upon the occurrence of an Event of Default, Lender shall have the
right to set off and apply against the Obligations in such manner as Lender may determine, without
notice to Borrower, any and all deposits (general or special, time or demand, provisional or final)
or other sums at any time credited by or owing from Lender to Borrower. As further security for
the Obligations of Borrower, Borrower hereby grants to Lender a security interest in all money,
instruments and other property of Borrower now or hereafter held by Lender, including, without
limitation, property held in safekeeping. In addition to Lender’s right of setoff and as further
security for the Obligations of Borrower, Borrower hereby grants to Lender a security interest in
all deposits (general or special, time or demand, provisional or final) and other accounts of
Borrower now or hereafter on deposit with or held by Lender and all other sums at any time credited
by or owing from Lender to Borrower. The rights and remedies of Lender hereunder are in addition
to other rights and remedies (including, without limitation, other rights of setoff) which Lender
may have.

     4..3. Guaranty of the Obligations. Contemporaneously with the making of the Loan,
Guarantor shall guarantee payment of the Obligations of Borrower by execution and delivery of the
Guaranty.

Article 5.

Conditions Precedent

     5..1. Loan. The obligation of Lender to make the Loan is subject to Lender’s receipt or
written waiver, on or before the day of the making of the Loan, of each of the following, each
dated (unless otherwise indicated) the day of the making of the Loan, in form and substance
satisfactory to Lender:

     a. The Certificate of Incorporation of Borrower.

     b. Certificates of the appropriate government officials of the state of formation of the
Borrower as to the existence of the Borrower.

     c. The Note executed by Borrower.

     d. The Guaranty executed by Guarantor.

     e. The Security Agreement executed by Borrower.

     f. UCC-1 Financing Statement covering the Collateral executed by Borrower.

     g. The Deed of Trust executed by Guarantor and Borrower.

     h. The Certificate of Secretary of certifying that the Board of Directors of Borrower has
passed a resolution, which (i) authorizes the execution, delivery and performance by Borrower of
this Agreement and/or the other Loan Documents to which

First Amended and Restated Loan Agreement — Page 8

 

 

Borrower is or will be a party hereunder
and (ii) sets forth the name of the officers of Borrower authorized to sign this Agreement and/or
each of the other Loan Documents to which Borrower is or will be a party (including the
certificates contemplated herein).

     i.. The Certificate of Secretary of Guarantor certifying that the Board of Directors of
Guarantor has passed a resolution, which (i) authorizes the execution, delivery and performance by
Guarantor of this Agreement, the Guaranty and/or the other Loan Documents to which the Borrower are
or will be a party hereunder and (ii) sets forth the name of the officers of Guarantor authorized
to sign this Agreement and/or each of the other Loan Documents to which Guarantor is or will be a
party (including the certificates contemplated herein).

     j. The Loan Agreement Rider executed by the Borrower and Guarantor.

     k. A UCC search report from the Secretary of States of Texas and Delaware revealing no
conflicting security interests in the Collateral other than as expressly permitted by Lender in its
sole and absolute discretion.

     l. All necessary authorizations, consents, approvals, licenses, filings and registrations with
governmental or regulatory authorities or in connection with the execution, delivery or performance
by Borrower or Guarantor of this Agreement, the Note and other Loan Documents to which Borrower and
Guarantor are a party.

     m. Such documents, instruments, and information as Lender may reasonably request.

     n. Borrower and Guarantor have delivered to Lender its audited financial statements.

     o. All corporate proceedings taken in connection with the transactions contemplated by this
Agreement and all documents, instruments and other legal matters incident thereto shall be
satisfactory to Lender.

Article 6.

Representations and Warranties

     To induce Lender to enter into this Agreement, Borrower and Guarantor represent and warrant to
Lender that:

     6..1. Existence and Authority. The Borrower (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware; (b) has all
requisite power to own assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify would have a material
adverse effect on its business, financial condition, or operations. The Borrower has the power and
authority to execute, deliver and perform its obligations under this Agreement and the other Loan
Documents to which it is or may become a party.

First Amended and Restated Loan Agreement — Page 9

 

 

     6..2. Financial Statements. Borrower has delivered to Lender consolidated financial
statements of Borrower and Guarantor, setting forth all financial information regarding the
Borrower, all as at and for the last fiscal year of Borrower. The financial statements prepared at
the end of the fiscal year of Borrower and, along with the other financial statements referred to
above or delivered in connection herewith, are true and correct, and fairly present, on a
consolidated basis, if applicable, the financial condition of the Borrower as of the respective
dates indicated therein and the results of operations for the respective periods indicated therein.
Borrower has no material contingent liabilities, liabilities for taxes, material forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable commitments not
reflected in such financial statements. There has been no material adverse change in the
condition, financial or otherwise, or operations of the Borrower since the effective date of the
most recent financial statements referred to in this Section 6.2.

     6..3. Default. Neither Borrower nor Guarantor are in default in any material respect
under any loan agreement, indenture, mortgage, pledge agreement or other material agreement or
obligation to which it is a party or by which any of their properties may be bound.

     6..4. Authorization and Compliance with Laws and Material Agreements. The execution,
delivery and performance by Borrower and Guarantor of this Agreement and the other Loan Documents
to which Borrower and Guarantor are or may become parties have been duly authorized by all
requisite action on the part of Borrower and Guarantor and do not and will not violate the
Certificates of Incorporation of Borrower and Guarantor, or any law or any order of any court,
governmental authority or arbitrator, and do not and will not conflict with, result in a breach of,
or constitute a default under, or result in the imposition of any Lien (except as provided in
Article 4.) upon any assets of Borrower and Guarantor pursuant to the provisions of any indenture,
mortgage, deed of trust, pledge agreement, franchise, permit, license or other instrument or
agreement by which Borrower or Guarantor or their respective properties is bound.

     6..5. Litigation and Judgments. Except as disclosed under the caption “Legal
Proceedings” in the Borrower’s Annual Report on Form 10-K for the fiscal year ended December 31,
2006, there is no action, suit or proceeding before any court, governmental authority or arbitrator
pending, or to the knowledge of Borrower or Guarantor, threatened against or affecting Borrower or
Guarantor that would, if adversely determined, have a material adverse effect on the financial
condition or operations of Borrower or Guarantor or the ability of Borrower or Guarantor to pay and
perform the Obligations. There are no outstanding judgments against Borrower or Guarantor.

     6..6. Rights in Properties; Liens. Borrower and Guarantor have good and indefeasible
title or valid leasehold interests in their respective properties and assets, real and personal,
reflected in the financial statements described in Section 6.2., and none of the properties, assets
or leasehold interests of Borrower or Guarantor is subject to any Lien, except as permitted by
Section 8.2.

     6..7. Title to Collateral. Borrower and Guarantor own, and with respect to Collateral
acquired after the date hereof, Borrower and Guarantor will own, legally and beneficially, the
Collateral free of any Lien or any right or option on the part of any third person to purchase or
otherwise acquire the Collateral or any part thereof, except for the Lien granted pursuant to the
Security Agreement executed by the Borrower and the Permitted Liens. Borrower and Guarantor have
the unrestricted right to grant a security interest in the Collateral as contemplated hereby. The
Collateral is not subject to any restriction on

First Amended and Restated Loan Agreement — Page 10

 

 

transfer or assignment except for compliance with
applicable federal and state laws and regulations promulgated thereunder.

     6..8. Enforceability. This Agreement constitutes, and the other Loan Documents to
which Borrower and Guarantor are parties, when delivered, shall constitute legal, valid and binding
obligations of Borrower and Guarantor, enforceable against Borrower and Guarantor in accordance
with their respective terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors’ rights.

     6..9. Approvals. No authorization, approval or consent of, and no filing or
registration with, any court, governmental authority or third party is or will be necessary for the
execution, delivery or performance by Borrower or Guarantor of this Agreement and the other Loan
Documents to which Borrower and Guarantor are or may become a party or the validity or
enforceability thereof.

     6..10. Taxes. Borrower and Guarantor have filed all tax returns (federal, state and
local) required to be filed, including all income, franchise, employment, property and sales taxes.
Except for (a) the existing employment tax dispute with the Internal Revenue Service previously
disclosed to Lender in writing by Borrower, for which Borrower has a maximum potential liability of
no more the $50,000.00 in the aggregate, and (b) certain existing unpaid sales tax obligations in
various states which do not exceed more than $20,000.00 in the aggregate [(a) and (b) being
collectively referred to herein as the “Disclosed Outstanding Tax Issues”], Borrower and Guarantors
have paid all of their respective tax liabilities, and neither Borrower or Guarantor know of any
pending investigation of Borrower or Guarantor by any taxing authority or of any pending but
unassessed tax liability of Borrower or Guarantor.

     6..11. Use of Proceeds; Margin Securities. Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulations G, T, U of X of the Board of Governors
of the Federal Reserve System), and no part of the proceeds of any extension of credit under this
Agreement will be used to purchase or carry any such margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock. Borrower, nor any person acting on Borrower’s
behalf, has taken any action that might cause the transactions contemplated by this Agreement or
the Note, as to violate Regulations G, T, U or X or to violate the Securities Exchange Act of 1934,
as amended.

     6..12. ERISA. The Borrower has complied with all applicable minimum funding
requirements and all other applicable and material requirements, if applicable, of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and there are no existing conditions
that would give rise to liability thereunder. No Reportable Event (as defined in Section 4043 of
ERISA) has occurred in connection with any employee benefit plan that might constitute grounds for
the termination thereof by the Pension Benefit Guaranty Corporation or for the appointment by the
appropriate United States District Court of a trustee to administer such plan.

     6..13. Disclosure. No representation or warranty made by Borrower and Guarantor in
this Agreement or in any other Loan Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make the statements herein or therein not misleading.
Except as otherwise disclosed to Lender in writing, there is no fact known to Borrower or
Guarantor which has a material adverse effect, or which could reasonably be expected to have a
material adverse effect, on the business, assets, financial condition, or operations of Borrower or
Guarantor.

First Amended and Restated Loan Agreement — Page 11

 

 

     6..14. Contracts. Neither Borrower nor Guarantor is a party to, or bound by any
agreement, condition, contract or arrangement, which which could reasonably be expected to have a
material adverse effect on the business, operations or financial condition of Borrower or
Guarantor.

     6..15. Compliance with Law. To the best of its knowledge Borrower and Guarantor are
in compliance with all laws, rules, regulations, orders and decrees which are applicable to
Borrower or Guarantor or any of their respective properties.

     6..16. Principal Place of Business. The place where the Borrower keeps its books and
records is located at the address set forth in Article 10.

Article 7.

Positive Covenants

     Borrower and Guarantor covenant and agree that, as long as the Obligations or any part thereof
are outstanding or Lender has any commitment hereunder, Borrower and Guarantor will perform and
observe the following positive covenants, unless Lender shall otherwise consent in writing:

     7..1. Financial Statements. Borrower and Guarantor will furnish to Lender:

     a. As soon as available, and in any event within one hundred thirty five (135) days after
the end of each fiscal year of Borrower and Guarantor, beginning with the fiscal year most recently
ended, a copy of the annual audited consolidated financial report of Borrower and Guarantor for
such fiscal year containing, for each of Borrower and Guarantor, balance sheets, statements of
income, statements of stockholder’ equity and statements of change in financial position as of the
end of such fiscal year and for the 12-month period then ended, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in reasonable detail and certified
by the chief financial officer of the Borrower and Guarantor, prepared in accordance with GAAP.

     b. As soon as available, and in any event within thirty (30) days after the end of each fiscal
quarter of Borrower, commencing at the end of the current fiscal quarter, a copy of the quarterly
operating statements of Borrower for such fiscal quarter containing cash flow statements, balance
sheets, and statements of income, all in reasonable detail and certified to be true and correct in
all material respects by the president or chief financial officer of Borrower.

     c. As soon as available and in any event within ten (10) days after the end of each month of
each fiscal year of Borrower, (i) a copy of the accounts receivable aging and sales journal, all in
reasonable detail and certified by the chief financial officer of Borrower to fairly present the
financial condition and results of operations of Borrower, at the date and for the period indicated
therein, and (ii) a current Borrowing Base Certificate. Lender shall have the right to audit at
Borrower’s expense the accounts receivable aging and sales journals every three (3) months during
the term hereof.

First Amended and Restated Loan Agreement — Page 12

 

 

     d. As soon as available, and in any event within thirty (30) days of filing same with the
Internal Revenue Service of each year, a true and correct copy of the consolidated annual federal
income tax return of Borrower and Guarantor for the immediately preceding year, signed by Borrower
and Guarantor and filed with the Internal Revenue Service.

     e. On or before January 31 of each year, evidence that all ad valorem taxes or other
assessments due and owing against the Property have been paid in full.

     f. Promptly, such additional financial information concerning Borrower and Guarantor as Lender
may request.

     7..2. Certificates; Other Information. Borrower and Guarantor will furnish to
Lender all of the following:

     a. As soon as available, copies of all reports and information made available to directors and
shareholders of the Borrower of a material nature which could impair Lender’s prospect of payment
or performance of the Obligations or any portion thereof.

     b. Promptly, such additional information concerning the Borrower and Guarantor as Lender may
reasonably request.

     7..3. Performance of Obligations. Borrower will duly and punctually pay and
perform the Obligations, including without limitation, its obligations under this Agreement and the
other Loan Documents.

     7..4. Preservation of Existence and Conduct of Business. Borrower will (i) preserve
and maintain its legal existence and all of its leases, privileges, franchises, qualifications and
rights that are necessary or desirable in the ordinary conduct of its business, and (ii) conduct
its business as presently conducted in an orderly and efficient manner in accordance with good
business practices.

     7..5. Maintenance of Properties. Borrower will maintain its respective assets and
properties in good condition and repair.

     7..6. Payment of Taxes and Claims. Borrower and Guarantor will pay or discharge at or
before maturity or before becoming delinquent (i) all taxes, levies, assessments and governmental
charges imposed on them or any of their property, except for the Disclosed Outstanding Tax Issues
which Borrower is contesting or resolving in good faith, and (ii) all lawful claims for labor,
material and supplies, which, if unpaid, might become a Lien upon any of their property; provided,
however, that neither Borrower nor Guarantor shall be required to pay or discharge any tax, levy,
assessment or governmental charge which is being contested in good faith by appropriate proceedings
diligently pursued, and for which adequate reserves have been established.

     7..7. Insurance. Borrower will maintain with financially sound and reputable
insurance companies workmen’s compensation insurance, liability insurance, and insurance on its
property, assets

First Amended and Restated Loan Agreement — Page 13

 

 

and business at least in such amounts and against such risks as are usually
insured against by Persons engaged in similar businesses and showing Lender as an additional Loss
Payee.

     7..8. Inspection Rights. At any reasonable time and from time to time, Borrower will
permit representatives of Lender to examine and make copies of the books and records of, and visit
and inspect the properties of Borrower, and to discuss the business, operations and financial
condition of Borrower with its officers and employees and with its independent certified public
accountants.

     7..9. Keeping Books and Records. Borrower will maintain proper books of record and
account in which full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.

     7..10. Compliance with Laws. Borrower and Guarantor will comply with all applicable
laws, rules, regulations and orders of any court, governmental authority or arbitrator.

     7..11. Compliance with Agreements. Borrower and Guarantor will comply, in all
material respects, with all agreements, indentures, mortgages, security agreements, pledge
agreements, deeds of trust and other documents binding on Borrower or Guarantor or affecting their
respective properties or business.

     7..12. Notices. Borrower and Guarantor will promptly notify Lender of (i) the
occurrence of an Event of Default, or of any event that with notice or lapse of time, or both,
would be an Event of Default, (ii) the commencement of any action, suit or proceeding against
Borrower that might have a material adverse effect on the business, financial condition or
operations of Borrower and (iii) any other matter that might have a material adverse effect on the
business, financial condition or operations of Borrower.

     7..13. Further Assurances. Borrower and Guarantor will execute and deliver such
further instruments as may be deemed necessary or desirable by Lender to carry out the provisions
and purposes of this Agreement and the other Loan Documents and to preserve and perfect the Lien of
Lender in the Collateral.

     7..14. Compliance with ERISA. Borrower will comply with all minimum funding
requirements and all other material requirements of ERISA, if applicable, so as not to give rise to
any liability thereunder. Promptly after the filing thereof, Borrower shall furnish to Lender with
regard to each employee benefit plan of Borrower, copies of each annual report required to be filed
pursuant to Section 103 of ERISA in connection with each such plan for each plan year. Borrower
will notify Lender immediately of any fact, including, but not limited to, any “Reportable Event”
as that term is defined in Section 4043 of ERISA, arising in connection with any such plan which
might constitute grounds for the termination thereof by the Pension Benefit Guaranty Corporation or
for the appointment by the appropriate United States District Court of a trustee to administer such
plan and furnish to Lender, promptly upon its request therefor, such additional information
concerning any such plan as may be reasonably requested.

     7..15. Compliance with Regulations G, T, U and X. Neither Borrower nor any Person
acting on its behalf will take any action which might cause this Agreement or any of the Loan
Documents to violate, and Borrower will take actions necessary to cause compliance with Regulations
G, T, U and X of

First Amended and Restated Loan Agreement — Page 14

 

 

the Board of Governors of the Federal Reserve System and the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in effect.

     7..16. Operating Account. Except for Borrower’s payroll account and its Canadian bank
accounts maintained by Borrower’s Canadian Affiliates, Borrower and Guarantor shall maintain all of
its operating accounts with Lender. Transfers of funds between Borrower’s local accounts and the
Canadian bank accounts shall be prohibited, unless such transfers are made in the ordinary course
of business.

     7..17. Financial Covenants. Borrower and Guarantor covenant and agree that, as long as
the Obligations or any part thereof are outstanding or Lender has any commitment hereunder,
Borrower and Guarantor will perform, observe and maintain the following financial covenants, unless
Lender shall otherwise consent in writing:

     a. Current Ratio. Borrower shall maintain a “Current Ratio” of at least 1.25
to 1. “Current Ratio” means [current assets minus prepaid items] divided by [current
liabilities] (as those terms are defined in GAAP).

     b. Debt Service Coverage Ratio. [Intentionally Omitted].

     c. Liabilities to Tangible Net Worth. Borrower shall maintain a maximum ratio of
total liabilities to tangible net worth of 2.5 to 1 (as those terms are defined in GAAP).

     The financial covenants set forth herein shall be tested on a quarterly basis in conjunction
with the delivery of Borrower’s financial statements. If Borrower shall fail to satisfy a
financial covenant, Borrower shall have fifteen (15) days to bring such covenant into compliance
after written notice therefore is sent to Borrower, before Lender may claim an Event of Default
hereunder.

Article 8.

Negative Covenants

     Borrower and Guarantor covenant and agree that, as long as the Obligations or any part thereof
are outstanding or Lender has any commitment hereunder, Borrower and Guarantor will perform and
observe the following negative covenants, unless Lender shall otherwise consent in writing:

     8..1. Limitation on Liens. Borrower will not incur, create, assume or permit to
exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except Liens in favor of Lender and the Permitted Liens.

     8..2. Mergers, Acquisitions and Dissolutions. Borrower will not, without the prior
written consent of Lender, become a party to a merger or consolidation, or purchase or otherwise
acquire all or a substantial part of the assets of any Person or any shares or other evidence of beneficial
ownership of any Person . Borrower nor any partner of the Borrower shall not dissolve or liquidate.

     8..3. Transactions with Affiliates. Borrower will not enter into any transaction with
any director, officer, employee or shareholder of Borrower or any Affiliate, except upon fair and
reasonable terms.

First Amended and Restated Loan Agreement — Page 15

 

 

     8..4. Debt. Borrower shall not, without the prior written consent of Lender, incur,
create, assume or permit to exist, any Debt, except (i) Debt to Lender; (ii) trade payables
incurred in the ordinary course of business with a due date not greater than sixty (60) days from
date it is incurred; (iii) purchase money debt for the acquisition or lease of equipment used in
the ordinary course of Borrower’s business, not to exceed $100,000.00 in the aggregate.

Article 9.

Default

     9..1. Event of Default. Each of the following shall be deemed an “Event of Default”:

     a. Any Obligated Party shall fail to pay when due the Obligations or any part thereof and such
default in payment is not cured within five (5) days after written notice of same is sent to
Borrower.

     b. Any representation or warranty made or deemed made by any Obligated Party (or any of their
respective officers) in any Loan Document or in any certificate, report, notice or financial
statement furnished at any time in connection with this Agreement shall be false, misleading or
erroneous in any material respect when made or deemed to have been made.

     c. Any Obligated Party shall fail to perform, observe or comply with any covenant, agreement
or term contained in this Agreement or any other Loan Document (which does not involve the payment
of monetary Obligations covered by Section 9..1a. Above), and such failure to perform, observe or
comply is not fully cured within fifteen (15) days after written notice of same is sent to
Borrower; provided, however, that if the default described within this section 8..1c. is of
such a nature that it cannot possibly be cured by anyone within such fifteen (15) day period, then
such failure shall not constitute an Event of Default hereunder, if Borrower commences the curing
of the failure within such fifteen (15) day period, and thereafter diligently prosecutes the curing
of the same to completion, and provides to the Lender written evidence of such actions,
provided that if such default still remains uncured after thirty (30) days from the date
such original notice from Lender was sent, then such failure shall constitute an Event of Default
hereunder, notwithstanding..

     d. Any Obligated Party shall commence a voluntary proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or a substantial part of its property or
shall consent to any such relief or to the appointment of or taking possession by any such official
in such a proceeding commenced against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become due or shall take any corporate
action to authorize any of the foregoing.

     e. Any involuntary proceeding shall be commenced against any Obligated Party seeking
liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official for it or a substantial part of its
property, and such involuntary proceeding shall remain undismissed and unstayed for a period of
forty-five (45) days.

First Amended and Restated Loan Agreement — Page 16

 

 

     f. Any Obligated Party shall fail to discharge within a period of forty-five (45) days after
the commencement thereof any attachment, sequestration or similar proceeding against any of its
assets or properties to the extent enforcement would have a material adverse effect on the
financial condition of such Obligated Party.

     g. Any Obligated Party shall fail to satisfy and discharge promptly any judgment against it
after the judgment becomes final to the extent enforcement would have a material adverse effect on
the financial condition of such Obligated Party.

     h. Any Obligated Party shall default in the payment of any of its Debt beyond any applicable
grace period, or shall default in the performance of any other agreement binding upon it or its
property.

     i. This Agreement or any other Loan Document shall cease to be in full force and effect or
shall be declared null and void or the validity or enforceability thereof shall be contested or
challenged by any Obligated Party or any of their respective shareholders, or any Obligated Party
shall deny that it has any further liability or obligation under any of the Loan Documents.

     j. The sale, encumbrance or other unauthorized transfer of the Collateral without Lender’s
prior written consent, that is not made in the ordinary course of business.

     k. Any Obligated Party shall cease to exist.

     l. Borrower shall fail to satisfy any financial covenant as set forth in Section 7..18 hereof
and such failure is not cured within fifteen (15) days after written notice of same is sent to
Borrower.

     m. The occurrence of any Event of Default as that term is defined in the Term Loan Agreement.

     9..2. Remedies Upon Default. Upon the occurrence of an Event of Default, Lender may
without notice terminate its commitment to lend hereunder and declare the Obligations or any part
thereof to be immediately due and payable, and the same shall thereupon become immediately due and
payable, without demand, presentment, notice of dishonor, notice of acceleration, notice of intent
to accelerate, notice of intent to demand, or protest, which are hereby expressly waived; provided,
however, that upon the occurrence of an Event of Default under Section 9.1.d. or Section 9.1.e.,
the commitment of Lender to lend hereunder shall automatically terminate, and the Obligations shall
become immediately due and payable without notice, demand, presentment, notice of dishonor, notice
of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, which are
hereby expressly waived. Upon the occurrence of any Event of Default, Lender may exercise all rights and
remedies available to it in law or in equity, under the Loan Documents or otherwise.

Article 10.

Miscellaneous

     10..1. Expenses of Lender. Borrower agrees to pay on demand all costs and expenses
incurred by Lender in connection with the preparation, negotiation and execution of this Agreement
and the other

First Amended and Restated Loan Agreement — Page 17

 

 

Loan Documents and any and all amendments, modifications and supplements thereto,
including, without limitation, the costs and fees of Lender’s legal counsel, and all costs and
expenses incurred by Lender in connection with the enforcement or preservation of any rights under
this Agreement or any other Loan Document, including, without limitation, the reasonable costs and
fees of Lender’s legal counsel. Lender is and shall be authorized to fund these costs directly out
of the proceeds of the Loan.

     10..2. Restatement. Except as otherwise disclosed in writing by Borrower, the
delivery of each statement, report and certificate to Lender pursuant to this Agreement and the
request by Borrower for an advance hereunder shall by virtue of such delivery or request alone
constitute a restatement of the representations and warranties contained in Article 6. hereof on
and as of the date of delivery or the date requested for the advance, except that the
representations and warranties contained in Section 6.2. shall in each instance be deemed to be
made with respect to the financial statements most recently furnished to Lender pursuant to Section
6.2. or 7.1., as the case may be. Each such delivery or request shall also constitute a
representation and warranty at the time of said delivery or on the date requested for the advance
that no Event of Default has occurred and is continuing and that no event has occurred and is
continuing that, with the giving of notice or lapse of time or both, would be an Event of Default.

     10..3. No Waiver; Cumulative Remedies. No failure on the part of Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies provided for in
this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and
remedies provided by law.

     10..4. Successors and Assigns. This Agreement is binding upon and shall inure to the
benefit of Lender, Borrower, Guarantor and their respective successors and assigns, except that
Borrower and Guarantor may not, except as expressly provided herein, assign or transfer any of
their rights or obligations under this Agreement without the prior written consent of Lender.

     10..5. Survival of Representations and Warranties. All representations and warranties
made in this Agreement or any other Loan Document or in any document, statement or certificate
furnished in connection with this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, and no investigation by Lender or any closing shall affect
the representations and warranties or the right of Lender to rely upon them.

     10..6. Entire Agreement; Amendment. This Agreement and the other Loan Documents
embody the entire agreement among the parties hereto and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. The provisions of this Agreement
and the other Loan Documents to which Borrower and Guarantor are a party may be amended or waived
only by an instrument in writing signed by the parties thereto.

     10..7. Maximum Interest Rate. No provision of this Agreement or Note shall require
the payment or the collection of interest in excess of the maximum permitted by applicable law. If
any excess of interest in such respect is hereby provided for, or shall be adjudicated to be so
provided, in Note or otherwise in connection with this loan transaction, the provisions of this
Section 10.7. shall govern and prevail and neither Borrower nor the sureties, Guarantor, successors
or assigns of Borrower shall be obligated to pay the excess amount of such interest or any other
excess sum paid for use,

First Amended and Restated Loan Agreement — Page 18

 

 

forbearance or detention of sums loaned pursuant hereto. In the event
Lender ever receives, collects or applies as interest any such sum, such amount which would be in
excess of the maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by the Note; and, if the principal of the
Note has been paid in full, any remaining excess shall forthwith be paid to Borrower.

     10..8. Notices. Any notice, consent or other communication required or permitted to
be given under any of the Loan Documents to Lender, Borrower or Guarantor must be in writing and
delivered in person or mailed by registered or certified mail, return receipt requested, postage
prepaid, as follows:

	 	 	 
	To Borrower:

	 	American Locker Group, Incorporated

815 S. Main Street

Grapevine, Texas 76051
	 
	 	 
	To Guarantor:

	 	Altreco, Incorporated

815 S. Main Street

Grapevine, Texas 76051
	 
	 	 
	In either case, with a copy to:
	 	 
	 
	 	 
	 

	 	Hallett & Perrin, P.C.

2001 Bryan Street, #3900

Dallas, Texas 75201

Attn: Timothy R. Vaughn
	 
	 	 
	To Lender:

	 	The F&M Bank & Trust Company

14185 Dallas Parkway, Suite 140

Dallas, Texas 75254

Attention: David J. Broussard, Senior Vice-President

or such other address as shall be set forth in a notice from the appropriate party given in
compliance with this Section 10.8. Any such notice, consent or other communication shall be
deemed given when delivered in person or, if mailed, when duly deposited in the mails.

     10..9 .Applicable Law. THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL
BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS, AND SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.

     10..10 Jurisdiction, Venue.

     ANY SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR GUARANTOR WITH RESPECT TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT OF ANY THEREOF
WILL BE BROUGHT IN THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS, AS LENDER (IN ITS SOLE DISCRETION) MAY ELECT, AND BORROWER AND
GUARANTOR

First Amended and Restated Loan Agreement — Page 19

 

 

HEREBY ACCEPT THE EXCLUSIVE JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT,
ACTION OR PROCEEDING.

     IN ADDITION, BORROWER AND GUARANTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS BROUGHT IN THE STATE OF TEXAS, AND HEREBY FURTHER IRREVOCABLY
WAIVE ANY CLAIM OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE DISTRICT COURTS IN DALLAS COUNTY,
TEXAS THAT MAY HAVE BEEN BROUGHT IN THE INCONVENIENT FORUM. SHOULD ANY SUCH SUIT, ACTION OR
PROCEEDING BE PENDING IN MORE THAN ONE FORUM, LENDER’S CHOICE OF FORUM SHALL BE CONCLUSIVE.

     10..11 WAIVER OF JURY TRIAL. IN THE EVENT LITIGATION SHOULD ARISE OUT OF THE
TRANSACTIONS CONTEMPLATED BY ANY OF THE LOAN DOCUMENTS OR ANY OTHER MATTER RELATED THERETO
WHATSOEVER OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OR INACTIONS BY LENDER, IT IS HEREBY STIPULATED AND AGREED BY BORROWER AND
GUARANTOR THAT THEY SHALL WAIVE AND DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ALL
RIGHTS TO DEMAND A TRIAL OF ANY SUCH MATTER BY OR BEFORE A JURY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO COMMIT TO MAKE THE LOAN.

     10..12 RELIEF FROM AUTOMATIC STAY. AS A MATERIAL INDUCEMENT AND AS FURTHER
CONSIDERATION TO INDUCE LENDER TO MAKE THE LOAN, BORROWER AND GUARANTOR HEREBY STIPULATE, AGREE,
CONSENT TO AND ACKNOWLEDGE THAT IN THE EVENT THAT A PROCEEDING UNDER TITLE 11 OF THE U.S. CODE IS
COMMENCED, EITHER VOLUNTARY OR INVOLUNTARY, BY OR AGAINST BORROWER OR GUARANTOR, LENDER IS ENTITLED
TO IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY IMPOSED UNDER SECTION 362 OF TITLE 11 OF THE U.S. CODE,
AS AMENDED, OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE
TO LENDER, WITHOUT REQUIRING LENDER TO FILE A MOTION FOR RELIEF FROM THE AUTOMATIC STAY. IN
ADDITION TO THE FOREGOING, BORROWER AND GUARANTOR FURTHER STIPULATE, AGREE AND ACKNOWLEDGE THAT NEITHER BORROWER NOR GUARANTOR WILL OPPOSE OR OBJECT TO
LENDER’S MOTION FOR RELIEF FROM ANY AUTOMATIC STAY OR ANY VALUATION OF THE PROPERTY SUBJECT TO THE
AUTOMATIC STAY CONDUCTED BY LENDER.

     10..13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.

     10..14. Severability. Any provision of this Agreement held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.

First Amended and Restated Loan Agreement — Page 20

 

 

     10..15. Headings. The headings, captions and arrangements used in this Agreement are
for convenience only and shall not affect the interpretation of this Agreement.

     10..16. Participations. Lender shall have the right at any time and from time to time
to grant participations in the Note and any other Loan Documents. Each participant shall be
entitled to receive all information received by Lender regarding the creditworthiness of Borrower
and Guarantor.

     10..17. Controlling Interpretation. The other Loan Documents delivered pursuant to or
in connection with this Agreement shall supplement and be in addition to the terms and provisions
of this Agreement. If an inconsistency of provisions should exist between any of the Loan
Documents, the interpretation of such provision most favorable to Lender shall control, determined
by Lender in its sole discretion.

     10..18. Amendment and Restatement. This Agreement amends and restates that certain
Loan Agreement dated March 5, 2007, by and between Borrower, Guarantor and Lender.

     In Witness Whereof, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	Borrower:

American Locker Group, Incorporated, a Delaware corporation

 	 
	 	By:  	/S/ PAUL M. ZAIDINS
 	 
	 	 	Paul Zaidins, President 	 
	 	 	 	 
	 
	 	Guarantor:

Altreco, Incorporated, a Delaware corporation

 	 
	 	By:  	/S/ PAUL M. ZAIDINS
 	 
	 	 	Paul Zaidins, President 	 
	 	 	 	 
	 
	 	Lender:

The F&M Bank & Trust Company

 	 
	 	By:  	/S/ DAVID BROUSSARD
 	 
	 	 	(Signature) 	 
	 	 	 	 
	 	  	David Broussard, Sr. Vice President
 	 
	 	 	(Printed Name and Title) 	 
	 	 	 	 
	 

First Amended and Restated Loan Agreement — Page 21exv10w1

EXHIBIT 10.1

ADOPTION AGREEMENT

	 	 	 	 	 	 	 
	1.01	 	PREAMBLE
	 
	 	 	 	 	 	 
	 	 	By the execution of this Adoption Agreement the Plan Sponsor
hereby [complete (a) or (b)]
	 
	 	 	 	 	 	 
	 

	 	(a)
	 	þ
	 	adopts a new plan as of July 1, 2008 [month, day, year]
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	o
	 	amends and restates its existing
plan as of                     
[month, day, year] which is the Amendment Restatement Date. Except as otherwise
provided in Appendix A, all amounts deferred under the Plan prior to the Amendment
Restatement Date shall be governed by the terms of the Plan as in effect on the day
before the Amendment Restatement Date.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Original Effective Date:                      [month, day, year]
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Pre-409A Grandfathering: o Yes o No
	 
	 	 	 	 	 	 
	1.02	 	PLAN
	 
	 	 	 	 	 	 
	 	 	Plan Name:	 	Juniper Networks, Inc. Deferred Compensation Plan
	 
	 	 	 	 	 	 
	 	 	Plan Year:	 	January 1 — December 31, initial Plan Year is July 1, 2008 — December 31, 2008
	 
	 	 	 	 	 	 
	1.03	 	PLAN SPONSOR
	 
	 	 	 	 	 	 
	 	 	Name:	 	Juniper Networks, Inc.
	 	 	Address:	 	1194 North Mathilda Ave., Sunnyvale, CA 94089
	 	 	Phone # :	 	(408) 745-2000
	 	 	EIN:	 	77-0422528
	 	 	Fiscal Yr:	 	December 31
	 
	 	 	 	 	 	 
	 	 	Is stock of the Plan Sponsor, any Employer or any Related Employer publicly traded on an
established securities market?
	 
	 	 	 	 	 	 
	 	 	þ Yes       o No

- 1 -

 

	1.04	 	EMPLOYER
	 
	 	 	The following entities have been authorized by the Plan Sponsor to participate in and have
adopted the Plan (insert “Not Applicable” if none have been authorized):

	 	 	 	 	 
	Entity	 	Publicly Traded on Est. Securities Market
	 	 	Yes	 	No
	 
	 	 	 	 
	Juniper Networks (US) Inc.

	 	þ
	 	o
	 

	 	o
	 	o
	 

	 	o
	 	o
	 

	 	o
	 	o
	 

	 	o
	 	o
	 

	 	o
	 	o

	1.05	 	ADMINISTRATOR
	 
	 	 	The Plan Sponsor has designated the following party or parties to be responsible for the
administration of the Plan:
	 
	 	 	Name: Investment Committee
	 
	 	 	Address: 1194 North Mathilda Ave., Sunnyvale, CA 94089

			
	          Note:	 	The Administrator is the person or persons designated by the Plan Sponsor to
be responsible for the administration of the Plan. Neither Fidelity Employer Services
Company nor any other Fidelity affiliate can be the Administrator.

- 2 -

 

	 	 	 	 	 	 	 	 	 
	2.01	 	PARTICIPATION
	 
	 	 	 	 	 	 	 	 
	 	 	(a)	 	þ	 	Employees [complete (i), (ii) or (iii)]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	o
	 	Eligible Employees are selected by the Employer.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	þ
	 	Eligible Employees are those employees of the Employer who satisfy the following criteria:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Senior Director level (including the equivalent level) and above as
selected by the Employer 

	 

	 	 	 	 	 	 	 	
 

	 

	 	 	 	 	 	 	 	
 

	 

	 	 	 	 	 	 	 	
 

	 

	 	 	 	 	 	 	 	
 

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(iii)
	 	o
	 	Employees are not eligible to participate.
	 
	 	 	 	 	 	 	 	 
	 	 	(b)	 	þ	 	Directors [complete (i), (ii) or (iii)]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	o
	 	All Directors are eligible to participate.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	o
	 	Only Directors selected by the Employer are eligible to participate.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(iii)
	 	þ
	 	Directors are not eligible to participate.

- 3 -

 

	 	 	 	 	 	 	 
	3.01	 	COMPENSATION
	 
	 	 	 	 	 	 
	 	 	For purposes of determining Participant contributions under Article 4 and Employer
contributions under Article 5, Compensation shall be defined in the following manner
[complete (a) or (b) and select (c) and/or (d), if applicable]:
	 
	 	 	 	 	 	 
	 

	 	(a)
	 	þ
	 	Compensation is defined as:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Base pay, commissions, and bonus (Company Performance Bonus Program
and Executive Annual Incentive Bonus Plan) 

	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 
	 	 	 	 	 	 
	 

	 	(b)
	 	o
	 	Compensation as defined in [insert name of qualified plan] without
regard to the limitation in Section 401(a)(17) of the Code for such
Plan Year.
	 
	 	 	 	 	 	 
	 

	 	(c)
	 	o
	 	Director Compensation is defined as:
	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	
 

	 
	 	 	 	 	 	 
	 

	 	(d)
	 	o
	 	Compensation shall, for all Plan purposes, be limited to $     .
	 
	 	 	 	 	 	 
	 

	 	(e)
	 	o
	 	Not Applicable.
	 
	 	 	 	 	 	 
	3.02	 	BONUSES
	 
	 	 	 	 	 	 
	 	 	Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following
type of bonuses:

	 	 	 	 	 
	 	 	Will be treated as Performance
	Type	 	Based Compensation
	 	 	Yes	 	No
	Company Performance Bonus Program

	 	o
	 	þ
	Executive Annual Incentive Bonus Plan

	 	o
	 	þ
	 

	 	o
	 	o
	 

	 	o
	 	o
	 

	 	o
	 	o

			
	o	 	Not Applicable.

- 4 -

 

	4.01	 	PARTICIPANT CONTRIBUTIONS
	 
	 	 	If Participant contributions are permitted, complete (a),
(b), and (c). Otherwise complete (d).

	 	(a)	 	Amount of Deferrals
	 
	 	 	 	A Participant may elect within the period specified in Section 4.01(b) of the
Adoption Agreement to defer the following amounts of remuneration. For each type of
remuneration listed, complete “dollar amount” and / or “percentage amount”.

	 	(i)	 	Compensation Other than Bonuses [do not complete if you
complete (iii)]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	% Amount	 	 
	Type of Remuneration	 	Min	 	Max	 	Min	 	Max	 	Increment
	(a) Base Compensation
	 	 	 	 	 	 	 	 	 	 	1	%	 	 	50	%	 	 	1	%
	(b) Commissions
	 	 	 	 	 	 	 	 	 	 	1	%	 	 	100	%	 	 	1	%
	(c)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	Note: The increment is required to determine the permissible deferral amounts. For
example, a minimum of 0% and maximum of 20% with a 5% increment would allow an
individual to defer 0%, 5%, 10%, 15% or 20%.

	 	(ii)	 	Bonuses [do not complete if you complete (iii)]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	% Amount	 	 
	Type of Bonus	 	Min	 	Max	 	Min	 	Max	 	Increment
	(a) Company
Performance Bonus
Program
	 	 	 	 	 	 	 	 	 	 	1	%	 	 	100	%	 	 	1	%
	(b) Executive
Annual Incentive
Bonus Plan
	 	 	 	 	 	 	 	 	 	 	1	%	 	 	100	%	 	 	1	%

	 	(iii)	 	Compensation [do not complete if you completed (i) and (ii)]

	 	 	 	 	 	 	 	 	 
	Dollar Amount	 	% Amount	 	 
	Min	 	Max	 	Min	 	Max	 	Increment
	 
	 	 	 	 	 	 	 	 

	 	(iv)	 	Director Compensation

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	% Amount	 	 
	Type of Compensation	 	Min	 	Max	 	Min	 	Max	 	Increment
	Annual Retainer
	 	 	 	 	 	 	 	 	 	 
	Meeting Fees
	 	 	 	 	 	 	 	 	 	 
	Other:
	 	 	 	 	 	 	 	 	 	 
	Other:
	 	 	 	 	 	 	 	 	 	 

- 5 -

 

	 	(b)	 	Election Period

	 	(i)	 	Performance Based Compensation
	 
	 	 	 	A special election period
	 
	 	 	 	o Does þ Does Not
	 
	 	 	 	apply to each eligible type of performance based compensation referenced in
Section 3.02 of the Adoption Agreement.
	 
	 	 	 	The special election period, if applicable, will be determined by the Employer.
	 
	 	(ii)	 	Newly Eligible Participants
	 
	 	 	 	An employee who is classified or designated as an Eligible Employee during a
Plan Year
	 
	 	 	 	þ May o May Not
	 
	 	 	 	elect to defer Compensation earned during the remainder of the Plan Year by
completing a deferral agreement within the 30 day period beginning on the date
he is eligible to participate in the Plan.

	 	(c)	 	Revocation of Deferral Agreement
	 
	 	 	 	A Participant’s deferral agreement
	 
	 	 	 	þ Will
	 
	 	 	 	o Will Not
	 
	 	 	 	be cancelled for the remainder of any Plan Year during which he receives a hardship
distribution of elective deferrals from a qualified cash or deferred arrangement
maintained by the Employer. If cancellation occurs, the Participant may resume
participation in accordance with Article 4 of the Plan.
	 
	 	(d)	 	No Participant Contributions
	 
	 	 	 	o Participant contributions are not permitted under the Plan.

- 6 -

 

	5.01	 	EMPLOYER CONTRIBUTIONS
	 
	 	 	If Employer contributions are permitted, complete (a) and/or (b). Otherwise

complete (c).

	 	(a)	 	Matching Contributions

	 	(i)	 	Amount
	 
	 	 	 	For each Plan Year, the Employer shall make a Matching Contribution on behalf of
each Participant who defers Compensation for the Plan Year and satisfies the
requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete
the ones that are applicable]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	           [insert percentage] of the Compensation the Participant has elected to defer for the Plan Year
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	An amount determined by the Employer in its sole discretion
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	Matching Contributions for each Participant shall be limited to $           and/or           % of Compensation.
	 
	 	 	 	 	 	 
	 

	 	(D)
	 	o
	 	Other:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(E)
	 	þ
	 	Not Applicable [Proceed to Section 5.01(b)]

	 	(ii)	 	Eligibility for Matching Contribution
	 
	 	 	 	A Participant who defers Compensation for the Plan Year shall receive an
allocation of Matching Contributions determined in accordance with Section
5.01(a)(i) provided he satisfies the following requirements [complete the ones
that are applicable]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	Describe requirements:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	Is selected by the Employer in its sole discretion to receive an allocation of Matching Contributions
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	No requirements

- 7 -

 

	 	(iii)	 	Time of Allocation
	 
	 	 	 	Matching Contributions, if made, shall be treated as allocated [select one]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	As of the last day of the Plan Year
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	At such times as the Employer shall determine in it sole discretion
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant
	 
	 	 	 	 	 	 
	 

	 	(D)
	 	o
	 	Other:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	(b)	 	Other Contributions

	 	(i)	 	Amount
	 
	 	 	 	The Employer shall make a contribution on behalf of each Participant who
satisfies the requirements of Section 5.01(b)(ii) equal to [complete the ones
that are applicable]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	An amount equal to            [insert number] % of the Participant’s Compensation
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	þ
	 	An amount determined by the Employer in its sole discretion
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	Contributions for each Participant shall be limited to $                    
	 
	 	 	 	 	 	 
	 

	 	(D)
	 	o
	 	Other:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(E)
	 	o
	 	Not Applicable [Proceed to Section 6.01]

- 8 -

 

	 	(ii)	 	Eligibility for Other Contributions
	 
	 	 	 	A Participant shall receive an allocation of other Employer contributions
determined in accordance with Section 5.01(b)(i) for the Plan Year if he
satisfies the following requirements [complete the one that is applicable]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	Describe requirements:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	þ
	 	Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	No requirements

	 	(iii)	 	Time of Allocation
	 
	 	 	 	Employer contributions, if made, shall be treated as allocated [select one]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	As of the last day of the Plan Year
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	þ
	 	At such time or times as the Employer shall determine in its sole discretion
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	Other:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	(c)	 	No Employer Contributions
	 
	 	 	 	o Employer contributions are not permitted under the Plan.

- 9 -

 

	6.01	 	DISTRIBUTIONS
	 
	 	 	The timing and form of payment of distributions made from the Participant’s vested Account
shall be made in accordance with the elections made in this Section 6.01 of the Adoption
Agreement except when Section 9.6 of the Plan requires a six month delay for certain
distributions to Key Employees of publicly traded companies.

	 	(a)	 	Timing of Distributions

	 	(i)	 	All distributions shall commence in accordance with the following [choose one]:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	þ
	 	As soon as administratively feasible following the distribution event
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	Monthly on specified day            [insert day]
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	Annually on specified month and day            [insert month and day]
	 
	 	 	 	 	 	 
	 

	 	(D)
	 	o
	 	Calendar quarter on specified month and day [          month of quarter (insert 1,2 or 3);            day (insert day)]

	 	(ii)	 	The timing of distributions as determined in Section 6.01(a)(i) shall
be modified by the adoption of:

	 	 	 	 	 	 	 
	 

	 	(A)
	 	þ
	 	Event Delay — Distribution events other than those
based on (i) a distribution event specified in
Section 6.01(b), or (ii) a payment made due to death
or disability made under Section 6.01(d) will be
treated as not having occurred for 6 months .
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	Hold Until Next Year — Distribution events other
than those based on Specified Date or Specified Age
will be treated as not having occurred for twelve
months from the date of the event if payment pursuant
to Section 6.01(a)(i) will thereby occur in the next
calendar year or on the first payment date in the
next calendar year in all other cases.
	 
	 	 	 	 	 	 
	 

	 	(C)
	 	o
	 	Immediate Processing — The timing method selected by
the Plan Sponsor under Section 6.01(a)(i) shall be
overridden for the following distribution events
[insert events]:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(D)
	 	o
	 	Not applicable.

- 10 -

 

	 	(b)	 	Distribution Events
	 
	 	 	 	Participants may elect the following payment events and the associated form or forms of
payment. If multiple events are selected, the earliest to occur will trigger payment.
For installments, insert the range of available periods (e.g., 5-15) or insert the
periods available (e.g., 5,7,9).

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Lump Sum	 	Installments
	 
	 	 	 	 	 	 	 	 
	(i)

	 	þ
	 	Specified Date
	 	þ
	 	2 — 15 years
	 
	 	 	 	 	 	 	 	 
	(ii)

	 	o
	 	Specified Age
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(iii)

	 	o
	 	Separation from Service
	 	o
	 	years
	 
	 	 	 	 	 	 	 	 
	(iv)

	 	þ
	 	Separation from Service plus 6 months
	 	þ
	 	2 — 15 years
	 
	 	 	 	 	 	 	 	 
	(v)

	 	o
	 	Separation from Service plus      
months [not to exceed       months]
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(vi)

	 	o
	 	Retirement
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(vii)

	 	o
	 	Retirement plus 6 months
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(viii)

	 	o
	 	Retirement plus       months [not to
exceed       months]
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(ix)

	 	o
	 	Later of Separation from Service or
Specified Age
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(x)

	 	o
	 	Later of Separation from Service or
Specified Date
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(xi)

	 	o
	 	Disability
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(xii)

	 	o
	 	Death
	 	     
	 	      years
	 
	 	 	 	 	 	 	 	 
	(xiii)

	 	o
	 	Change in Control
	 	     
	 	      years

	 	 	 	The minimum deferral period for Specified Date or Specified Age event shall be
two years.
	 
	 	 	 	Installments may be paid [select each that applies]

	 	 	 
	o

	 	Monthly
	o

	 	Quarterly
	þ

	 	Annually

	 	(c)	 	Specified Date and Specified Age elections may not extend beyond age Not
Applicable [insert age or “Not Applicable” if no maximum age applies].

- 11 -

 

	 	(d)	 	Payment Election Override
	 
	 	 	 	Payment of the remaining vested balance of the Participant’s Account will automatically
occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form
indicated upon the earliest to occur of the following events [check each event that
applies and for each event include only a single form of payment]:

	 	 	 	 	 	 	 	 	 
	 	 	EVENTS	 	 	 	FORM OF PAYMENT
	þ

	 	Separation from Service
provided that the Participant
has earned less than 4 Years
of Service
	 	þ
	 	Lump sum
	 	      Installments
	o

	 	Separation from

Service before Retirement
	 	     
	 	Lump sum
	 	      Installments
	þ

	 	Death
	 	þ
	 	Lump sum
	 	      Installments
	þ

	 	Disability (LTD only)
	 	þ
	 	Lump sum
	 	      Installments
	o

	 	Not Applicable	 	 	 	 	 	 

	 	(e)	 	Involuntary Cashouts

	 	 	 
	þ

	 	If the Participant’s vested Account and any Other Accounts at the time of his
Separation from Service does not exceed $15,000, then distribution of the
vested Account and the Other Accounts shall automatically be made in the form
of a single lump sum in accordance with Section 9.5 of the Plan.
	 
	 	 
	o

	 	There are no involuntary cashouts.

	 	(f)	 	Retirement

	 	 	 
	o

	 	Retirement shall be defined as a Separation from Service that occurs on or
after the Participant [insert description of requirements]:
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	þ

	 	No special definition of Retirement applies.

- 12 -

 

	 	(g)	 	Distribution Election Change
	 
	 	 	 	A Participant

	 	 	 
	þ

	 	Shall
	o

	 	Shall Not

	 	 	 	be permitted to modify a scheduled distribution date and/or payment option in
accordance with Section 9.2 of the Plan.
	 
	 	 	 	A Participant shall generally be permitted to elect such modification an
unlimited number of times as permitted by applicable law.
	 
	 	 	 	Administratively, allowable distribution events will be modified to reflect all
options necessary to fulfill the distribution change election provision.
	 
	 	(h)	 	Frequency of Elections
	 
	 	 	 	The Plan Sponsor

	 	 	 
	þ

	 	Has
	o

	 	Has Not

	 	 	 	Elected to permit annual elections of a time and form of payment for amounts deferred
under the Plan.

- 13 -

 

	7.01	 	VESTING

	 	(a)	 	Matching Contributions
	 
	 	 	 	The Participant’s vested interest in the amount credited to his Account attributable to
Matching Contributions shall be based on the following schedule:

	 	 	 	 	 	 	 	 	 
	o

	 	Years of Service
	 	Vesting %	 	 
	 

	 	 	0	 	 	     
	 	(insert ‘100’ if there is immediate vesting)
	 

	 	 	1	 	 	     	 	 
	 

	 	 	2	 	 	     	 	 
	 

	 	 	3	 	 	     	 	 
	 

	 	 	4	 	 	     	 	 
	 

	 	 	5	 	 	     	 	 
	 

	 	 	6	 	 	     	 	 
	 

	 	 	7	 	 	     	 	 
	 

	 	 	8	 	 	     	 	 
	 

	 	 	9	 	 	     	 	 

	 	 	 
	o

	 	Other:
	 

	 	                    
	 

	 	                    
	 
	 	 
	o

	 	Class year vesting applies.
	 

	 	                    
	 
	 	 
	þ

	 	Not applicable.

	 	(b)	 	Other Employer Contributions
	 
	 	 	 	The Participant’s vested interest in the amount credited to his Account attributable to
Employer contributions other than Matching Contributions shall be based on the following
schedule:

	 	 	 	 	 	 	 	 	 
	þ

	 	Years of Service
	 	Vesting %	 	 
	 

	 	 	0	 	 	100*
	 	(insert ‘100’ if there is immediate vesting)
	 

	 	 	1	 	 	     	 	 
	 

	 	 	2	 	 	     	 	 
	 

	 	 	3	 	 	     	 	 
	 

	 	 	4	 	 	     	 	 
	 

	 	 	5	 	 	     	 	 
	 

	 	 	6	 	 	     	 	 
	 

	 	 	7	 	 	     	 	 
	 

	 	 	8	 	 	     	 	 
	 

	 	 	9	 	 	     	 	 

	 	 	 
	o

	 	Other:
	 

	 	                    
	 

	 	                    
	 
	 	 
	o

	 	Class year vesting applies.
	 

	 	                    
	 
	 	 
	o

	 	Not applicable.

- 14 -

 

	(c)	 	Acceleration of Vesting
	 
	 	 	A Participant’s vested interest in his Account will automatically be 100% upon the
occurrence of the following events: [select the ones that are applicable]:

	 	 	 	 	 
	(i)

	 	o
	 	Death
	 
	 	 	 	 
	(ii)

	 	o
	 	Disability
	 
	 	 	 	 
	(iii)

	 	o
	 	Change in Control
	 
	 	 	 	 
	(iv)

	 	o
	 	Eligibility for Retirement
	 
	 	 	 	 
	(v)

	 	o
	 	Other:                     
	 

	 	 	 	                              
	 
	 	 	 	 
	(vi)

	 	þ
	 	Not applicable.

	 	(d)	 	Years of Service

	 	(i)	 	A Participant’s Years of Service shall include all service performed
for the Employer and

	 	 	 
	þ

	 	Shall
	o

	 	Shall Not

	 	 	 	include service performed for the Related Employer.
	 
	 	(ii)	 	Years of Service shall also include service performed for the following
entities:
	 
	 	 	 	                    
	 
	 	 	 	                    
	 
	 	 	 	                    
	 
	 	 	 	                    
	 
	 	 	 	                    
	 
	 	 	 	                    
	 
	 	(iii)	 	Years of Service shall be determined in accordance with (select one)

	 	 	 	 	 
	     (A)

	 	o
	 	The elapsed time method in Treas. Reg. Sec. 1.410(a)-7
	 
	 	 	 	 
	     (B)

	 	o
	 	The general method in DOL Reg. Sec. 2530.200b-1 through b-4
	 
	 	 	 	 
	     (C)

	 	þ
	 	The Participant’s Years of Service credited under [insert name of
plan] Juniper Networks, Inc. 401(k) Plan
	 

	 	 	 	                    
	 
	 	 	 	 
	     (D)

	 	o
	 	Other:                     
	 

	 	 	 	                              
	 

	 	 	 	                              

	 	 	 	 	 
	(iv)

	 	o
	 	Not applicable.

- 15 -

 

	8.01	 	UNFORESEEABLE EMERGENCY

	 	(a)	 	A withdrawal due to an Unforeseeable Emergency as defined in Section 2.24:
	 
	 	 	 	þ Will
	 
	 	 	 	o Will Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to
Section 9.01]

	 	 	 	be allowed.
	 
	 	(b)	 	Upon a withdrawal due to an Unforeseeable Emergency, a Participant’s deferral
election for the remainder of the Plan Year:
	 
	 	 	 	þ Will
	 
	 	 	 	o Will Not

	 	 	 	be cancelled. If cancellation occurs, the Participant may resume participation in
accordance with Article 4 of the Plan.

- 16 -

 

	9.01	 	INVESTMENT DECISIONS
	 
	 	 	Investment decisions regarding the hypothetical amounts credited to a Participant’s Account
shall be made by [select one]:

	 	(a)	 	þ The Participant or his Beneficiary
	 
	 	(b)	 	o The Employer

- 17 -

 

	10.01	 	GRANTOR TRUST
	 
	 	 	The Employer [select one]:
	 
	 	 	þ Does
	 
	 	 	o Does Not
	 
	 	 	intend to establish a grantor trust in connection with the Plan.

- 18 -

 

	11.01	 	TERMINATION UPON CHANGE IN CONTROL
	 
	 	 	The Plan Sponsor
	 
	 	 	o Reserves
	 
	 	 	þ Does Not Reserve
	 
	 	 	the right to terminate the Plan and distribute all vested amounts credited to Participant
Accounts upon a Change in Control as described in Section 9.7.
	 
	11.02	 	AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL
	 
	 	 	Distribution of the remaining vested balance of each Participant’s Account
	 
	 	 	o Shall
	 
	 	 	þ Shall Not
	 
	 	 	automatically be paid as a lump sum payment upon the occurrence of a Change in Control as
provided in Section 9.7.
	 
	11.03	 	CHANGE IN CONTROL
	 
	 	 	A Change in Control for Plan purposes includes the following [select each definition that
applies]:

	 	(a)	 	o A change in the ownership of the Employer as described in Section 9.7(c) of the
Plan.
	 
	 	(b)	 	o A change in the effective control of the Employer as described in Section
9.7(d) of the Plan.
	 
	 	(c)	 	o A change in the ownership of a substantial portion of the assets of the
Employer as described in Section 9.7(e) of the Plan.
	 
	 	(d)	 	þ Not Applicable.

- 19 -

 

	12.01	 	GOVERNING STATE LAW
	 
	 	 	The laws of California shall apply in the administration of the Plan to the extent
not preempted by ERISA.

- 20 -

 

EXECUTION PAGE

The Plan Sponsor has caused this Adoption Agreement to be executed this 13th day of June,
2008.

	 	 	 	 	 
	 

	 	PLAN SPONSOR:
	 	Juniper Networks, Inc.
	 

	 	 	 	 
	 

	 	By:
	 	/s/ Steven Rice
	 

	 	 	 	 
	 

	 	Title:
	 	Executive Vice President, Human Resources
	 

	 	 	 	 

- 21 -

 

Juniper Networks, Inc.

IMPORTANT NOTE

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

January 2008

 

 

TABLE OF CONTENTS

	 	 	 
	PREAMBLE
	 
	 	 
	ARTICLE 1 — GENERAL
	1.1

	 	Plan
	1.2

	 	Effective Dates
	1.3

	 	Amounts Not Subject to Code Section 409A
	 
	 	 
	ARTICLE 2 — DEFINITIONS
	2.1

	 	Account
	2.2

	 	Administrator
	2.3

	 	Adoption Agreement
	2.4

	 	Beneficiary
	2.5

	 	Board or Board of Directors
	2.6

	 	Bonus
	2.7

	 	Change in Control
	2.8

	 	Code
	2.9

	 	Compensation
	2.10

	 	Director
	2.11

	 	Disabled
	2.12

	 	Eligible Employee
	2.13

	 	Employer
	2.14

	 	ERISA
	2.15

	 	Key Employee
	2.16

	 	Other Accounts
	2.17

	 	Participant
	2.18

	 	Plan
	2.19

	 	Plan Sponsor
	2.20

	 	Plan Year
	2.21

	 	Related Employer
	2.22

	 	Retirement
	2.23

	 	Separation from Service
	2.24

	 	Unforeseeable Emergency
	2.25

	 	Valuation Date
	2.26

	 	Years of Service
	 
	 	 
	ARTICLE 3 — PARTICIPATION
	3.1

	 	Participation
	3.2

	 	Termination of Participation

i

 

	 	 	 
	ARTICLE 4 — PARTICIPANT ELECTIONS
	4.1

	 	Deferral Agreement
	4.2

	 	Amount of Deferral
	4.3

	 	Timing of Election to Defer
	4.4

	 	Election of Payment Schedule and Form of Payment
	 
	 	 
	ARTICLE 5 — EMPLOYER CONTRIBUTIONS
	5.1

	 	Matching Contributions
	5.2

	 	Other Contributions
	 
	 	 
	ARTICLE 6 — ACCOUNTS AND CREDITS
	6.1

	 	Establishment of Account
	6.2

	 	Credits to Account
	 
	 	 
	ARTICLE 7 — INVESTMENT OF CONTRIBUTIONS
	7.1

	 	Investment Options
	7.2

	 	Adjustment of Accounts
	 
	 	 
	ARTICLE 8 — RIGHT TO BENEFITS
	8.1

	 	Vesting
	8.2

	 	Death
	8.3

	 	Disability
	 
	 	 
	ARTICLE 9 — DISTRIBUTION OF BENEFITS
	9.1

	 	Amount of Benefits
	9.2

	 	Method and Timing of Distributions
	9.3

	 	Unforeseeable Emergency
	9.4

	 	Payment Election Overrides
	9.5

	 	Cashouts of Amounts Not Exceeding Stated Limit
	9.6

	 	Required Delay in Payment to Key Employees
	9.7

	 	Change in Control
	9.8

	 	Permissible Delays in Payment
	9.9

	 	Permitted Acceleration of Payment

ii

 

	 	 	 
	ARTICLE 10 — AMENDMENT AND TERMINATION
	10.1

	 	Amendment by Plan Sponsor
	10.2

	 	Plan Termination Following Change in Control or Corporate Dissolution
	10.3

	 	Other Plan Terminations
	 
	 	 
	ARTICLE 11 — THE TRUST
	11.1

	 	Establishment of Trust
	11.2

	 	Grantor Trust
	11.3

	 	Investment of Trust Funds
	 
	 	 
	ARTICLE 12 — PLAN ADMINISTRATION
	12.1

	 	Powers and Responsibilities of the Administrator
	12.2

	 	Claims and Review Procedures
	12.3

	 	Plan Administrative Costs
	 
	 	 
	ARTICLE 13 — MISCELLANEOUS
	13.1

	 	Unsecured General Creditor of the Employer
	13.2

	 	Employer’s Liability
	13.3

	 	Limitation of Rights
	13.4

	 	Anti-Assignment
	13.5

	 	Facility of Payment
	13.6

	 	Notices
	13.7

	 	Tax Withholding
	13.8

	 	Indemnification
	13.9

	 	Successors
	13.10

	 	Disclaimer
	13.11

	 	Governing Law

iii

 

PREAMBLE

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

 

 

ARTICLE 1 — GENERAL

	1.1	 	Plan. The Plan will be referred to by the name specified in the Adoption Agreement.
	 
	1.2	 	Effective Dates.

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

	1.3	 	Amounts Not Subject to Code Section 409A
	 
	 	 	Except as otherwise indicated by the Plan Sponsor in Section 1.01 of the Adoption
Agreement, amounts deferred before January 1, 2005 that are earned and vested on December
31, 2004 will be separately accounted for and administered in accordance with the terms of
the Plan as in effect on December 31, 2004.

1-1

 

ARTICLE 2 — DEFINITIONS

Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the
context clearly indicates otherwise. Wherever used herein, the following terms have the meanings
set forth below, unless a different meaning is clearly required by the context:

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

2-1

 

	2.11	 	“Disabled” means a determination by the Administrator that the Participant is either (a)
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (b) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or last
for a continuous period of not less than twelve months, receiving income replacement benefits
for a period of not less than three months under an accident and health plan covering
employees of the Employer. A Participant will be considered Disabled if he is determined to
be totally disabled by the Social Security Administration or the Railroad Retirement Board.
	 
	2.12	 	“Eligible Employee” means an employee of the Employer who satisfies the requirements in
Section 2.01 of the Adoption Agreement.
	 
	2.13	 	“Employer” means the Plan Sponsor and any other entity which is authorized by the Plan
Sponsor to participate in and, in fact, does adopt the Plan.
	 
	2.14	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	2.15	 	“Key Employee” means all Participants.
	 
	2.16	 	“Other Accounts” means any accounts under any other non-qualified deferred compensation plan
required to be aggregated with the Plan pursuant to Treasury Regulation §1.409A-1(c)(2).
	 
	2.17	 	“Participant” means an Eligible Employee or Director who commences participation in the Plan
in accordance with Article 3.
	 
	2.18	 	“Plan” means the unfunded plan of deferred compensation set forth herein, including the
Adoption Agreement and any trust agreement, as adopted by the Plan Sponsor and as amended from
time to time.
	 
	2.19	 	“Plan Sponsor” means the entity identified in Section 1.03 of the Adoption Agreement or any
successor by merger, consolidation or otherwise.
	 
	2.20	 	“Plan Year” means the period identified in Section 1.02 of the Adoption Agreement.
	 
	2.21	 	“Related Employer” means the Employer and (a) any corporation that is a member of a
controlled group of corporations as defined in Code Section 414(b) that includes the Employer
and (b) any trade or business that is under common control as defined in Code Section 414(c)
that includes the Employer.

2-2

 

	2.22	 	“Retirement” has the meaning specified in 6.01(f) of the Adoption Agreement.
	 
	2.23	 	“Separation from Service” means the date that the Participant dies, retires or otherwise has
a termination of employment with respect to all entities comprising the Related Employer. A
Separation from Service does not occur if the Participant is on military leave, sick leave or
other bona fide leave of absence if the period of leave does not exceed six months or such
longer period during which the Participant’s right to re-employment is provided by statute or
contract. If the period of leave exceeds six months and the Participant’s right to
re-employment is not provided either by statute or contract, a Separation from Service will be
deemed to have occurred on the first day following the six-month period. If the period of
leave is due to any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than six
months, where the impairment causes the Participant to be unable to perform the duties of his
or her position of employment or any substantially similar position of employment, a 29 month
period of absence may be substituted for the six month period.
	 
	 	 	Whether a termination of employment has occurred is based on whether the facts and
circumstances indicate that the Related Employer and the Participant reasonably anticipated
that no further services would be performed after a certain date or that the level of bona
fide services the Participant would perform after such date (whether as an employee or as
an independent contractor) would permanently decrease to no more than 20 percent of the
average level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36 month period (or the full period of services
to the Related Employer if the employee has been providing services to the Related Employer
for less than 36 months). If a Participant continues to provide services to a Related
Employer in a capacity other than as an employee, the Participant will not be deemed to
have a termination of employment if the Participant is providing services at an annual rate
that is at least 50 percent of the services rendered by such individual, on average, during
the immediately preceding 36 month period of employment (or such lesser period of
employment) and the annual remuneration for such services is at least 50 percent of the
average annual remuneration earned during the such 36 calendar months of employment (or
such lesser period of employment).
	 
	 	 	An independent contractor is considered to have experienced a Separation from Service with
the Related Employer upon the expiration of the contract (or, in the case of more than one
contract, all contracts) under which services are performed for the Related Employer if the
expiration

2-3

 

	 	 	constitutes a good-faith and complete termination of the contractual relationship.
	 
	 	 	If a Participant provides services as both an employee and an independent contractor of the
Related Employer, the Participant must separate from service both as an employee and as an
independent contractor to be treated as having incurred a Separation from Service. If a
Participant ceases providing services as an independent contractor and begins providing
services as an employee, or ceases providing services as an employee and begins providing
services as an independent contractor, the Participant will not be considered to have
experienced a Separation from Service until the Participant has ceased providing services
in both capacities.
	 
	 	 	If a Participant provides services both as an employee and as a member of the board of
directors of a corporate Related Employer (or an analogous position with respect to a
noncorporate Related Employer), the services provided as a director are not taken into
account in determining whether the Participant has incurred a Separation from Service as an
employee for purposes of a nonqualified deferred compensation plan in which the Participant
participates as an employee that is not aggregated under Code Section 409A with any plan in
which the Participant participates as a director.
	 
	 	 	If a Participant provides services both as an employee and as a member of the board of
directors of a corporate related Employer (or an analogous position with respect to a
noncorporate Related Employer), the services provided as an employee are not taken into
account in determining whether the Participant has experienced a Separation from Service as
a director for purposes of a nonqualified deferred compensation plan in which the
Participant participates as a director that is not aggregated under Code Section 409A with
any plan in which the Participant participates as an employee.
	 
	 	 	All determinations of whether a Separation from Service has occurred will be made in a
manner consistent with Code Section 409A and the final regulations thereunder.

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

2-4

 

	2.25	 	“Valuation Date” means each business day of the Plan Year.
	 
	2.26	 	“Years of Service” means each one year period for which the Participant receives service
credit in accordance with the provisions of Section 7.01(d) of the Adoption Agreement.

2-5

 

ARTICLE 3 — PARTICIPATION

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

3-1

 

ARTICLE 4 — PARTICIPANT ELECTIONS

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

4-1

 

	 	 	end of the Employer’s taxable year immediately preceding the first taxable year of the
Employer in which any services are performed for which such Compensation is payable.

	 	 	Except as otherwise provided below, an employee who is classified or designated as an
Eligible Employee during a Plan Year or a Director who is designated as eligible to
participate during a Plan Year may elect to defer Compensation otherwise payable during the
remainder of such Plan Year in accordance with the rules of this Section 4.3 by executing a
deferral agreement within the thirty (30) day period beginning on the date the employee is
classified or designated as an Eligible Employee or the date the Director is designated as
eligible, whichever is applicable, if permitted by Section 4.01(b)(ii) of the Adoption
Agreement. If Compensation is based on a specified performance period that begins before
the Eligible Employee or Director executes his deferral agreement, the election will be
deemed to apply to the portion of such Compensation equal to the total amount of
Compensation for the performance period multiplied by the ratio of the number of days
remaining in the performance period after the election becomes irrevocable and effective
over the total number of days in the performance period. The rules of this paragraph shall
not apply unless the Eligible Employee or Director can be treated as initially eligible in
accordance with Reg. Sec. 1.409A-2(a)(7).
	 
	4.4	 	Election of Payment Schedule and Form of Payment.
	 
	 	 	All elections of a payment schedule and a form of payment will be made in accordance with
rules and procedures established by the Administrator and the provisions of this Section
4.4.

(a) If the Plan Sponsor has elected to permit annual distribution elections in accordance
with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an
Eligible Employee or Director completes a deferral agreement, the Eligible Employee or
Director must elect a distribution event (which includes a specified time) and a form of
payment for the Compensation subject to the deferral agreement from among the options the
Plan Sponsor has made available for this purpose and which are specified in 6.01(b) of the
Adoption Agreement. Prior to the time required by Reg. Sec. 1.409A-2, the Eligible
Employee or Director shall elect a distribution event (which includes a specified time) and
a form of payment for any Employer contributions that may be credited to the Participant’s
Account during the Plan Year. If an Eligible Employee or Director fails to elect a
distribution event, he shall be deemed to have elected Separation from Service as the
distribution event. If he fails to elect a form of payment, he shall be deemed to have
elected a lump sum form of payment.

4-2

 

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

4-3

 

ARTICLE 5 — EMPLOYER CONTRIBUTIONS

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

5-1

 

ARTICLE 6 — ACCOUNTS AND CREDITS

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

6-1

 

ARTICLE 7 — INVESTMENT OF CONTRIBUTIONS

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

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ARTICLE 8 — RIGHT TO BENEFITS

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

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ARTICLE 9 — DISTRIBUTION OF BENEFITS

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

9-1

 

	 	 	insurance or otherwise, (b) by liquidation of the Participant’s assets to the extent such
liquidation would not itself cause severe financial hardship, or (c) by cessation of
deferrals under the Plan. A distribution due to an Unforeseeable Emergency must be limited
to the amount reasonably necessary to satisfy the emergency need and may include any
amounts necessary to pay any federal, state, foreign or local income taxes and penalties
reasonably anticipated to result from the distribution. The distribution will be made in
the form of a single lump sum cash payment. If permitted by Section 8.01(b) of the
Adoption Agreement, a Participant’s deferral elections for the remainder of the Plan Year
will be cancelled upon a withdrawal due to an Unforeseeable Emergency. If the payment of
all or any portion of the Participant’s vested Account is being delayed in accordance with
Section 9.6 at the time he experiences an Unforeseeable Emergency, the amount being delayed
shall not be subject to the provisions of this Section 9.3 until the expiration of the six
month period of delay required by Section 9.6.

	9.4	 	Payment Election Overrides. If the Plan Sponsor has elected one or more payment election
overrides in accordance with Section 6.01(d) of the Adoption Agreement, the following
provisions apply. Upon the occurrence of the first event selected by the Plan Sponsor, the
remaining vested amount credited to the Participant’s Account shall be paid in the form
designated to the Participant or his Beneficiary regardless of whether the Participant had
made different elections of time and /or form of payment or whether the Participant was
receiving installment payments at the time of the event.
	 
	9.5	 	Cashouts Of Amounts Not Exceeding Stated Limit. If the vested amount credited to the
Participant’s Account and Other Accounts does not exceed the limit established for this
purpose by the Plan Sponsor in Section 6.01(e) of the Adoption Agreement at the time he
undergoes a Separation from Service with the Related Employer for any reason, the Employer
shall distribute such amount to the Participant at the time specified in Section 6.01(a) of
the Adoption Agreement in a single lump sum cash payment following such Separation from
Service regardless of whether the Participant had made different elections of time or form of
payment as to the vested amount credited to his Account or whether the Participant was
receiving installments at the time of such termination. A Participant’s Account, for purposes
of this Section 9.5, shall include any amounts described in Section 1.3. If a distribution
under this Section 9.5 is delayed pursuant to Section 9.6, then in the event the Account and
Other Accounts have increased in value so that their aggregate value exceeds the amount
specified in Section 6.01(e) of the Adoption Agreement, then such Account and Other Accounts
shall instead be paid in accordance with the applicable plan and plans and deferral elections

9-2

 

	 	 	thereunder.

	9.6	 	Required Delay in Payment to Key Employees. Except as otherwise provided in this Section
9.6, a distribution made on account of Separation from Service (or Retirement, if applicable)
to a Participant who is a Key Employee as of the date of his Separation from Service (or
Retirement, if applicable) shall not be made before the date which is six months after the
Separation from Service (or Retirement, if applicable). All Participants shall be treated as
Key Employees.
	 
	 	 	The six month delay does not apply to payments described in Section 9.9(a), (b) or (d)
or to payments that occur after the death of the Participant. If the payment of all or any
portion of the Participant’s vested Account is being delayed in accordance with this
Section 9.6 at the time he incurs a Disability which would otherwise require a distribution
under the terms of the Plan, no amount shall be paid until the expiration of the six month
period of delay required by this Section 9.6.
	 
	9.7	 	Change in Control. If the Plan Sponsor has elected to permit distributions upon a Change in
Control, the following provisions shall apply. A distribution made upon a Change in Control
will be made at the time specified in Section 6.01(a) of the Adoption Agreement in the form
elected by the Participant in accordance with the procedures described in Article 4.
Alternatively, if the Plan Sponsor has elected in accordance with Section 11.02 of the
Adoption Agreement to require distributions upon a Change in Control, the Participant’s
remaining vested Account shall be paid to the Participant or the Participant’s Beneficiary at
the time specified in Section 6.01(a) of the Adoption Agreement as a single lump sum payment.
A Change in Control, for purposes of the Plan, will occur upon a change in the ownership of
the Plan Sponsor, a change in the effective control of the Plan Sponsor or a change in the
ownership of a substantial portion of the assets of the Plan Sponsor, but only if elected by
the Plan Sponsor in Section 11.03 of the Adoption Agreement. The Plan Sponsor, for this
purpose, includes any corporation identified in this Section 9.7. All distributions made in
accordance with this Section 9.7 are subject to the provisions of Section 9.6.
	 
	 	 	If a Participant continues to make deferrals in accordance with Article 4 after he has
received a distribution due to a Change in Control, the residual amount payable to the
Participant shall be paid at the time and in the form specified in the elections he makes
in accordance with Article 4 or upon his death or Disability as provided in Article 8.
	 
	 	 	Whether a Change in Control has occurred will be determined by the

9-3

 

	 	 	Administrator in accordance with the rules and definitions set forth in this Section 9.7.
A distribution to the Participant will be treated as occurring upon a Change in Control if
the Plan Sponsor terminates the Plan in accordance with Section 10.2 and distributes the
Participant’s benefits within twelve months of a Change in Control as provided in Section
10.3.

	 	(a)	 	Relevant Corporations. To constitute a Change in Control for purposes of the
Plan, the event must relate to (i) the corporation for whom the Participant is
performing services at the time of the Change in Control, (ii) the corporation that is
liable for the payment of the Participant’s benefits under the Plan (or all
corporations liable if more than one corporation is liable) but only if either the
deferred compensation is attributable to the performance of services by the
Participant for such corporation (or corporations) or there is a bona fide business
purpose for such corporation (or corporations) to be liable for such payment and, in
either case, no significant purpose of making such corporation (or corporations)
liable for such payment is the avoidance of federal income tax, or (iii) a corporation
that is a majority shareholder of a corporation identified in (i) or (ii), or any
corporation in a chain of corporations in which each corporation is a majority
shareholder of another corporation in the chain, ending in a corporation identified in
(i) or (ii). A majority shareholder is defined as a shareholder owning more than
fifty percent (50%) of the total fair market value and voting power of such
corporation.
	 
	 	(b)	 	Stock Ownership. Code Section 318(a) applies for purposes of determining
stock ownership. Stock underlying a vested option is considered owned by the
individual who owns the vested option (and the stock underlying an unvested option is
not considered owned by the individual who holds the unvested option). If, however, a
vested option is exercisable for stock that is not substantially vested (as defined by
Treasury Regulation Section 1.83-3(b) and (j)) the stock underlying the option is not
treated as owned by the individual who holds the option.
	 
	 	(c)	 	Change in the Ownership of a Corporation. A change in the ownership of a
corporation occurs on the date that any one person or more than one person acting as a
group, acquires ownership of stock of the corporation that, together with stock held
by such person or group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of such corporation. If any one
person or more than one person acting as a group is considered to own more than fifty
percent (50%) of the total fair market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the corporation (or

9-4

 

	 	 	 	to cause a change in the effective control of the corporation as discussed below in
Section 9.7(d)). An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock. Section 9.7(c) applies only when there is a transfer of stock of a
corporation (or issuance of stock of a corporation) and stock in such corporation
remains outstanding after the transaction. For purposes of this Section 9.7(c),
persons will not be considered to be acting as a group solely because they purchase
or own stock of the same corporation at the same time or as a result of a public
offering. Persons will, however, be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the corporation. If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a group with other shareholders in a
corporation prior to the transaction giving rise to the change and not with respect
to the ownership interest in the other corporation.
	 
	 	(d)	 	Change in the effective control of a corporation. A change in the effective
control of a corporation occurs on the date that either (i) any one person, or more
than one person acting as a group, acquires (or has acquired during the twelve month
period ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the corporation possessing thirty percent (30%) or more of the
total voting power of the stock of such corporation, or (ii) a majority of members of
the corporation’s board of directors is replaced during any twelve month period by
directors whose appointment or election is not endorsed by a majority of the members
of the corporation’s board of directors prior to the date of the appointment or
election, provided that for purposes of this paragraph (ii), the term corporation
refers solely to the relevant corporation identified in Section 9.7(a) for which no
other corporation is a majority shareholder for purposes of Section 9.7(a). In the
absence of an event described in Section 9.7(d)(i) or (ii), a change in the effective
control of a corporation will not have occurred. A change in effective control may
also occur in any transaction in which either of the two corporations involved in the
transaction has a change in the ownership of such corporation as described in Section
9.7(c) or a change in the ownership of a substantial portion of the assets of such
corporation as described in Section 9.7(e). If any one person, or more than one
person acting as a group, is considered to effectively control a corporation within
the meaning of this Section 9.7(d), the acquisition of additional control of the
corporation by the

9-5

 

	 	 	 	same person or persons is not considered to cause a change in the effective control
of the corporation or to cause a change in the ownership of the corporation within
the meaning of Section 9.7(c). For purposes of this Section 9.7(d), persons will or
will not be considered to be acting as a group in accordance with rules similar to
those set forth in Section 9.7(c) with the following exception. If a person,
including an entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation only with respect to the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership interest
in the other corporation.
	 
	 	(e)	 	Change in the ownership of a substantial portion of a corporation’s assets.
A change in the ownership of a substantial portion of a corporation’s assets occurs on
the date that any one person, or more than one person acting as a group (as determined
in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or
has acquired during the twelve month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a total
gross fair market value equal to or more than forty percent (40%) of the total gross
fair market value of all of the assets of the corporation immediately prior to such
acquisition or acquisitions. For this purpose, gross fair market value means the
value of the assets of the corporation or the value of the assets being disposed of
determined without regard to any liabilities associated with such assets. There is no
Change in Control event under this Section 9.7(e) when there is a transfer to an
entity that is controlled by the shareholders of the transferring corporation
immediately after the transfer. A transfer of assets by a corporation is not treated
as a change in ownership of such assets if the assets are transferred to (i) a
shareholder of the corporation (immediately before the asset transfer) in exchange for
or with respect to its stock, (ii) an entity, fifty percent (50%) or more of the total
value or voting power of which is owned, directly or indirectly, by the corporation,
(iii) a person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all the
outstanding stock of the corporation, or (iv) an entity, at least fifty (50%) of the
total value or voting power of which is owned, directly or indirectly, by a person
described in Section 9.7(e)(iii). For purposes of the foregoing, and except as
otherwise provided, a person’s status is determined immediately after the transfer of
assets.

9-6

 

	9.8	 	Permissible Delays in Payment. Distributions may be delayed beyond the date payment would
otherwise occur in accordance with the provisions of Articles 8 and 9 in any of the following
circumstances as long as the Employer treats all payments to similarly situated Participants
on a reasonably consistent basis.

	 	(a)	 	The Employer may delay payment if it reasonably anticipates that its
deduction with respect to such payment would be limited or eliminated by the
application of Code Section 162(m). Payment must be made during the Participant’s
first taxable year in which the Employer reasonably anticipates, or should reasonably
anticipate, that if the payment is made during such year the deduction of such payment
will not be barred by the application of Code Section 162(m) or during the period
beginning with the Participant’s Separation from Service and ending on the later of
the last day of the Employer’s taxable year in which the Participant separates from
service or the 15th day of the third month following the Participant’s Separation from
Service. If a scheduled payment to a Participant is delayed in accordance with this
Section 9.8(a), all scheduled payments to the Participant that could be delayed in
accordance with this Section 9.8(a) will also be delayed.
	 
	 	(b)	 	The Employer may also delay payment if it reasonably anticipates that the
making of the payment will violate federal securities laws or other applicable laws
provided payment is made at the earliest date on which the Employer reasonably
anticipates that the making of the payment will not cause such violation.
	 
	 	(c)	 	The Employer reserves the right to amend the Plan to provide for a delay in
payment upon such other events and conditions as the Secretary of the Treasury may
prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

	9.9	 	Permitted Acceleration of Payment. The Employer may permit acceleration of the time or
schedule of any payment or amount scheduled to be paid pursuant to a payment under the Plan
provided such acceleration would be permitted by the provisions of Reg. Sec. 1.409A-3(j)(4),
including the following events:

	 	(a)	 	Domestic Relations Order. A payment may be accelerated if such payment is
made to an alternate payee pursuant to and following the receipt and qualification of
a domestic relations order as defined in Code Section 414(p).
	 
	 	(b)	 	Compliance with Ethics Agreements and Legal Requirements. A payment may be
accelerated as may be necessary to comply

9-7

 

	 	 	 	with ethics agreements with the Federal government or as may be reasonably
necessary to avoid the violation of Federal, state, local or foreign ethics law or
conflicts of laws, in accordance with the requirements of Code Section 409A.
	 
	 	(c)	 	De Minimis Amounts. A payment will be accelerated if (i) the amount of the
payment is not greater than the applicable dollar amount under Code Section
402(g)(1)(B), (ii) at the time the payment is made the amount constitutes the
Participant’s entire interest under the Plan and all other plans that are aggregated
with the Plan under Reg. Sec. 1.409A-1(c)(2).
	 
	 	(d)	 	FICA Tax. A payment may be accelerated to the extent required to pay the
Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and
3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA
Amount”). Additionally, a payment may be accelerated to pay the income tax on wages
imposed under Code Section 3401 of the Code on the FICA Amount and to pay the
additional income tax at source on wages attributable to the pyramiding Code Section
3401 wages and taxes. The total payment under this subsection (d) may not exceed the
aggregate of the FICA Amount and the income tax withholding related to the FICA
Amount.
	 
	 	(e)	 	Section 409A Additional Tax. A payment may be accelerated if the Plan fails
to meet the requirements of Code Section 409A; provided that such payment may not
exceed the amount required to be included in income as a result of the failure to
comply with the requirements of Code Section 409A.
	 
	 	(f)	 	Offset. A payment may be accelerated in the Employer’s discretion as
satisfaction of a debt of the Participant to the Employer, where such debt is incurred
in the ordinary course of the service relationship between the Participant and the
Employer, the entire amount of the reduction in any of the Employer’s taxable years
does not exceed $5,000, and the reduction is made at the same time and in the same
amount as the debt otherwise would have been due and collected from the Participant.
	 
	 	(g)	 	Other Events. A payment may be accelerated in the Administrator’s discretion
in connection with such other events and conditions as permitted by Code Section 409A.

9-8

 

ARTICLE 10 — AMENDMENT AND TERMINATION

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

10-1

 

	 	 	the Plan to provide that termination of the Plan will occur under such conditions and
events as may be prescribed by the Secretary of the Treasury in generally applicable
guidance published in the Internal Revenue Bulletin.

10-2

 

ARTICLE 11 — THE TRUST

	11.1	 	Establishment of Trust. The Plan Sponsor may but is not required to establish a trust to
hold amounts which the Plan Sponsor may contribute from time to time to correspond to some or
all amounts credited to Participants under Section 6.2. If the Plan Sponsor elects to
establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions
of Sections 11.2 and 11.3 shall become operative.
	 
	11.2	 	Grantor Trust. Any trust established by the Plan Sponsor shall be between the Plan Sponsor
and a trustee pursuant to a separate written agreement under which assets are held,
administered and managed, subject to the claims of the Plan Sponsor’s creditors in the event
of the Plan Sponsor’s insolvency. The trust is intended to be treated as a grantor trust
under the Code, and the establishment of the trust shall not cause the Participant to realize
current income on amounts contributed thereto. The Plan Sponsor must notify the trustee in
the event of a bankruptcy or insolvency.
	 
	11.3	 	Investment of Trust Funds. Any amounts contributed to the trust by the Plan Sponsor shall be
invested by the trustee in accordance with the provisions of the trust and the instructions of
the Administrator. Trust investments need not reflect the hypothetical investments selected
by Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or
investment results of the trust need not affect the hypothetical investment adjustments to
Participant Accounts under the Plan.

11-1

 

ARTICLE 12 — PLAN ADMINISTRATION

	12.1	 	Powers and Responsibilities of the Administrator. The Administrator has the full power and
the full responsibility to administer the Plan in all of its details, subject, however, to the
applicable requirements of ERISA. The Administrator’s powers, discretionary authority and
responsibilities include, but are not limited to, the following:

	 	(a)	 	To make and enforce such rules and procedures as it deems necessary or proper
for the efficient administration of the Plan;
	 
	 	(b)	 	To interpret the Plan, its interpretation thereof to be final, except as
provided in Section 12.2, on all persons claiming benefits under the Plan;
	 
	 	(c)	 	To decide all questions concerning the Plan and the eligibility of any person
to participate in the Plan;
	 
	 	(d)	 	To administer the claims and review procedures specified in Section 12.2;
	 
	 	(e)	 	To compute the amount of benefits which will be payable to any Participant,
former Participant or Beneficiary in accordance with the provisions of the Plan;
	 
	 	(f)	 	To determine the person or persons to whom such benefits will be paid;
	 
	 	(g)	 	To authorize the payment of benefits;
	 
	 	(h)	 	To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
	 
	 	(i)	 	To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan;
	 
	 	(j)	 	By written instrument, to allocate and delegate its responsibilities,
including the formation of an Administrative Committee to administer the Plan.

12-1

 

	12.2	 	Claims and Review Procedures.

	 	(a)	 	Claims Procedure.

	 	 	 	If any person believes he is being denied any rights or benefits under the Plan,
such person may file a claim in writing with the Administrator. If any such claim
is wholly or partially denied, the Administrator will notify such person of its
decision in writing. Such notification will contain (i) specific reasons for the
denial, (ii) specific reference to pertinent Plan provisions, (iii) a description
of any additional material or information necessary for such person to perfect such
claim and an explanation of why such material or information is necessary, and (iv)
a description of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the person’s right to bring a civil
action following an adverse decision on review. Such notification will be given
within 90 days after the claim is received by the Administrator. The Administrator
may extend the period for providing the notification by 90 days if special
circumstances require an extension of time for processing the claim and if written
notice of such extension and circumstance is given to such person within the
initial 90 day period. If such notification is not given within such period, the
claim will be considered denied as of the last day of such period and such person
may request a review of his claim.

	 	(b)	 	Review Procedure.

	 	 	 	Within 60 days after the date on which a person receives a written notification of
denial of claim (or, if written notification is not provided, within 60 days of the
date denial is considered to have occurred), such person (or his duly authorized
representative) may (i) file a written request with the Administrator for a review
of his denied claim and of pertinent documents and (ii) submit written issues and
comments to the Administrator. The Administrator will notify such person of its
decision in writing. Such notification will be written in a manner calculated to
be understood by such person and will contain specific reasons for the decision as
well as specific references to pertinent Plan provisions. The notification will
explain that the person is entitled to receive, upon request and free of charge,
reasonable access to and copies of all pertinent documents and has the right to
bring a civil action following an adverse decision on review. The decision on
review will be made within 60 days. The Administrator may extend the period for
making the

12-2

 

	 	 	 	decision on review by 60 days if special circumstances require an extension of time
for processing the request such as an election by the Administrator to hold a
hearing, and if written notice of such extension and circumstances is given to such
person within the initial 60-day period. If the decision on review is not made
within such period, the claim will be considered denied.

	 	(c)	 	Special Procedure for Claims Due to Disability.

	 	 	 	To the extent an application for distribution as a result of a Disability requires
the Administrator or the panel reviewing the Administrator’s determination, as
applicable, to make a determination of Disability under the terms of the Plan, then
such determination shall be subject to all of the general rules described in this
Section, except as they are expressly modified by this Section 12(c).

	 	(i)	 	The initial decision on the claim for a Disability
distribution will be made within forty-five (45) days after the Plan receives
the claimant’s claim, unless special circumstances require additional time, in
which case the Administrator will notify the claimant before the end of the
initial forty-five (45)-day period of an extension of up to thirty (30) days.
If necessary, the Administrator may notify the claimant, prior to the end of
the initial thirty (30)-day extension period, of a second extension of up to
thirty (30) days. If an extension is due to the claimant’s failure to supply
the necessary information, then the notice of extension will describe the
additional information and the claimant will have forty-five (45) days to
provide the additional information. Moreover, the period for making the
determination will be delayed from the date the notification of extension was
sent out until the claimant responds to the request for additional
information. No additional extensions may be made, except with the claimant’s
voluntary consent. The contents of the notice shall be the same as described
in Section 12(a) above. If a disability distribution claim is denied in whole
or in part, then the claimant will receive notification, as described in
Section 12(a).
	 
	 	(ii)	 	If an internal rule, guideline, protocol or similar criterion
is relied upon in making the adverse determination, then the denial notice to
the claimant will either set forth the internal rule, guideline, protocol or
similar criterion, or will state that such was relied upon and will be
provided free of charge to the claimant upon request (to the extent not
legally-

12-3

 

	 	 	 	privileged) and if the claimant’s claim was denied based on a medical
necessity or experimental treatment or similar exclusion or limit, then
the claimant will be provided a statement either explaining the decision
or indicating that an explanation will be provided to the claimant free of
charge upon request.
	 	(iii)	 	Any claimant whose application for a Disability distribution
is denied in whole or in part, may appeal the denial by submitting to the
panel reviewing the administrator’s determination (the “Review Panel”) a
request for a review of the application within one hundred and eighty (180)
days after receiving notice of the denial. The request for review shall be in
the form and manner prescribed by the Review Panel. In the event of such an
appeal for review, the provisions of Section 12(b) regarding the claimant’s
rights and responsibilities shall apply. Upon request, the Review Panel will
identify any medical or vocational expert whose advice was obtained on behalf
of the Review Panel in connection with the denial, without regard to whether
the advice was relied upon in making the determination. The entity or
individual appointed by the Review Panel to review the claim will consider the
appeal de novo, without any deference to the initial denial. The review will
not include any person who participated in the initial denial or who is the
subordinate of a person who participated in the initial denial.
	 
	 	(iv)	 	If the initial Disability distribution denial was based in
whole or in part on a medical judgment, then the Review Panel will consult
with a health care professional who has appropriate training and experience in
the field of medicine involved in the medical judgment, and who was neither
consulted in connection with the initial determination nor is the subordinate
of any person who was consulted in connection with that determination; and
upon notifying the claimant of an adverse determination on review, include in
the notice either an explanation of the clinical basis for the determination,
applying the terms of the Plan to the claimant’s medical circumstances, or a
statement that such explanation will be provided free of charge upon request.
	 
	 	(v)	 	A decision on review shall be made promptly, but not later
than forty-five (45) days after receipt of a request for review, unless
special circumstances require an extension of time for processing. If an
extension is required, the claimant will

12-4

 

	 	 	 	be notified before the end of the initial forty-five (45)-day period that
an extension of time is required and the anticipated date that the review
will be completed. A decision will be given as soon as possible, but not
later than ninety (90) days after receipt of a request for review. The
Review Panel shall give notice of its decision to the claimant; such
notice shall comply with the requirements set forth in paragraph (h)
above. In addition, if the claimant’s claim was denied based on a medical
necessity or experimental treatment or similar exclusion, then the
claimant will be provided a statement explaining the decision, or a
statement providing that such explanation will be furnished to the
claimant free of charge upon request. The notice shall also contain the
following statement: “You and your Plan may have other voluntary
alternative dispute resolution options, such as mediation. One way to
find out what may be available is to contact your local U.S. Department of
Labor Office and your State insurance regulatory agency.”

	 	(d)	 	Exhaustion of Claims Procedure and Right to Bring Legal Claim.

	 	 	 	No action in law or equity shall be brought more than one (1) year after
the Review Panel’s affirmation of a denial of the claim, or, if earlier,
more than four (4) years after the facts or events giving rise to the
claimant’s allegation(s) or claim(s) first occurred.

	12.3	 	Plan Administrative Costs. All reasonable costs and expenses (including legal, accounting,
and employee communication fees) incurred by the Administrator in administering the Plan shall
be paid by the Plan to the extent not paid by the Employer.

12-5

 

ARTICLE 13 — MISCELLANEOUS

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

13-1

 

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

(b) The right to indemnification provided in this Section shall include the right to have
the expenses incurred by the Indemnitee in defending any Proceeding paid by the Employer in
advance of the final disposition of the Proceeding, to the fullest extent permitted by the
law of the jurisdiction in which the Employer is incorporated; provided that, if such law
requires, the payment of such expenses incurred by the Indemnitee in advance of the final
disposition of a Proceeding shall be made only on delivery to the Employer of an
undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced without
interest if it shall ultimately be determined that the Indemnitee is not entitled to be
indemnified under this Section or otherwise.

(c) Indemnification pursuant to this Section shall continue as to an Indemnitee who has
ceased to be such and shall inure to the benefit of his heirs, executors, and
administrators. The Employer agrees that the undertakings made in this Section shall be
binding on its successors or assigns and shall survive the termination, amendment or
restatement of the Plan.

13-2

 

(d) The foregoing right to indemnification shall be in addition to such other rights as the
Indemnitee may enjoy as a matter of law or by reason of insurance coverage of any kind and
is in addition to and not in lieu of any rights to indemnification to which the Indemnitee
may be entitled pursuant to the by-laws of the Employer.

(e) For the purposes of this Section, the following definitions shall apply:

(1) “Indemnitee” shall mean each person serving as an Administrator (or any other person
who is an employee, director, or officer of the Employer) who was or is a party to, or is
threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of
the fact that he is or was performing administrative functions under the Plan.

(2) “Proceeding” shall mean any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, an action, suit, or proceeding by or in the right
of the Employer), whether civil, criminal, administrative, investigative, or through
arbitration.

	13.9	 	Successors. The provisions of the Plan shall bind and inure to the benefit of the Plan
Sponsor, the Employer and their successors and assigns and the Participant and the
Participant’s designated Beneficiaries.
	 
	13.10	 	Disclaimer. It is the Plan Sponsor’s intention that the Plan comply with the requirements of
Code Section 409A. Neither the Plan Sponsor nor the Employer shall have any liability to any
Participant should any provision of the Plan fail to satisfy the requirements of Code Section
409A.
	 
	13.11	 	Governing Law. The Plan will be construed, administered and enforced according to the laws
of the State specified by the Plan Sponsor in Section 12.01 of the Adoption Agreement.

13-3

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