Document:

Collaboration Agreement

 Exhibit 10.1 
  
 Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as [***]. 
  
 COLLABORATION AGREEMENT 
  
 This Agreement is entered into as of
June18, 2004 by and between: 
  
 SEATTLE GENETICS, INC., a
Delaware corporation, having its principal place of business at 21823 30th Drive S.E., Bothell, Washington 98021 
  
 (hereinafter referred to as “SGI”) 
  
 and: 
  
 CURAGEN CORPORATION, a Delaware corporation, having its principal place of business at 555 Long Wharf Avenue, New Haven, CT 06511 
  
 (hereinafter referred to as “Licensee”). 
  
 WITNESSETH 
  
 WHEREAS, SGI owns or controls intellectual property rights relating to certain technology useful for linking certain proprietary cytotoxins to
other molecules such as antibodies capable of directing such cytotoxins to specific tissues and/or cells; 
  
 WHEREAS, Licensee is currently conducting research and development programs to discover antigens that may have activity in certain disease-related
pathways, and to develop antibodies that bind to those antigens; 
  
 WHEREAS, the Parties have created ADCs (as such term is defined below) to, and conducted initial characterization work regarding, the First Exclusive Antigen (as such term is defined below) pursuant to the terms and subject to the
conditions of the Initial Agreements (as such term is defined below); 
  
 WHEREAS, Licensee wishes to obtain an exclusive worldwide license under certain of SGI’s patent rights and know-how related to SGI’s proprietary cytotoxin and linker technology to the First Exclusive Antigen for use in
conjunction with Licensee’s antibodies on the terms set forth below and Licensee wishes to acquire from SGI an exclusive option to obtain an exclusive worldwide license under SGI’s patent rights and know-how related to SGI’s
proprietary cytotoxin and linker technology to a Second Exclusive Antigen for use in conjunction with Licensee’s antibodies; and 
  
 WHEREAS, SGI wishes to grant to Licensee such license and option and to allow Licensee to evaluate SGI’s cytotoxin and linker technology for
use with certain of Licensee’s antigens and antibodies. 
  
 CONFIDENTIAL 

 NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth herein, the
Parties hereto, intending to be legally bound, agree as follows: 
  
 ARTICLE
1 - DEFINITIONS AND INTERPRETATION 
  
 1.1
Definitions: For the purposes of this Agreement the following words and phrases shall have the following meanings: 
  
 1.1.1 “AAA” has the meaning set forth in Section 19.3.4. 
  
 1.1.2 “ADC” or “Antibody-Drug Conjugate” means an Antibody that is linked to a
cytotoxin or cytostatic agent and that contains, uses or is made using SGI Technology. 
  
 1.1.3 “ADC Access Fee” has the meaning set forth in Section 6.1.1. 
  
 1.1.4 “Affiliate” of a Party means any corporation or other business entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with a Party. As used herein, the term “control” means the direct or indirect ownership of [***] or more of the stock having the right to vote for directors thereof or
the ability to otherwise control the management thereof. 
  
 1.1.5 “Agreement” means this agreement, all amendments and supplements to this Agreement and all schedules to this Agreement, including the following: 
  
 1.1.6 Schedule A - Research Plan. 
  
 1.1.7 Schedule B - SGI Patents. 
  
 1.1.8 Schedule C - SGI In-Licenses. 
  
 1.1.9 Schedule D - Designated Antigens and Exclusive Antigens. 
  
 1.1.10 “Antibody” or “Antibodies”
means any antibody, or [***], that binds to an Antigen. 
  
 1.1.11 “Antigen” means any [***], that is Controlled by Licensee. 
  
 1.1.12 “[***]” means [***] having a GenBank accession number of [***]. 
  
 1.1.13 “[***]” means the SGI Technology licensed to SGI under the BMS Agreement (as defined in the
definition of “SGI In-Licenses”). 
  
 1.1.14
“Breaching Party” has the meaning set forth in Section 13.3. 
  
 1.1.15 “Calendar Quarter” means any of the three-month periods beginning January 1, April 1, July 1 and October 1 in any year. 
  
 1.1.16 “Change in Control” has the meaning set forth in Article 16. 
  
 1.1.17 “Claims” has the meaning set forth in Section
14.1.1. 

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 1.1.18 “Combination Product” means any Licensed Product that contains, in
addition to an ADC, one or more other ingredients that (a) are not covered by SGI Technology, and (b) [***]. 
  
 1.1.19 “Confidential Information” has the meaning set forth in Section 8.1. 
  
 1.1.20 “Control” means, with respect to any
information or intellectual property right, possession by a Party of the ability to grant the right to access or use, or to grant a license or a sublicense to, such information or intellectual property right as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party. [***]. 
  
 1.1.21 “Cost of Goods” shall mean with respect to Drug Conjugate Materials supplied to Licensee (a) for manufacturing activities performed by Third Parties, [***], as well as [***], including
without limitation [***]; and (b) for manufacturing activities performed by SGI or its Affiliates, the [***]. 
  
 1.1.22 “Designated Antigen” means the [***] Antigens targeted by the ADCs prepared by SGI and designated as such in accordance
with Section 2.5 of this Agreement. 
  
 1.1.23
“[***]” means the [***] that may be [***] pursuant to [***] of this Agreement. 
  
 1.1.24 “Drug Conjugation Materials” means the compound [***] and [***] and [***] thereof, including [***], as well as compounds that are useful in attaching such compounds to [***], in each
case to the extent included in or covered by the SGI Technology. Drug Conjugation Materials shall also include Improvements to Drug Conjugation Materials and any additional cytotoxic or cytostatic compounds that are included in New Technologies and
that the Parties agree to include under this Agreement pursuant to Section 3.7.2. 
  
 1.1.25 “Drug Conjugation Technology” means chemical compositions and methods that are useful to attach cytotoxins or cytostatic compounds to Antibodies, including the composition and methods of
making and using cytotoxic or cytostatic compounds, as well as compositions and methods useful for attaching the foregoing cytotoxic or cytostatic compounds to Antibodies. 
  
 1.1.26 “Effective Date” means the date set forth in the first line of this Agreement. 
  
 1.1.27 “Events of Force Majeure” has the meaning set
forth in Article 15. 
  
 1.1.28 “Exclusive
Antigen” means collectively, the First Exclusive Antigen, the Second Exclusive Antigen and any Replacement Antigen. 
  
 1.1.29 “Exclusive License” has the meaning set forth in Section 3.2. 
  
 1.1.30 “Exclusive License Maintenance Fee” has the meaning set forth in Section 6.2. 

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 1.1.31 “Existing Third Party Royalties” has the meaning set forth in Section
6.5.1. 
  
 1.1.32 “FD&C Act” means the
federal Food, Drug & Cosmetic Act, as amended. 
  
 1.1.33 “FDA” means the United States Food and Drug Administration, and any successor agency thereto. 
  
 1.1.34 “Field” means the [***]; provided, that, with respect to use of the [***], the Field shall be limited to
[***].  
  
 1.1.35 “First Commercial
Sale” means, in each country of the Territory, the first commercial sale of a Licensed Product by Licensee, its Affiliates or Sublicensees to a Third Party following, if required by law, Regulatory Approval and, when Regulatory Approval is
not required by law, the first commercial sale in that country, in each case for use or consumption of such Licensed Product in such country by the general public. Sales for test marketing, sampling and promotional uses, clinical trial purposes or
compassionate or similar use shall not be considered to constitute a First Commercial Sale. 
  
 1.1.36 “First Exclusive Antigen” means [***] having a [***]. 
  
 1.1.37 “FTE Fees” has the meaning set forth in Section 6.1.2. 
  
 1.1.38 “GAAP” means generally accepted accounting principles in the United States. 
  
 1.1.39 “Good Laboratory Practices” means the
then-current standards for laboratory activities for pharmaceuticals, as set forth in the FD&C Act and applicable regulations and guidances promulgated thereunder, including without limitation the Code of Federal Regulations, as amended from
time to time. 
  
 1.1.40 “Improvements”
means all patentable or non-patentable inventions, discoveries, or other know-how developed and Controlled by either Party during the Term that utilize, incorporate, are derived from, or are made using, the SGI Technology; provided that
Improvements shall not include any [***] or any of the foregoing developed by SGI that, within a reasonable time period after such inventions, discoveries or know-how are made or identified, [***], which instead shall be included in [***].

  
 1.1.41 “IND” means (a) an
Investigational New Drug Application filed with the FDA or its equivalent in any country outside the United States where a regulatory filing is required or obtained to conduct a clinical trial; or (b) with respect to any country where a regulatory
filing is not required or obtained to conduct a clinical trial, the first enrollment of a patient in the first trial involving the first use of a Licensed Product in humans.  
  
 1.1.42 “Indemnitee” has the meaning set forth in Section 14.2. 
  
 1.1.43 “Indemnitor” has the meaning set forth in
Section 14.2. 

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 1.1.44 “Initial Agreements” means (a) the [***] by and between the Parties and
(b) the [***] by and between the Parties. 
  
 1.1.45
“Initiation” means, with respect to a human clinical trial, the dosing of the first patient with a Licensed Product pursuant to the clinical protocol for the specified clinical trial. 
  
 1.1.46 “Joint Patents” has the meaning set forth in
Section 9.2.2. 
  
 1.1.47 “Liabilities”
has the meaning set forth in Section 14.1.1. 
  
 1.1.48
“Licensed Product” means any and all products containing an ADC comprised of an Antibody that binds specifically to an Exclusive Antigen and that is attached to a cytotoxin or cytostatic agent included in the Drug Conjugation
Materials: (a) the manufacture, use, sale, offer for sale or import of which [***]; or (b) [***]. 
  
 1.1.49 “Licensee ADC Know-How” means all Program Inventions developed by Licensee using SGI Technology, and that are necessary or
useful for identifying, developing, making, using or selling ADCs that bind to any Exclusive Antigen or Designated Antigen. 
  
 1.1.50 “Licensee ADC Patents” means all patent applications and patents that are Controlled by Licensee that claim Licensee ADC
Know-How. 
  
 1.1.51 “Licensee
Know-How” means all technical information, processes, formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets, in each case that are not in the public domain, used by Licensee in
the Research Program and that are Controlled by Licensee, including technical information, processes, formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets that relate to (a) the
composition, method of using or method of making an Exclusive Antigen or Designated Antigen, or (b) the composition, method of using or method of making an Antibody that binds specifically to an Exclusive Antigen or Designated Antigen. [***].

  
 1.1.52 “Licensee Materials” means any
tangible chemical, biological or physical research materials that are furnished by or on behalf of Licensee to SGI in connection with this Agreement. 
  
 1.1.53 “Licensee Patents” means all patent applications and patents that claim Licensee Know-How. 
  
 1.1.54 “Net Sales” means, as to each calendar
quarter, the gross invoiced sales prices charged for all Licensed Products sold by or for Licensee, its Affiliates and Sublicensees to independent Third Parties during such quarter, [***]: 
  
 (a) [***]; 
  
 (b) [***]; 

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 (c) [***]; and 
  

(d) [***]. 
  
 All of the [***] from the gross invoiced sales prices of Licensed Products shall be determined in accordance with GAAP. In the event that Licensee, its
Affiliates or Sublicensees make any adjustments [***] after the associated Net Sales have been reported pursuant to this Agreement, the adjustments shall be reported and reconciled in the next report and payment of any royalties due. 
  
 In the event a Licensed Product is sold as part of a Combination Product, the
Net Sales from the Combination Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the Combination Product (as defined in the standard Net Sales definition above), during the applicable
royalty reporting period, by [***]. In the event that such average sale price cannot be determined for the Licensed Product, on the one hand, and all other product(s) included in the Combination Product, on the other, Net Sales for the purposes of
determining royalty payments shall be [***]. 
  
 1.1.55
“[***]” means any [***], or other [***] that either: (a) are developed by SGI after the Effective Date and that, within a reasonable time period after such [***] are made or identified, SGI determines are [***] or (b) are in-licensed
by SGI after the Effective Date, and that in each case either (x) [***], or (y) [***]. [***] shall include without limitation cytotoxic or cytostatic compounds other than those included in the Drug Conjugation Materials as of the Effective Date that
SGI Controls during the Term.  
  
 1.1.56
“Notice of Dispute” has the meaning set forth in Section 19.3.1. 
  
 1.1.57 “Option” has the meaning set forth in Section 3.3. 
  
 1.1.58 “Option Period” means, with respect to each Designated Antigen, the period commencing on the date such [***] and continuing
until [***] (a) [***] or (b) [***]; provided that all Option Periods shall terminate when [***] pursuant to the terms hereof; and provided further that, if applicable, the Option Period for [***] shall be for a period of [***] after
SGI notifies Licensee that [***]. 
  
 1.1.59
“Parties” means Licensee and SGI, and “Party” means either of them. 
  
 1.1.60 “Phase II Clinical Trial” means a controlled dose clinical trial prospectively designed to evaluate the efficacy and safety
of a candidate drug in the targeted patient population and to define the optimal dosing regimen. 
  
 1.1.61 “Phase III Clinical Trial” means a controlled, and usually multi-center, clinical trial, involving patients with the
disease or condition of interest to obtain sufficient efficacy and safety data to support Regulatory Approval of a candidate drug. 
  
 1.1.62 “Program Invention” means any process, formula, method, chemical compound, biological or physical material, invention,
technology, know-how, trade secret or data conceived or reduced to practice by either Party or jointly by both Parties in the conduct of the 

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 activities under this Agreement and/or under the Initial Agreements; provided, that any Program Inventions made
pursuant to the Initial Agreements that are not related to a Designated Antigen or an Exclusive Antigen shall remain governed by the terms of the Initial Agreements. 
  
 1.1.63 “Program Licensee Patents” has the meaning set forth in Section 9.3.3. 
  
 1.1.64 “Publication” has the meaning set forth in
Section 8.5. 
  
 1.1.65 “Regulatory
Approval” means final regulatory approval (including, where applicable, pricing approval in the event that actual sales do not take place before such approval) required to market a Licensed Product for a disease or condition in accordance
with the applicable laws and regulations of a given country. In the United States, its territories and possessions, Regulatory Approval means approval of a New Drug Application (“NDA”), Biologics License Application
(“BLA”) or an equivalent by the FDA. 
  
 1.1.66 “[***]” means the Designated Antigen, if any, designated by Licensee to replace the [***] in accordance with [***] of this Agreement. 
  
 1.1.67 “Reports” has the meaning set forth in Section 7.1.1. 
  
 1.1.68 “Research Fees” has the meaning set forth in
Section 6.1.2. 
  
 1.1.69 “Research Fees
Report” has the meaning set forth in Section 6.1.2. 
  
 1.1.70 “Research License” has the meaning set forth in Section 3.1. 
  
 1.1.71 “Research Plan” means the plan for the Research Program agreed upon by the Parties and attached hereto as Schedule A. 
  
 1.1.72 “Research Program” means the research program conducted pursuant to Article 2. 
  
 1.1.73 “Research Program Term” means the term of the
Research Program set forth in Section 2.2. 
  
 1.1.74
“Royalty Term” means, on a Licensed Product-by-Licensed Product and country-by-country basis, until the later to occur of: (a) the (10th) tenth anniversary of the date of First Commercial Sale of the Licensed Product in such country; or (b) the expiration of the last to expire Valid Patent Claim that would be infringed by the sale of
the Licensed Product in such country, if not for the licenses granted hereunder. 
  
 1.1.75 “Second Exclusive Antigen” means a Designated Antigen, other than the First Exclusive Antigen, for which Licensee exercises the Option for an Exclusive License under Section 3 of this
Agreement. 
  
 1.1.76 “SGI In-Licenses”
means the following agreements between SGI and the indicated Third Parties: (a) the [***]; (b) [***]; and (c) any other license agreement between SGI and a Third Party covering [***] under which Licensee is [***]. 

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 1.1.77 “SGI Know-How” means any and all technical information, processes,
formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets, in each case that are not in the public domain, that relate to or are useful to practice the Drug Conjugation Technology and that
have been, or hereafter are during the Term, Controlled by SGI. SGI Know-How shall include Improvements Controlled by SGI but shall exclude [***] unless [***]. 
  

1.1.78 “SGI Patents” means: 
  
 (a) any existing patents and patent applications listed in Schedule B to this Agreement, which shall be amended from time to time to reflect any
other patents and patent applications; 
  
 (b) any patents
and patent applications covering Improvements and, solely to the extent the Parties so agree [***],[***], in each case that are Controlled by SGI;  
  
 (c) any future patents issued from any patent applications referred to above and any future patents issued from any continuation, continuation-in part
(to the extent Controlled by SGI), or divisional of any of the foregoing patent applications or any patent applications from which the foregoing patents issued, in each case to the extent Controlled by SGI; and 
  
 (d) any reissues, reexaminations, confirmations, renewals, registrations,
substitutions, extensions, or counterparts of any of the foregoing, in each case to the extent Controlled by SGI. 
  
 1.1.79 “SGI Technology” means the SGI Patents and the SGI Know-How. 
  
 1.1.80 “Sublicensees” means any person or entity that
is granted a sublicense under the SGI Technology by Licensee or its Affiliates in accordance with the terms of this Agreement. 
  
 1.1.81 “Supply Fees” has the meaning set forth in Section 6.1.2. 
  
 1.1.82 “Term” has the meaning set forth in Article 13.  
  
 1.1.83 “Territory” means all countries in the world.

  
 1.1.84 “Third Party” means any person
or entity other than Licensee, SGI and their respective Affiliates. 
  
 1.1.85 “Valid Patent Claim” means (a) an unexpired claim of an issued patent which has not been found to be unpatentable, invalid or unenforceable by an unreversed and unappealable decision of a court or other
authority in the subject country; or (b) a claim of an application for a patent that has been pending for less than [***]. 

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 1.2 Certain Rules of Interpretation in this Agreement and the Schedules. 
  
 1.2.1 Unless otherwise specified, all references to monetary amounts
are to United States of America currency (U.S. Dollars); 
  
 1.2.2 The preamble to this Agreement and the descriptive headings of Articles and Sections are inserted solely for convenience of reference and are not intended as complete or accurate descriptions of the content of this Agreement or
of such Articles or Sections; 
  
 1.2.3 The use of words in
the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits; 
  
 1.2.4 The words “include” and “including” have the
inclusive meaning frequently identified with the phrases “without limitation” and “but not limited to”; 
  
 1.2.5 Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by
excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next business day following if the last day of the period is not a business day in the jurisdiction of the Party to
make such payment or do such act; and 
  
 1.2.6 Whenever
any payment is to be made or action to be taken under this Agreement is required to be made or taken on a day other than a business day, such payment shall be made or action taken on the next business day following such day to make such payment or
do such act. 
  
 ARTICLE 2 - RESEARCH PROGRAM 
  
 2.1 Objective and Conduct of the Research Program. Licensee
intends to conduct a Research Program, with SGI’s support, to evaluate ADCs for commercial development under this Agreement with the goal of using SGI Technology to identify [***] for further development by Licensee as Licensed Products, as
more fully described in the Research Plan. Licensee acknowledges that, in addition to the licenses to the SGI Patents granted hereunder, the SGI Know-How transferred to Licensee under this Agreement contains valuable information that is critical to
Licensee’s development of ADCs hereunder. All research work performed by Licensee and SGI hereunder shall be performed in a good scientific manner and in compliance with all applicable laws. 
  
 2.2 Term of the Research Program. The term of the Research
Program shall initially be for a period of [***] after the Effective Date (the “Research Program Term”), unless terminated earlier in accordance with Article 13. 
  
 2.3 Delivery of Drug Conjugation Materials. In support of the Research Program, SGI will deliver Drug
Conjugation Materials to Licensee at mutually agreed upon times and in mutually agreed upon quantities to enable Licensee to attach such materials to Licensee’s Antibodies to create ADCs. At Licensee’s request, SGI will also provide
Licensee with the [***] provided to Licensee to [***]. All such Drug Conjugation Materials and other information provided by SGI to Licensee hereunder will be deemed Confidential Information of SGI pursuant to Article 8. 

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 2.4 SGI Preparation of ADCs. [***]. In order to identify the Second Exclusive Antigen
during the Research Program Term, SGI will prepare mutually agreed upon research quantities of ADCs using the Drug Conjugation Materials for up to [***] targeted to up to [***] supplied by Licensee to SGI. 
  
 2.5 Availability of Antigens. Licensee shall provide SGI with a
confidential written description of each Antigen, including to the extent available, the GenBank accession number and the cDNA and/or amino acid sequence for each Antigen, which Licensee desires to designate as a Designated Antigen for purposes of
this Agreement. Within [***] following SGI’s receipt of such written notice with respect to a particular Antigen, SGI shall notify Licensee in writing whether the Exclusive License described in Article 3 of this Agreement is available with
respect to such Antigen. In addition, SGI shall promptly notify Licensee in writing if at any time during the Research Program Term [***]. To the extent such Exclusive License to [***] is and/or becomes available as described in this Section 2.5,
then [***] shall be deemed to be a Designated Antigen under this Agreement and Licensee shall have an Option Period of [***] thereafter to determine whether to exercise an Exclusive License to [***] as the Second Exclusive Antigen. Schedule D
to this Agreement will be amended from time to time to list the Designated Antigens and the Second Exclusive Antigen (including a description thereof) under this Agreement. The Parties hereby acknowledge and agree that an Antigen shall be available
for designation by Licensee as a Designated Antigen unless (a) [***] or (b) [***]. Licensee may not designate Antigens as Designated Antigens following expiration of the Research Program Term. If, after designation of an Antigen as a Designated
Antigen, a [***], SGI shall inform Licensee in writing, and Licensee shall have a period of [***] to inform SGI in writing that Licensee [***]. If Licensee does not exercise an Exclusive License for such Designated Antigen [***], then (a) [***] (b)
below and (b) [***]. 
  
 2.6 Additional Activities under
Research Program. Upon mutual agreement of the Parties, the Research Program may also include the development by SGI of a technology transfer program for the conjugation of toxins to Antibodies, including the associated purification and
analytics. 
  
 2.7 Payment. Licensee shall pay SGI
the amounts set forth in Section 6.1.2 for any research efforts or other assistance provided by SGI. 
  
 2.8 Supply of Licensee Materials. From time to time during the Term, Licensee may supply SGI with Licensee Materials for use in the Research
Program. In connection therewith, SGI hereby agrees that (a) it shall not use Licensee Materials for any purpose other than exercising any rights granted to it hereunder; (b) it shall use the Licensee Materials only in compliance with all applicable
federal, state, and local laws and regulations; (c) it shall not transfer any Licensee Materials to any Third Party without the prior written consent of Licensee; (d) Licensee shall retain full ownership of all such Licensee Materials; and (e) upon
the expiration or termination of this Agreement, SGI shall at the instruction of Licensee either destroy or return any unused Licensee Materials. 
  

2.9 Disclaimers. EXCEPT AS MAY BE OTHERWISE PROVIDED IN ARTICLE 12, SGI MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR 

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 OTHERWISE, REGARDING THE DRUG CONJUGATION MATERIALS OR ANY ADCs PREPARED BY SGI, INCLUDING ANY WARRANTY OF QUALITY,
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR USE OR PURPOSE. EXCEPT AS MAY BE OTHERWISE PROVIDED IN ARTICLE 12, LICENSEE MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
BY STATUTE OR OTHERWISE, REGARDING THE LICENSEE MATERIALS, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR USE OR PURPOSE. 
  
 ARTICLE 3 – LICENSES; OPTION; DROPPED ANTIGENS 
  
 3.1 Research License Grants. Upon payment of the ADC Access Fee set forth in Section 6.1.1, subject to the
terms and conditions of this Agreement, SGI shall automatically be deemed to have granted to Licensee a non-exclusive, worldwide, royalty-free license under the SGI Technology solely to conduct the Research Program in accordance with Article 2 of
this Agreement (the “Research License”). The Research License shall include the right to evaluate and conduct research on ADCs that bind to any Designated Antigen solely for the purpose of determining Licensee’s interest in
exercising the Option for such Designated Antigen, but shall not include (a) the right to grant sublicenses thereto to any Third Party, (b) the right to initiate any human clinical trial utilizing such ADCs in any country or (c) the right to make,
have made, use or sell a Licensed Product or any SGI Technology. Notwithstanding the foregoing, [***], a form of which has been provided by Licensee to SGI. The Research License shall continue for the Research Program Term, unless earlier terminated
pursuant to Article 13; provided that the Research License shall terminate when Licensee no longer has the right to designate any Designated Antigen(s) as either a Replacement Antigen or a Second Exclusive Antigen pursuant to the terms
hereof. 
  
 3.2 Exclusive License Grants. Upon
payment of the ADC Access Fee set forth in Section 6.1.1 with respect to the First Exclusive Antigen, and the Option Exercise Fee set forth in Section 6.3 of this Agreement with respect to the Second Exclusive Antigen, subject to the terms and
conditions of this Agreement, and commencing as of the date SGI has received the ADC Access Fee or Option Exercise Fee, as the case may be, from Licensee, SGI shall automatically be deemed to have granted to Licensee an exclusive (even as to SGI),
royalty-bearing license under the SGI Technology, with the right to sublicense as permitted in Section 3.6, to discover, develop, have developed, make, have made, import, use, offer for sale, and sell Licensed Products that bind specifically to the
Exclusive Antigen within the Field in the Territory (each, an “Exclusive License” and collectively, the “Exclusive Licenses”). Each Exclusive License shall continue for the Royalty Term, unless earlier terminated
pursuant to Article 13, subject to payment of applicable milestones, royalties and the Exclusive License Maintenance Fees set forth in Section 6.2 of this Agreement applicable to such Exclusive License. 
  
 3.3 Grant of Option. Subject to the provisions of this
Agreement, SGI hereby grants Licensee an option to obtain the Exclusive License described in Section 3.2 of this Agreement to the Second Exclusive Antigen (the “Option”) during the Option Period. 

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 3.4 Procedure to Exercise Option. At any time during the Option Period, Licensee shall have
the right to notify SGI in writing that it desires to obtain the Exclusive License to the Second Exclusive Antigen by providing written notice to SGI. Licensee shall pay SGI the Option Exercise Fee described in Section 6.3 of this Agreement (the
date of payment by Licensee of the Option Exercise Fee being referred to herein as the “Option Exercise Date”) whereupon (a) such Designated Antigen shall be deemed to be the Second Exclusive Antigen for purposes of this Agreement
and (b) Licensee shall be deemed to have been granted an Exclusive License with respect to such Second Exclusive Antigen in accordance with Section 3.2 of this Agreement, without any further action of the Parties. [***]. 
  
 3.5 [***]. If at any time during the period commencing on the
Effective Date and continuing for a period of [***] thereafter, Licensee reasonably determines [***] for purposes of this Agreement by providing SGI with written notice of same. Licensee shall have the right to designate [***] as a [***] in
accordance with the procedure described in Sections 2.5 and 3.4 of this Agreement. Once the [***] becomes a [***] (a) [***], (b) [***] and (c) [***]. 
  
 3.6 Rights to Sublicense. 
  
 3.6.1 Licensee shall have the right to grant sublicenses of each Exclusive License to any Affiliate or Third Party with respect to any Licensed
Product for which Licensee has either retained marketing rights or upon which Licensee has expended material research and/or development effort, it being understood that any Licensed Product that contains a Designated Antigen and/or an Antibody to a
Designated Antigen developed by Licensee shall be deemed to have satisfied the foregoing condition and that Licensee shall have the right to grant sublicenses under the Exclusive License with respect to such Licensed Product, subject to the
remainder of this Section 3.6.1. Licensee agrees to contractually obligate any Sublicensee to make all payments due to SGI pursuant to this Agreement by reason of achievement of any milestones set forth in Section 6.6 or owed on Net Sales of any
Licensed Products by any such Sublicensee pursuant to Sections 6.4 and 6.5, as well as to comply with all terms of this Agreement and the SGI In-Licenses applicable to Licensee (including all terms of this Agreement identified as applicable to
Sublicensee). Licensee shall also require any such Sublicensee to agree in writing to keep books and records and permit SGI to review the information concerning such books and records in accordance with the terms of this Agreement.

  
 3.6.2 Licensee shall notify SGI of each sublicense
granted to Affiliates or Third Parties and shall provide SGI with the name and address of each Sublicensee and a description of the rights granted and the territory covered by each Sublicensee. 

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 3.7 Improvements and New Technologies. 
  
 3.7.1 Improvements. In the event that, during the Research
Program Term, either Party conceives, develops or reduces to practice an Improvement, such Party shall promptly notify the other Party of the discovery of such Improvement. SGI shall own all Improvements and, to the extent that any Improvements
shall have been conceived, developed or reduced to practice by Licensee, Licensee hereby assigns all of its right, title and interest therein to SGI. SGI’s interest in any such Improvements shall be included in the SGI Technology and made
available to Licensee via the Research License and Exclusive License provided in Article 3. 
  
 3.7.2 [***]. Subject to the [***], Licensee shall have the right to practice any [***] pursuant to the Exclusive Licenses granted under
Article 3 as follows: SGI shall [***] of any [***] by providing to Licensee a written [***] of the [***], including all [***] under which [***] would be able to access such [***]. If Licensee is interested in practicing such [***], the Parties shall
discuss in good faith modifications to this Agreement to reflect the terms governing Licensee’s access to any [***] pursuant to this Agreement, which shall include without limitation Licensee’s agreement to [***] attributable to
Licensee’s use of such [***] and; provided that the [***] shall be deemed to include [***] (as applicable) relating to or covering such [***] only after the Parties execute an amendment to this Agreement specifying such modified
terms. Except as set forth in the foregoing sentence and any modifications to this Agreement including any such modification relating to [***] for [***], SGI shall be responsible for [***] of all consideration (including all [***])[***] under
any agreements covering [***]. 
  
 3.7.3 [***].
[***] shall be amended from time to time to [***] Controlled by SGI [***] in accordance with this Section 3.7. 
  
 3.8 Compliance with the SGI In-Licenses. 
  
 3.8.1 Licensee, its Affiliates and Sublicensees shall comply with all obligations, covenants and conditions of the SGI In-Licenses listed in
Schedule C applicable to Licensee and its Affiliates and Sublicensees, and any amendments thereto following written disclosure thereof to Licensee, that apply under each of the SGI In-Licenses. The Parties agree that BMS is a Third Party
beneficiary of this Agreement solely to the extent SGI Technology licensed to Licensee hereunder includes technology sublicensed by SGI under the BMS Agreement. 
  

3.8.2 SGI will not [***] any [***] to an [***] that [***] or [***] of the [***] hereunder [***]. 
  
 3.9 License to SGI. Subject to the provisions of this
Agreement, Licensee hereby grants to SGI during the Research Program Term a non-exclusive, royalty-free, sublicenseable license under the Licensee Patents and Licensee Know-How, to enable SGI to perform or have performed its responsibilities under
the Research Program. 
  
 ARTICLE 4- TECHNOLOGY DISCLOSURE

  
 4.1 Disclosure of Drug Conjugation
Technology. During the Term, SGI shall (a) disclose to Licensee such SGI Know-How as is reasonably useful to enable Licensee to use the 

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 Drug Conjugation Materials and Drug Conjugation Technology as provided in the Research Plan or to practice the Research
License and Exclusive Licenses, and subject to the conditions, of this Agreement and (b) upon Licensee’s reasonable request and with adequate notice to SGI, make available to Licensee at SGI’s facilities, SGI’s personnel to provide a
reasonable amount of technical assistance and training to Licensee’s personnel. Licensee shall pay to SGI for such assistance an amount equal to the FTE Fees in accordance with Section 6.1.2 for SGI employees providing such assistance.

  
 ARTICLE 5 - DEVELOPMENT AND COMMERCIALIZATION; MANUFACTURING

  
 5.1 Diligence. Licensee shall use
commercially reasonable efforts to develop, commercialize and market Licensed Products, such efforts to be consistent with the exercise of prudent scientific and business judgment and comparable to the efforts Licensee applies to its other projects
of similar potential and market size. Without limiting the foregoing, Licensee shall, as commercially prudent, (a) conduct such preclinical and clinical trials as are necessary to obtain Regulatory Approvals for Licensed Products in major markets
therefor, (b) diligently obtain any necessary approvals to market such Licensed Products in major markets therefor (including, as relevant, pricing and reimbursement approval), and (c) market such Licensed Products in each country in which Licensee
has received Regulatory Approval therefor. Licensee shall comply with all applicable laws, rules and regulations (including Good Laboratory Practices, and good clinical and manufacturing practices, to the extent applicable) in the development and
commercialization of such Licensed Products, and shall cause its Affiliates and Sublicensees to do the same. 
  
 5.2 Funding and Progress Reports. Except as expressly set forth herein, as between SGI and Licensee, Licensee shall be solely responsible
for funding all costs of the development and commercialization of Licensed Products. Licensee shall keep SGI informed in a timely manner as to the progress of the development of Licensed Products. 
  
 5.3 Manufacturing. Except as otherwise expressly set forth in
this Agreement, Licensee shall be responsible for all manufacturing and supply of the Licensed Products. Notwithstanding the foregoing, SGI shall (a) [***], including in accordance with good manufacturing practices for clinical trials, on an [***]
and (b) consider in good faith any request by Licensee for supply of other Drug Conjugate Materials. In the event SGI [***], the Parties shall [***], including [***] and other such terms as may be appropriate and customary in [***].

  
 ARTICLE 6 - FEES, ROYALTIES AND PAYMENTS 
  
 6.1 Research Fees. Licensee shall pay to SGI the following
amounts in consideration of the Research Program: 
  
 6.1.1
Within ten (10) business days of the Effective Date, Licensee shall pay to SGI the sum of Two Million U.S. Dollars ($2,000,000) by wire transfer of immediately available funds (the “ADC Access Fee”). 
  
 6.1.2 Licensee shall pay SGI at an annual rate of [***] per FTE who
provides assistance as requested by Licensee pursuant to this Agreement in each of the first [***] of the Term (the “FTE Fees”). Commencing upon the [***] of the Effective Date (the “[***]”) and 

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 upon [***] thereafter, the FTE Fees will [***] by [***] per FTE per year; provided, that, notwithstanding
the foregoing, the Parties hereby agree that Licensee shall pay no consideration to SGI in connection with any preparation of ADCs or related characterization work performed by SGI under the Initial Agreements. Licensee shall also pay SGI for all
Drug Conjugation Materials supplied by SGI to Licensee hereunder at the rate of [***] of SGI’s Cost of Goods therefor (the “Supply Fees”). The FTE Fees and the Supply Fees are collectively referred to herein as (the
“Research Fees”). Within [***] after the end of each [***], SGI shall submit a report to Licensee supporting the calculation of the Research Fees due for such [***] (a “Research Fees Report”). Licensee shall pay all
Research Fees to SGI within [***] of receipt of each Research Fees Report. 
  
 6.2 Exclusive License Maintenance Fees. Licensee shall be [***] to SGI in the sum of [***] per Exclusive Antigen by wire transfer of immediately available funds (the “Exclusive License
Maintenance Fee”) on [***] (with respect to the [***]) and the Option Exercise Date (with respect to the [***]) up through the date on which [***]. 
  
 6.3 Option Exercise Fee. Licensee shall pay to SGI an Option Exercise Fee of [***] for the Exclusive License obtained by Licensee with
respect to the [***] to the extent such Exclusive License is obtained on or before the [***] of the Effective Date, [***] to the extent such Exclusive License is obtained on or before the [***] of the Effective Date and [***] to the extent such
Exclusive License is obtained on or before the [***] of the Effective Date, payable in either case, within [***] after the exercise by Licensee of the Option with respect to the [***] in accordance with Section 3.4 of this Agreement. 
  
 6.4 Royalties Payable by Licensee. In consideration for the
Exclusive Licenses granted to Licensee herein, during the Royalty Term, and subject to Section 6.5, Licensee shall pay to SGI and BMS royalties on Net Sales of Licensed Products during the Royalty Term. Such royalties shall be paid at the following
rates, determined on a Licensed Product-by-Licensed Product basis as set forth below: 
  
 6.4.1 Royalties Payable to SGI. 
  
 (a) [***] of the first [***] in aggregate [***] of [***] in each [***]; and 
  
 (b) [***] of the portion of aggregate [***] of [***] in excess of [***] in each [***]. 
  
 6.4.2 Royalties Payable to BMS. [***] of [***] of [***] in each
[***] during the Royalty Term, subject to all of the terms and conditions of the BMS Agreement. Solely for the purpose of this Section 6.4.2, the terms “Net Sales”, “Licensed Products” and “Royalty Term” and any other
relevant terms related to calculation of royalties payable to BMS shall have their respective meanings set forth in the BMS Agreement. 
  
 6.4.3 Royalty Background. In establishing the royalty structure of this Section 6.4, the Parties recognize, and Licensee acknowledges, the
substantial value of the various actions and investments undertaken by SGI prior to the Effective Date. Such value is significant and in addition to the value of SGI’s grant to Licensee of the Exclusive License pursuant to 

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 Section 3.2, as it enables the rapid and effective development and commercialization of the Licensed Products in the
Territory. Therefore, the Parties agree that the royalty payments calculated as a percentage of Net Sales (plus the license fee, milestone payments and other payment provided for elsewhere herein) provide fair compensation to SGI for these
additional benefits. 
  
 6.5 Third Party Royalties;
Adjustments to Royalties. 
  
 6.5.1 Licensee shall
be solely responsible for paying all royalties owed to Third Parties by either Licensee or SGI on account of sales of Licensed Products by Licensee, its Affiliates or Sublicensees, including royalties owed due to use of the SGI Technology, [***].
SGI shall be responsible for the payment of all other consideration (including any milestone payments) due and payable under the SGI In-Licenses except as described in the foregoing sentence and/or except as set forth in Section 3.7.2 with regard to
any [***]. SGI represents and warrants that [***]. 
  
 6.5.2
The royalties otherwise due and payable to SGI pursuant to Section 6.4.1 of this Agreement shall [***] with respect to any Licensed Product sold in any country where commercialization, manufacture, marketing or sale of such Licensed Product
[***]. 
  
 6.5.3 If the sum of (a) [***] under [***] and
(b) any other royalties Licensee is required to pay any [***] in order to practice the SGI Technology to make, use and sell [***] (including any royalties payable with respect to [***] of [***] of a [***] in any calendar year, then the royalties
otherwise due and payable by Licensee under Section 6.4.1 [***] of any royalties due by Licensee with respect to Net Sales of a Licensed Product in such [***] of such [***]; provided, however, that in no event shall the [***] pursuant
to Section 6.4.1 with respect to a Licensed Product in any calendar year be [***] of the [***] under Section 6.4.1 but for such offsets. 
  
 6.5.4 If, as a result of either (a) negotiations between [***] conducted during the Term of this Agreement and/or (b) use of SGI Technology in
Licensed Products that does not [***], the royalty payable to [***] under [***] above by Licensee, its Affiliates or Sublicensees is [***] of [***] (the amount of any such [***], the [***]), then the royalty otherwise due and payable by Licensee to
SGI under [***] shall be [***] of the [***]. For purposes of clarity, this Section 6.5.4 shall not apply to any [***] to the [***] agreed to or implemented pursuant to [***] above prior to the Effective Date (including without limitation any [***]
that are contained in the [***] as of the Effective Date), which [***] shall be applied to the royalty payable by Licensee [***] under [***] without any corresponding increase in the [***]. 
  
 6.6 Milestone Payments. As additional consideration for the
licenses, rights and privileges granted to it hereunder, Licensee shall pay to SGI the following milestone payments within [***] of the first occurrence of each event set forth below with respect to the [***] Licensed Product that targets each
Exclusive Antigen (regardless of how many Licensed Products are developed to target that Exclusive Antigen), whether such events are achieved by Licensee, its Affiliates or Sublicensees, as follows: 
  
 (a) Upon [***] for a [***]; 

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 (b) Upon [***]for a [***]; 
  
 (c) Upon [***]for a [***]; 
  

(d) Upon [***]or equivalent for a [***]; and 
  
 (e) Upon [***] for a [***]. 
  
 If any of (a) through (d) above is achieved before a preceding milestone payment has become due, then such payment shall be deemed to become due within
[***] of the achievement of the subsequent milestone. 
  
 6.7
Payment Terms. Royalties shown to have accrued by each Report provided for under Article 6 of this Agreement shall be due on the date such Report is due pursuant to Section 7.1.3. 
  
 6.8 Payment Method. All payments by Licensee to SGI under this
Agreement shall be paid in U.S. dollars, and all such payments shall be made by bank wire transfer in immediately available funds to the bank account designated by SGI in writing. 
  
 6.9 Exchange Control. If at any time legal restrictions prevent the prompt remittance of part or all royalties
with respect to any country in the Territory where Licensed Product is sold, payment shall be made through such lawful means or method as the Parties reasonably shall determine. 
  
 6.10 Withholding Taxes. Except as otherwise provided below, all amounts due from Licensee to SGI under this
Agreement are gross amounts. Licensee shall be entitled to deduct the amount of any withholding taxes payable or required to be withheld by Licensee, its Affiliates or Sublicensees, to the extent Licensee, its Affiliates or Sublicensees pay such
withheld amounts to the appropriate governmental authority on behalf of SGI. Licensee shall use commercially reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of SGI by Licensee, its Affiliates or
Sublicensees. Licensee promptly shall deliver to SGI proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto, and shall cooperate with SGI
in seeking any related tax credits that may be available to SGI with respect thereto. 
  
 ARTICLE 7 - ROYALTY REPORTS AND ACCOUNTING 
  
 7.1
Reports, Exchange Rates. 
  
 7.1.1 During the
Royalty Term, Licensee shall furnish to SGI, with respect to each [***], a written report showing, on a consolidated basis in reasonably specific detail and on a country-by-country basis, (a) the gross sales of Licensed Products sold by Licensee,
its Affiliates and its Sublicensees in the Territory during the [***] and the calculation of Net Sales from such gross sales; (b) the royalties payable in U.S. dollars, if any, which shall have accrued hereunder based upon such Net Sales of Licensed
Products; (c) the withholding taxes, if any, required by law to be deducted in respect of such royalties; (d) the dates of the First Commercial 

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 Sale of each Licensed Product in each country in the Territory, if it has occurred during the corresponding [***]; and
(e) the exchange rates (as determined pursuant to Section 7.1.4 herein) used in determining the royalty amount expressed in U.S. dollars (collectively, “Reports”). 
  
 7.1.2 Licensee shall include in each permitted sublicense granted by it pursuant to this Agreement a provision
requiring its Affiliates and Sublicensees to make Reports to Licensee within [***] of the close of each [***] and to keep and maintain records of sales made pursuant to such sublicense as if such sales were by Licensee for the purpose of Section
7.1.1. 
  
 7.1.3 Reports shall be due on the [***]
following the end of the [***] to which such Report relates. Licensee shall keep complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales and to enable the royalties payable hereunder to be determined.
 
  
 7.1.4 With respect to sales of Licensed
Products invoiced in U.S. dollars, the gross sales, Net Sales, and royalties payable shall be expressed in U.S. dollars. With respect to sales of Licensed Products invoiced in a currency other than U.S. dollars, the gross sales, Net Sales and
royalties payable shall be expressed in the currency of the invoice issued by the Party making the sale together with the U.S. dollars equivalent of the royalty due, calculated using the [***]. 
  
 7.2 Audits. 
  
 7.2.1 Upon the written request of SGI and with at least [***] prior
written notice, but not more than [***] in any [***], Licensee shall permit an independent certified public accounting firm of internationally recognized standing, selected by SGI and reasonably acceptable to Licensee, [***], to have access during
normal business hours to such of the records of Licensee as required to be maintained under this Agreement to verify the accuracy of the Reports due hereunder. Such accountants may audit records relating to Reports made for any year ending not more
than [***] prior to the date of such request. The accounting firm shall disclose to SGI only whether the Reports were correct or not, and the specific details concerning any discrepancies. No other information obtained by such accountants shall be
shared with SGI. 
  
 7.2.2 If such accounting firm
concludes that any royalties were owed but not paid to SGI, Licensee shall pay the additional royalties within [***] of the date SGI delivers to Licensee such accounting firm’s written report so concluding. The fees charged by such accounting
firm shall be [***]; provided, however, if the audit discloses that the royalties payable by Licensee for the audited period [***] of the royalties actually paid for such period, then [***] charged by such accounting firm. If such
accounting firm concludes that the royalties paid were more than what was owed during such period, SGI shall refund the overpayments within [***] of the date SGI receives such accounting firm’s written report so concluding. 
  
 7.3 Confidential Financial Information. SGI shall treat all
financial information subject to review under this Article 7 or under any sublicense agreement as Confidential Information of Licensee as set forth in Article 8, and shall cause its accounting firm to retain all such financial information in
confidence under terms substantially similar to those set forth in Article 8. 

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 ARTICLE 8 – CONFIDENTIALITY 
  
 8.1 Non-Disclosure Obligations. Except as otherwise provided in this Article 8, during the Term and for a
period of [***] thereafter, each Party shall maintain in confidence, and use only for purposes as expressly authorized and contemplated by this Agreement, all confidential or proprietary information, data, documents or other materials supplied by
the other Party under this Agreement and marked or otherwise identified as “Confidential.” Confidential Information of SGI shall include SGI Technology and SGI’s interest in any Improvements and [***]. Confidential Information of a
Party may also include information relating to such Party’s research programs, development, marketing and other business practices and finances. For purposes of this Agreement, information and data described above shall be hereinafter referred
to as “Confidential Information.” Each Party shall use at least the same standard of care as it uses to protect its own Confidential Information to ensure that its and its Affiliates’ employees, agents, consultants and clinical
investigators only make use of the other Party’s Confidential Information for purposes as expressly authorized and contemplated by this Agreement and do not disclose or make any unauthorized use of such Confidential Information. 
  
 8.2 Permitted Disclosures. Notwithstanding the foregoing, but
subject to the last sentence of this Section 8.2, the provisions of Section 8.1 shall not apply to information, documents or materials that the receiving Party can conclusively establish: 
  
 (a) have become published or otherwise entered the public domain
other than by breach of this Agreement by the receiving Party or its Affiliates; 
  
 (b) are permitted to be disclosed by prior consent of the other Party; 
  
 (c) have become known to the disclosing Party by a Third Party, provided such Confidential Information was not obtained by such Third Party
directly or indirectly from the other Party under this Agreement on a confidential basis; 
  
 (d) prior to disclosure under the Agreement, was already in the possession of the receiving Party, its Affiliates or Sublicensees, provided such Confidential Information was not obtained directly or indirectly
from the other Party under this Agreement; 
  
 (e) are
required to be disclosed by the receiving Party to comply with any applicable law, regulation or court order, or are reasonably necessary to obtain patents, copyrights or authorizations to conduct clinical trials with, and to commercially market,
Licensed Product(s), provided that the receiving Party shall provide prior notice of such disclosure to the other Party and take reasonable and lawful actions to avoid or minimize the degree of disclosure; 
  
 (f) to the extent reasonably needed in a patent application claiming
Program Inventions made hereunder to be filed with the United States Patent and Trademark Office and/or any similar foreign agency, provided that the Party filing the patent shall provide prior notice of such disclosure to the other Party and take
reasonable and lawful actions to avoid or minimize the degree of disclosure; 
  
 (g) to a potential Sublicensee or Sublicensee as permitted hereunder, provided that such potential Sublicensee or Sublicensee is then subject to obligations of confidentiality and limitations on use of such
Confidential Information substantially similar to those contained herein; and 

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 (h) to a potential or bona fide collaborator or manufacturing, development or sales contractor or
partner, but only to the extent directly relevant to the collaboration, partnership or contract and provided that such collaborator, partner or contractor is then subject to obligations of confidentiality and limitations on use of such Confidential
Information substantially similar to those contained herein. 
  
 Notwithstanding
the disclosures permitted under subsections (e)-(h), if the information, documents or materials covered by such subsection is otherwise protected by obligations of confidentiality, then the confidentiality obligations of Section 8.1 shall still
apply. 
  
 8.3 Terms of the Agreement. Licensee and
SGI shall not disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other Party, except as required by applicable laws, regulations or a court order or to comply with rules of a securities exchange,
in which case the disclosing Party shall provide notice to the other Party and take reasonable and lawful actions to avoid or minimize the degree of such disclosures. 
  
 8.4 Press Releases and Other Disclosures to Third Parties. Neither SGI nor Licensee will, without the prior
consent of the other, issue any press release or make any other public announcement or furnish any statement to any person or entity (other than either Parties’ respective Affiliates) concerning the existence of this Agreement, its terms and
the transactions contemplated hereby, except for (i) an initial press release mutually agreed upon by the Parties, (ii) disclosures made in compliance with Sections 8.2 and 8.3, (iii) attorneys, consultants, and accountants retained to represent the
Parties in connection with the transactions contemplated hereby. 
  
 8.5 Publications Regarding Results of the Research Program. Neither Party may publish, present or announce results of the Research Program either orally or in writing (a “Publication”) without complying with
the provisions of this Section 8.5. The other Party shall have [***] from receipt of a proposed Publication to provide comments and/or proposed changes to the publishing Party. The publishing Party shall take into account the comments and/or
proposed changes made by the other Party on any Publication and shall agree to designate employees or others acting on behalf of the other Party as co-authors on any Publication describing results to which such persons have contributed in accordance
with standards applicable to authorship of scientific publications. If the other Party reasonably determines that the Publication would entail the public disclosure of such Party’s Confidential Information and/or of a patentable invention upon
which a patent application should be filed prior to any such disclosure, submission of the concerned Publication to Third Parties shall be delayed for [***] any such Confidential Information of the other Party (if the other Party has requested
deletion thereof from the proposed Publication), and/or the drafting and filing of a patent application covering such invention, provided such additional period shall not exceed [***] from the date the publishing Party first provided the proposed
Publication to the other Party. 

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 ARTICLE 9 - INVENTIONS AND PATENTS 
  
 9.1 Ownership of Inventions and Technology; Use of Data. 
  
 9.1.1 Disclosure of Inventions. Each Party shall promptly
disclose to the other Party the making, conception or reduction to practice of any Program Inventions. 
  
 9.1.2 Ownership of Program Inventions. All right, title and interest in all Program Inventions that are discovered, made or conceived as
part of the activities conducted pursuant to this Agreement shall be owned as follows: 
  
 (a) [***] shall own all Program Inventions that (A) are invented solely by one or more employees, agents or consultants of [***] and do not primarily relate to the [***] or (B) are invented solely or jointly by
employees, agents or consultants of Licensee and/or [***] and [***]. To the extent that any such Program Inventions relating primarily to an [***] shall have been invented by [***] and are owned by [***], [***] hereby assigns all of its right, title
and interest therein to [***]. 
  
 (b) [***] shall own all Program
Inventions that (i) are invented solely by one or more employees, agents or consultants of [***] and do not primarily relate to an [***] or (ii) are invented solely or jointly by employees, agents or consultants of Licensee and/or SGI and primarily
relate to the [***]. To the extent that any Program Inventions relating primarily to [***] shall have been invented by [***] and are owned by [***], [***] hereby assigns all of its right, title and interest therein to [***]. 
  
 (c) Except as set forth in Sections 9.1.2(a) and 9.1.2(b), [***] and [***]
shall [***] own all other Program Inventions. For purposes of clarification and notwithstanding anything to the contrary set forth herein, all Program Inventions that relate primarily to [***], including without limitation, [***] owned. 

 
 (d) Inventorship, for the purposes of this Agreement, shall be determined
in accordance with U.S. laws of inventorship. 
  
 9.1.3
Ownership of Technology. 
  
 (a) Licensee shall own all
right, title and interest in and to all Licensee Know-How. 
  
 (b)
SGI shall own all right, title and interest in and to all SGI Technology. 

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 9.2 Patent Prosecution and Maintenance. 
  
 9.2.1 SGI shall be responsible for and shall control the preparation,
filing, prosecution, grant and maintenance of all SGI Patents. SGI shall, at its sole expense, prepare, file, prosecute and maintain such SGI Patents in good faith consistent with its customary patent policy and its reasonable business judgment, and
shall consider in good faith the interests of Licensee in so doing. 
  
 9.2.2 Each Party shall be responsible for and shall control the preparation, filing, prosecution, grant and maintenance, of any patents and patent applications claiming Program Inventions owned solely by it in accordance with Section
9.1 and shall, at its sole expense, prepare, file, prosecute and maintain such patent rights in good faith consistent with its customary patent policy and its reasonable business judgment. Patents and patent applications claiming Program Inventions
owned [***] in accordance with [***] ([***]) shall be controlled, prepared, filed, prosecuted and maintained by [***] (a) [***], (b) [***], if [***] or (c) of [***]. The cost of such outside legal expenses shall be borne by the Party that controls
such [***] under (a) or (b) above and [***] if such [***] is controlled by [***]. The Party responsible for filing and controlling patent prosecution and maintenance for Program Inventions shall provide to the other Party copies of any response,
document or communication with patent authorities that could materially affect the scope of any patent or patent application covering Program Inventions or detrimentally effect the rights of the Parties in such inventions in any way, at least [***]
prior to the planned submission or communication. Such other Party shall have the opportunity to comment on the response or document within such [***] period, which comments shall be reasonably considered by the Party primarily responsible for the
prosecution.  
  
 9.2.3 If either Party decides not
to continue prosecuting patent applications or not to maintain a patent claiming an invention assigned to such Party pursuant to Section 9.1 in whole or in part, then such Party shall promptly so notify the other Party (which notice shall be at
least [***] before any relevant deadline for such patent application or patent). Thereafter, the other Party shall have the right to prosecute or maintain such patent application or patent, at such Party’s sole expense. 
  
 9.2.4 The Parties shall at all times fully cooperate in order to
reasonably implement the foregoing provisions, such cooperation may include the execution of necessary legal documents and the provision of the assistance of its relevant personnel. 
  
 9.3 Enforcement of SGI Patents. 
  
 9.3.1 SGI shall have the first right, at its sole expense, but not the obligation, to determine the appropriate
course of action to enforce the SGI Patents or otherwise abate the infringement thereof, to take (or refrain from taking) appropriate action to enforce the SGI Patents, to control any litigation or other enforcement action and to enter into, or
permit, the settlement of any such litigation or other enforcement action with respect to the SGI Patents. SGI shall in good faith consider the interests of Licensee in conducting the foregoing activities. All monies recovered upon the final
judgment or settlement of any such suit to enforce any SGI Patents with respect to the manufacture, use or sale by Third Parties of products competitive with Licensed Products or technologies competitive with SGI Patents shall be [***]. Licensee
shall fully cooperate with SGI in any such action at SGI’s expense, to enforce the SGI Patents, including being joined as a party to such action if necessary. 

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 9.3.2 If SGI fails to take any action to enforce the SGI Patents or control any litigation with
respect to the SGI Patents with respect to the manufacture, use or sale by Third Parties of products competitive with Licensed Products or technologies competitive with SGI Patents within a period of [***] after the Parties receive reasonable notice
of the infringement of the SGI Patents, then Licensee shall have the right to bring and control any such action by counsel of its own choice, [***]. In such case, all monies recovered upon the final judgment or settlement of any such suit to enforce
any SGI Patents shall be [***]. In such a case, SGI shall cooperate fully with Licensee, at Licensee’s expense, in its efforts to enforce the SGI Patents, including being joined as a party to such action if necessary. In no event may Licensee
assert an argument or settle a suit in a manner which would render a claim in the SGI Patents invalid or unenforceable without SGI’s prior written consent. 
  

9.3.3 Licensee shall have the right, at its sole expense, to determine the appropriate course of action to enforce patents claiming Program
Inventions owned solely by Licensee in accordance with Section 9.1 (“Program Licensee Patents”), or otherwise to abate the infringement thereof, to take (or refrain from taking) appropriate action to enforce the Program Licensee
Patents, to control any litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation or other enforcement action with respect to the Program Licensee Patents. All monies recovered upon the final judgment
or settlement of any such suit to enforce any Program Licensee Patents shall be retained by Licensee. SGI shall fully cooperate with Licensee, at Licensee’s expense, in any action to enforce the Program Licensee Patents. 
  
 9.3.4 In the event either Party becomes aware of an infringement by a
Third Party of a Joint Patent, it shall promptly notify the other Party and the Parties shall determine a mutually agreeable course of action. In no event shall a Party make an argument or settle a dispute which would render a claim in a Joint
Patent to be invalid or unenforceable without the other Party’s prior written consent. 
  
 9.4 Prior Patent Rights. Notwithstanding anything to the contrary in this Agreement, with respect to any SGI Patents that are subject to the SGI In-Licenses, the rights and obligations of the Parties
under Section 9.2 and 9.3 shall be subject to SGI’s licensors’ rights to participate in and control prosecution, maintenance and enforcement of such SGI Patents, and to receive a share of damages recovered in such action, in accordance
with the terms and conditions of the applicable SGI In-License. 
  
 ARTICLE
10 - INFRINGEMENT ACTIONS BROUGHT BY THIRD PARTIES 
  
 If
Licensee, SGI or any of their respective Affiliates, or any of Licensee’s Sublicensees, is sued by a Third Party for infringement of a Third Party’s patent because of the use of the SGI Technology in connection with activities conducted
pursuant to this Agreement, the Party that has been sued shall promptly notify the other Party within [***] of its receipt of notice of such suit. The notice shall set forth the facts of such infringement available to the relevant Party. The Parties
shall then meet to discuss each Party’s commercial interests in the defense of the suit, a 

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 plan for the defense of the suit, how the costs of the suit should be allocated, and which Party should have primary
control of the suit, provided that if such infringement relates previously to SGI Technology, then SGI shall have the first right to control such suit. In no event may the Party controlling the suit settle or otherwise consent to an adverse judgment
in such suit that diminishes the rights or interests of the non-controlling Party without the express written consent of the non-controlling Party. 
  
 ARTICLE 11 - REGULATORY ASSISTANCE 
  
 Licensee shall be solely responsible for, and shall solely own, all applications for Regulatory Approval with respect to Licensed Products. Should
Licensee desire to file an IND or an application for Regulatory Approval, or equivalents of the foregoing, for a Licensed Product, SGI will use reasonable commercial efforts to provide at Licensee’s request, technical information reasonably
required for Licensee, including information relating to the chemical structure of the ADC, the toxin used to create such ADC, and the linker and chemistry used to create such ADC, as well as documents necessary to compile the Chemistry
Manufacturing and Controls section of any application for Regulatory Approval, or to provide other toxicity and safety data for such filings, and any other relevant information as the Parties may mutually agree. Licensee shall reimburse SGI for any
out-of-pocket costs incurred by SGI in providing any such information plus an amount equal to SGI’s then current FTE Fee for SGI’s personnel engaged in such activities, as set forth in Section 6.1.2. If SGI has a drug master file with the
FDA or equivalent that contains information related to Drug Conjugation Materials that is useful to support an IND or application for Regulatory Approval, Licensee shall have a right of reference or access to the contents of such drug master file on
mutually agreeable terms. 
  
 ARTICLE 12 – REPRESENTATIONS AND
WARRANTIES 
  
 12.1 Representations and
Warranties. 
  
 12.1.1 This Agreement has been
duly executed and delivered by each Party and constitutes the valid and binding obligation of each Party, enforceable against such Party in accordance with its terms, except as enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other laws relating to or affecting creditors’ rights generally and by general equitable principals. The execution, delivery and performance of this Agreement has been duly authorized by all necessary
action on the part of each Party, its officers and directors. 
  
 12.1.2 The execution, delivery and performance of the Agreement by each Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency having jurisdiction over it. 
  
 12.1.3 SGI represents and warrants that (a) the SGI Technology is [***] on the Effective Date related to SGI’s [***] of Licensed Products in
the manner contemplated hereunder, (b) it has the right to grant the licenses granted herein and that as of the Effective Date it has no knowledge of any rights of any Third Parties that would be infringed by the practice of the SGI Patents or other
SGI Technology in connection with activities to be 

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 conducted hereunder, (c) as of the Effective Date, there are no claims, judgments or settlements against SGI pending or
to its knowledge, threatened, seeking to invalidate the SGI Patents; (d) SGI has provided Licensee with accurate and complete copies of the SGI In-Licenses, with certain information redacted therefrom that has no impact on the grant of the license
to Licensee under this Agreement; and (e) as of the Effective Date, (i) the SGI In-Licenses are the only in-license agreements executed by SGI with respect to the SGI Technology licensed to Licensee under this Agreement, (ii) each of the SGI
In-Licenses is in full force and effect and (iii) SGI has not breached, or received notice regarding any actual or alleged breach of, or issued any notice of breach to any party to, the SGI In-Licenses. Licensee represents and warrants that it has
the right to grant the licenses granted to SGI herein and that as of the Effective Date it has no knowledge of any rights of any Third Parties that would be infringed by activities to be conducted by the Parties hereunder.  
  
 12.2 Performance by Affiliates. The Parties recognize that each
may perform some or all of its obligations under this Agreement through Affiliates, provided, however, that each Party shall remain responsible and be a guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance. 
  
 ARTICLE 13 – TERM AND TERMINATION 
  
 13.1 Term. Unless earlier terminated pursuant to this Article 13, the term of this Agreement (the “Term”) shall commence on the Effective Date and shall remain in full force and effect until the later of: (a)
the expiration or termination of the [***]; or (b) with respect to each Exclusive License obtained by Licensee prior to the expiration or termination of the [***], the expiration of the last to expire Royalty Term. 
  
 13.2 Termination of Exclusive License by Licensee. Licensee
shall have the right to terminate an Exclusive License under this Agreement by providing not less than [***] prior written notice to SGI of such termination. [***]. 
  
 13.3 Termination for Cause. Either Party may terminate this Agreement for material breach by the other Party
(the “Breaching Party”) of any material provision of the Agreement, if the Breaching Party has not cured such breach within [***] after notice thereof. 
  
 13.4 Termination Upon Insolvency. Either Party may terminate this Agreement if, at any time, (a) the other
Party shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee
of that Party or of its assets, (b) such other Party proposes a written agreement of composition or extension of its debts, (c) such other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within [***] after the filing thereof, (d) such other Party shall propose or be a party to any dissolution or liquidation, or (e) such other Party shall make an assignment for the benefit of its creditors. All rights
and licenses granted under this Agreement are, and shall be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(56) of the United
States Bankruptcy Code. The Parties agree that in the event of the 

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 commencement of a bankruptcy proceeding by or against one Party hereunder under the United States Bankruptcy Code, the
other Party shall be entitled to complete access to any such intellectual property, and all embodiments of such intellectual property, pertaining to the rights granted in the licenses hereunder of the Party by or against whom a bankruptcy proceeding
has been commenced, subject, however, to payment of the fees, milestone payments and royalties set forth in this Agreement through the effective date of any termination hereunder. 
  
 13.5 Termination of SGI In-Licenses. All rights and obligations under an SGI In-License sublicensed under this
Agreement shall terminate upon [***] prior written notice by SGI to Licensee if Licensee performs any action that would constitute a breach of any material provision of such SGI In-License Agreement and fails to cure such breach within such [***]
period; provided, however, such cure period may be extended by mutual written consent of the Parties. All rights and obligations under the BMS Agreement shall automatically terminate if Licensee fails to maintain the insurance required under Article
18 of this Agreement. SGI covenants that (a) it will use reasonable commercial efforts to maintain all SGI In-Licenses for the duration of this Agreement, (b) it shall not modify Section 13.7 of the BMS Agreement without Licensee’s prior
written consent and (c) it shall provide Licensee with prompt written notice if it receives or issues any notice of breach or alleged breach under the SGI In-Licenses. 
  
 13.6 Effect of Expiration and Termination. 
  
 13.6.1 In the event that this Agreement is terminated by Licensee pursuant to Sections 13.3 or by either Party
pursuant to 13.4, Licensee shall continue to have all Exclusive Licenses then in effect, subject to its continued payment of the applicable fees, milestone payments and royalties with respect thereto as set forth in Article 6. 
  
 13.6.2 In the event that this Agreement is terminated by SGI pursuant
to Section 13.3 or 13.5 (a) all licenses granted by SGI to Licensee hereunder, including all Exclusive Licenses, will immediately terminate and (b) any Sublicense agreement in effect as of the date of such termination that is not the subject of the
material breach shall not terminate but instead, shall become a direct license between SGI and the Sublicensee and shall otherwise continue in full force and effect in accordance with its terms, subject to each such Sublicensee signing a written
acknowledgement with SGI agreeing to be bound by all of the terms and conditions of this Agreement applicable to such Sublicensee. 
  
 13.6.3 Upon any termination of any Exclusive License (except for termination by Licensee pursuant to Section 13.3) and in the case of a [***]
and/or any Designated Antigens for which the relevant Option Periods have expired, Licensee shall be automatically deemed to have granted to SGI a worldwide, nonexclusive, irrevocable, royalty-free, sublicensable license in the Territory under the
Licensee ADC Know-How and Licensee ADC Patents to identify, develop and commercialize products that contain an ADC consisting of an Antibody that binds specifically to the Antigen that was the subject of the terminated Exclusive License(s) or
Option(s). 
  
 13.6.4 Except where explicitly provided
within this Agreement, termination of this Agreement for any reason, or expiration of this Agreement, will not affect any: (a) obligations, including payment of any royalties or other sums which have accrued as of the date 

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 of termination or expiration, and (b) rights and obligations which, from the context thereof, are intended to survive
termination or expiration of this Agreement, including provisions of Articles 1, 8, 9, 10, 14 (as to actions arising during the term of this Agreement or in the course of a Party practicing any licenses retained by such Party thereafter), 18 and 19,
Sections 3.5, 7.2, 7.3 and 13.6 and any payment obligations pursuant to Article 6 incurred prior to termination. 
  
 13.6.5 Upon the expiration of the Royalty Term, SGI shall grant, and shall by this provision be deemed to have granted, to Licensee a royalty-free,
perpetual, worldwide, nonexclusive license to use the SGI Technology to make, use, sell, offer for sale and import Licensed Products that bind specifically to each Exclusive Antigen, with no further obligation to SGI. 
  
 ARTICLE 14 - INDEMNITY 
  
 14.1 Direct Indemnity. 
  
 14.1.1 Each Party shall defend, indemnify and hold harmless the other
Party from and against all liabilities, losses, damages, and expenses, including reasonable attorneys’ fees and costs, (collectively, the “Liabilities”) resulting from all Third Party claims, suits, actions, terminations or
demands (collectively, the “Claims”) that are incurred, relate to or arise out of (a) the breach of any material provision of this Agreement by the indemnifying Party (or the inaccuracy of any representation or warranty made by such
Party in this Agreement), or (b) the gross negligence, recklessness or willful misconduct of the indemnifying Party in connection with the performance of its obligations hereunder. 
  
 14.1.2 Licensee shall defend, indemnify and hold harmless SGI from and against all Liabilities resulting from all
Claims that are incurred, relate to or arise out of the development, manufacture or commercialization of Licensed Products by SGI for Licensee or by Licensee, its Affiliates or Sublicensees, including any failure to test for or provide adequate
warnings of adverse side effects, or any manufacturing defect in any Licensed Product; except in each case to the extent such Liabilities resulted from the gross negligence, recklessness or willful misconduct by SGI or the inaccuracy of any
representation or warranty made by SGI in this Agreement or from any other action for which SGI must indemnify Licensee under Section 14.1.3. 
  
 14.1.3 SGI shall defend, indemnify and hold harmless Licensee from and against all Liabilities resulting from all Claims that are incurred, relate
to or arise out of any claims of infringement of Third Party rights arising out of the use of SGI Technology to make Antibodies that bind specifically to a Research Antigen or to make a Licensed Product (but not any other technology, including the
composition or methods of making or using Antibodies or technology not relating to SGI Technology), except to the extent such Liabilities resulted from the gross negligence, recklessness or willful misconduct by Licensee or the inaccuracy of any
representation or warranty made by Licensee in this Agreement or any other action for which Licensee must indemnify SGI hereunder. 
  
 14.2 Procedure. A Party (the “Indemnitee”) that intends to claim indemnification under this Article 14 shall promptly
provide notice to the other Party (the “Indemnitor”) of any 

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 Liability or action in respect of which the Indemnitee intends to claim such indemnification, which notice shall include
a reasonable identification of the alleged facts giving rise to such Liability, and the Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, jointly with any other Indemnitor similarly noticed, to assume
the defense thereof with counsel selected by the Indemnitor. However, notwithstanding the foregoing, the Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between such Indemnitee and any other Party represented by such counsel in such proceedings. Any settlement of a Liability for
which any Indemnitee seeks to be indemnified, defended or held harmless under this Article 14 that could adversely affect the Indemnitee shall be subject to prior consent of such Indemnitee, provided that such consent shall not be withheld
unreasonably 
  
 ARTICLE 15 - FORCE MAJEURE 
  
 No Party (or any of its Affiliates) shall be held liable or responsible to
the other Party (or any of its Affiliates), or be deemed to have defaulted under or breached the Agreement, for failure or delay by such Party in fulfilling or performing any term of the Agreement when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party (or any of its Affiliates), including fire, floods, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, acts of God or acts,
earthquakes, or omissions or delays in acting by any governmental authority (collectively, “Events of Force Majeure”); provided, however, that the affected Party shall exert all reasonable efforts to eliminate, cure or
overcome any such Event of Force Majeure and to resume performance of its covenants promptly. Notwithstanding the foregoing, to the extent that an Event of Force Majeure continues for a period in excess of [***], the affected Party shall promptly
notify in writing the other Party of such Event of Force Majeure and within [***] of the other Party’s receipt of such notice, the Parties shall negotiate in good faith either (a) a resolution of the Event of Force Majeure, if possible, (b) an
extension by mutual agreement of the time period to resolve, eliminate, cure or overcome such Event of Force Majeure, (c) an amendment of this Agreement to the extent reasonably possible, or (d) an early termination of this Agreement. 
  
 ARTICLE 16 - ASSIGNMENT 
  
 This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations hereunder be assigned or transferred to any Third Party by either Party without the consent of the other Party, such consent not to be unreasonably withheld; provided, however,
that either Party may, without such consent but with notification, assign this Agreement and its rights and obligations hereunder to any of its Affiliates or in connection with the transfer or sale of all or substantially all of its business, or in
the event of its merger or consolidation of such Party (such merger or consolidation shall be hereinafter referred to as a “Change in Control”). Any permitted assignee shall assume all rights and obligations of its assignor under
this Agreement; [***]. Any attempted assignment of this Agreement not in accordance with this Article 16 shall be void and of no effect. 

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 ARTICLE 17 - SEVERABILITY 
  
 Each Party hereby agrees that it does not intend to violate any public policy, statutory or common laws, rules, regulations,
treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions, in their economic effect, are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement based on such valid
provisions. In case such alternative provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid provisions. 
  
 ARTICLE 18 – INSURANCE 
  
 During the Term and thereafter for the period of time required below, each Party shall maintain an [***]; and commencing not later than [***] and
thereafter for the period of time required below, Licensee shall obtain and maintain on an ongoing basis [***] (including [***] coverage on Licensee’s [***] under this Agreement) in the amount of at least [***]. All of such insurance coverage
shall be maintained with an insurance company or companies having an [***] or better and an aggregate deductible not to exceed [***]. Not later than the Effective Date, and not later than [***], Licensee shall provide to SGI a certificate(s)
evidencing all required coverage hereunder. Thereafter, Licensee shall maintain such insurance coverage without interruption during the Term and for a period of at least [***] thereafter, and shall provide certificates evidencing such insurance
coverage without interruption on an annual basis during the period of time for which such coverage must be maintained. Licensee’s insurance shall name [***] and [***] as additional insureds on the [***] required hereunder and shall state that
SGI shall be provided at least [***] prior written notice of any cancellation or material change in the insurance policy. 
  
 ARTICLE 19 - MISCELLANEOUS 
  
 19.1 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties hereto to
the other shall be in writing, delivered personally or by facsimile (and promptly confirmed by personal delivery, first class air mail or courier), first class air mail or courier, postage prepaid (where applicable), addressed to such other Party at
its address indicated below, or to such other address as the addressee shall have last furnished in writing to the address or in accordance with this Section 19.1 and (except as otherwise provided in this Agreement) shall be effective upon receipt
by the addressee. 

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 If to SGI: 
  
 Seattle Genetics, Inc. 
 21823 30th Drive S.E. 
 Bothell, WA 98021 
 Attention: General Counsel 
 Telephone: (425) 527-4000 
 Facsimile: (425) 527-4109 
  
 If to Licensee: 
  
 CuraGen Corporation 
 555 Long Wharf Avenue

 New Haven, CT 06511 
 Attention: Executive Vice President 
 Telephone: 203-401-3330 
 Facsimile: 203-401-3333 
  
 With a copy to: 
  
 [***][***][***] 
 Attention: [***] 

Telephone: [***] 
 Facsimile: [***]

  
 19.2 Applicable Law. The Agreement shall be
governed by and construed in accordance with the laws of the State of Washington, without regard to the conflict of law principles thereof that may dictate application of the laws of any other state. 
  
 19.3 Dispute Resolution. The Parties agree that if any dispute
or disagreement arises between Licensee on the one hand and SGI on the other in respect of this Agreement, they shall follow the following procedure in an attempt to resolve the dispute or disagreement. 
  
 19.3.1 The Party claiming that such a dispute exists shall give notice
in writing (“Notice of Dispute”) to the other Party of the nature of the dispute; 
  
 19.3.2 Within [***] of receipt of a Notice of Dispute, a nominee or nominees of Licensee and a nominee or nominees of SGI shall meet in person and
exchange written summaries reflecting, in reasonable detail, the nature and extent of the dispute, and at this meeting they shall use their reasonable endeavors to resolve the dispute. 
  
 19.3.3 If, within a further period of [***], the dispute has not been resolved, the President of SGI and the
President of Licensee shall meet at a mutually agreed upon time and location for the purpose of resolving such dispute. 
  
 19.3.4 If, within a further period of [***], the dispute has not been resolved or if, for any reason, the required meeting has not been held, then
the same shall be submitted by the Parties for resolution by an arbitral body in [***] in accordance with the then-current commercial arbitration rules of the American Arbitration Association (“AAA”) except as 

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 otherwise provided herein. The Parties shall choose, by mutual agreement, [***] within [***] of receipt of notice of the
intent to arbitrate. If no arbitrator is appointed within the times herein provided or any extension of time that is mutually agreed upon, the AAA shall make such appointment within [***] of such failure. The judgment rendered by the arbitrator
shall include costs of arbitration, reasonable attorneys’ fees and reasonable costs for expert and other witnesses. Nothing in this Agreement shall be deemed as preventing either Party from seeking injunctive relief (or any other equitable or
provisional remedy). If the issues in dispute involve scientific, technical or commercial matters, any arbitrator chosen hereunder shall have educational training and/or industry experience sufficient to demonstrate a reasonable level of relevant
scientific, medical and industry knowledge. 
  
 19.3.5 In
the event of a dispute regarding any payments owing under this Agreement, all undisputed amounts shall be paid promptly when due and the balance, if any, promptly after resolution of the dispute. 
  
 19.3.6 Notwithstanding the foregoing, any disputes relating to
inventorship or the validity, enforceability or scope of any patent or trademark rights shall be submitted for resolution by a court of competent jurisdiction. 
  

19.4 Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the specific subject matter
hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly superseded by this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed
by both Parties hereto. 
  
 19.5 Independent
Contractors. SGI and Licensee each acknowledge that they shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture, agency or any type of fiduciary relationship.
Neither SGI nor Licensee shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior consent of the other Party to do so.

  
 19.6 Affiliates. Each Party shall cause its
respective Affiliates to comply fully with the provisions of this Agreement to the extent such provisions specifically relate to, or are intended to specifically relate to, such Affiliates, as though such Affiliates were expressly named as joint
obligors hereunder. 
  
 19.7 Waiver. The waiver by
either Party hereto of any right hereunder or the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or
otherwise. 
  
 19.8 Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 [Signature page follows] 

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 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. 
  

			
	SEATTLE GENETICS, INC.
		
	 By:
	 	 Clay B. Siegall

	 Name:
	 	 /s/ Clay B. Siegall

	 Title:
	 	 President & CEO

	
	CURAGEN CORPORATION
		
	 By:
	 	 Jonathan M. Rothberg

	 Name:
	 	 /s/ Jonathan M. Rothberg

	 Title:
	 	 CEO

 SCHEDULE A 
  
 RESEARCH PLAN 
  
 RESEARCH SUPPORT 
  
 SGI will conjugate research quantities [***] of Antibodies to Designated Antigens with several combinations of [***]. Licensee shall perform or have performed [***]. 
  

  
 DEVELOPMENT SUPPORT 
  
 Assistance will be provided in the form of [***]. 
  
 Preclinical Development 
  
 SGI will provide the following
preclinical support: 
  
 [***] 
  
 Conjugation Development 
  
 [***] 

 [***] Confidential treatment has been requested with respect to the omitted portions. 

 SCHEDULE B 
  
 SGI PATENTS 
  
 Existing SGI Technology 
  
 [***] 

 [***] Confidential treatment has been requested with respect to the omitted portions. 

 SCHEDULE C 
  
 SGI IN-LICENSES 
  
 The following SGI In-Licenses are attached: 
  
 [***] 

 [***] Confidential treatment has been requested with respect to the omitted portions. 

 SCHEDULE D 
  
 DESIGNATED ANTIGENS AND EXCLUSIVE ANTIGENS 
  
 “First Exclusive Antigen” means [***] having a [***]. 

 [***] Confidential treatment has been requested with respect to the omitted portions.Avon Personal Savings Account Plan, as amended

  
 EXHIBIT 4.4 

 
 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  

					
	 	  	 	  	PAGE

	 SECTION 1
	  	DEFINITIONS	  	1
			
	 SECTION 2
	  	ELIGIBILITY	  	14
			
	 SECTION 3
	  	CONTRIBUTIONS	  	15
			
	 SECTION 4
	  	ALLOCATIONS	  	19
			
	 SECTION 5
	  	INVESTMENT DIRECTIONS	  	21
			
	 SECTION 6
	  	LOANS	  	24
			
	 SECTION 7
	  	HARDSHIP DISTRIBUTIONS AND IN-SERVICE WITHDRAWALS	  	28
			
	 SECTION 8
	  	PAYMENT OF BENEFITS ON RETIREMENT OR TERMINATION OF EMPLOYMENT	  	32
			
	 SECTION 9
	  	DEATH BENEFITS	  	33
			
	 SECTION 10
	  	CONDITIONS OF DISTRIBUTION OF COMPANY STOCK	  	34
			
	 SECTION 11
	  	GENERAL RULES ON DISTRIBUTIONS	  	35
			
	 SECTION 12
	  	ADMINISTRATION OF THE PLAN	  	38
			
	 SECTION 13
	  	CLAIM REVIEW PROCEDURE	  	41
			
	 SECTION 14
	  	LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS	  	45
			
	 SECTION 15
	  	PROHIBITION AGAINST DIVERSION	  	46
			
	 SECTION 16
	  	LIMITATION OF RIGHTS	  	46
			
	 SECTION 17
	  	AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST	  	46
			
	 SECTION 18
	  	PARTICIPATION IN PLAN BY AFFILIATE OR SUBSIDIARY	  	48
			
	 SECTION 19
	  	QUALIFICATION AND RETURN OF CONTRIBUTIONS	  	49
			
	 SECTION 20
	  	INCORPORATION OF SPECIAL LIMITATIONS AND OF OTHER PLAN SPONSORS	  	50
			
	 APPENDIX A
	  	LIMITATION ON ALLOCATIONS	  	A-1
			
	 APPENDIX B
	  	TOP-HEAVY PROVISIONS	  	B-1
			
	 APPENDIX C
	  	SPECIAL NONDISCRIMINATION RULES	  	C-1
			
	 APPENDIX D
	  	MINIMUM DISTRIBUTION REQUIREMENTS	  	D-1

  

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  
 THIS INDENTURE made on the 28 day of December, 2002 by Avon Products, Inc. (the “Primary Sponsor’), a corporation
duly organized and existing under the laws of the State of New York. 
  
 INTRODUCTION 
  
 The Primary Sponsor
maintains the Avon Employees’ Savings and Stock Ownership Plan (the “Plan”) which was last amended and restated by an indenture dated June 11, 1998. The Plan has been amended several times since its previous restatement to make
certain administrative changes and to comply with various legislative changes and regulations and rulings issued by government agencies thereon and for other reasons. The Primary Sponsor now wishes to amend and restate the Plan primarily to comply
with and make changes permitted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). This amendment and restatement is intended as good faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and any guidance issued thereunder. 
  
 The
amended and restated Plan is intended to be a profit sharing plan within the meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) containing a cash or deferred arrangement as described in Section 401(k) of the Internal Revenue Code of 1986, as
amended, and an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Internal Revenue Code. The provisions of the Plan are effective with respect to Participants who perform an Hour of Service (as defined in the Plan) in
plan years beginning on and after January 1, 2002. 
  

 AMENDMENT AND RESTATEMENT 
  
 NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the Plan generally effective as of January 1, 2002, to
read as follows: 
  
 SECTION 1 
 DEFINITIONS 
  
 Wherever used herein, the masculine pronoun shall be deemed to include the feminine, and the singular to include the plural, unless the context clearly
indicates otherwise and the following words and phrases shall, when used herein, have the meanings set forth below: 
  
 1.1 “Account” means the accounts and subaccounts established and maintained by the Plan Administrator. In addition to any other accounts
as the Plan Administrator may establish and maintain, the Plan Administrator shall establish and maintain separate accounts and subaccounts (each of which shall be adjusted pursuant to the Plan to reflect income, gains, losses and other credits or
charges attributable thereto) to be designated as follows: 
  
 (a) “After-Tax Participant Account” which shall reflect an Eligible Participant’s interest in After-Tax Participant Contributions made pursuant to Plan Section 3.2. For purpose of Plan Section 7,
a Participant’s After-Tax Participant Account shall be divided into two subaccounts, a Participant’s “After-Tax Participant Basic Subaccount,” consisting of those After-Tax Participant Contributions that constitute Basic
Contributions, and a Participant’s “After-Tax Participant Supplemental Subaccount,” consisting of those After-Tax Participant Contributions that do not constitute Basic Contributions. 
  
 (b) “Before-Tax Participant Account” which
shall reflect an Eligible Participant’s interest in Before-Tax Participant Contributions made pursuant to Plan Section 3.1. 
  
 (c) “ESOP Company Account” which shall reflect a Participant’s interest in contributions made by a Plan Sponsor
pursuant to Plan Section 3.5. 
  
 (d)
“Personal Savings Account Matching Account” which shall reflect an Eligible Participant’s interest in Plan Sponsor Matching Contributions made by a Plan Sponsor on or after January 1, 2003 pursuant to Plan Section 3.3.

  
 (e) “Post-1991 Matching
Account” which shall reflect an Eligible Participant’s interest in contributions made by a Plan Sponsor to the Fund pursuant to Plan Section 3.3 on or after January 1, 1992 and prior to January 1, 2003. 
  
 (f) “Pre-1992 Company Matching Account”
which shall reflect an Eligible Participant’s interest in Plan Sponsor matching contributions made by a Plan Sponsor under the Avon Employees’ Savings Plan (the “Savings Plan”) prior to January 1, 1992. 
  
 (g) “Rollover Account” which shall reflect an
Eligible Participant’s interest in Rollover Amounts. 
  
 Notwithstanding the foregoing, the Plan shall separately account for any Rollover Amounts that are not includable in gross income of the Participant (determined without 

  

 
regard to the rollover) and are transferred to the Plan in a direct trustee-to-trustee transfer, and earnings and losses thereon. 
  
 (h) “Stock Grant Program Account” which
shall reflect the interest of a Participant in the part of the Fund attributable to the Stock Grant Program 
  
 (i) “Unallocated Company Contribution Account” which shall consist of Company Stock and any other assets of the Fund
which have been contributed by the Plan Sponsor to the Fund under Plan Section 3.5 during a Plan Year prior to the last day of the Plan Year, which Company Stock and other assets have not been allocated to the ESOP Company Accounts of Participants.

  
 (j) “Loan Suspense Account”
which shall consist of Company Stock acquired by the Fund with the proceeds of an Acquisition Loan, which Company Stock has not been allocated to the Accounts of Participants. 
  
 (k) “Company Stock Subaccount” which shall mean the subaccount within each Account under
the ESOP invested in Company Stock. A Company Stock Subaccount shall be expressed in terms of whole or any fractional share or right to a fractional share of Company Stock, and shall be adjusted pursuant to the Plan to reflect any change in the
number of shares of Company Stock attributable to the Company Stock Subaccount. 
  
 (l) “Other Investment Subaccount” which shall mean the subaccount within each Account under the ESOP invested in other than
Company Stock. 
  
 In addition, the Plan Administrator shall allocate the interest
of a Participant in any funds transferred to the Plan in a trust-to-trust transfer (other than Rollover Amounts) or pursuant to the merger of another tax-qualified retirement plan with the Plan among the Participant’s Accounts as the Plan
Administrator determines best reflects the interest of the Participant. 
  
 A
Participant’s “ESOP Matching Account” shall refer to a Participant’s Post-1991 Matching Account and Personal Savings Account Matching Account, as applicable. 
  
 1.2 “Acquisition Loan” means a loan (or other extension of credit) made to the ESOP by or subject to
Guarantee by a person described in Code Section 4975(e)(2), including a direct loan of cash, a purchase-money transaction, and an assumption of an obligation of the ESOP, used by the Trustee to finance the acquisition of Company Stock or to repay
any Acquisition Loan, as further set forth in Plan Section 4.3. 
  
 1.3 “Affiliate” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Code Section 414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c)) with a Plan Sponsor, (c) any other corporation, partnership or other organization which is a member of an affiliated service group (within the meaning of Code Section
414(m)) with a Plan Sponsor, and (d) any other entity required to be aggregated with a Plan Sponsor pursuant to regulations under Code Section 414(o). Notwithstanding the foregoing, for purposes of applying the limitations set forth in Appendix A
and for purposes of 

  

 2 

 
determining Annual Compensation under Appendix A, the references to Code Section 414(b) and (c) above shall be modified by Code Section 415(h). 

 
 1.4 “After-Tax Participant Contribution” means that
portion of the Participant Contribution made on behalf of an Eligible Participant pursuant to Plan Section 3.2. 
  
 1.5 “Annual Compensation” means the wages within the meaning of Code Section 3401(a) (for purposes of income tax withholding at the
source) paid to an Employee by a Plan Sponsor (and Affiliates for purposes of Appendices A and C) during a Plan Year (but without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or
the services performed, such as the exception for agricultural labor in Code Section 3401 (a)(2)), to the extent not in excess of the Annual Compensation Limit for all purposes under the Plan except determining Key Employees. Notwithstanding the
above, Annual Compensation shall be determined as follows: 
  
 (a) in determining the amount of contributions made by or on behalf of an Employee under Plan Sections 3.1, 3.2 and 3.3 and allocations thereof under Plan Section 4, and for purposes of applying the provisions of
Appendix C hereto for such Plan Years as the Secretary of the Treasury my allow, Annual Compensation shall only include the total pay paid to an Employee for the portion of the Plan Year during which the Employee was a Participant; 
  
 (b) in determining the amount of contributions made on
behalf of an Employee under Plan Section 3 and allocations thereof under Plan Section 4, Annual Compensation includes sick pay, vacation pay and pay for personal days, holidays, shift differential and Before-Tax Participant Contributions under the
Plan or before-tax contributions under any other plan sponsored by the Plan Sponsor and shall also include lump-sum awards, variable pay sales incentive bonuses, VIP payments under the Variable Incentive Program, overtime and commissions, and
premium pay on and after January 1, 2002, but shall not include severance (prior to April 1, 1998), lump sum awards or other forms of extraordinary remuneration, deferred compensation, other distributions which receive special tax treatment, end of
the year bonuses under the Management Incentive Plan and awards under the U.S. incentive Plan and any other bonuses; 
  
 (c) if, with respect to a Plan Year, the “Compensation Percentage,” as defined below, for Highly Compensated Employees is
greater than the Compensation Percentage for non-Highly Compensated Employees by more than a de minimis amount, then Subsection (b) of this Section shall not apply for purposes of Plan Sections 3.5 and 4.1(d). The “Compensation Percentage”
for a group of Employees is the average of the Compensation Ratio for each Employee in the group. An Employee’s Compensation Ratio is the Employee’s Annual Compensation determined in accordance with Subsection (b) hereof divided by such
Employee’s Annual Compensation determined without regard to Subsection (b) hereof; and 
  
 (d) for all purposes under the Plan, Annual Compensation shall include any amount which would have been paid during a Plan Year but was
contributed by a Plan 

  

 3 

 
Sponsor on behalf of an Employee pursuant to a salary reduction agreement which is not includable in the gross income of the Employee under Code Section l25,
402(e)(3), 402(h), or 132(f)(4). 
  
 1.6 “Annual
Compensation Limit” means $200,000, which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of the Treasury. 
  
 1.7 “Appeals Fiduciary” means an individual or group of individuals appointed to review appeals of claims
for benefits payable due to the Participant’s Disability made pursuant to Plan Section 13.4. 
  
 1.8 “Basic Contribution” means that portion of the Participant Contribution made on behalf of an Eligible Participant for any payroll
period not in excess of six percent (6%) of the Participant’s Annual Compensation payable during the payroll period. Before-Tax Participant Contributions shall first be characterized as Basic Contributions, and then, if such contributions do
not equal or exceed six percent (6%) of the Participant’s Annual Compensation, After-Tax Participant Contributions shall be characterized as Basic Contributions. Notwithstanding the foregoing, contributions described in Section 3.1(c) shall not
constitute Basic Contributions prior to January 1, 2003. 
  
 1.9
“Before-Tax Participant Contribution” means that portion of the Participant Contribution made on behalf of an Eligible Participant pursuant to Plan Section 3.1. 
  
 1.10 “Beneficiary” means the person or trust that a Participant designated most recently in writing to the
Plan Administrator, provided, however, that if the Participant has failed to make a designation, no person designated is alive, no trust has been established, or no successor Beneficiary has been designated who is alive, the term
“Beneficiary” means (a) the Participant’s spouse or (b) if no spouse is alive, the Participant’s surviving children, or (c) if no children are alive, the Participant’s parent or parents, or (d) if no parent is alive, the
Participant’s sibling or siblings, or if no sibling is alive, the legal representative of the deceased Participant’s estate. Notwithstanding the preceding sentence, the spouse of a married Participant shall be his Beneficiary unless that
spouse has consented in writing to the designation by the Participant of some other person or trust and the spouse’s consent acknowledges the effect of the designation and is witnessed by a notary public. A Participant may change his
designation at any time. However, a Participant may not change his designation without further consent of his spouse under the terms of the preceding sentence unless the spouse’s consent permits designation of another person or trust without
further spousal consent and acknowledges that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily relinquishes this right. Notwithstanding the above, the spouse’s consent shall not be required if
the Participant establishes to the satisfaction of the Plan Administrator that the spouse cannot be located, if the Participant has a court order indicating that he is legally separated or has been abandoned (within the meaning of local law) unless
a “qualified domestic relations order” (as defined in Code Section 414(p)) provides otherwise, or if there are other circumstances as the Secretary of the Treasury prescribes. If the spouse is legally incompetent to give consent, consent
by the spouse’s legal guardian shall be deemed to be consent by the spouse. If, subsequent to the death of a Participant, the Participant’s beneficiary dies while entitled to receive benefits under the Plan, 

  

 4 

 
the successor Beneficiary, if any, or the Beneficiary listed under Subsection (a), (b), (c) or (d) shall be the Beneficiary. 
  
 1.11 “Board of Directors” means the Board of Directors of
the Primary Sponsor. 
  
 1.12 “Break in Service”
means, the failure of an Employee to perform an Hour of Service within the twelve-consecutive-month period commencing on his Severance Date. 
  
 1.13 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 1.14 “Company Stock” means (a) Qualifying Employer Securities which are common stock issued by the Primary
Sponsor or a corporation which is a member of a controlled group of corporations which includes the Primary Sponsor (within the meaning of Code Section 1563(a), determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(C)) and with voting
power and dividend rights no less favorable than the voting power and dividend rights of any other common stock issued by the Primary Sponsor or the other corporation, or (b) Qualifying Employer Securities which are noncallable preferred stock
issued by the Primary Sponsor, which are at all times immediately convertible into the stock described in Subsection (a) above at a conversion price which is reasonable. 
  
 1.15 “Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the
Distributee. 
  
 1.16 “Disability” means a
disability of a Participant within the meaning of Code Section 72(m)(7), to the extent that the Participant is, or would be, entitled to disability retirement benefits under the federal Social Security Act. The determination of whether or not a
Disability exists shall be determined by the Plan Administrator and shall be substantiated by competent medical evidence. 
  
 1.17 “Distributee” means an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and
the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees with regard to the interest of the spouse or former
spouse. 
  
 1.18 “Effective Date” means January
1, 2002. 
  
 1.19 “Elective Deferrals” means,
with respect to any taxable year of the Participant, the sum of 
  
 (a) any Before-Tax Participant Contributions; 
  
 (b) any contributions made by or on behalf of a Participant under any other qualified cash or deferred arrangement as defined in Code Section 401(k), whether or not maintained by a Plan Sponsor, to the extent such
contributions are not or would not, but for Code Section 402(g)(1) be included in the Participant’s gross income for the taxable year; and 
  

 5 

 (c) any other contributions made by or on behalf of a Participant pursuant to Code
Section 402(g)(3). 
  
 1.20 “Eligibility Service”
means one (1) year of Service. 
  
 1.21 “Eligible
Employee” means any Employee of a Plan Sponsor, Avon Capital Corporation or Avon International Operations other than those Employees whose principal place of employment is Caguas, Puerto Rico. Eligible Employee shall not include an Employee
who is (a) covered by a collective bargaining agreement between a union and a Plan Sponsor, provided that retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement provides for participation in the
Plan, (b) a ‘Leased Employee’ (as defined below), (c) deemed to be an Employee of the Plan Sponsor pursuant to regulations under Code Section 414(o), (d) a nonresident alien who received no earned income from the Plan Sponsor which
constitutes income from sources within the United Slates, or (e) an Employee employed at the Mirabella or Lomalinda locations of the Plan Sponsor in Puerto Rico. For purposes of this Section 1.21 and Section 1.25, an Employee shall be deemed to be a
‘Leased Employee’ within the meaning of Code Section 414(n)(2) if the individual is a person (other than an Employee of the recipient) who, pursuant to an agreement between the recipient and any other person, has performed services for the
recipient (or for the recipient and related persons determined in accordance with Code Section 414(n)(6)) on a substantially full-time basis for a period of at least one year, and such services are performed under the primary direction or control of
the service recipient. 
  
 1.22 “Eligible
Participant” means each Eligible Employee who has met the requirements of Sections 2.1 and 2.2. 
  
 1.23 “Eligible Retirement Plan” means any of the following that will accept a Distributee’s Eligible Rollover Distribution:

  
 (a) an individual retirement account
described in Code Section 408(a); 
  
 (b) an
individual retirement annuity described in Code Section 408(b); 
  
 (c) an annuity plan described in Code Section 403(a) or an annuity contract described in Code Section 403(b); 
  
 (d) a qualified trust described in Code Section 401(a); or 
  
 (e) an eligible plan under Code Section 457(b) which is maintained by a state or political subdivision of a
state, or any agency or instrumentality of a state or political subdivision and which agrees to separately account for amounts transferred into such plan from this Plan. 
  
 Effective for distributions after December 31, 2005, if any portion of an Eligible Rollover Distribution is attributable to
payments or distributions from a designated Roth account (as 

  

 6 

 
defined in Code Section 4024) an Eligible Retirement Plan with respect to such portion shall include only another designated Roth account and a Roth IRA

  
 1.24 “Eligible Rollover Distribution” means
any distribution of all in any portion of the Distributee’s Account, except that an Eligible Rollover Distribution does not include: 
  
 (a) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten (10) years or more; 
  
 (b) any distribution to the extent such distribution is
required under Code Section 401(a)(9); 
  
 (c)
any distribution which is made upon hardship of the Employee; and 
  
 (d) except as otherwise provided in this Section, the portion of any distribution that is not includable in gross income (determined without regard to the exclusions for net unrealized appreciation with respect to
employer securities). 
  
 An “Eligible Rollover
Distribution” shall include any portion of the distribution that is not includable in gross income provided such amount is distributed directly to one of the following: 
  
 (i) an individual retirement account described in Code Section 408(a) or an individual retirement annuity
described in Code Section 408(b) (other than an endowment contract); or 
  
 (ii) a qualified trust as described in Code Section 401(a) but only to the extent that: 
  
 (A) the distribution is made in a direct trustee-to-trustee transfer; 
  
 (B) the transferee plan is a defined contribution plan; and 
  
 (C) the transferee plan agrees to separately account for
amounts transferred (including a separate accounting for the portion of the distribution which is includable in income and the portion which us not includable in income). 
  
 1.25 “Employee” means any person who is (a) employed by a Plan Sponsor or an Affiliate for purposes of the
Federal Insurance Contributions Act, (b) a ‘Leased Employee’ (as defined in Section 1.21 above), or (c) deemed to be an employee of a Plan Sponsor pursuant to regulations under Code Section 414(o). Notwithstanding the foregoing, Employee
shall not include an individual receiving a pension or, prior to April 1, 1998, severance pay from a Plan Sponsor or Affiliate. 
  

 7 

 1.26 “Employment Commencement Date” means the date on which an Employee first performs
an Hour of Service for which he is paid or entitled to be paid by a Plan Sponsor or an Affiliate for the performance of duties. If an Employee is reemployed by a Plan Sponsor or Affiliate after incurring a Severance Date, the date in which he first
performs an hour of Service for which he is entitled to be paid by a Plan Sponsor or Affiliate for the performance of duties after such Severance Date shall also be an Employment Commencement Date. 
  
 1.27 “ERISA” means the Employee Retirement Income Security
Act of 1974, as amended. 
  
 1.28 “ESOP” means
the stock bonus plan set forth in the Plan which is an employee stock ownership plan as defined in Code Section 4975(e)(7) and the regulations promulgated thereunder. The ESOP shall consist of the Personal Savings Account Matching Accounts, ESOP
Company Accounts, the Post-1991 Matching Accounts, the Pre-1992 Company Matching Accounts, the Stock Grant Program Accounts, the Unallocated Company Contribution Account, and the Loan Suspense Account. 
  
 1.29 “Fair Market Value of Company Stock” means: 

 
 (a) if the Company Stock is not Publicly Traded, the
value as determined by an Independent Appraiser; or 
  
 (b) if the Company Stock is Publicly Traded, the price most recently bid or asked, as appropriate, or paid for Company Stock listed on any exchange, quoted through the National Association of Securities Dealers, Inc Automated Quotation
System, or traded in the over-the-counter market. 
  
 1.30
“Fiduciary” means each Named Fiduciary and any other person who exercises or has any discretionary authority or control regarding management or administration of the Plan, any other person who renders investment advice for a fee or
has any authority or responsibility to do so with respect to any assets of the Plan, or any other person who exercises or has any authority or control respecting management or disposition of assets of the Plan. 
  
 1.31 “Full Time Regular Employee” means any Employee who is
regularly scheduled to work at least 75% of the full-time weekly schedule applicable to the Employee’s specific location. 
  
 1.32 “Fund” means the amount at any given time of Company Stock, cash and other property held by the Trustee pursuant to the Plan.

  
 1.33 “Guarantee” means any guarantee of
payment of an Acquisition Loan by a person or entity other than the Plan. 
  

 8 

 1.34 “Highly Compensated Employee” means each Employee who: 
  
 (a) was at any time during the Plan year or the immediately
preceding Plan Year an owner of five percent (5%) or more of the outstanding stock of a Plan Sponsor or an Affiliate or five percent (5%) or more of the total combined voting power of all stock of a Plan Sponsor or an Affiliate; or 
  
 (b) received Annual Compensation in excess of $90,000 during
the immediately preceding Plan Year, which amount may be adjusted for changes in the cost of living as provided in regulations issued by the Secretary of the Treasury. 
  
 (c) For purposes of this Section, a former Employee shall be treated as a Highly Compensated Employee if (1)
the former Employee was a Highly Compensated Employee at the time, the former Employee separated from service with the Plan Sponsor or Affiliate or (2) the former Employee was a Highly Compensated Employee at any time after the former Employee
attained age 55. 
  
 (d) For purposes of this
Section, Employees who are nonresident aliens and who receive no earned income from the Employer or an Affiliate from sources within the United States shall not be treated as Employees. 
  
 1.35 “Hour of Service” means: 
  
 (a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a
Plan Sponsor or any Affiliate during the applicable computation period, and such hours shall be credited to the computation period in which the duties are performed; 
  
 (b) Each hour for which an Employee is paid, or entitled to payment, by a Plan Sponsor or any Affiliate on
account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of
absence; 
  
 (c) Each hour for which back pay,
irrespective of mitigation or damages, is either awarded or agreed to by a Plan Sponsor or any Affiliate, and such hours shall be credited to the computation period or periods to which the award or agreement for back pay pertains rather than to the
computation period in which the award, agreement or payment is made; provided, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in Subsection (b) of this Section shall be subject to the
limitations set forth in Subsection (e); 
  
 (d)
Solely for purposes of determining whether a Break in Service has occurred, each hour during any period that the Employee is absent from work (1) by reason of the pregnancy of the Employee, (2) by reason of the birth of a child of the Employee, (3)
by reason of the placement of a child with the Employee in connection with the adoption of the child by the Employee, or (4) for purposes of caring for such child for a period immediately following its birth or placement. The hours described in this
Subsection (d) shall be credited (A) only in the computation period in which the 

  

 9 

 
absence from work begins, if the Employee would be prevented from incurring a Break in Service in that year solely because of that credit, or (B), in any
other case, in the next following computation period; 
  
 (e) The Plan Administrator shall credit Hours of Service in accordance with the provisions of Section 2530 200b-2(b) and (c) of the U.S. Department of Labor Regulations or such other federal regulations as may from time to time be
applicable and determine Hours of Service from the employment records of a Plan Sponsor or in any other manner consistent with regulations promulgated by the Secretary of Labor, and shall construe any ambiguities in favor of crediting Employees with
Hours of Service. Notwithstanding any other provision of this Section, in no event shall an Employee be credited with more than 501 hours of Service during any single continuous period during which he performs no duties for the Plan Sponsor or
Affiliate: 
  
 (f) In the event that a Plan
Sponsor or an Affiliate acquires substantially all of the assets of another corporation or entity or a controlling interest of the stock of another corporation or merges with another corporation or entity and is the surviving entity, then service of
an Employee who was employed by the prior corporation or entity and who is employed by the Plan Sponsor in an Affiliate at the time of the acquisition or merger shall be counted in the manner provided, with the consent of the Primary Sponsor, in
resolutions adopted by the Plan Sponsor authorizing the counting of such service; and 
  
 (g) Effective August 5, 1993, without duplication of the Hours of Service counted pursuant to Subsection (d) hereof and solely for such
purposes as required pursuant to the Family and Medical Leave Act of 1993 and the regulations thereunder (the “Act”), each hour (as determined pursuant to the Act) for which an Employee is granted leave under the Act (1) for the birth of a
child, (2) for placement with the Employee of a child for adoption or foster care, (3) to care for the Employee’s spouse, child or parent with a serious health condition, or (4) for a serious health condition that makes the Employee unable to
perform the functions of the Employee’s job. 
  
 1.36
“Independent Appraiser” means an individual who holds himself out to the public as an appraiser, who is qualified to make an appraisal of Company Stock, who understands that a false or fraudulent overstatement of the value of
Company Stock may subject him to a civil penalty under Code Section 6701 and who is not: 
  
 (a) the seller of Company Stock; 
  
 (b) the Plan Sponsor or an Affiliate, 
  
 (c) any person employed by or related to (within the meaning of Code Section 267(b)) the persons described in Subsections (a) or (b) of
this Section; 
  
 (d) a party to the transaction
by which the person selling or contributing any Company Stock to the Plan acquired the Company Stock (unless the Company Stock is sold or contributed to the Plan within 2 months of its acquisition and its appraised price does not exceed its
acquisition cost); or 
  

 10 

 (e) any person whose relationship with a person described in Subsections (a), (b), (c) or
(d) of this Section is such that a reasonable person would question the independence of the appraiser. 
  
 1.37 “Individual Fund” means those funds with varying investment objectives maintained by the Trustee for the investment of certain
Accounts under the Plan in accordance with Plan Section 5. The Plan Administrator shall specify from time to time to the Trustee or Investment Manager, as applicable, the identity of and the investment goals and objectives for each Individual Fund.
As to each of the Individual Funds, the Trustee shall be authorized to purchase short-term investments pending the selection and purchase of investments suitable for a particular Individual Fund. Pending the selection and purchase of suitable
investments, which decision by the Trustee shall be conclusive, or the payment of expenses or other anticipated distributions, the Trustee may retain in cash, without liability for interest, such portion of the Individual Fund as it shall deem
reasonable under the circumstances. 
  
 1.38 “Investment
Committee” means a committee which may be established to direct the Trustee with respect to investments of the Fund. 
  
 1.39 “Investment Manager” means a Fiduciary, other than the Trustee, the Plan Administrator, or a Plan Sponsor, who may be appointed by
the Primary Sponsor: 
  
 (a) who has the power to
manage, acquire, or dispose of any assets of the Fund or a portion thereof; and 
  
 (b) who (1) is registered as an investment adviser under the Investment Advisers Act of 1940; (2) is a bank as defined in that Act; or (3)
is an insurance company qualified to perform services described in Subsection (a) above under the laws of more than one state; and 
  
 (c) who has acknowledged in writing that he is a Fiduciary with respect to the Plan. 
  
 1.40 “Loan Fund” means the Individual Fund of the Fund for
the investment of an Eligible Participant s Account in a promissory note by the Eligible Participant evidencing a loan to the Eligible Participant from the Fund. 
  
 1.41 “Named Fiduciary” means only the following: 
  
 (a) the Plan Administrator; 
  
 (b) the Trustee; 
  
 (c) the Investment Committee; 
  
 (d) the Investment Manager; and 
  

 11 

 (e) the Appeals Fiduciary. 
  
 1.42 “Normal Retirement Age” means age 65. 
  
 1.43 “Part-Time Employee” means any Employee regularly scheduled to work less than 75% of the full-time
weekly schedule applicable to the Employee’s specific location. 
  
 1.44 “Participant” means each Eligible Employee or former Eligible Employee who has met the requirements of Sections 2.1 or 2.2 for so long as his vested Account has not been fully distributed pursuant to the Plan.

  
 1.45 “Participant Contributions” means the
contributions made on behalf of a Participant under Plan Sections 3.1 and 3.2. 
  
 1.46 “Plan Administrator” means the organization or person designated to administer the Plan. 
  
 1.47 “Plan Sponsor” means individually the Primary Sponsor and any Affiliate or other entity which, with consent of the Primary Sponsor,
has adopted the Plan and Trust. 
  
 1.48 “Plan
Year” means the calendar year. 
  
 1.49 “Publicly
Traded” means listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) or quoted on a system sponsored by a national securities association registered under Section 15A(b) of
the Securities Exchange Act of 1934 (15 U.S.C. 780). 
  
 1.50
“Put Rights” mean the rights described in Plan Section 10.3. 
  
 1.51 “Qualifying Employer Security” means an employer security issued by a Plan Sponsor or an Affiliate which is stock or an equity security, or which is a bond, debenture, note, or certificate or
other evidence of indebtedness which is described in Section 408(e) of ERISA and Paragraphs (1), (2), and (3) of Code Section 503(e). 
  
 1.52 “Reserve Employee” means an Employee who is hired (i) to fill a full-time position as a substitute, or (ii) to work during periods
of special requirements. 
  
 1.53 “Retirement
Date” means the date on which the Participant retires under the defined benefit pension plan qualified under Code Section 401(a), maintained by a Plan Sponsor or Affiliate, in which he last participated, or if he does not participate in any
such plan, the date on which he retires on or after attaining Normal Retirement Age or becoming subject to a Disability. 
  
 1.54 “Rollover Amount” means any amount transferred to the Fund by a Participant, which amount qualities as an Eligible Rollover
Distribution under Code Sections 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), or 457(e)(16), and any regulations issued thereunder. 
  

 12 

 1.55 “Service” means the sum of each period elapsed between an Employee’s
Employment Commencement Date and any Severance Date immediately following thereafter. In determining Service, the following rules shall apply: 
  
 (a) if an Employee performs one Hour of Service within twelve (12) months of a Severance Date described in Plan Section 1.56(a), or of the
date the Employee was first absent from service for any other reason, any period of severance which would otherwise occur shall be ignored and be required to be taken into account in computing the Employee’s period of Service; and 

 
 (b) the period between the first anniversary and second
anniversary of an absence from service for the reasons specified in Plan Section 1.56(b)(2) shall be neither a period of severance nor a period of Service, except as may otherwise be required under the Family and Medical Leave Act effective August
5, 1993. 
  
 1.56 “Severance Date” means the
earlier of: 
  
 (a) the date on which an Employee
quits, is discharged, retires or dies; or 
  
 (b)
(1) the first anniversary of the first date of a period in which an Employee remains absent from service (with or without pay) with the Plan Sponsor for any other reason, such as vacation, layoff, or leave of absence, except that, effective August
5, 1993, an approved leave of absence pursuant to the Family and Medical Leave Act will not be considered as an absence from service for this purpose; or 
  
 (2) in the case of an Employee who remains absent from service beyond the first anniversary of the first day of absence by reason of the
Employee’s pregnancy, the birth of the Employee’s child, the placement of a child in the Employee’s home or adoption by the Employee, or the caring for the child for the period immediately following its birth or adoption, the second
anniversary of the first day of absence from service. 
  
 1.57
“Termination Completion Date” means the last day of the fifth consecutive Break in Service computation period, determined under the Plan Section which defines Break in Service, in which a Participant completes a Break in Service.

  
 1.58 “Termination of Employment” means a
severance from employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) of an Employee from all Plan Sponsors and Affiliates for any reason other than death, Disability, or attainment of a Retirement Date. Any absence from active
employment of the Plan Sponsor and Affiliates by reason of an approved leave of absence shall not be deemed for any purpose under the Plan to be a Termination of Employment. Transfer of an Employee from one Plan Sponsor to another Plan Sponsor or to
an Affiliate shall not be deemed for any purpose under the Plan to be a Termination of Employment. In addition, transfer of an Employee to another employer (other than a Plan Sponsor or an Affiliate) in connection with a corporate transaction
involving a sale of assets, merger, or sale of stock, shall not be deemed to be a Termination of Employment, for purposes 

  

 13 

 
of the timing of distribution under Section 8.1, if the employer to which such Employee is transferred agrees with the Plan Sponsor to accept a transfer of
assets from the Plan to its tax-qualified plan in a trust-to-trust transfer meeting the requirements of Code Section 414(l). 
  
 1.59 “Trust” means the trust established under an agreement between the Primary Sponsor and the Trustee to hold the Fund. 
  
 1.60 “Trustee” means the trustee under the Trust.

  
 1.61 “Valuation Date” means each business
day. 
  
 1.62 “Vesting Service” means the number
of years, disregarding fractional years, of Service credited to that Employee. Vesting Service shall include years during which a former Employee receives severance pay, but shall not include an Employee’s period of employment prior to January
1, 1985. In the case of an Employee who completes five consecutive Breaks in Service, all years of Vesting Service in Plan Years after his Termination Completion Date shall be disregarded in determining the vested portion of his Account derived from
Plan Sponsor contributions which accrued before his Termination Completion Date. 
  
 SECTION 2 
 ELIGIBILITY 
  
 2.1 Eligibility. 
  
 (a) (1) Except as provided in paragraph (2) hereof, each Eligible Employee who is a Full-Time Regular Employee shall become a Participant as of the first
pay period following his Employment Commencement Date and the processing by the Plan Administrator of his enrollment in the Plan indicating his election to participate in the Plan. An Eligible Employee shall enroll in the Plan in the form and manner
prescribed by the Plan Administrator from time to time. 
  
 (2) Each Eligible Employee who is a Full-Time Regular Employee employed in the Avon Salon and Spa, Avon Express Center, or kiosk operations, shall become a Participant as of the first pay period following the
performance of ninety (90) days of Service following his Employment Commencement Date and the processing by the Plan Administrator of his enrollment in the Plan indicating his election to participate in the Plan. An Eligible Employee shall enroll in
the Plan in the form and manner prescribed by the Plan Administrator from time to time. 
  
 (b) Each Eligible Employee who is a Reserve Employee or a Part-Time Employee shall become a Participant as of the first pay period
following the completion of his Eligibility Service and the processing by the Plan Administrator of his enrollment in the Plan indicating his election to participate in the Plan. An Eligible Employee shall enroll in the Plan in the form and manner
prescribed by the Plan Administrator from time to time 
  

 14 

 (c) Each individual who was a Participant on the day immediately preceding the Effective
Date shall continue as a Participant as of the Effective Date. 
  
 2.2 Effect of Reemployment. Each former Participant who is reemployed by a Plan Sponsor stall become a Participant as of the date of his reemployment as an Eligible Employee. Each former Employee who completes his Eligibility
Service, if any is required, but terminates employment with a Plan Sponsor before becoming a Participant shall become a Participant as of the latest of the date he (a) is reemployed, (b) would have become a Participant if he had not terminated
employment, or (c) becomes in Eligible Employee. Each other former Employee whose employment with a Plan Sponsor has terminated and who thereafter becomes an Eligible Employee may participate in the Plan on the date he satisfies the eligibility
requirements of Section 2.1. 
  
 2.3 Rollovers. Solely for
the purpose of contributing a Rollover Amount to the Plan, an Eligible Employee who has not yet become a Participant pursuant to any other provision of this Section 2 shall become a Participant as of the date on which the Rollover Amount is
contributed to the Plan. 
  
 SECTION 3 
 CONTRIBUTIONS 
  
 3.1 (a) Deferral Amounts. The Plan Sponsor shall make a contribution to the fund on behalf of each Participant who is an Eligible Employee and has
elected to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and to have such portion contributed to the Fund. Except to the extent permitted under Section 3.1(c) and Code Section 414(v), the contribution made by
a Plan Sponsor on behalf of a Participant under this Section 3.1(a) shall be in an amount equal to the amount specified in the Participant’s deferral election, but not greater than 20% (25% on and after January 1, 2003) of the
Participant’s Annual Compensation. Pursuant to Section 4 of Appendix C, the Plan Administrator may restrict the amount which Highly Compensated Employees may defer under this Section 3.1(a). 
  
 (b) Limit on Deferral Amounts. Except to the extent
permitted under Section 3.1(c) and Code Solution 414(v), Elective Deferrals shall in no event exceed the limit set forth in Code Section 402(g) in any one taxable year of the Participant. In the event the amount of Elective Deferrals exceeds Code
Section 402(g) limit, in any one taxable year then, 
  
 (1) not later than the immediately following March 1, the Participant may designate to the Plan the portion of the Participant Deferral Amounts which Consist (of excess Elective Deferrals, and 
  
 (2) not later than the immediately following April 15, the
Plan may distribute the amount designated to it under Paragraph (1) above, as adjusted to reflect income, gain, or loss attributable to it through the end of the Plan Year, and 

  

 15 

 
reduced by any ‘Excess Deferral Amounts,’ as defined in Appendix C hereto, previously distributed or recharacterized with respect to the
Participant for the Plan Year beginning with or within that taxable year 
  
 The payment of the excess Elective Deferrals, as adjusted and reduced, from the Plan shall be made to the Participant without regard to any other provision in the Plan. In the event that a Participant’s Elective
Deferrals exceed the Code Section 402(g) limit, as adjusted, in any one taxable year under the Plan and other plans of the Plan Sponsor and its Affiliates, the Participant shall be deemed to have designated for distribution under the Plan the amount
of Excess Elective Deferrals, as adjusted and reduced, by taking into account only Elective Deferral amounts under the Plan and other plans of the Plan Sponsor and its Affiliates. 
  
 (c) Catch-Up Contributions. Effective October 1, 2002, a Participant who is eligible to contribute
Deferral Amounts to the Plan and who has attained age 50 on or before the last day of the Plan Year shall be eligible to elect to have a portion of his Annual Compensation otherwise payable to him for the Plan Year contributed by the Plan Sponsor to
the Fund on his behalf as catch-up contributions in accordance with and subject to the limitations of, Code Section 414(v). Contributions made pursuant to this Section 3.1(c) shall not be taken into account for purposes of implementing the
limitations set forth in Section 3.1(a), 3.1(b) and Appendix A hereto. The Plan shall not be treated as failing to satisfy the provisions of Appendix B, Appendix C or Code Section 410(b), if applicable, by reason of the making of the catch-up
contributions as described in this Section 3.1(c). 
  
 (d) Allocation of Contributions. Contributions made pursuant to this Section 3.1 shall be allocated to the 401(k) Account of the Participant on whose behalf they were made as soon as reasonably practicable following the date of
withholding by the Plan Sponsor and receipt by the Trustee. 
  
 (e) Deferral Elections. The elections under this Section 3.1 must be made before the Annual Compensation is payable and may only be made in such manner and subject to such rules and limitations as the Plan
Administrator may prescribe and shall specify the percentage or dollar amount, as applicable, of Annual Compensation that the Participant desires to defer pursuant to Section 3.1(a) and/or 3.1(c) and to have contributed to the Fund. Once a
Participant has made an election for a Plan Year, the Participant may revoke or modify his election to increase or reduce the rate of future deferrals, as provided in the administrative procedures established by the Plan Administrator. 

 
 (f) In the event an Eligible Employee elects to
contribute Before-Tax Participant Contributions which would exceed the limitations contained in Subsection (b) hereof, such election shall be deemed to be an election to contribute the amount in excess of the limitation contained in Subsection (b)
hereof as an After-Tax Participant Contribution pursuant to Section 3.2 below. Notwithstanding the foregoing, the preceding sentence shall not apply to any Employee that is eligible to participate in the Avon Deferred Compensation Plan on or alter
January 1, 2003 and has made an election to 

  

 16 

 
contribute any amounts which would exceed the limitations contained in Subsection (b) hereof to the Avon Deferred Compensation Plan. 
  
 3.2 After-Tax Participant Contributions. Subject to such rules and
regulations as the Plan Administrator may from time to time prescribe, each Eligible Participant may contribute as an After-Tax Participant Contribution to the Fund in an amount of his Annual Compensation not in excess of 20% (25% on and after
January 1, 2003) of the Eligible Participant’s Annual Compensation for the Plan Year reduced by the percentage of the Participant’s Annual Compensation which the Participant has elected to have contributed by Before-Tax Participant
Contributions pursuant to Plan Section 3.1(a). After-Tax Participant Contributions shall be made to the fund through regular payroll deductions. 
  
 3.3 Matching Contributions. 
  
 (a) The Plan Sponsor proposes to make contributions to the Fund with respect to each Eligible Participant in an amount equal to:

  
 (1) one hundred percent (100%) of the Basic
Contribution made on behalf of a Participant with respect to a payroll period to the extent that such Contribution does not exceed the first three percent (3%) of the Eligible Participant’s Annual Compensation payable during such payroll
period, and 
  
 (2) fifty percent (50%) of the
Basic Contributions made on behalf of a Participant with respect to a payroll period to the extent that such contribution does not exceed the next three percent (3%) of the Eligible Participant’s Annual Compensation payable during such payroll
period. 
  
 (b) Contributions under this Section
3.3 may be made in the form of Company Stock, cash or other property acceptable to the Trustee. If the contribution to be made by the Plan Sponsor under Subsection (a) hereof with respect to such Basic Contributions is to be made in shares of
Company Stock, the number of shares of Company Stock to be contributed with respect to such Basic Contributions shall be based on the closing price of the Company Stock on the New York Stock Exchange on the day such Basic Contributions are made.

  
 3.4 Permitted Suspensions or Changes. An Eligible
Participant may change his rate of Before-Tax and After-Tax Participant Contributions by notifying the Plan Administrator in the manner and pursuant to rules established by the Plan Administrator. An Eligible Participant may suspend entirely his
rate of either his Before-Tax or After-Tax Participant Contributions, or both, by notifying the Plan Administrator in the manner and pursuant to rules established by the Plan Administrator. Any such suspension shall be effective as of the first pay
period after such suspension is processed pursuant to normal administrative procedures. In the event an Eligible Participant suspends his Participant Contributions prior to October 1, 2002, he will not be permitted to make Participant Contributions
to the Plan for three months. 
  
 (a) An Eligible
Participant who suspends his Participant Contributions may have them resumed following the period of suspension by notifying the Plan 

  

 17 

 
Administrator in the manner and pursuant to rules established by the Plan Administrator. Such resumption shall be effective as of the first day of a month
following the mandatory three-month suspension (for suspensions prior to October 1, 2002). 
  
 (b) If Participant Contributions on behalf of an Eligible Participant are suspended in their entirety by the Plan Administrator in order
in satisfy the limitations set forth in Plan Section 3.1(b), Appendix A or Appendix C for a Plan Year, the otherwise applicable mandatory three-month suspension of Participant Contributions shall not apply; rather, Participant Contributions may be
resumed as of the first day of the following Plan Year or at such earlier date as may be permitted by the Plan Administrator. 
  
 3.5 Company Contributions. Each Plan Sponsor, subject to its right to terminate or amend its participation in the Plan and Trust, shall make
contributions to the Fund with respect to each Plan Year in an amount required to pay when due all required payments of interest and principal under any and all Acquisition Loans for the Plan Year (after the application of all or a portion of the
contribution made under Plan Section 3.3 as is specified by the Plan Sponsor to be applied to the repayment of an Acquisition Loan) or a greater amount to be determined at the discretion of the Plan Sponsor. Contributions may be made in the form of
Company Stock, cash or other property acceptable to the Trustee, provided that Plan Sponsor contributions shall be paid in cash as is needed to provide the Fund with funds sufficient to pay in full when due any principal and interest payments
required by an Acquisition Loan. 
  
 3.6 Rollover
Contributions. Any Eligible Employee may, with the consent of the Plan Administrator and subject to such rules and conditions as the Plan Administrator may prescribe, transfer a Rollover Amount to the Fund (which may include without limitation
prohibitions against transferring certain categories of Rollover Amounts to the Plan); provided, however, that the Plan Administrator shall not administer this provision in a manner which is discriminatory in favor of Highly Compensated Employees.

  
 3.7 Contribution Limitations. Except as otherwise
specified, contributions may be made only in cash or other property which is acceptable to the Trustee. In no event will the sum of contributions under Plan Sections 3.1, 3.3 and 3.5 exceed the deductible limits under Code Section 404. 

 
 3.8 Forfeitures. Forfeitures shall be used to reduce Plan Sponsor
contributions under Plan Section 3.3 and then under Plan Section 3.5 and not to increase benefits. 
  
 3.9 Military Service. Effective December 12, 1994, notwithstanding any provision of the Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. 
  

 18 

 SECTION 4 
 ALLOCATIONS 
  
 4.1
Allocation of Contributions. 
  
 (a) As
soon as reasonably practicable following the date of withholding by the Plan Sponsor if applicable, and receipt by the Trustee, Participant Contributions and Rollover Amounts contributed by the Participant shall be allocated to the Before-Tax
Participant Account, the After-Tax Participant Account, and the Rollover Account, as applicable, of the Participant on behalf of whom the contributions were made. 
  
 (b) As soon as practicable after receipt. Plan Sponsor contributions under Plan Section 3.3 prior to January
1, 2003 shall be allocated to the Post-1991 Matching Account of each Participant on behalf of whom such contributions were made, and Plan Sponsor contributions under Plan Section 3.3 on and after January 1, 2003 shall be allocated to the Personal
Savings Account Matching Account of each Participant on behalf of whom such contributions were made. 
  
 (c) As of last day of each Plan Year, that portion of the Plan Sponsor contributions made under Plan Section 3.5 for the Plan Year which
is contributed after that date shall be allocated to the ESOP Company Account of each Participant who is employed by the Plan Sponsor on the last day of the Plan Year, who was employed by the Plan Sponsor immediately prior to the date of the
Participant’s death or Retirement Date if it occurred since the last day of the prior Plan Year, in the proportion that the Participant’s Annual Compensation for the Plan Year bears to the aggregate Annual Compensation for the Plan Year of
all Participants entitled to an allocation under this Subsection (c). 
  
 (d) That portion of the Plan Sponsor contributions made under Plan Section 3.5 which is contributed before the last day of the Plan Year with respect to which it is contributed shall be credited immediately following
its receipt by the Trustee to the Unallocated Company Contribution Account. As of the last day in each Plan Year, a Plan Sponsor’s contribution which has been credited during the Plan Year to subaccounts of the Unallocated Company Contribution
Account, shall be allocated to the Company Stock Subaccount and Other Investment Subaccount, as applicable, of the ESOP Company Account of each Participant in the manner described in Subsection (c) of this Section. 
  
 (e) All repayments of principal and interest on a
Participant’s loan under the Loan Fund shall be allocated to the Participant’s Account, in accordance with his investment direction made under Plan Section 5.1, as soon as practicable following receipt. 
  
 4.2 Allocation of Net Income. 
  
 (a) Net income or net loss of the Plan shall be allocated as
of each Valuation Date. 
  

 19 

 (b) (1) Dividends Paid on Shares of Stock Prior to 2003. Prior to January 1, 2003, any dividends
paid on shares of Company Stock held in the ESOP may be allocated to Participants’ Accounts in accordance with the provisions of the Trust, distributed to Participants no later than 90 days after the close of the Plan Year in which paid to the
Fund, or to the extent that the dividend is paid on shares of Company Stock acquired with the proceeds of an Acquisition Loan, be used to repay an Acquisition Loan, provided that with respect to dividends attributable to shares of Company Stock
allocated to Participants and used to repay an Acquisition Loan, Company Stock with a fair market value of not less than the amount of such dividend is allocated to Participants for the Plan Year during which such dividend otherwise would have been
allocated to the Participants. Unless otherwise specified by the Board of Directors or until the ESOP is obligated under an Acquisition Loan, dividends on Company Stock held in the ESOP shall be distributed to Participants in accordance with the
preceding sentence. Notwithstanding the foregoing, any dividends paid on or after January 1, 1996 on shares of Company Stock held in the ESOP which may be distributed to a Participant pursuant to this Subsection (b) shall be permitted only if the
amount of such dividends to be distributed to such Participant exceeds $25. 
  
 (2) Dividends Paid on Shares of Stock on and after January 1, 2003. Upon the receipt on or after January 1, 2003 by the Plan of a dividend payable with respect to shares of Company Stock held in the ESOP, the
Primary Sponsor shall provide to each Participant (or, if the Participant is deceased, his Beneficiary) who has an interest in the ESOP the option to elect, within a reasonable period of time established by the Plan Administrator, to: 
  
 (A) receive a distribution of the dividend in cash from the
Plan. Such distribution shall take place not later than the 90th day after the close of the Plan Year in which the dividend is received by the Plan; or 
  
 (B) have the dividend reinvested by the Plan in Company Stock, which stock is allocated to the Participant’s Account. 
  
 If a Participant does not make an election under this Section in the time
provided by the Plan Administrator, the Plan shall reinvest the dividend allocated to the Participant’s Account in Company Stock, as outlined in subsection (B) above. 
  
 4.3 Acquisition Loans. 
  
 (a) Company Stock purchased with the proceeds of an Acquisition Loan shall be credited to the Company Stock Subaccount of the Loan
Suspense Account. 
  
 (b) Any shares of Company
Stock which have been released from the Loan Suspense Account by reason of the payment of principal or interest on an Acquisition Loan from any ESOP Company Accounts, Former ESOP Matching Accounts or ESOP Matching Accounts shall be credited to the
Company Stock Subaccounts of such 

  

 20 

 
Accounts as of the date of payment, all in the proportion that the total amount to be paid from each such Account on the date of payment bears to the
aggregate amount paid from all such Accounts on the date of payment. Payment of principal and interest on an Acquisition Loan shall first be made from the Former ESOP Matching Accounts and the ESOP Matching Accounts, if and to the extent specified
by the Plan Sponsor, and then from the ESOP Company Accounts. 
  
 (c) Any shares of Company Stock which have been released from the Loan Suspense Account by reason of the payment of a cash dividend or the receipt of other cash income thereon which is used to make a payment on an
Acquisition Loan shall be credited to the Company Stock Subaccount of the Unallocated Company Contribution Account for later allocation to the Accounts of Participants in the manner set forth in Plan Section 4.1(d). 
  
 SECTION 5 
 INVESTMENT DIRECTIONS 
  
 5.1 Investment Elections. Until such time as the Plan Administrator may direct otherwise or unless specifically restricted for particular Individual Funds, each Participant may direct the Plan Administrator in
the manner and pursuant to the rules established by the Plan Administrator, to invest contributions in or to transfer amounts held in the Participant’s Account between one or more Individual Funds. No Participant may direct the investment of
any of his Accounts held under the ESOP, except to the extent provided in Plan Sections 5.3 and 5.4. 
  
 (a) All investment directions shall be in multiples of one percent (1%) of future contributions being made at any time and the
Participant’s current Account balance. 
  
 (b) Until a new investment direction is given to the Plan Administrator in the manner specified by the Plan Administrator, investment of contributions to a Participant’s Account shall be governed by the investment election on file with
the Plan Administrator. 
  
 (c) To the extent
permissible by law, no Fiduciary shall be liable for any Loss which results from a Participant’s exercise or failure to exercise his investment election. 
  

5.2 Loan Fund. A Loan Fund shall be established by the Trustee for any Participant for whom a loan is made pursuant to Plan Section 6. The Loan
Fund shall be credited with the amount of any loan made by the Plan to the Participant and interest thereon, and shall be debited with all principal and interest repayments of any such loans. Under rules established by the Plan Administrator, a
Participant’s interest in the Individual Funds shall be debited by the amount credited to the Participant’s Loan Fund. All principal and interest repayments debited to the Loan Fund shall be invested as contributions to the
Participant’s Account pursuant to Plan Section 5.1. Each Loan Fund shall be invested in a note or notes made by the Participant evidencing the promised repayment of monies loaned to the Participant from the Fund. 
  

 21 

 5.3 ESOP Diversification. 
  
 (a) Prior to October 1, 2002, each Participant who has (1) completed ten (10) or more years of Service, and
(2) attained age 55, may elect, in the manner and pursuant to rules established by the Plan Administrator, to transfer the value of up to twenty-five percent (25%) (in multiples of five percent (5%)) of the Participant’s Accounts under the ESOP
(other than the value of any dividends on Company Stock then being held for year-end distribution to the Participant) as of any Valuation Date during the Plan Year after the Participant has met such requirements. In each of the succeeding three Plan
Years after the Participant first becomes eligible for transfers under this Section, the Participant may elect, in the manner and pursuant to rules established by the Plan Administrator, to transfer the value of up to fifty percent (50%),
seventy-five percent (75%) and one hundred percent (100%), respectively (in multiples of five percent (5%)), of the Participant’s Accounts under the ESOP (other than the value of any dividends on Company Stock then being held for year-end
distribution to the Participant) as of any Valuation Date during such Plan Year. In any subsequent year the Participant may elect to transfer the value of up to one hundred percent (100%) (in multiples of five percent (5%)) of the Participant’s
Accounts under the ESOP (other than the value of any dividends on Company Stock then being held for year-end distribution to the Participant) as of any Valuation Date. Each Participant who has terminated employment with a Plan Sponsor and who has
not yet received a complete distribution of his Accounts under the ESOP, may elect, in the manner and pursuant to the rules established by the Plan Administrator and without regard to the ten (10) years of Service and age 55 requirements above, to
transfer the value of up to one hundred percent (100%) (in multiples of five percent (5%)) of such Participant’s Accounts under the ESOP (other than the value of any dividends on Company Stock then being held for year-end distribution to the
Participant) as of any Valuation Date during the Plan Year after the Participant has met such requirements. The proceeds of such transfers shall be invested among Individual Funds in accordance with the Participant’s election pursuant to the
provisions of Plan Section 5.1. No more than one election to transfer pursuant to this Section 5.3 shall be made during a Plan Year. Investment transfers pursuant to elections made under this Section shall be completed no later than ninety (90) days
after the election is properly made. 
  
 (b)
Effective October 1, 2002, each Participant who has completed three or more years of participation in the Plan may elect, in the manner and pursuant to rules established by the Plan Administrator, to transfer the value of up to 50% (in multiples of
1%) of the Participant’s Account under the ESOP. In addition, each Participant who has attained the age of 55 and who has completed ten years of Service may elect, in the manner and pursuant to rules established by the Plan Administrator, to
transfer the value of up to 100% (in multiples of 1%) of the Participant’s Accounts under the ESOP. The proceeds of such transfers shall be invested among Individual Funds in accordance with the Participant’s election pursuant to the
provisions of Plan Section 5.1. 
  
 5.4 Tender Offers. In
the event of a tender offer for Company Stock, each Participant shall be entitled to direct the Trustee to tender and sell to the person or corporation making such 

  

 22 

 
offer the number of shares (including fractional shares) of Company Stock standing to the credit of his Account as of a date selected by the Plan
Administrator preceding as closely as practicable the commencement of the tender offer (less the number of shares, if any, distributed from his Account between such date and the last date upon which shares may be tendered pursuant to the tender
offer). Promptly after the commencement of a tender offer (which shall be deemed to commence at 12:01 A.M. New York time on the date the tender offer is first published or distributed to shareholders), the Plan Administrator shall (i) determine the
total number of shares of Company Stock which each Participant is entitled to direct the Trustee to tender and (ii) in accordance with the procedures provided by the Trust inform the Trustee of the names of the Participants and the number of shares
(including fractional shares) of Company Stock each is entitled to direct the Trustee to tender. Within 120 hours after the commencement of a tender offer and in accordance with the procedures provided by the Trust, the Primary Sponsor shall provide
to each Participant (i) the written tender offer information provided to shareholders of the Primary Sponsor, (ii) a statement of the number of full and fractional shares of Company Stock which the Participant may direct the Trustee to tender and
(iii) the means established and paid for by the Primary Sponsor by which a Participant may instruct the Trustee to tender. 
  
 Thereafter, during the pendency of the tender offer, the Primary Sponsor shall promptly provide each Participant with any additional written tender offer
information that is provided to shareholders of the Primary Sponsor but except for directions as to how to use the forms provided for giving instructions, the Primary Sponsor shall not provide to Participants any information or guidance not provided
to all shareholders. The Trustee shall tender or not tender (or withdraw from tender) shares in accordance with such instructions. The Trustee shall determine in its own discretion, or may, with the consent of the Primary Sponsor which consent shall
not be unreasonably withheld, appoint an independent fiduciary to determine whether to tender shares for which timely instructions are not received. In any event, the Trustee shall not tender any shares until a time not sooner than before the last
day (the “Expiration Time”) shares can be tendered under the terms of the tender offer as announced prior to the time of tender, except that in the case of an offer for less than all of the Primary Sponsor’s shares, if the proration
period ends before the Expiration Time, the Trustee will tender such shares not sooner than three hours before the end of the proration period. If permitted to do so under the terms of the tender offer and applicable law, the Trustee will withdraw
from the tender offer any shares tendered pursuant to the offer on behalf of a Participant if the Participant shall have requested the withdrawal of such shares. A Participant shall not be limited as to the number of instructions to tender or
withdraw that he may give to the Trustee. All shares that have been tendered pursuant to Participant’s instructions and have not been withdrawn prior to the expiration of the tender offer will be sold by the Trustee in accordance with the terms
of the tender offer. Tender offer instructions received from Participants shall be held in confidence by the Trustee and shall not be divulged to the Primary Sponsor or to any officer or employee thereof, or to any other person other than such
agents of the Trustee as they may appoint to perform their duties under this Section. 
  
 A direction by a Participant to the Trustee to tender shares of Company Stock credited to his Account shall not be considered a written election under the Plan by the Participant to withdraw, or have distributed, any
portion of his Account. The Plan Administrator shall credit to the Account of the Participant from which the tendered shares of Company Stock were taken the proceeds received by the Trustee in exchange for the shares of Company Stock tendered from

  

 23 

 
that Account. Such proceeds shall be invested in accordance with the investment election by the Participant, but without regard to any election to invest in
Company Stock. 
  
 In the event of a tender offer for shares of
Company Stock, the Trustee shall accept or reject the tender offer for the shares of Company Stock held in the Unallocated Company Contribution Account, Loan Suspense Account and any suspense account established pursuant to the provisions of
Appendix A (collectively, the “Allocated Suspense Shares”), as follows. 
  
 (a) Each Participant who was an Employee as of the last day of the preceding Plan Year and who is an Employee at the time of any action
described in this Subsection (a), shall be allocated, solely for the purpose of instructing the Trustee as to the acceptance or rejection of any tender offer for the Company Stock and for the purpose set forth in Section 12.9 hereof, a portion of
the total number of Allocated Suspense Shares based upon the proportion by which the Participant’s Annual Compensation for the preceding Plan Year bears to the total Annual Compensation for the preceding Plan Year of all Participants who are
then eligible to receive an allocation of Allocated Suspense Shares. A Participant to whom Allocated Suspense Shares are allocated pursuant to this Subsection (a) shall be the named fiduciary with respect to such shares for the purpose of
instructing the Trustee as to the acceptance or rejection of any tender offer or instructing the Trustee as to all matters requiring a vote by the Trustee in accordance with the provisions of Section 12.9 hereof. 
  
 (b) Each Participant shall instruct the Trustee as to his
desire to accept or reject the tender offer as to his Allocated Suspense Shares. The Trustee shall then total all instructions received from the Participants as to the instructions desiring acceptance of the tender offer and the number of Allocated
Suspense Shares applicable thereto, and as to the instructions desiring rejection of the tender offer and the number of Allocated Suspense Shares applicable thereto. 
  
 (c) The Trustee shall either accept or reject the tender offer as to the Allocated Suspense Shares on the
basis of the Participants’ instruction applicable to a majority of the Allocated Suspense Shares for which such directions have been received. 
  
 SECTION 6 
 LOANS

  
 6.1 Eligibility for Plan Loans. Subject to the
provisions of the Plan and the Trust and pursuant to rules established by the Plan Administrator, each Eligible Participant shall have the right, subject to prior approval by the Plan Administrator, to borrow from the Fund an amount not to exceed
that portion of his vested Account not invested in the ESOP. In addition, each “party in interest,” as defined in ERISA Section 3(14), who is (a) a Participant but no longer an Employee, (b) the Beneficiary of a deceased Participant, or
(c) an alternate payee of a Participant pursuant to the provisions of a “qualified domestic relations order,” as defined in Code Section 414(p), shall also have the right, subject to prior approval by the Plan Administrator, to borrow from
the Fund; provided, however, that loans to such parties in interest may not discriminate in favor of Highly Compensated Employees. 
  

 24 

 6.2 Application. In order to apply for a loan, a borrower must complete and submit to the Plan
Administrator documents provided by the Plan Administrator for this purpose or shall otherwise apply pursuant to the rules and procedures established by the Plan Administrator from time to time. 
  
 6.3 Availability. Loans shall be available to all eligible borrowers
on a reasonably equivalent basis which may take into account the borrower’s creditworthiness and ability to repay. Loans shall not be made available to Highly Compensated Employees, officers or shareholders of a Plan Sponsor in an amount
greater than the amount made available to other borrowers. This provision shall be deemed to be satisfied if all borrowers have the right to borrow the same percentage of their interest in the Participant’s vested Account not invested in the
ESOP, notwithstanding that the dollar amount of such loans may differ as a result of differing values of Participants’ vested Accounts. Effective October 1, 2002, a Participant who has previously defaulted on a Plan loan shall not be eligible
for another plan loan unless and until the previously defaulted Plan loan is repaid. 
  
 6.4 Interest. Each loan shall bear a “reasonable rate of interest” and provide that the loan be amortized in substantially level payments, made no less frequently than quarterly, over a specified
period of time. 
  
 6.5 Security. Each loan shall be
adequately secured, with the security for the outstanding balance of all loans to the borrower to consist of one-half (1/2) of the Participant’s vested Account. 
  
 6.6 Amount. Each loan, when added to the outstanding balance of all other loans to the borrower from all retirement
plans of the Plan Sponsor and its Affiliates which are qualified under Section 401 of the Code, shall not exceed the lesser of: 
  
 (a) $50,000, reduced by the excess, if any, of 
  

(1) the highest outstanding balance, during the one (1) year period immediately preceding the day prior to the date on which such loan
was made, of loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan Sponsor and its Affiliates, over 
  
 (2) the outstanding balance of all other loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan
Sponsor and its Affiliates on the date on which such Loan was made, or 
  
 (b) one-half (1/2) of the value of the borrower’s interest in the vested Account attributable to the Participant’s Account. 
  
 For purposes of this Section, the value of the vested Account attributable to a Participant’s Account shall be established as of the
most recent Valuation Date preceding the date of application for the loan and shall be adjusted for any distributions made through the date of the origination of the loan. 
  

 25 

 6.7 Repayment. Each loan, by its terms, shall be repaid within five (5) years, except that any
loan which is used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the borrower may, by its terms, be repaid within ten (10) years. Plan loans may be
prepaid on and after October 1, 2002. 
  
 6.8 Minimum
Amount. Each loan shall be made in an amount of no less than $1,000. 
  
 6.9 Accelerated Repayment. The entire unpaid principal sum and accrued interest shall, at the option of the Plan Administrator, become due and payable if (a) a borrower fails to make any loan payment when due,
(b) a borrower ceases to be a “party in interest”, as defined in ERISA Section 3(14), (c) the vested Account held as security under the Plan for the borrower will, as a result of an impending distribution or withdrawal, be reduced to an
amount less than the amount of all unpaid principal and accrued interest then outstanding under the loan, or (d) a borrower makes any untrue representations or warranties in connection with the obtaining of the loan. In that event, the Plan
Administrator may take such steps as it deems necessary to preserve the assets of the Plan, including, but not limited to, the following: (1) direct the Trustee to deduct the unpaid principal sum, accrued interest, and any other applicable charge
under the note evidencing the loan from any benefits that may become payable out of the Plan to the borrower, (2) direct the Plan Sponsor to deduct and transfer to the Trustee the unpaid Principal balance, accrued interest, and any other applicable
charge under the note evidencing the loan from any amounts owed by the Plan Sponsor to the borrower, or (3) liquidate the security given by the borrower, other than amounts attributable to a Participant’s Before-Tax Basic and Supplemental
Accounts, and deduct from the proceeds the unpaid principal balance, accrued interest, and any other applicable charge under the note evidencing the loan. If any part of the indebtedness under the note evidencing the loan is collected by law or
through an attorney, the borrower shall be liable for attorneys’ fees in an amount equal to ten percent (10%) of the amount then due and all costs of collection. 
  
 6.10 Administration. Each loan shall be made only in accordance with regulations and rulings of the Internal Revenue
Service and the Department of Labor. The Plan Administrator shall be authorized to administer the loan program of this Section and to institute additional uniform and nondiscriminatory rules governing loans, and shall act in his sole discretion to
ascertain whether the requirements of such regulations and rulings and this Section have been met. 
  
 6.11 Acquisition Loans. 
  
 (a) The Plan Administrator may direct the Trustee to obtain Acquisition Loans under the ESOP. An Acquisition Loan shall meet all
requirements necessary to constitute an “exempt loan” within the meaning of Treasury Regulation Section 54.4975-7(b)(l)(iii). At the time an Acquisition Loan is made, the interest rate for the Acquisition Loan and the price of Company
Stock to be acquired therewith may not be such that assets of the Plan might be drained off. The terms of an Acquisition Loan must, at the time the Acquisition Loan is made, be at least as favorable to the Plan as the terms of a comparable loan
resulting from arm’s length negotiations between independent 

  

 26 

 
parties. An Acquisition Loan may not be obtained if when it is obtained the Plan Administrator knows that federal or state law will be violated by the
Primary Sponsor honoring the Put set forth in Section 10.3 of the Plan. The proceeds of any Acquisition Loan shall be used within a reasonable time after the Acquisition Loan is obtained and may only be used to purchase Company Stock, to repay the
Acquisition Loan, or to repay any prior Acquisition Loan. An Acquisition Loan shall provide for no more than a reasonable rate of interest. An Acquisition Loan must be without recourse against the Plan and must be for a specific term and not payable
at the demand of any person, except in case of default. For purposes of this Section, “default” shall mean the failure to pay any amount due under the Acquisition Loan, or any other event specified in the agreement memorializing the
Acquisition Loan. The Acquisition Loan’s number of years to maturity must be definitely ascertainable. The only assets of the Fund that may be given as collateral for an Acquisition Loan are shares of Company Stock acquired with its proceeds or
used as collateral on a prior Acquisition Loan repaid with the proceeds of the current Acquisition Loan. The Company Stock pledged shall be credited to the Loan Suspense Account. No person entitled to payment under an Acquisition Loan shall have
recourse against the Fund other than that collateral, Plan Sponsor contributions in cash that are made to meet obligations under the Acquisition Loan, and earnings attributable to that collateral and investment of Plan Sponsor contributions. In the
event of a default upon an Acquisition Loan, the value of assets of the Plan transferred in satisfaction thereof shall not exceed the amount of default. If the lender under an Acquisition Loan is a person described in Code Section 4975(e)(2), the
Acquisition Loan shall provide for a transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the Acquisition Loan. A pledge of Company Stock must provide for the release of shares
pledged, as provided in Subsection (b) below, upon the payment of any portion of the Acquisition Loan. An amendment of a Loan in order to qualify under this Section shall not be a refinancing of the loan or the making of another loan. 
  
 (b) For each Plan Year during the duration of the
Acquisition Loan, the number of shares of Company Stock released from any pledge and from the Loan Suspense Account must equal the number of shares acquired with the proceeds of the Acquisition Loan held immediately before release for the current
Plan Year multiplied by a fraction the numerator of which is the amount of principal and interest paid for that Plan Year and the denominator of which is the sum of the numerator plus the principal and interest to be paid fur all future Plan Years.
These years are determined without taking into account any possible extension or renewal periods. In the event the interest is variable, the interest to be paid in future years must be computed by using the interest rate applicable as of the end of
the Plan Year. If collateral in the Loan Suspense Account includes more than one class of Company Stock, the number of shares of each class to be released for a Plan Year must be determined by applying the same fraction to each class.
Notwithstanding the above, the number of shares of Company Stock released from any pledge and from the Loan Suspense Account for each Plan Year during the duration of an Acquisition Loan may be determined by reference to principal payments only, if
(1) the Acquisition Loan provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of those amounts for ten years, (2) interest included in any payment is disregarded
only to the extent that it would 

  

 27 

 
be determined to be interest under standard loan amortization tables, and (3) by reason of a renewal, extension, or refinancing during or prior to the Plan
Year, the sum of the expired duration of the Acquisition Loan, the renewal period, the extension period, and the duration of a new Acquisition Loan do not exceed ten years. 
  
 (c) Payments of principal and interest on any Acquisition Loan during a Plan Year shall be made by the
Trustee only from (1) Plan Sponsor contributions made to the Trust to meet the Plan’s obligation under an Acquisition Loan, earnings from Plan Sponsor contributions, and any cash dividends attributable to Company Stock given as collateral for
an Acquisition Loan (both received during or prior to the Plan Year), and (2) the proceeds of a subsequent Acquisition Loan made to repay a prior Acquisition Loan. Company Stock and earnings must be accounted for separately by the Plan until the
Acquisition Loan is repaid. 
  
 (d) In the event
that the contributions are insufficient to enable the Trust to pay principal and interest on the Acquisition Loan as it is due, then upon the Trustee’s request the Plan Sponsor shall make an Acquisition Loan to the Trust, as described in
Treasury Regulation Section 54.4975-7(b)(4)(iii), in sufficient amounts to meet principal and interest payments. The new Acquisition Loan shall also meet all requirements of an “exempt loan” within the meaning of Treasury Regulation
Section 54.4975-7(b)(l)(iii). Company Stock released from the pledge of the prior Acquisition Loan shall be pledged as collateral to secure the new Acquisition Loan. The Company Stock will be released from this new pledge and allocated to the
Accounts of the Participants in accordance with applicable provisions of the Plan. 
  
 The provisions of this Section 6.11 shall continue to be applicable to shares of Company Stock acquired hereunder and held in the Loan Suspense Account even if the Plan ceases to be an employee stock ownership plan
under Code Section 4975(e)(7). 
  
 SECTION 7 
 HARDSHIP DISTRIBUTIONS AND IN-SERVICE WITHDRAWALS 
  
 7.1 Withdrawals During Employment. 
  
 (a) An Eligible Participant may withdraw, in cash, any portion of his Account pursuant to the following withdrawal options: 
  
 Level 1 Any dollar amount up to 100 percent of the
Eligible Participant’s After-Tax Contributions made before January 1, 1987, excluding earnings thereon, not previously withdrawn; but not more than the current value of his After-Tax Participant Contributions then held under the Plan.

  
 Level 2 Any dollar amount up to 100
percent of the sum of: 
  
 (1) the maximum
amount available under Level 1; plus 
  

 28 

 (2) the amount of earnings, if any, attributable to the Eligible Participant’s
After-Tax Contributions made before January 1, 1987, not previously withdrawn; plus 
  
 (3) the amount of the Eligible Participant’s After-Tax Contributions, and earnings thereon, made on or after January 1, 1987, not
previously withdrawn; but not more than the current balance of the Eligible Participant’s After-Tax Accounts; plus 
  
 (4) the current balance in the Eligible Participant’s Rollover Accounts; plus 
  
 (5) the vested portion of the current balance in the
Eligible Participant’s Pre-1992 Company Matching Account and Post-1991 Matching Account provided that an Eligible Employee who has participated in the Plan for less than five years from the date of the first Participant Contribution may not
withdraw matching contributions that have been in the Plan for less than two years. 
  
 Level 3 Eligible Participants who have attained age 59-1/2 may withdraw any dollar amount up to 100 percent of the sum of:

  
 (1) the maximum available under Level 2;
plus 
  
 (2) the current balance of the Eligible
Participant’s Before-Tax Participant Account; plus 
  
 (3) the current balance of the Eligible Participant’s Personal Savings Account Matching Account; 
  
 Level 4 in the event of financial hardship, and subject to Plan Sections 7.2 and 7.3, any dollar amount up to 100% of the sum of:

  
 (1) the maximum available under Level 2;
plus 
  
 (2) the current balance in the Eligible
Participant’s Before-Tax Accounts, provided that no earnings after December 31, 1988, on Participant Before-Tax Contributions may be withdrawn unless the Eligible Participant has attained age 591⁄2; plus 
  
 (3) the current balance of the Eligible Participant’s
Personal Savings Account Matching Account, provided that no earnings on the Eligible Participant’s Personal Savings Account Matching Account may be withdrawn unless the Eligible Participant has attained age 591⁄2. 
  
 (b) Prior to January 1, 2003, if a withdrawal is made by an
Eligible Participant that includes any portion of the Eligible Participant’s post-1986 After-Tax Participant 

  

 29 

 
Account, Plan Sponsor Contributions on the Participant’s behalf under Plan Section 3.3(a) shall be suspended for three months, provided, however, that
such suspension will be waived in the case of a withdrawal made on account of financial hardship as described in Plan Section 7.2. On and after January 1, 2003, if a withdrawal is made by an Eligible Participant that includes any portion of the
Eligible Participant’s post-1986 After-Tax Participant Basic Subaccount, Plan Sponsor Contributions on the Participant’s behalf under Plan Section 3.3(a) shall be suspended for three months, provided, however, that such suspension will be
waived in the case of a withdrawal made on account of financial hardship as described in Plait Section 7.2. All Participant Contributions during the three-month suspension period shall not be eligible for Plan Sponsor contributions pursuant to Plan
Section 3.3. Notwithstanding the foregoing, effective January 1, 2003, with respect to any withdrawals from a Participant’s After-Tax Participant Account, such withdrawals shall first come from the Participant’s After-Tax Participant
Supplemental Subaccount and, once the After-Tax Participant Supplemental Subaccount is exhausted, from the Participant’s After-Tax Participant Basic Subaccount. 
  
 (c) An Eligible Participant may not make a withdrawal more frequently than once in any three-month period
except in the ease of financial hardship. 
  
 (d)
Withdrawals are based upon the value of an Eligible Participant’s Account as of the Valuation Date immediately following the receipt by the Plan Administrator of an Eligible Participant’s request for withdrawal in the manner prescribed by
the Plan Administrator, if such request is received on or before the date specified by the Plan Administrator. If the request is received after the date specified by the Plan Administrator, withdrawals are based upon the value of the Eligible
Participant’s Account as of the next practicable Valuation Date. 
  
 (e) Withdrawal amounts shall be paid out proportionately from applicable Individual Funds in which the portion of the Eligible Participant’s Account being withdrawn is invested. 
  
 (f) Notwithstanding the above, withdrawals during employment
shall be controlled by the Plan provision in effect at the time such withdrawal is requested. 
  
 (g) Any distributions pursuant to this Section 7 shall be subject to the Eligible Rollover Distribution rules set forth in Plan Section
11.2. 
  
 7.2 Financial Hardship. 
  
 A distribution will be deemed to be on account of a financial hardship if the
distribution is on account of 
  
 (a) expenses
for medical care described in Section 213(d) of the Code previously incurred by the Participant, his spouse, or any dependents of the Participant (as defined in Section 152 of the Code) or necessary for these persons to obtain medical care described
in Code Section 213(d); 
  

 30 

 (b) purchase (excluding mortgage payments) of a principal residence for the Participant;

  
 (c) payment of tuition and related
educational fees for the next twelve (12) months of post-secondary education for the Participant, his spouse, children, or dependents; 
  
 (d) prior to October 1, 2002, damage to a Participant’s principal residence resulting from fire and “acts of God” not
reimbursed by insurance or otherwise; 
  
 (e)
prior to October 1, 2002, funeral expenses for a member of the Participant’s family; 
  
 (f) prior to October 1, 2002, military leave of at least six consecutive months; 
  
 (g) the need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the Participant’s principal residence; or 
  
 (h) any other contingency determined by the Internal Revenue Service to constitute an “immediate and heavy financial need”
within the meaning of Treasury Regulations Section 1.40l(k)-1(d) 
  
 7.3 Hardship Documentation. In addition to the requirements set forth in Plan Section 7.2, any distribution for financial hardship under Level 4 of Plan Section 7.1 shall not be in excess of the amount necessary to satisfy the need
determined under Section 7.2 and shall also be subject to the following requirements: 
  
 (a) the Eligible Participant shall first obtain all distributions, other than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Plan Sponsor, and 
  
 (b) the Plan Sponsor shall not permit Elective Deferrals, including catch-up contributions as described in Code Section 414(v), or after-tax employee contributions to be made to the Plan or any other plan maintained
by the Plan Sponsor, for a period of six (6) months after the Participant receives the withdrawal pursuant to this Section. 
  
 Such distribution shall be made only in accordance with such rules, policies, procedures, restrictions, and conditions as the Plan Administrator may from time to time
adopt, and shall also he made in accordance with the Eligible Rollover Distribution rules set forth in Plan Section 11.2. Any determination of the existence of hardship and the amount to be distributed on account thereof shall be made by the Plan
Administrator in accordance with the foregoing rules as applied in a uniform and nondiscriminatory manner; provided that any such distribution may include the amount necessary to pay any federal, state, and local income taxes and penalties
reasonably anticipated to result from the distribution. A distribution under this Section shall be made in a lump sum to the Participant as soon as administratively feasible following the date the request is received by the Plan Administrator.

  

 31 

 SECTION 8 
 PAYMENT OF BENEFITS ON RETIREMENT OR 
 TERMINATION OF EMPLOYMENT 
  
 8.1 Determination of Benefit. In the event of a Termination of
Employment of a Participant (including the Termination of Employment of a Participant on or after reaching age 65), the Participant’s vested Account shall be determined as of the Valuation Date coinciding with or immediately preceding the date
the Participant’s Account is valued for imminent payout purposes pursuant to normal administrative procedures, increased by any contributions or Rollover Amounts allocated to the Account of the Participant after that Valuation Date and reduced
by any distributions therefrom. 
  
 8.2 Vesting. A
Participant shall be 100% vested in the Participant’s Account. 
  
 8.3 Payment of Benefit. Subject to Plan Section 11.3, a Participant’s Account shall be paid to him, or in the event of his death, to his Beneficiary. In the case of a Participant: 
  
 (a) who has a vested Account of $5,000 or less (effective
October 1, 2002, without regard to the value of a Participant’s Rollover Account), as soon as practicable after the later of the date he ceases to be an Employee or the date he ceases to receive severance payments from the Plan Sponsor, if any;
and 
  
 (b) who has a vested Account greater than
$5,000 (effective October 1, 2002, determined without regard to the amounts attributable to a Participant’s Rollover Account), as soon as practicable following the date the Participant’s election is processed pursuant to the administrative
procedures adopted by the Plan Administrator following the Participant’s Termination of Employment but in no event later than 60 days following the end of the Plan Year in which the Participant attains Normal Retirement Age, unless the
Participant has elected in writing for payments to begin at a later date. 
  
 8.4 Form of Payment. The payment of a Participant’s vested Account shall be in the form of one lump sum to the extent practicable. A Participant with a vested Account greater than $5,000 (effective October
1, 2002, determined without regard to amounts attributable to a Participant’s Rollover Account) may instead elect, at the time and in the manner prescribed by the Plan Administrator, to receive payment of his vested Account in the form of
quarterly installments over a period of not less than 10 years and not greater than 15 years. The first installment payment will commence as soon as practicable following the date the Participant’s election is processed pursuant to the
administrative procedures adopted by the Plan Administrator but in no event prior to the later of the date the Participant ceases to be an Employee or ceases to receive severance payments from the Plan Sponsor, if any. Each next installment payment
will be made each third month thereafter. The Account of a Participant who elects installment payments shall be credited with its pro rata share of the net income, gain or loss of the Fund during the period over which installments are paid. The
Participant’s distribution from the portion of his Account invested in Company Stock, unless the Participant elects to receive his interest in such Accounts entirely in cash, shall be in whole shares of Company Stock (and cash in lieu of
fractional shares). Distributions from the remaining 

  

 32 

 
Accounts shall be in cash. Pursuant to procedures established by the Plan Administrator, a Participant who is entitled to a distribution from the ESOP (1)
has the right to demand that the distribution be distributed in the form of Company Stock and (2) if the Company Stock distributed from the ESOP is not Publicly Traded has a right to require that the Primary Sponsor repurchase the Company Stock
distributed at the Fair Market Value of Company Stock in accordance with the provisions of Plan Section 10.3. 
  
 8.5 Consent. Except as otherwise provided herein, payment of the Participant’s Account shall be made as soon as administratively feasible
after the Participant terminates employment; provided, however, if the Participant’s Account exceeds $5,000 it will not be distributed before the 60th day of the year following the year in which the Participant reached Nominal Retirement Age,
unless the Participant elected to defer distribution pursuant to Section 8.3(b). 
  
 8.6 Change in Vesting Schedule. If a Plan amendment directly or indirectly changes the vesting schedule, the vesting percentage for each Participant in his Account accumulated to the date when the amendment is
adopted shall not be reduced as a result of the amendment. In addition, any Participant with at least three (3) years of Vesting Service may irrevocably elect to remain under the pre-amendment vesting schedule with respect to all of his benefits
accrued both before and after the amendment. 
  
 8.7
Reemployment of Participant. If a Participant has a Termination of Employment and is subsequently reemployed by a Plan Sponsor or an Affiliate on or prior to receiving a distribution of his Account, the Participant’s Account shall be
treated as the Account of a Participant who has not terminated employment other than in regard to allocations of Plan Sponsor contributions which would have been made to his Account at any Valuation Date occurring while the Participant was not
employed by a Plan Sponsor. 
  
 SECTION 9 
 DEATH BENEFITS 
  
 If a Participant dies before receiving a distribution of his Account, his Beneficiary shall receive the Participant’s Account as soon as
administratively feasible following the death of the Participant. Whether a deceased Participant’s Account must be paid in cash or in kind shall be determined in the same manner as under Section 8.4. If a Participant dies before beginning to
receive a distribution of his Account, the Participant’s Beneficiary shall receive the Participant’s Account in one lump sum as soon as administratively feasible following the death of the Participant. If a Participant dies after beginning
to receive a distribution of his Account, the Participant’s Beneficiary shall receive the undistributed portion of the Account. The Account of a Participant who dies while an Employee shall be fully vested. 
  

 33 

 SECTION 10 
 CONDITIONS OF DISTRIBUTION OF COMPANY STOCK 
  
 10.1 Restricted Stock. To the extent necessary to comply with federal or state securities laws, each share certificate for Company Stock distributed pursuant to the Plan shall be clearly marked
“RESTRICTED” on its face and, to the extent appropriate at that time, shall bear on its reverse side legends to the following effect: 
  
 (a) That the securities evidenced by the certificate were issued and distributed without registration under the federal Securities Act of
1933 (the “1933 Act”) or under the applicable laws of any state (collectively referred to as the “State Acts”), in reliance upon certain exemptive provisions of the 1933 Act or any applicable State Acts; 
  
 (b) That the securities cannot be sold or transferred
unless, in the opinion of counsel reasonably acceptable to the Primary Sponsor, the sale or transfer would be: 
  
 (1) pursuant to an effective registration statement under the 1933 Act or pursuant to an exemption from registration; and 
  
 (2) a transaction which is exempt under any applicable State
Acts or pursuant to an effective registration statement under or in a transaction which is in compliance with the State Acts. 
  
 (c) That the securities evidenced by the certificate were issued and distributed in accordance with the provisions of the Plan and Trust,
are subject to the provisions thereof, and may not be sold or transferred except in compliance with those provisions. 
  
 10.2 Securities Laws. If necessary to comply with the 1933 Act or any applicable State Acts, shares of Company Stock distributable under the Plan
must be acquired for investment and not with a view to the public distribution thereof. In furtherance thereof, as a condition of receiving Company Stock under the Plan, the distributee may be required to execute an investment letter and any other
documents that in the opinion of counsel reasonably acceptable to the Primary Sponsor, as issuer, arc necessary to comply with the 1933 Act or any applicable State Acts or any other applicable laws regulating the issuance or transfer of securities.

  
 10.3 Put Rights. 
  
 (a) Each Share of Company Stock distributed under the Plan
shall be subject to Put Rights. The Put Rights grant to the distributee (or his heirs or legatees) the right to require the Primary Sponsor or its designee to purchase any shares of Company Stock which have been distributed from the Plan provided
that the Company Stock is not Publicly Traded at the time (the “Put”). The Put shall be exercisable by giving written notice to the Primary Sponsor for a period of sixty (60) days following the date of distribution, and if the Put is not
exercised within that 60-day period, for an additional period of 60 days which begins on the later of (1) the anniversary date of the Plan Year 

  

 34 

 
following the Plan Year of distribution, or (2) the day following the expiration of the initial 60 day period. In the case of Company Stock which is Publicly
Traded without restriction when distributed but ceases to be so traded during either of the sixty (60) day periods, the Primary Sponsor must give notice to each distributee (or his heirs or legatees) in writing on or before the tenth (10th) day
after the date the Company Stock ceases to be so traded informing each distributee (or his heirs or legatees) that for the remainder of the period the Company Stock is subject to the Put and setting forth the terms of the Put. The number of days
between the tenth (10th) day and the date on which notice is actually given, if later, must be added to the duration of the Put. The period during which the Put is exercisable does not include the time when a distributee (or his heirs or legatees)
is unable to exercise it because the Primary Sponsor is prohibited from honoring it by applicable federal or state law. 
  
 (b) Except as provided in Section 10.3 above, no Company Stock acquired with the proceeds of an Acquisition Loan may be subject to a put,
call, option, buy-sell or similar arrangement while held by or when distributed from the Plan. 
  
 (c) The provisions of this Section 10.3 shall continue to be applicable to shares of Company Stock acquired hereunder even if the Plan
ceases to be an employee stock ownership plan under Code Section 4975(e)(7). 
  
 SECTION 11 
 GENERAL RULES ON DISTRIBUTIONS 
  
 11.1 Accounts shall not be adjusted for earnings or losses incurred after the
Valuation Date coinciding with or preceding the date of distribution of the Account. 
  
 11.2 Eligible Rollover Distributions. A Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a direct rollover. If an Eligible Rollover Distribution is one to which Code Sections 401(a)(11) and 417 do not apply, such Eligible Rollover Distribution may commence less than 30 days after
the notice required under section 1.411 (a)(11)(c) of the Income Tax Regulations is given, provided that: 
  
 (a) the Plan Administrator clearly informs the Distributee that the Distributee has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and 
  
 (b) the Distributee, after receiving the notice, affirmatively elects a distribution. 
  

 35 

 11.3 Required Distributions. Notwithstanding any other provisions of the Plan, 
  
 (a) Prior to the death of a Participant, all retirement
payments hereunder shall — 
  
 (1) be
distributed to the Participant not later than the required beginning date (as defined below) or, 
  
 (2) be distributed, commencing not later than the required beginning date (as defined below) — 
  
 (A) in accordance with regulations prescribed by the
Secretary of the Treasury, over the life of the Participant or over the lives of the Participant and his designated individual Beneficiary, if any, or 
  
 (B) in accordance with regulations prescribed by the Secretary of the Treasury, over a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy of the Participant and his designated individual Beneficiary, if any. 
  
 (b) (1) If — 
  
 (A) the distribution of a Participant’s retirement payments have begun in accordance with Subsection (a)(2) of this Section, and

  
 (B) the Participant dies before his entire
vested Account has been distributed to him, 
  
 then the
remaining portion of his vested Account shall be distributed at least as rapidly as under the method of distribution being used under Subsection (a)(2) of this Section as of the date of his death. 
  
 (2) If a Participant dies before the commencement of
retirement payments hereunder, the entire interest of the Participant shall he distributed within five (5) years after his death. 
  
 (3) If — 
  
 (A) any portion of a Participant’s vested Account is payable to or for the benefit of the Participant’s designated individual
Beneficiary, if any, 
  
 (B) that portion is to
be distributed, in accordance with regulations prescribed by the Secretary of the Treasury, over the life of the designated individual Beneficiary or over a period not extending beyond the life expectancy of the designated individual Beneficiary,
and 
  

 36 

 (C) the distributions begin not later than one (1) year after the date of the
Participant’s death or such later date as the Secretary of the Treasury may by regulations prescribe, 
  
 then, for purposes of Paragraph (2) of this Subsection (b), the portion referred to in Subparagraph (A) of this Paragraph (3) shall be treated as
distributed on the date on which the distributions to the designated individual Beneficiary begin. 
  
 (4) If the designated individual Beneficiary referred to in Paragraph (3)(A) of this Subsection (b) is the surviving spouse of the
Participant, then — 
  
 (A) the date on
which the distributions are required to begin under Paragraph (3)(C) of this Subsection (b) shall not be earlier than the date on which the Participant would have attained age 701⁄2, and 
  
 (B) if the surviving spouse dies before the distributions
to such spouse begin, this Subsection (b) shall be applied as if the surviving spouse were the Participant. 
  
 (c) For purposes of this Section, the term “required beginning date” means April 1 of the calendar year following the later of
the calendar year in which the Participant attains age 701⁄2 or the calendar year in which the Participant retires or otherwise terminates employment; except with respect to a Participant who is a five percent (5%) owner (as described in Code
Section 416(i)(1)(B)(i)) for the Plan Year ending in the calendar year in which such Participant attains age 701⁄2, in which case, “required beginning date” means April 1 of the calendar year following the calendar year in which the
Participant attains age 701⁄2. With respect to a Participant (other than a five percent (5%) owner) who attains age 701⁄2 prior to January 1, 1999, such Participant may elect in the form and manner prescribed by the Plan Administrator to
receive a distribution of his Vested Account, in the manner described in this Section 11.3 hereof, commencing no later than April 1 of the calendar year in which the Participant attains age 701⁄2. 
  
 (d) Distributions will be made in accordance with Code
Section 401(a)(9) and the regulations issued thereunder, including the incidental benefit requirements. Notwithstanding the foregoing, effective as of January 1, 2003, any distributions pursuant to Code Section 401(a)(9) shall be administered in
accordance with the requirements of Appendix D hereto. 
  
 11.4
Company Stock Not Publicly Traded. If a Participant is entitled to a distribution from the ESOP and the Company Stock distributed from the ESOP is not Publicly Traded, the Participant has a right to require that the Primary Sponsor repurchase
the Company Stock distributed at the Fair Market Value of Company Stock pursuant to Plan Section 10.3. 
  

 37 

 SECTION 12 
 ADMINISTRATION OF THE PLAN 
  
 12.1 Trust Agreement. The Primary Sponsor shall establish a Trust with the Trustee designated by the Board of Directors for the management of the Fund, which Trust shall form a part of the Plan and is
incorporated herein by reference. 
  
 12.2 Operation of the
Plan Administrator. 
  
 (a) The Primary
Sponsor shall appoint a Plan Administrator. If an organization is appointed to serve as the Plan Administrator, then the Plan Administrator may designate in writing a person who may act on behalf of the Plan Administrator. The Primary Sponsor shall
have the right to remove the Plan Administrator at any time by notice in writing. Upon removal or resignation, or in the event of the dissolution of the Plan Administrator, the Primary Sponsor shall appoint a successor. 
  
 (b) The Plan Administrator may resign by delivering a
written resignation to the Board of Directors. 
  
 (c) The Plan Administrator shall not receive compensation for his or her services. 
  
 (d) The Plan Administrator from time to time may establish rules for the administration of the Plan and the transaction of its business
including transitional rules during the first year of Plan implementation. The interpretation and construction of any provision of the Plan by the Plan Administrator shall be final and conclusive. 
  
 12.3 Powers and Duties of the Plan Administrator. The Plan
Administrator shall have such discretionary powers as may be necessary to carry out the provisions of the Plan and to perform its duties hereunder, including, without limiting the generality of the foregoing, the power: 
  
 (a) To appoint, retain, and terminate such persons as it
deems necessary or advisable to assist in the administration of the Plan or to render advice with respect to the responsibilities of the Plan Administrator under the Plan, including accountants, administrators, consultants, attorneys, custodians and
physicians. 
  
 (b) To appoint, by written
agreement, one or more Investment Managers with authority and discretion to manage, acquire, and dispose of all or any part of the assets of the Plan. The Investment Manager shall be either: (i) a corporation or partnership registered as an
investment advisor under the Investment Advisers Act of 1940; (ii) a bank, as defined in that Act; or (iii) an insurance company qualified to manage, acquire, or dispose of any asset of an employee pension benefit plan under the laws of more than
one State, and shall acknowledge in writing that it is a fiduciary with respect to the Plan. 
  
 (c) To review at least quarterly the performance of each Investment Manager and Trustee retaining investment discretion. 
  

 38 

 (d) To be generally responsible for reviewing at least annually the extent to which the
administration of the Plan is in compliance with ERISA and the performance of persons appointed pursuant to subsection (a) above. 
  
 (e) To report on its activities and on the investment performance of the Investment Manager or Trustee at least annually to the Board.

  
 (f) To determine all benefits and resolve all
questions pertaining to the administration, interpretation and application of Plan provisions, either by rules of general applicability or by particular decisions, provided that all Employees similarly situated are treated in a uniform and
non-discriminatory manner. 
  
 (g) To adopt such
forms, rules and regulations as it shall deem necessary or appropriate for the administration of the Plan and the conduct of its affairs, provided that any such forms, rules and regulations shall not be inconsistent with the provisions of the Plan
and shall be applied in a uniform and non-discriminatory manner to all Employees similarly situated. 
  
 (h) To remedy any inequity resulting from incorrect information received or communicated or from administrative error. 
  
 (i) To commence or defend any litigation arising from the
operation of the Plan in any legal or administrative proceeding. 
  
 (j) To direct the Trustee with respect to all payments from the Trust Fund, including the payment of expenses. 
  
 (k) To designate committees to perform various Plan administrative functions. 
  
 (l) The Plan Administrator shall cause an Independent
Appraiser to value shares of Company Stock as of the last day of each Plan Year if Company Stock is not then Publicly Traded, except that in the case of a transaction between the Plan and a “disqualified person” within the meaning Code
Section 4975, the valuation shall be as of the date of the transaction. 
  
 12.4 Records and Reports. 
  
 (a)
The Plan Administrator shall keep a record of its proceedings and acts and shall keep such books of accounts, records and other data as may be necessary for the proper administration of the Plan. 
  
 (b) The Plan Administrator shall furnish to each Participant
and Beneficiary without cost to the recipient such material as may be required by law. The Plan Administrator may, in its discretion, provide a Participant or Beneficiary such other material as he requests in writing, in which case the Plan
Administrator, in its discretion, 

  

 39 

 
may require the Participant or Beneficiary to pay the reasonable case of preparing and furnishing such material. 
  
 12.5 Required Information. Any Participant and any Beneficiary
eligible to receive benefits under the Plan shall furnish to the Plan Administrator any information or proof requested by the Plan Administrator and reasonably required for the proper administration of the Plan. Failure on the part of the
Participant or Beneficiary to comply with any such request within a reasonable period of time and in good faith shall be sufficient grounds for delay in the payment of benefits under the Plan until such information or proof is received by the Plan
Administrator. 
  
 12.6 Compensation and Expenses. All
expenses incident to the operation and administration of the Plan reasonably incurred, including, without limitation by way of specification, the fees and expenses of the Trustees, attorneys, advisors, and for such other professional, technical and
clerical assistance as may be required, shall be charged against the Trust Fund unless paid by the Plan Sponsor. 
  
 12.7 Indemnification. The Primary Sponsor hereby agrees to indemnify the Plan Administrator (and each of its members, if applicable), and any other
Employees who are deemed fiduciaries hereunder, and to hold them harmless against all liability, joint and several, for their acts, omissions and conduct and for the acts, omissions and conduct of their duly appointed agents made in good faith
pursuant to the provisions of the Plan and Trust Agreement, including any out-of-pocket expenses reasonably incurred in the defense of any claim relating thereto; provided, however, that neither the Plan Administrator (nor its members, if
applicable), nor any such fiduciary shall voluntarily assume or admit any liability, nor, except at its or his own cost, shall any of the foregoing make any payment, assume any obligations or incur any expense without the prior written consent of
the Board of Directors. The Primary Sponsor may purchase, at its expense, liability insurance to protect the Primary Sponsor and the persons indemnified hereunder from liability incurred in the good faith administration of this Plan. 
  
 12.8 Action by a Plan Sponsor. Any action to be taken by a Plan
Sponsor shall be taken by resolution or written direction duly adopted by its board of directors or appropriate governing body (including the Compensation Committee of such board of directors to the extent it has been delegated authority to do so),
as the case may be; provided, however, that by such resolution or written direction, the board of directors or appropriate governing body (including the Compensation Committee of such board of directors to the extent it has been delegated authority
to do so), as the case may be, may delegate to any officer or other appropriate person of a Plan Sponsor the authority to take any such actions as may be specified in such resolution or written direction, other than the power to amend, modify or
terminate the Plan or the Trust or to determine the basis of any Plan Sponsor contributions. 
  
 12.9 Voting of Company Stock. 
  
 (a) The Trustee shall vote shares of Company Stock held in the Fund and allocated to the Accounts of Participants as follows: 
  

(1) Whole shares of Company Stock held in Accounts for which it has received instructions from Participants shall be voted in
accordance with such instructions. In the absence of voting instructions by a Participant, whole shares of Company Stock held in a Participant’s Accounts held under the ESOP shall not be voted. 
  

 40 

 (2) The combined fractional shares and fractional rights to shares of Company Stock held
in Accounts shall be voted to the extent possible in the same proportion as whole shares of Company Stock held in such Accounts are directed to be voted by Participants unless the fiduciary requirements of ERISA require otherwise. 
  
 (b) Each Participant who is then entitled to an allocation
of the Allocated Suspense shares in accordance with the provisions of Plan Section 5.4, shall instruct the Trustee as to how the Allocated Suspense Shares allocated to such Participant shall be voted and the Trustee shall vote the Allocated Suspense
Shares for which it has received instructions from Participants in accordance with such instructions. The Trustee shall vote Allocated Suspense Shares for which it has received no instructions in the same proportions as the Allocated Suspense Shares
for which it has received instructions are voted. 
  
 12.10
Appeals Fiduciary. The Primary Sponsor shall appoint an Appeals Fiduciary. The Appeals Fiduciary shall be required to review claims for benefits payable due to the Participant’s Disability that are initially denied by the Plan
Administrator and for which the claimant requests a full and fair review pursuant to Section 12.3. The Appeals Fiduciary may not be the individual who made the initial adverse determination with respect to any claim he reviews and may not be a
subordinate of any individual who made the initial adverse determination. The Appeals Fiduciary may be removed in the same manner in which appointed or may resign at any time by written notice of resignation to the Primary Sponsor. Upon such removal
or resignation, the Primary Sponsor shall appoint a successor. 
  
 SECTION 13 
 CLAIM REVIEW PROCEDURE 
  
 13.1 Notice of Denial. If a Participant or a Beneficiary is denied a claim for benefits under the Plan, the Plan
Administrator shall provide to the claimant written notice of the denial within ninety (90) days (forty-five (45) days with respect to a denial of any claim for benefits due to the Participant’s Disability) after the Plan Administrator receives
the claim, unless special circumstances require an extension of time for processing the claim. If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial
90-day period. In no event shall the extension exceed a period of ninety (90) days (thirty (30) days with respect to a claim for benefits due to the Participant’s Disability) from the end of such initial period. With respect to a claim for
benefits due to the Participant’s Disability, an additional extension of up to thirty (30) days beyond the initial 30-day extension period may be required for processing the claim. In such event, written notice of the extension shall be
furnished to the claimant within the initial 30-day extension period. Any extension 

  

 41 

 
notice shall indicate the special circumstances requiring the extension of time, the date by which the Plan Administrator expects to render the final
decision, the standards on which entitlement to benefits are based, the unresolved issues that prevent a decision on the claim and the additional information needed to resolve those issues. 
  
 13.2 Contents of Notice of Denial. If Participant or Beneficiary is
denied a claim for benefits under a Plan, the Plan Administrator shall provide to such claimant written notice of the denial which shall set forth: 
  
 (a) the specific reasons for the denial; 
  
 (b) specific references to the pertinent provisions of the Plan on which the denial is based; 
  
 (c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; 
  
 (d) an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures, including a statement of
the claimant’s right to bring a civil action under Sections 502(a) of ERISA following art adverse benefit determination on review; 
  
 (e) in the case of a claim for benefits due to the Participant’s Disability, if an internal rule, guideline, protocol or other
similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making
the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; and 
  
 (f) in the case of a claim for benefits due to the Participant’s Disability, if a denial of the claim is based on a medical necessity
or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation 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. 
  
 13.3
Right to Review. After receiving written notice of the denial of a claim or that a domestic relations order is a qualified domestic relations order, a claimant or his representative shall be entitled to: 
  
 (a) request a full and fair review of the denial o the claim
or determination that a domestic relations order is a qualified domestic relations order by written application to the Plan Administrator (or Appeals Fiduciary in the case of a claim for benefits payable due to the Participant’s Disability);

  
 (b) request, free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant to the claim; 
  

 42 

 (c) submit written comments, documents, records, and other information relating to the
denied claim to the Plan Administrator or Appeals Fiduciary, as applicable; and 
  
 (d) a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the
claim, without regard to whether such information was submitted or considered in the initial benefit determination. 
  
 13.4 Application for Review. 
  
 (a) If a claimant wishes a review of the decision denying his claim to benefits under the Plan, other than a claim described in Subsection
(b) of this Section 13.4, or if a claimant wishes to appeal a decision that a domestic relations order is a qualified domestic relations order, he must submit the written application to the Plan Administrator within sixty (60) days after receiving
written notice of the denial or notice that the domestic relations order is a qualified domestic relations order. 
  
 (b) If the claimant wishes a review of the decision denying his claim to benefits under the Plan due to the Participant’s Disability,
he must submit the written application to the Appeals Fiduciary within one hundred eighty (180) days after receiving written notice of the denial. With respect to any such claim, in deciding an appeal of any denial based in whole or in part on a
medical judgment (including determinations with regard to whether a particular treatment, drug, or other item is experimental. investigational, or not medically necessary or appropriate), the Appeals Fiduciary shall 
  
 (i) consult with a health care professional who has
appropriate training and experience in the field of medicine involved in the medical judgment; and 
  
 (ii) identify the medical and vocational experts whose advice was obtained on behalf of the Plan in connection with the denial without
regard to whether the advice was relied upon in making the determination to deny the claim. 
  
 Notwithstanding the foregoing, the health care professional consulted pursuant to this Subsection (b) shall be an individual who was not consulted with respect to the initial denial of the claim that is the subject of
the appeal or a subordinate of such individual. 
  
 13.5
Hearing. Upon receiving such written application for review, the Plan Administrator or Appeals Fiduciary, as applicable, may schedule a hearing for purposes of reviewing the claimant’s claim, which hearing shall take place not more than
thirty (30) days from the date on which the Plan Administrator or Appeals Fiduciary received such written application for review. 
  

 43 

 13.6 Notice of Hearing. At least ten (10) days prior to the scheduled hearing, the claimant and
his representative designated in writing by him, if any, shall receive written notice of the date, time, and place of such scheduled hearing. The claimant or his representative, if any, may request that the hearing be rescheduled, for his
convenience, on another reasonable date or at another reasonable time or place: 
  
 13.7 Counsel. All claimants requesting a review of the decision denying their claim for their benefits may employ counsel for purposes of the hearing. 
  
 13.8 Decision on Review. No later than sixty (60) days (forty-live
(45) days with respect to a claim for benefits due to the Participant’s Disability) following the receipt of the written application for review, the Plan Administrator or the Appeals Fiduciary, as applicable, shall submit its decision on the
review in writing to the claimant involved and to his representative, if any, unless the Plan Administrator or Appeals Fiduciary determines that special circumstances (such as the need to hold a hearing) require an extension of time, to a day no
later than one hundred twenty (120) days (ninety (90) days with respect to a claim for benefits due to the Participant’s Disability) after the date of receipt of the written application for review. If the Plan Administrator or Appeals Fiduciary
determines that the extension of time is required, the Plan Administrator or Appeals Fiduciary shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60) day (forty-five (45) days with respect to a
claim for benefits due to the Participant’s Disability) period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator or Appeals Fiduciary expects to render its
decision on review. In the case of a decision adverse to the claimant, the Plan Administrator or Appeals Fiduciary shall provide to the claimant written notice of the denial which shall include: 
  
 (a) the specific reasons for the decision; 
  
 (b) specific references to the pertinent provisions of the
Plait on which the decision is based; 
  
 (c) a
statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; 
  
 (d) an explanation of the Plan’s claim review
procedures, and the time limits applicable to such procedures, including a statement of the claimant’s right to bring an action under Section 502(a) of ERISA following the denial of the claim upon review; 
  
 (e) in the case of a claim for benefits due to the
Participant’s Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such
rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; 
  

 44 

 (f) in the case of a claim for benefits due to the Participant’s Disability, if a
denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation 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; and 
  
 (g) in the case of a claim for benefits due to the Participant’s Disability, a statement regarding the availability of other
voluntary alternative dispute resolution options. 
  
 SECTION 14

 LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY 
 INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS 
  
 14.1 Inalienability of Benefits. No benefit which shall be payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts
of any person, nor shall it be subject to attachment or legal process for, or against, such person, and the same shall not be recognized under the Plan, except to such extent as may be required by law. Notwithstanding the above, this Section shall
not apply to a “qualified domestic relations order” (as defined in Code Section 414(p)), and benefits may be paid pursuant to the provisions of such an order. The Plan Administrator shall develop procedures (in accordance with applicable
federal regulations) to determine whether a domestic relations order is qualified, and, if so, the method and the procedures for complying therewith. In addition, a distribution to an “alternate payee” (as defined in Code Section 414(q)
shall be permitted if such distribution is authorized by a Qualified Domestic Relations Order, even if the affected Participant has not yet separated from service and has not yet reached the “earliest retirement age” (as defined in Code
Section 414(p)). 
  
 14.2 Payment to a Minor or
Incompetent. Whenever any benefit which shall be payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined to be incompetent by qualified medical advice, the Plan Administrator need not require
the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of such minor or incompetent, or to cause the same to be paid to such minor or incompetent without the intervention of
a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of such minor or incompetent if one has been appointed or to cause the same to be used for the benefit of such minor or incompetent. 
  
 14.3 Missing Participant. If the Plan Administrator cannot ascertain
the whereabouts of any Participant to whom a payment is due under the Plan, the Plan Administrator may direct that the payment and all remaining payments otherwise due to the Participant be cancelled on the records of the Plan and the amount thereof
applied as a forfeiture in accordance with Plan Section 4.1 (b) or (c) as applicable, except that, in the event the Participant later notifies the Plan Administrator of his whereabouts and requests the payments due to him under the Plan, the Plan

  

 45 

 
Sponsor shall contribute to the Plan an amount equal to the payment to be paid to him as soon as administratively feasible. 
  
 SECTION 15 
 PROHIBITION AGAINST DIVERSION 
  
 At no time shall any part of the Fund be used for or diverted to purposes other than the exclusive benefit of the Participants or their Beneficiaries,
subject, however, to the payment of all taxes and administrative expenses and subject to the provisions of the Plan with respect to returns of contributions. 
  
 SECTION 16 
 LIMITATION OF RIGHTS

  
 Participation in the Plan shall not give any Employee
any right or claim except to the extent that such right is specifically fixed under the terms of the Plan. The adoption of the Plan and the Trust by any Plan Sponsor shall not be construed to give any Employee a right to be continued in the employ
of a Plan Sponsor or as interfering with the right of a Plan Sponsor to terminate the employment of any Employee at any time. 
  
 SECTION 17 
 AMENDMENT TO OR
TERMINATION OF THE 
 PLAN AND THE TRUST 
  
 17.1 Amendment or Termination. The Primary Sponsor reserves the right at any time to modify or amend or terminate the
Plan or the Trust in whole or in part by action approved by the Board of Directors or its delegatee; provided, however, that the Primary Sponsor shall have no power to modify or amend the Plan in such manner as would cause or permit any portion of
the funds hold under a Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Participants or their Beneficiaries, or as would cause or permit any portion of a fund held under the Plan to become the property of a Plan
Sponsor; and provided further, that the duties or liabilities of the Trustee shall not be increased without its written consent: and provided further that the provisions of the Plan affecting the amount, price and timing of awards (within the
meaning of Rule 16b-3(c) promulgated pursuant to the Securities Exchange Act of 1934) and affecting the eligibility of persons subject to Section 16 of the Securities Exchange Act of 1934 to participate in the Plan, shall be amended only by a
committee of two or more “disinterested directors,” as that term is used in Rule 16b-3(c)(2)(i) promulgated pursuant to the Securities Exchange Act of 1934, other than to comport with changes in the Code, ERISA or the rules and regulations
thereunder. No such modifications or amendments shall have the effect of retroactively changing or depriving Participants or Beneficiaries of benefits already accrued under the Plan. No Plan Sponsor other than the Primary Sponsor shall have the
right to so modify, amend or terminate the Plan or the Trust. Notwithstanding the foregoing, each Plan Sponsor may terminate its own participation in the Plan and Trust pursuant to the Plan. 
  

 46 

 17.2 Termination by Plan Sponsor. Each Plan Sponsor other than the Primary Sponsor shall have the
right to terminate its participation in the Plan and Trust by resolution of its board of directors or other appropriate governing body and notice in writing to the Primary Sponsor and the Trustee unless such termination would result in the
disqualification of the Plan or the Trust or would adversely affect the exempt status of the Plan or the Trust as to any other Plan Sponsor. If contributions by or on behalf of a Plan Sponsor are completely terminated, the Plan and Trust shall be
deemed terminated as to such Plan Sponsor. Any termination by a Plan Sponsor, shall not be a termination as to any other Plan Sponsor. 
  
 17.3 Vesting Upon Termination. 
  
 (a) If the Plan is terminated by the Primary Sponsor or if contributions to the Trust should be permanently discontinued, it shall
terminate as to all Plan Sponsors and the Fund shall be used, subject to the payment of expenses and taxes, for the benefit of Participants and Beneficiaries, and for no other purposes, and the Account of each affected Participant shall be fully
vested and nonforfeitable, notwithstanding the provisions of the Section of the Plan which sets forth the vesting schedule. 
  
 (b) In the event of the partial termination of the Plan, each affected Participant’s Account shall be fully vested and
nonforfeitable, notwithstanding the provisions of the Section of the Plan which sets forth the vesting schedule. 
  
 17.4 Effect of Plan Sponsor Termination. In the event of the termination of the Plan or the Trust with respect to a Plan Sponsor, the Accounts of
the Participants with respect to the Plan as adopted by such Plan Sponsor shall be held subject to the instructions of the Plan Administrator; provided that the Trustee shall not be required to make any distribution until it receives a copy of an
Internal Revenue Service determination letter to the effect that the termination does not affect the qualified status of the Plan or the exempt status of the Trust or, in the event that such letter is applied for and is not issued, until the Trustee
is reasonably satisfied that adequate provision has been made for the payment of all taxes which may be due and owing by the Trust. 
  
 17.5 Merger, Transfer, Consolidation. In the event of any merger or consolidation of the Plan with, or any transfer of the assets or liabilities of
the Plan to, any other plan qualified under Code Section 401, the terms of the merger, consolidation or transfer shall be such that each Participant would receive (in the event of termination of the Plan or its successor immediately thereafter) a
benefit which is no less than the benefit which the Participant would have received in the event of termination of the Plan immediately before the merger, consolidation or transfer. 
  
 17.6 Successor Companies. Any business entity which succeeds to all or any part of the business or assets of the
Primary Sponsor may, by resolution of its board of directors (or like controlling body), adopt the Plan and shall thereupon succeed to such rights and assume such obligations hereunder as such business entity and the Board shall have agreed upon in
writing. 
  

 47 

 17.7 Early Retirement Benefits. Notwithstanding any other provision of the Plan, an amendment to
the Plan – 
  
 (a) which eliminates or
reduces an early retirement benefit, if any, or which eliminates or reduces a retirement-type subsidy (as defined in regulations issued by the Department of the Treasury), if any, or 
  
 (b) which eliminates an optional form of benefit shall not be effective with respect to benefits
attributable to service before the amendment is adopted. In the case of a retirement, type subsidy described in Subsection (a) above, this Section shall be applicable only to a Participant who satisfies, either before or after the amendment, the
preamendment conditions for the subsidy. 
  
 SECTION 18

 PARTICIPATION IN PLAN BY AFFILIATE OR SUBSIDIARY 
  
 18.1 Adoption by Subsidiary or Affiliate; Extension to Division or Unit. Any subsidiary, Affiliate, unit, or division
of the Primary Sponsor, or any unit or division of a subsidiary or Affiliate, may become a participating employer in this Plan with respect to its employees by adopting this Plan with the consent of the Primary Sponsor. Upon the filing with the
Trustee and the Plan Administrator of a certified copy of the resolutions or other document evidencing adoption of the Plan and a written instrument evidencing the consent of the Board of Directors to such adoption, such subsidiary, Affiliate, unit
or division shall be admitted as a participating employer in the Plan with respect to its Eligible Employees. Any contributions provided for under the Plan and made by such participating employer or by its Eligible Employees shall become part of the
Trust and shall be held by the Trustee subject to the terms and provisions of the Plan and the Trust Agreement. The Board of Directors shall designate the divisions or units of the Primary Sponsor which shall be participating employers under the
Plan. 
  
 18.2 Special Provisions for Employees of
Subsidiaries, Affiliates, Acquired Companies, Units and Divisions. 
  
 (a) In approving the adoption of the Plan by, or the extension of the Plan to, any employer under Section 18.1, the Primary Sponsor, subject to the requirements of applicable law, shall designate (i) the extent, if
any, to which employment prior to the date of such adoption or extension shall be considered as Eligibility Service or as Vesting Service, (ii) the extent, if any, to which benefits with respect to employment prior to the date of such adoption or
extension shall be provided under the Plan, and (iii) such other special provisions (which may differ from the provisions of the Plan as set forth herein) which shall apply to employees of such employer. Such special provisions shall be set forth in
an Appendix to this Plan. 
  
 (b) The special
provisions referred to in paragraph (a) above, to the extent applicable, shall govern as to the eligibility for, and the amount of, benefits payable under the Plan, notwithstanding the regular provisions of the Plan. 
  

 48 

 SECTION 19 
 QUALIFICATION AND RETURN OF CONTRIBUTIONS 
  
 19.1 Qualification by IRS. If the Plan and the related Trust fail to receive the initial approval of the Internal Revenue Service as a qualified plan and trust within one (1) year after the date of denial of
qualification (a) the contribution of a Plan Sponsor after payment of all expenses will be returned to a Plan Sponsor free of the Plan and Trust, (b) contributions made by a Participant shall be returned to the Participant who made the
contributions, and (c) the Plan and Trust shall thereupon terminate. 
  
 19.2 Deductibility of Contributions. All Plan Sponsor contributions to the Plan are contingent upon deductibility. To the extent permitted by the Code and other applicable laws and regulations thereunder, upon a Plan Sponsor’s
request, a contribution which was made by reason of a mistake of fact or which was nondeductible under Code Section 404, shall be returned to a Plan Sponsor within one (1) year after the payment of the contribution, or the disallowance of the
deduction (to the extent disallowed), whichever is applicable. 
  
 In the event of a contribution which was made by reason of a mistake of fact or which was nondeductible, the amount to be returned to the Plan Sponsor shall be the excess of the contribution above the amount that would have been contributed
had the mistake of fact or the mistake in determining the deduction not occurred, less any net loss attributable to the excess. Any net income attributable to the excess shall not be returned to the Plan Sponsor. No return of any portion of the
excess shall be made to the Plan Sponsor if the return would cause the balance in a Participant’s Account to be less than the balance would have been had the mistaken contribution not been made. 
  

 49 

 SECTION 20 
 INCORPORATION OF SPECIAL LIMITATIONS 
 AND OF OTHER PLAN SPONSORS 
  
 Appendices A, B, C and D to the Plan, attached hereto, are incorporated by
reference and the provisions of the same shall apply notwithstanding anything to the contrary contained herein. 
  
 IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to be executed as of the date first above written. 
  

			
	AVON PRODUCTS, INC.
		
	By:	 	 /s/ Andrea Jung

		
	 Title:
	 	 Chairman & Chief Executive Officer

  

 50 

  
 APPENDIX A 

LIMITATION ON ALLOCATIONS 
  
 SECTION 1 
  
 Except to the extent permitted under Plan Section 3.1(c) and Code Section 414(v), if applicable, the ‘annual addition’ for any Participant for
any one limitation year may not exceed the lesser of: 
  
 (a) $40,000, as adjusted under Code Section 415(d); or 
  
 (b) 100% of the Participant’s Annual Compensation. 
  
 The limit described in Subsection (b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Section 401(h) or 419A(f)(2)) which is otherwise treated as an
annual addition. 
  
 SECTION 2 
  
 For the purposes of this Appendix A, the term “annual addition” for
any Participant means for any limitation year, the sum of certain Plan Sponsor, Affiliate, and Participant contributions, forfeitures, and other amounts as determined in Code Section 415(c)(2) in effect for that limitation year. Participant
contributions shall be determined without regard to Rollover Amounts, employee contributions to a simplified employee pension which are excludable from gross income under Code Section 401(k)(6), and catch-up contributions as described in Code
Section 414(v). 
  
 SECTION 3 
  
 For purposes of this Appendix A, the term “limitation year” shall
mean a Plan Year unless a Plan Sponsor elects, by adoption of a written resolution, to use any other twelve month period adopted in accordance with regulations issued by the Secretary of the Treasury. 
  
 SECTION 4 
  
 For purposes of applying the limitations of this Appendix A, all defined contribution plans maintained or deemed to be
maintained by a Plan Sponsor shall be treated as one defined contribution plan, and all defined benefit plans now or previously maintained or deemed to be maintained by a Plan Sponsor shall be treated as one defined benefit plan. In the event any of
the actions to be taken pursuant to Section 5 of this Appendix A or pursuant to any language of similar import in another defined contribution plan are required to be taken as a result of the 

  

 A-1 

 
annual additions of a Participant exceeding the limitations set forth in Section 1 of this Appendix A, because of the Participant’s participation in
more than one defined contribution plan, the actions shall be taken first with regard to this Plan. 
  
 SECTION 5 
  
 In the event the limitations contained in Section 1 of this Appendix A are exceeded, any reduction in the annual addition made on behalf of a Participant shall first be made in all other defined contribution plans of the Plan Sponsor in
which the Participant participates and in the event the limitation contained in Section 1 of this Appendix A is exceeded, who in the event of reasonable error in determining deferrals, the Plan Administrator shall, in writing, direct the Trustee to
take such of the following actions as the Plan Administrator shall deem appropriate, specifying in each case the amount or amounts of contributions involved: 
  

(a) Supplemental Contributions made by the Plan Sponsor on behalf of the Participant pursuant to Plan Section 3.2 which constitute
After-Tax Participant Contributions shall be reduced in the amount of the excess and distributed to the Participant together with income, gain or loss attributable to such contributions through the end of the Plan Year in which the contribution was
made; 
  
 (b) If further reduction is necessary,
Supplemental Contributions made by the Plan Sponsor on behalf of the Participant pursuant to Plan Section 3.1 which constitute Before-Tax Participant Contributions shall be reduced in the amount of the remaining excess together with income, gain or
loss attributable to such contributions through the end of the Plan Year in which the contribution was made and distributed to the Participant. 
  
 (c) If further reduction is necessary, Basic Contributions made by the Plan Sponsor on behalf of the Participant pursuant to Plan Section
3.2 which constitute After-Tax Participant Contributions and contributions of the Plan Sponsor thereon pursuant to Plan Section 3.3 shall be reduced in the amount of the remaining excess together with income, gain or loss attributable to such
contributions throughout the end of the Plan Year. The amount of reduction of After-Tax Participant Contributions shall be distributed to the Participant. The amount of the reduction under Plan Section 3.3 shall be reallocated to the ESOP Matching
Accounts of Participants who are not affected by the limitations in the same proportion as the contribution of the Plan Sponsor for the year is allocated under Plan Section 4.1 to the Accounts of such Participants; and 
  
 (d) If further reduction is necessary, Basic Contributions
made by the Plan Sponsor on behalf of the Participant pursuant to Plan Section 3.1 which constitute Before-Tax Participant Contributions and contributions of the Plan Sponsor thereon pursuant to Plan Section 3.3 shall be reduced in the amount of the
remaining excess together with income, gain or loss attributable to such contributions through the end of the Plan Year in which the contribution was made. The amount of the reduction of Before-Tax Participant Contribution shall be distributed to
the Participant. The amount 

  

 A-2 

 
of reduction under Plan Section 3.3 shall be reallocated to the ESOP Matching Accounts of Participant who are not affected by the limitations in the same
proportion as the contribution of the Plan Sponsor for the year is allocated under Plan Section 4.1 to the Accounts of such Participants; and 
  
 (e) If further reduction is necessary, Company contributions made by the Plan Sponsor on behalf of the Participant pursuant to Plan
Section 3.5 shall be reduced by the remaining excess together with income, gain or loss attributable to such contributions through the end of the Plan Year in which the contribution was made, and reallocated to the ESOP Matching Accounts of
Participants who are not affected by the limitations in the same proportion as the contribution of the Plan Sponsor for the year is allocated under Plan Section 4.1 to the Accounts of such Participants. 
  
 (f) If the contributions of the Plan Sponsor would cause the
annual addition to exceed the limitations set forth herein with respect to all Participants under the Plan, the portion of such contributions in excess of the limitations shall be segregated in a suspense account. While the suspense account is
maintained, (1) no Plan Sponsor contributions under the Plan shall be made which would be precluded by this Appendix A, (2) income, gains and losses of the Fund shall not be allocated to such suspense account and (3) amounts in the suspense account
shall be allocated in the same manner as Plan Sponsor contributions under the Plan as of each Valuation Date on which Plan Sponsor contributions may be allocated until the suspense account is exhausted. In the event of the termination of the Plan,
the amounts in the suspense account shall be returned to the Plan Sponsor to the extent that such amounts may not then be allocated to the Participants’ Accounts. 
  
 Notwithstanding anything contained in the Plan to the contrary, the Plan Administrator may modify the provisions of this
Section 5 with respect to reduction of Participant’s accounts in accordance with such procedures as the Plan Administrator may establish with respect to catch-up contributions described in code Section 414(v). 
  

 A-3 

  
 APPENDIX B 

TOP-HEAVY PROVISIONS 
  
 SECTION 1 
  
 As used in this Appendix B, the following Words shall have the following meanings: 
  
 (a) “Determination Date” means, with respect to any Plan Year, the last day of the
preceding Plan Year, or, in the case of the first Plan Year, means the last day of the first Plan Year. 
  
 (b) “Key Employee” means an Employee or former Employee (including a Beneficiary of a Key Employee or former Key
Employee) who at any time during the Plan Year containing the Determination Date was: 
  
 (1) an officer of the Plan Sponsor or any Affiliate whose Annual Compensation was greater than $130,000 (as adjusted for changes in the
cost of living as provided in regulations issued by the Secretary of the Treasury for Plan Years beginning after December 31, 2002) for the calendar year in which the Plan Year ends, where the term ‘officer’ means an administrative
executive in regular and continual service to the Plan Sponsor or an Affiliate; provided, however, that in no event shall the number of officers exceed the lesser of (A) fifty (50) employees; or (B) the greater of (I) three (3) employees or (II) ten
percent (10%) of the number of Employees during the Plan Year, with any non-integer being increased to the next integer. If for any year, no officer of the Plan Sponsor meets the requirements of this Subparagraph (1), the highest paid officer of the
Plan Sponsor for the Plan Year shall be considered an officer for purposes of this Subparagraph (1); 
  
 (2) an owner of more than five percent (5%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than five percent (5%) of
the total combined voting power of all stock of the Plan Sponsor or an Affiliate; or 
  
 (3) an owner of more than one percent (1%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than one percent (1%) of
the total combined voting power of all stock of the Plan Sponsor or an Affiliate, and who in such Plan Year had Annual Compensation from the Plan Sponsor and all of its Affiliates of more than $l50,000. 
  
 For purposes of determining ownership under Subsections (2) and (3) above,
the rules set forth in Code Section 318(a)(2) shall be applied as follows (i) in the case of any Plan Sponsor or Affiliate which is a corporation, by substituting five percent (5%) for fifty percent (50%) and (ii) in the case of any Plan Sponsor or
Affiliate which is not a corporation, ownership shall be determined in accordance with Treasury Regulations which shall be based on principles similar to the principles of Code Section 318 (modified as described in Clause (i) above). 
  

 B-1 

 Employees other than Key Employees are sometimes referred to in this Appendix B as ‘non-key
employees.’ 
  
 (c) “Required
Aggregation Group” means: 
  
 (1) each
plan of the Plan Sponsor and its Affiliates which qualifies under Code Section 401(a) in which a Key Employee is a participant, and 
  
 (2) each other plan of the Plan Sponsor and its Affiliates which qualifies under Code Section 401(a) and which enables any plan described
in Subsection (a) of this Section to meet the requirements of Section 401(a)(4) or 410 of the Code. 
  
 (d) (1) “Top-Heavy” means: 
  
 (A) if the Plan is not included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the
Determination Date; 
  
 (i) the present value of
the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) made in the Plan Year in which the determination is being made) under the Plan for all Key Employees exceeds sixty percent (60%) of the present value of
the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) for the Current Plan Year) under the Plan for all Participants; and 
  
 (ii) the Plan, when included in every potential combination, if any, with any or all of: 
  
 (I) any Required Aggregation Group, and 
  
 (II) any plan of the Plan Sponsor which is not part of any
Required Aggregation Group and which qualifies under Code Section 401(a) 
  
 is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and 
  
 (B) if the Plan is included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the Determination
Date: 
  
 (i) the Required Aggregation Group is
a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and 
  

 B-2 

 (ii) the Required Aggregation Group, when included in every potential combination, if
any, with any or all of the plans of the Plan Sponsor and its Affiliates which are not part of the Required Aggregation Group and which qualify under Code Section 401(a), is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection).

  
 (C) For purposes of Subparagraphs (A)(ii)
and (B)(ii) of this Paragraph (1), any combination of plans must satisfy the requirements of Sections 401(a)(4) and 410 of the Code. 
  
 (2) A group shall be deemed to be a Top-Heavy Group if: 
  
 (A) the sum, as of the Determination Date, of the present value of the cumulative accrued benefits for all
Key Employees under all plans included in such group exceeds 
  
 (B) sixty percent (60%) of a similar sum determined for all participants in such plans. 
  
 (3) (A) For purposes of this Section, the present value of the accrued benefit for any participant in a defined contribution plan as of any Determination
Date or last day of a plan year shall be the sum of: 
  
 (i) as to any defined contribution plan other than a simplified employee pension, the account balance as of the most recent valuation date occurring within the plan year ending on the Determination Date or last day of a plan year, and

  
 (ii) as to any simplified employee pension,
the aggregate employer contributions, and 
  
 (iii) an adjustment for contributions due as of the Determination Date or last day of a plan year. 
  
 In the case of a plan that is not subject to the minimum funding requirements of Code Section 412, the adjustment in Clause (iii) of this Subparagraph
(A) shall be the amount of any contributions actually made after the valuation date but on or before the Determination Date or last day of the plan year to the extent not included under Clause (i) or (ii) of this Subparagraph (A); provided however
that in the first plan year of the plan, the adjustment in Clause (iii) of this Subparagraph (A) shall also reflect the amount of any contributions made thereafter that are allocated as of a date in such first plan year. In the case of a plan that
is subject to the minimum funding requirements, the account balance in Clause (i) and 

  

 B-3 

 
the aggregate contributions in Clause (ii) of this Subparagraph (A) shall include contributions that would be allocated as of a date not later than the
Determination Date or last day of a plan year, even though those amounts are not yet required to be contributed, and the adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of any contribution actually made (or due to be made)
after the valuation date but before the expiration of the extended payment period in Code Section 412(c)(l0) to the extent not included under Clause (i) or (ii) of this Subparagraph (A). 
  
 (B) For purposes of this Subsection, the present value of the accrued benefit for any participant in a
defined benefit plan as of any Determination Date or last day of a plan year must be determined as of the most recent valuation date which is within a 12-month period ending on the Determination Date or last day of a plan year as if such participant
terminated as of such valuation date; provided, however, that in the first plan year of a plan, the present value of the accrued benefit for a current participant must be determined either (i) as if the participant terminated service as of the
Determination Date or last day of a plan year or (ii) as if the participant terminated service as of such valuation date, but taking into account the estimated accrued benefit as of the Determination Date or last day of a plan year. For purposes of
this Subparagraph (B), the valuation date must be the same valuation date used for computing plan costs for minimum funding, regardless of whether a valuation is performed that year. The actuarial assumptions utilized in calculating the present
value of the accrued benefit for any participant in a defined benefit plan for purposes of this Subparagraph (B) shall be established by the Plan Administrator after consultation with the actuary for the plan, and shall be reasonable in the
aggregate and shall comport with the requirements set forth by the Internal Revenue Service in Q&A T-26 and T-27 of Regulation Section 1.4161. 
  
 (C) For purposes of determining the present value of the cumulative accrued benefit under a plan for any Participant in accordance with
this Subsection, the present value shall be increased by the aggregate distributions made with respect to the Participant (including distributions paid on account of death to the extent they do not exceed the present value of the cumulative accrued
benefit existing immediately prior to death) under each plan being considered, and under any terminated plan which if it had not been terminated would have been in a Required Aggregation Group with the Plan, during the one-year period ending on the
Determination Date or the last day of the Plan Year that falls within the calendar year in which the Determination Date falls. In the case of a distribution made with respect to a Participant made for a reason other than separation from service,
death, or disability, this provision shall be applied by substituting a five-year period for the one-year period. 
  

 B-4 

 (D) For purposes of this Paragraph (3), participant contributions which are deductible
as “qualified retirement contributions” within the meaning of Code Section 219 or any successor, as adjusted to reflect income, gains, losses, and other credits or charges attributable thereto, shall not be considered to be part of the
accrued benefits under any plan. 
  
 (E) For
purposes of this Paragraph (3), if any employee is not a Key Employee with respect to any plan for any plan year, but such employee was a Key Employee with respect to such plan for any prior plan year, any accrued benefit for such employee shall not
be taken into account. 
  
 (F) For purposes of
this Paragraph (3), if any Employee has not performed any service for a Plan Sponsor or an Affiliate maintaining the Plan during the one-year period ending on the Determination Date, any accrued benefit for that Employee shall not be taken into
account. 
  
 (G) (i) In the case of an “unrelated
rollover” (as defined below) between plans which qualify under Code Section 401(a), (a) the plan providing the distribution shall count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting
the distribution shall not consider the distribution part of the accrued benefit under this Section; and 
  
 (ii) in the case of a “related rollover” (as defined below) between plans which qualify under Code Section 401(a), (a) the plan
providing the distribution shall not count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting the distribution shall consider the distribution part of the accrued benefit under this Section.

  
 For purposes of this Subparagraph (G), an “unrelated
rollover” is a rollover as defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan transfer which is both initiated by the participant and made from a plan maintained by one employer to a plan maintained by another employer where the
employers are not Affiliates. For purposes of this Subparagraph (G), a “related rollover” is a rollover as defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan transfer which is either not initiated by the participant or made
to a plan maintained by the employer or an Affiliate. 
  

 B-5 

 SECTION 2 
  

(a) Notwithstanding anything contained in the Plan to the contrary, except as otherwise provided in Subsection (b) of this Section, in any Plan Year
during which the Plan is Top-Heavy, allocations of Plan Sponsor contributions and forfeitures for the Plan Year for the Account of each Participant who is not a Key Employee and who has not separated from service with the Plan Sponsor prior to the
end of the Plan Year shall not be less than three percent (3%) of the Participant’s Annual Compensation. For purposes of this Subsection, an allocation to a Participant’s Account resulting from any Plan Sponsor contribution attributable to
a salary reduction or similar arrangement shall not be taken into account. 
  
 (b) (1) The percentage referred to in Subsection (a) of this Section for any Plan Year shall not exceed the percentage at which allocations are made or are required to be made under the Plan for the Plan Year for the
Key Employee for whom the percentage is highest for a Plan Year. For purposes of this Paragraph, an allocation to the Account of a Key Employee resulting from any Plan Sponsor contribution attributable to a salary reduction or similar agreement
shall be taken into account but allocations of catch-up contributions as described in Code Section 414(v) shall not be taken into account. 
  
 (2) For purposes of this Subsection (b), all defined contribution plans which are members of a Required Aggregation Group shall be treated
as part of the Plan. 
  
 (3) This Subsection (b)
shall not apply to any plan which is a member of a Required Aggregation Group if the plan enables a defined benefit plan which is a member of the Required Aggregation Group to meet the requirements of Code Section 401(a)(4) or 410. 
  
 (4) If the Plan Sponsor maintains a defined benefit plan
which is qualified under Code Section 401(a) and which would be Top-Heavy within the meaning of the Plan for its plan year ending within or coincident with the Plan Year, no allocation shall be made pursuant to Subsection (a) of this Section on
behalf of any Participant who participates in the defined benefit plan and acquires a year of service within the meaning of paragraphs (4), (5) and (6) of Code Section 411(a) under the defined benefit plan for the plan year, if the defined benefit
plan provides generally that the accrued benefit of the Participant when expressed as an annual retirement benefit shall not, when expressed as a percentage of the Participant’s Annual Compensation, be less than the lesser of (A) 2 percent
multiplied by the number of such years of service in plan years during which such plan was Top-Heavy, or (B) 20 percent. 
  

 B-6 

  
 APPENDIX C 

SPECIAL NONDISCRIMINATION RULES 
  
 SECTION 1 
  
 As used in this Appendix, the following words shall have the following meanings: 
  
 (a) “Eligible Participant” means a Participant who is an Employee during any particular
Plan Year. 
  
 (b) “Highly Compensated
Eligible Participant” means any Eligible Participant who is a Highly Compensated Employee. 
  
 (c) “Matching Contribution” means any contribution made by a Plan Sponsor and any other contribution made to a plan by a
Plan Sponsor or an Affiliate on behalf of an Employee on account of a contribution made by an Employee or on account of an Elective Deferral. 
  
 (d) “Qualified Matching Contribution” means Matching Contributions of the Plan Sponsor or an Affiliate to the 401(k)
Account of a Participant who is not a Highly Compensated employee which are immediately nonforfeitable when made, and which would be nonforfeitable, regardless of the age or service of the Employee or whether the Employee is employed on a certain
date, and which may not be distributed, except upon one of the events described under Section 401(k)(2)(B) of the Code and the regulations thereunder. 
  
 (e) “Qualified Nonelective Contributions” means contributions of the Plan Sponsor or an Affiliate to the 401(k) Account
of a Participant who is not a Highly Compensated Employee, other than Matching Contributions or Elective Deferrals, which are nonforfeitable when made, and which would be nonforfeitable regardless of the age or service of the Employee or whether the
Employee is employed on a certain date, and which may not be distributed, except upon one of the events described under Code Section 401(k)(2)(B) and the regulations thereunder. 
  
 SECTION 2 
  
 Except as provided in Section 8, in addition to any other limitations set forth in the Plan, for each Plan Year one of the following tests must be
satisfied: 
  
 (a) the actual deferral percentage
for the Highly Compensated Eligible Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the Plan Year multiplied by 1.25; or 
  
 (b) the excess of the actual deferral percentage for the
Highly Compensated Eligible Participants for the Plan Year over that of all other Eligible 

  

 C-1 

 
Participants for the Plan Year must not be more than two (2) percentage points, and the actual deferral percentage for the Highly Compensated Eligible
Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the Plan Year multiplied by two (2). 
  

The “actual deferral percentage” for the Highly Compensated Eligible Participants and all other Eligible Participants for a Plan Year is the average in each
group of the ratios, calculated separately for each Employee, of the Deferral Amounts contributed by the Plan Sponsor on behalf of an Employee for the Plan Year to the Annual Compensation of the Employee in the Plan Year. In addition, for purposes
of calculating the “actual deferral percentage” as described above, Deferral Amounts of Employees who are not Highly Compensated Employees which are prohibited by Code Section 40l(a)(30) shall not be taken into consideration. Except to the
extent limited by Treasury Regulation Section 1.401(k)-l(b)(5) and any other applicable regulations promulgated by the Secretary of the Treasury, all or part of the Qualified Matching Contributions and Qualified Nonelective Contributions (other than
Qualified Nonelective Contributions that are treated as matching Contributions pursuant to Section 5 of Appendix C) made pursuant to the Plan may be treated as Deferral Amounts for purposes of determining the “actual deferral percentage.”
The Plan Sponsor may in its sole discretion contribute Qualified Nonelective Contributions or Qualified Matching Contributions with respect to a Plan Year, provided the contributions are made no later than the last day of the Plan Year following the
Plan for which the Qualified Nonelective Contributions or Qualified Matching Contributions are made. Qualified Nonelective Contributions for a Plan Year will be allocated to the QMAC/QNEC Account of the Participant who has the least amount of Annual
Compensation for such Plan Year in an amount which, when combined with contributions made on behalf of the Participant pursuant to Sections 3.2 and 3.3, equals twenty-five percent (25%) of the Participant’s Annual Compensation. This Qualified
Nonelective Contribution formula allocation shall be repeated for the Participants, determined in ascending order of relative Annual Compensation for such year, until the actual deferral percentage test described in this Section is passed.

  
 SECTION 3 
  
 If the Deferral Amounts contributed on behalf of any Highly Compensated
Eligible Participant exceeds the amount permitted under the “actual deferral percentage” test described in Section 2 of this Appendix C for any given Plan Year, then before the end of the Plan Year following the Plan Year for which the
Excess Deferral Amount was contributed, (a) the portion of the Excess Deferral Amount for the Plan Year attributable to a Highly Compensated Participant, as adjusted to reflect income, gain, or loss attributable to it through the date the end of the
Plan Year for which the test is being performed and reduced by any excess Elective Deferrals as determined pursuant to Section 3.1 previously distributed to a Participant for the Participant’s taxable year ending with or within the Plan Year,
may be distributed to the Highly Compensated Eligible Participant or (b) to the extent provided in regulations issued by the Secretary of the Treasury, the Plan Administrator may permit the Participant to elect, within two and one-half months after
the end of the Plan Year for which the Excess Deferral Amount was contributed, to treat the Excess Deferral Amount, 

  

 C-2 

 
unadjusted for earnings, gains, and losses, but as so reduced, as an amount distributed to the Participant and then contributed as an after-tax contribution
by the Participant to the Plan (“recharacterized amounts”). The income allocable to such Excess Deferral Amount shall be determined in a similar manner as described in Section 4.2 of the Plan. The Excess Deferral Amount to be distributed
or recharacterized shall be reduced by Deferral Amounts previously distributed or recharacterized for the taxable year ending in the same Plan Year, and shall also be reduced by Deferral Amounts previously distributed or recharacterized for the Plan
Year beginning in such taxable year. For all other purposes under the Plan other than this Appendix C recharacterized amounts shall continue to be treated as Deferral Amounts. The portion of the Matching Contribution on which such Excess Deferral
Amount was based shall be forfeited upon the distribution or recharacterization, as the case may be, of such Excess Deferral Amount. 
  
 (a) For purposes of this Section 3, “Excess Deferral Amount” means, with respect to a Plan Year, the excess of: 
  
 (1) the aggregate amount of Deferral Amounts contributed by
a Plan Sponsor on behalf of Highly Compensated Eligible Participants for the Plan Year, over 
  
 (2) the maximum Amount of Deferral Amounts permitted under Section 2 of this Appendix C for the Plan Year, which shall be determined by
reducing the Deferral Amounts contributed on behalf of Highly Compensated Eligible Participants in order of the actual deferral percentages beginning with the highest of such percentages. 
  
 (b) Distribution of the Excess Deferral Amount for any Plan
Year shall be made to Highly Compensated Eligible Participants on the basis of the dollar amount of Deferral Amounts attributable to each Highly Compensated Eligible Participant. The Plan Sponsor shall determine the amount of Excess Deferral Amounts
which shall be distributed to each Highly Compensated Eligible Participant as follows. 
  
 (1) The Deferral Amounts allocated to the Highly Compensated Eligible Participant with the highest dollar amount of Deferral Amounts for
the Plan Year shall be reduced by the amount required to cause that Highly Compensated Eligible Participant’s remaining Deferral Amounts for the Plan Year to be equal to the dollar amount of the Deferral Amounts allocated to the Highly
Compensated Eligible Participant with the next highest dollar amount of Deferral Amounts for the Plan Year. This amount is then distributed to the Highly Compensated Eligible Participant with the highest dollar amount of Deferral Amounts, unless a
smaller reduction, when added to the total dollar amount already distributed pursuant to this Paragraph (1), equals the total Excess Deferral Amounts. 
  
 (2) If the total amount distributed under Paragraph (1) of this Section 3(b) is less than the total Excess Deferral Amounts, the procedure
in Paragraph (1) 

  

 C-3 

 
shall be successively repeated until the total dollar amount distributed is equal to the total Excess Deferral Amounts attributable to Highly Compensated
Eligible Participants. 
  
 If a distribution of
the Excess Deferral Amounts attributable to the Highly Compensated Eligible Participants is made in accordance with Paragraphs (1) and (2) of this Section, the limitations in Section 2 of this Appendix C shall be treated as being met regardless of
whether the actual deferral percentage, if recalculated after such distributions, would have satisfied the requirements of Section 2. 
  
 SECTION 4 
  
 The Plan Administrator shall have the responsibility of monitoring the Plan’s compliance with the limitations of this Appendix C and shall have the
power to take all steps it deems necessary or appropriate to ensure compliance, including, without limitation, restricting the amount which Highly Compensated Eligible Participants can elect to have contributed pursuant to Section 3.1(a). Any
actions taken by the Plan Administrator pursuant to this Section 4 shall be pursuant to non-discriminatory procedures consistently applied. 
  
 SECTION 5 
  
 Except as provided in Section 8, in addition to any other limitations set forth in the Plan, Matching Contributions under the Plan and the amount of
nondeductible employee contributions under the Plan, for each Plan Year must satisfy one of the following tests: 
  
 (a) The contribution percentage for Highly Compensated Eligible Participants for the Plan Year must not exceed 125% of the contribution
percentage for all other Eligible Participants for the Plan Year; or 
  
 (b) The contribution percentage for Highly Compensated Eligible Participants for the Plan Year must not exceed the lesser of (1) 200 % of the contribution percentage for all other Eligible Participants for the Plan
Year, and (2) the contribution percentage for all other Eligible Participants for the Plan Year plus two (2) percentage points. 
  
 Notwithstanding the foregoing, for purposes of this Section 5, the terms Highly Compensated Eligible Participant and Eligible Participant shall not include any
Participant who is not eligible to receive a Matching Contribution under the provisions of the Plan, other than as a result of the Participant failing to contribute to the Plan or failing to have an Elective Deferral contributed to the Plan on the
Participant’s behalf. The “contribution percentage” for Highly Compensated Eligible Participants and for all other Eligible Participants for a Plan Year shall be the average of the ratios, calculated separately for each Participant,
of (A) to (B), where (A) is the amount of Matching Contributions under the Plan (excluding Qualified Matching Contributions which are used to apply the test set forth in Section 2 of this Appendix C) and 

  

 C-4 

 
nondeductible employee contributions made under the Plan for the Eligible Participant for the Plan Year, and where (B) is the Annual Compensation of the
Eligible Participant for the Plan Year. Except to the extent limited by Treasury Regulation Section 1.401(m)-e(b)(5) and any other applicable regulations promulgated by the Secretary of the Treasury, a Plan Sponsor may elect to treat Deferral
Amounts and Qualified Nonelective Contributions as Matching Contributions for purpose of determining the “contribution percentage,” provided the Deferral Amounts, excluding those treated as Matching Contributions, satisfy the test set
forth in Section 2 of Appendix C. The Plan Sponsor may in its sole discretion contribute Qualified Nonelective Contributions or Qualified Matching Contributions with respect to a Plan Year, provided the contributions are made no later than the last
day of the Plan Year following the Plan Year for which the Qualified Nonelective Contributions or Qualified Matching Contributions are made. Notwithstanding the foregoing, Qualified Nonelective Contributions and Qualified Matching Contributions that
are taken into account for purposes of applying the test contained in Section 2 of this Appendix C shall not be taken into account under this Section 5. Qualified Matching Contributions will be allocated to the QMAC/QNEC Account of the Participant
who has the lowest average deferral percentage in an amount which, when combined with contributions made on behalf of the Participant pursuant to Sections 3.2 and 3.3, equals twenty-five percent (25%) of the Participant’s Annual Compensation.
This Qualified Matching Contribution formula allocation shall be repeated for the Participants, determined in ascending order of relative Annual Compensation for such year, until the actual deferral percentage test described in this Section is
passed. Qualified Nonelective Contributions for a Plan Year will be allocated to the QMAC/QNEC Account of the Participant who has the least amount of Annual Compensation for such Plan Year in an amount which, when combined with contributions made on
behalf of the Participant pursuant to Sections 3.2 and 3.3, equals twenty-five percent (25%) of the Participant’s Annual Compensation. This Qualified Nonelective Contribution formula allocation shall be repeated for the Participants, determined
in ascending order of relative Annual Compensation for such year, until the actual deferral percentage test described in this Section is passed. 
  
 SECTION 6 
  
 If either (a) the Matching Contributions and, if taken into account under Section 5 of this Appendix C, the Deferral Amounts, Qualified Nonelective
Contributions and/or Qualified Matching Contributions made on behalf of Highly Compensated Eligible Participants, or (b) the nondeductible employee contributions made by Highly Compensated Eligible Participants exceed the amount permitted under the
“contribution percentage test” for any given Plan Year, then, before the close of the Plan Year following the Plan Year for which the Excess Aggregate Contributions were made, the amount of the Excess Aggregate Contributions attributable
to the Plan for the Plan Year under either Section (6)(c)(1) or (2), or both, as adjusted to reflect any income, gain or loss attributable to such contributions through the date the Excess Aggregate Contributions are distributed shall be distributed
or, if the Excess Aggregate Contributions are forfeitable, forfeited. The income allocable to such contributions shall be determined in a similar manner as described in Section 4.2 of the Plan. As to any Highly Compensated Employee, any distribution
or forfeiture of his allocable 

  

 C-5 

 
portion of the Excess Aggregate Contributions for a Plan Year shall first be attributed to any nondeductible employee contributions made by the Participant
during the Plan Year for which no corresponding Plan Sponsor contribution is made and then to any remaining nondeductible employee contributions made by the Participant during the Plan Year and any Matching Contributions thereon. As between the Plan
and any other plan or plans maintained by the Plan Sponsor in which Excess Aggregate Contributions for a Plan Year are held, each such plan shall distribute or forfeit a pro-rata share of each class of contribution based on the respective amounts of
a class of contribution made to each plan during the Plan Year. The payment of the Excess Aggregate Contributions shall be made without regard to any other provision in the Plan. 
  
 For purposes of this Section 6, with respect to any Plan Year, “Excess Aggregate Contributions” means the excess
of: 
  
 (a) the aggregate amount of the Matching
Contributions and nondeductible employee contributions (and any Qualified Nonelective Contributions or Qualified Matching Contributions) and, if taken into account under Section 5 of this Appendix C, the Deferral Amounts actually made on behalf of
Highly Compensated Eligible Participants for the Plan Year, over 
  
 (b) the maximum amount of contributions permitted under the limitations of Section 5 of this Appendix C, determined by reducing contributions made on behalf of Highly Compensated Eligible Participants in order of
their contribution percentages beginning with the highest of such percentages. 
  
 The determination of the amount of Excess Aggregate Contributions under this Section 6 shall be made after (1) first determining the
excess Elective Deferrals under Section 3.1(b) of the Plan and (2) then determining the Excess Deferral Amounts under Section 3 of this Appendix C. 
  
 (c) Distribution or forfeiture of nondeductible employee contributions or Matching Contributions in the amount of the Excess Aggregate
Contributions for any Plan Year shall be made with respect to Highly Compensated Eligible Participants on the basis of the dollar amount of the Excess Aggregate Contributions attributable to each Highly Compensated Eligible Participant. Forfeitures
of Excess Aggregate Contributions may not be allocated to Participants whose contributions are reduced under this Section 6. The Plan Sponsor shall determine the amount of Excess Aggregate Contributions which shall be distributed to each Highly
Compensated Eligible Participant as follows. 
  
 (1) The Matching Contributions and nondeductible contributions allocated to the Highly Compensated Eligible Participant with the highest dollar amount of such contributions for the Plan Year shall be reduced by the amount required to cause
that Highly Compensated Eligible Participant’s remaining Matching Contributions and nondeductible contributions for the Plan Year to be equal to the dollar amount of such contributions allocated to the Highly 

  

 C-6 

 
Compensated Eligible Participant with the next highest dollar amount of Matching Contributions and nondeductible contributions for the Plan Year. This amount
is then distributed to the Highly Compensated Eligible Participant with the highest dollar amount of Matching Contributions and nondeductible contributions, unless a smaller reduction, when added to the total dollar amount already distributed
pursuant to this Subsection (1), equals the total Excess Aggregate Contributions. 
  
 (2) If the total amount distributed under paragraph (1) is less than the total Excess Aggregate Contributions, the procedure in Paragraph
(1) shall be repeated until the total dollar amount of Matching Contributions and nondeductible contributions distributed is equal to the total Excess Aggregate Contributions attributable to Highly Compensated Eligible Participants. 
  
 If a distribution of the total Excess Aggregate Contributions is made in
accordance with Paragraphs (1) and (2) of this Section 6(c), the limitations in Section 5 of this Appendix C shall be treated as being met regardless of whether the actual contribution percentage, if recalculated after such distributions, would have
satisfied the requirements of Section 5. 
  
 SECTION 7

  
 Except to the extent limited by rules promulgated by the
Secretary of the Treasury, if a Highly Compensated Eligible Participant is a participant in any other plan of the Plan Sponsor or any Affiliate which includes Matching Contributions, deferrals wider a cash or deferred arrangement pursuant to Code
Section 401(k), or nondeductible employee contributions, any contributions made by or on behalf of the Participant to the other plan shall be allocated with the same class of contributions under the Plan for purposes of determining the “actual
deferral percentage” and “contribution percentage” under the Plan; provided, however, contributions that are made under an “employee stock ownership plan” (within the meaning of Code Section 4975(e)(7)) shall not be combined
with contributions under any plan which is not an employee stock ownership plan (within the meaning of Code Section 4975(e)(7)). 
  
 Except to the extent limited by rules promulgated by the Secretary of the Treasury, if the Plan and any other plans which include Matching Contributions,
deferrals under a cash or deferred arrangement pursuant to Code Section 401(k), or nondeductible employee contributions are considered as one plan for purposes of Code Section 401(a)(4) and 410(b)(1), any contributions under the other plans shall be
allocated with the same class of contributions under the Plan for purposes of determining the “contribution percentage” and “actual deferral percentage” under the Plan; provided, however, contributions that are made under an
“employee stock ownership plan” (within the meaning of Code Section 4975(e)(7)) shall not be combined with contributions under any plan which is not an employee stock ownership plan (within the meaning of Code Section 4975(e)(7)).

  

 C-7 

 SECTION 8 
  

Notwithstanding any other provision in this Appendix C to the contrary, to the extent otherwise applicable, the limitations expressed in this Appendix
C shall not apply with respect to those Plan Years in which the Plan satisfies the requirements of Code Sections 40l(m)(11) and/or 40l(k)(12). 
  
 (a) Effective as of January 1, 2003, the Employer has elected to contribute those Matching Contributions described in Plan Section 3.3.
Such Matching Contributions shall constitute “ADP Safe Harbor Contributions,” and shall be one hundred percent (100%) vested at all times. As a result of electing to make the ADP Safe Harbor Contributions, the Actual Deferral Percentage
Test of this Appendix C shall not apply to this Plan. 
  
 (b) If the Employer makes Matching Contributions that are in addition to the contribution under Section 3.3 or if a Participant makes After-Tax Participant Contributions, such additional Matching Contributions (but not the Matching
Contribution under Section 3.3) or such After-Tax Participant Contributions shall be subject to the Actual Contribution Percentage Test of this Appendix C. 
  
 (c) The Employer shall provide a written notice to each Participant (and each individual reasonably expected to become a Participant)
within the Notice Period, describing the Participant’s rights and obligations under the Plan with regard to the ADP Safe Harbor Contributions. Such notice shall be written in a manner calculated to be understood by the average Participant.

  
 (d) The “Notice Period” shall be a
reasonable period prior to the first day of each Plan Year, or for Employees who become eligible to participate in the Plan during the Plan Year, a reasonable time prior to the Employee’s expected Entry Date. For this purpose, a
‘reasonable period’ shall be at least thirty but not more than ninety days before the beginning of the Plan Year (or, in the case of a newly eligible Employee, such period before such individual’s Entry Date). Notwithstanding the
foregoing, the Notice Period may be any other period permitted by the Secretary of the Treasury and/or the Internal Revenue Service in guidance issued by the Secretary or the Service. 
  
 (e) The ADP Safe Harbor Contributions shall be deposited in the Trust as outlined in Section 4 above and
shall be allocated to the Participants’ Personal Savings Account Matching Accounts as described in Section 4. 
  

 C-8 

  
 APPENDIX D 

MINIMUM DISTRIBUTION REQUIREMENTS 
  
 SECTION 1 
 GENERAL RULES

  
 (a) Effective Date and Precedence. Effective as
of January 1, 2003, the provisions of this Appendix D will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. The requirements of this Appendix D will take precedence over any
inconsistent provisions of the Plan. 
  
 (b) Requirements of
Treasury Regulations Incorporated. All distributions required under this Section will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9). 
  
 (c) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Appendix D, distributions may be
made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. 
  
 SECTION 2 
 TIME AND MANNER OF DISTRIBUTION 
  
 (a) Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later
than the Participant’s Required Beginning Date. 
  
 (b)
Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows: 
  
 (1) If the Participant’s surviving spouse is the
Participant’s sole Designated Beneficiary, then, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died or by December 31 of the calendar year
in which the Participant would have attained age 701⁄2, if later. 
  
 (2) If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant died. 
  
 (3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be 

  

 D-1 

 
distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. 
  
 (4) The Participant’s surviving spouse is the
Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2(b), other than Section 2(b)(l) of this Appendix D, will apply as if the
surviving spouse were the Participant. 
  
 For purposes of this
Section 2(b) and Section 4 of this Appendix D, unless Section 2(b)(4) of this Appendix D applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Section 2(b) of this Appendix D applies, distributions are
considered to begin on the date distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D. If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant
before the Participant’s Required Beginning Date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2(b)(1)), the date distributions are considered to begin
is the date distributions actually commence. 
  
 (c) Forms of
Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year,
distributions will be made in accordance with Sections 3 and 4 of this Appendix D. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance
with the requirements of Code Section 401(a)(9) and the regulations issued thereunder. 
  
 SECTION 3 
 REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT’S LIFETIME 

 
 (a) Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of: 
  
 (1) the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table set
forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or 
  
 (2) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the
Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.40l(a)(9)-9 of the Treasury Regulations, using the Participant’s and
spouse’s attained ages as of the Participant’s and spouse’s birthdays in the Distribution Calendar Year. 
  

 D-2 

 (b) Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death.
Required minimum distributions will be determined under this Section 3 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death. 
  
 SECTION 4 
 REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT’S DEATH 
  
 (a) Death On or After Date Distributions Begin. 
  
 (1) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a
Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the
remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows: 
  
 (i) The Participants remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for
each subsequent year. 
  
 (ii) If the
Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using
the surviving spouse’s age as of the spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of
the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year. 
  
 (iii) If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated
Beneficiary’s remaining Life Expectancy is calculated using the age of the Designated Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year. 
  
 (2) No Designated Beneficiary. If the Participant
dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after
the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one
for each subsequent year. 
  

 D-3 

 (b) Death Before Date Distributions Begin. 
  
 (1) Participant Survived by Designated Beneficiary.
If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient
obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Section 4(a). 
  
 (2) No Designated Beneficiary. If the Participant dies before the date distributions begin and there
is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant’s death. 
  
 (3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole
Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2(b)( I) of this Appendix D, this Section (b) will apply as if the surviving spouse were the Participant.

  
 SECTION 5 
 DEFINITIONS 
  
 As used in this Appendix D, the following words and phrases shall have the meaning set forth below: 
  
 (a) Designated Beneficiary. The individual who is designated as the
Beneficiary under Section 1.10 of the Plan and is the designated Beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations. 
  
 (b) Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning
Date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 2(b). The required minimum distribution for the
Participant’s first distribution calendar year will be made on or before the Participant’s Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for
the distribution calendar year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that distribution calendar year. 
  

 D-4 

 (c) Life Expectancy. Life expectancy as computed by use of the Single Life Table in Section
1.401(a)(9)-9 of the Treasury Regulations. 
  
 (d)
Participant’s Account Balance. The Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (“Valuation Calendar Year”) increased by the amount of any contributions
made and allocated or forfeitures allocated to the Account balance as of dates in the Valuation Calendar Year after the Valuation Date and decreased by distributions made in the Valuation Calendar Year after the Valuation Dare. The Account balance
for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year. 
  
 (e) Required Beginning Date. The date specified in Section 11.3(c) of
the Plan. 
  

 D-5 

  
 FIRST AMENDMENT TO THE

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  
 THIS FIRST AMENDMENT is made as of this 30th day of November, 2003, by AVON PRODUCTS, INC., a corporation duly organized and existing under the laws of
the State of New York (the “Company”). 
  
 INTRODUCTION 
  
 The Company maintains the
Avon Personal Savings Account Plan (the “Plan”) which was last amended and restated by an indenture dated December 28, 2002 and generally effective January 1, 2002. The Company now desires to amend the Plan to provide for increased
eligibility for those employees of Avon employed at an Avon Express Center and to provide that a Participant may withdraw amounts from the Participant’s Stock Grant Program Account on or after January 1, 2003. 
  
 AMENDMENT 
  
 NOW, THEREFORE, the Company does hereby amend the Plan as follows:

  
 1. Effective May 1, 2002, by adding the following to the end
of Plan Section 2.l(a)(2): 
  
 “Notwithstanding the
foregoing, any Eligible Employee who is a Full-Time Regular Employee who is employed at (A) either the Miami, Florida or Los Angeles, California Avon Express Center locations on or after May 1, 2002; or (B) any other Avon Express Center location on
or after March 1, 2013, shall become a Participant as of the date and in the manner described in Section 2.1(a)(l) above.” 
  
 2. Effective January 1, 2003, by deleting Section 3.1(c) and by substituting therefor the following: 
  
 “(c) Catch-Up Contributions. Effective October
1, 2002, a Participant who is eligible to contribute Deferral Amounts to the Plan and who has attained age 50 on or before the last day of the Plan Year shall be eligible to elect to have a portion of his Annual Compensation otherwise payable to him
for the Plan Year contributed by the Plan Sponsor to the Fund on his behalf as catch-up contributions in accordance with and subject to the limitations of, Code Section 414(v). Contributions made pursuant to this Section 3.1(c) shall not be taken
into account for purposes of implementing the limitations set forth in Section 3.1(b) and Appendix A hereto (and, prior to January 1, 2003, Section 3.1(a)). The Plan shall not be treated as failing to satisfy the provisions of Appendix B, Appendix C
or Code Section 410(b), as applicable, by reason of the making of the catch-up contributions as described in this Section 3.1(c).” 
  

 3. Effective January 1, 2003, by deleting the existing clause (5) of Section 7.1(a), Level 2, and by
substituting therefor the following: 
  
 “(5) the vested portion of the current balance in the Eligible Participant’s Pre-1992 Company Matching Account, Post-1991 Matching Account and Stock Grant Program Account provided that an Eligible Employee who has participated in
the Plan for less than five years from the date of the first Participant Contribution may not withdraw matching contributions that have been in the Plan for less than two years.” 
  
 Except as specifically amended hereby, the Plan shall remain in full force and effect as prior to this First Amendment.

  
 IN WITNESS WHEREOF, the Company has caused this First
Amendment to be executed on the day and year first above written. 
  

			
	AVON PRODUCTS, INC.
		
	 By:
	 	 /s/ Andrea Jung

		
	 Title:
	 	 

  

 2 

  
 SECOND AMENDMENT TO THE

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  
 THIS SECOND AMENDMENT is made to the Avon Personal Savings Account Plan by AVON PRODUCTS, INC., a corporation duly organized and existing under the laws
of the State of New York (the “Company”). 
  
 INTRODUCTION 
  
 The Company maintains the Avon
Personal Savings Account Plan (the “Plan”). The Company now desires to amend the Plan to enable the Company to deduct dividends on Company common stock held in participant pre-tax and after-tax contribution accounts under the Plan. Such
amendment will be effective as of the first record date for such dividends after the date the amendment is adopted. 
  
 AMENDMENT 
  
 NOW, THEREFORE, the Company does hereby amend the Plan as follows: 
  
 1. Effective as of November 1, 2003 (the “Second Amendment Effective Date”), Section 1.1(k) is amended by deleting the words “under the ESOP” in the first sentence. 
  
 2. Effective as of the Second Amendment Effective Date, Section 1.28 is
amended as follows: 
  
 1.28 “ESOP” means the stock
bonus plan set forth in the Plan which is an employee stock ownership plan as defined in the Code Section 4975(e)(7) and the regulation promulgated thereunder. The ESOP shall consist of all Company Stock Subaccounts, the Unallocated Company
Contribution Account and the Loan Suspense Account. 
  
 Except as
specifically amended hereby, the Plan shall remain in full force and effect as prior to this Second Amendment. 
  
 IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed on the date set forth below. 
  

									
	 	 	 	 	 AVON PRODUCTS, INC.

					
	 Dated:
	 	 January 26, 2005
	 	 	 	 By:
	 	 Gilbert L. Klemann, II, Esq.

					
	 	 	 	 	 	 	 Title:
	 	 Sr. VP and General Counsel

  

  
 THIRD AMENDMENT TO THE

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  
 THIS THIRD AMENDMENT is made to the Avon Personal Savings Account Plan by AVON PRODUCTS, INC., a corporation duly organized and existing under the laws of
the State of New York (the “Company”). 
  
 INTRODUCTION 
  
 The Company maintains the Avon
Personal Savings Account Plan (the “Plan”) which has been amended from time to time. The Company now desires to amend the Plan to suspend matching contributions for the period beginning February 25, 2005 and ending December 31, 2005. Such
amendment will be effective as of February 25, 2005. 
  
 AMENDMENT 
  
 NOW, THEREFORE, the Company does
hereby amend the Plan as follows: 
  
 Effective as of February 25,
2005, Section 3.3 is amended by adding new subsection (c) thereto as follows: 
  
 (c) Notwithstanding any other provision of the Plan to the contrary, the Plan Sponsor will not make contributions to the Fund pursuant to this Section 3.3 with respect to any Basic Contributions made for the period
beginning February 25, 2005 and ending December 31, 2005. 
  
 Except as specifically amended hereby, the Plan shall remain in full force and effect as prior to this Third Amendment. 
  
 IN WITNESS WHEREOF, the Company has caused this Third Amendment to be executed on the date set forth below. 
  

									
	 	 	 	 	 AVON PRODUCTS, INC.

					
	 Dated:
	 	 January 26, 2005
	 	 	 	 By:
	 	 Gilbert L. Klemann, II, Esq.

					
	 	 	 	 	 	 	 Title:
	 	 Sr. VP and General Counsel

  

  
 FOURTH AMENDMENT TO THE

 AVON PERSONAL SAVINGS ACCOUNT PLAN 
  
 THIS FOURTH AMENDMENT is made to the Avon Personal Savings Account Plan by AVON PRODUCTS, INC., a corporation duly organized and existing under the laws
of the State of New York (the “Company”). 
  
 INTRODUCTION 
  
 The Company maintains the Avon
Personal Savings Account Plan (the “Plan”) which has been amended front tune to time. The Company now desires to amend the Plan to reduce the mandatory cash-out threshold to $1,000 from $5,000 for distributions made on and after March 28,
2005. Such amendment will be effective as of March 28, 2005: 
  
 AMENDMENT 
  
 NOW THEREFORE, the Company does
hereby amend the Plan effective for distributions made on and after March 28, 2005 as follows: 
  
 1. Section 8.3 is amended in its entirety to read as follow: 
  
 “8.3 Payment of Benefit. Subject to Plan 11.3, a Participant’s Account shall be paid to him, or in the event of his death to his Beneficiary. In the case of a Participant: 
  
 (a) who has a vested Account of $1,000 or less, as soon as
practicable after the later of the date he ceases to be an Employee or the date he ceases to receive severance payments from the Plan Sponsor, if any; and 
  
 (b) who has a vested Account greater than $1,000, as soon as practicable following the date the Participant’s election is processed
pursuant to the administrative procedures adopted by the Plan Administrator following the Participant’s Termination of Employment but in no event later than 60 days following the end of the Plan Year in which the Participant attains Normal
Retirement Age, unless the Participant has elected in writing for payments to begin at a later date.” 
  

 2. The second sentence of Section 8.4 is amended in its entirety to read as follow: 
  
 “A Participant with a vested Account greater than $1,000, may instead
elect, at the time and in the manner prescribed by the Plan Administrator, to receive payment of his vested Account in the form of quarterly installments over a period of not less than 10 years and not greater than 15 years.” 
  
 3. Section 8.5 is amended in its entirety to read as follow: 
  
 “8.5 Consent. Except as otherwise provided herein,
payment of the Participant’s Account shall be made as soon as administratively feasible after the Participant terminates employment; provided, however, if the Participant’s Accounts exceeds $1,000, it will not be distributed before the
60th day of the year following the year in which the Participant reached Normal Retirement Age, unless the Participant elected to receive an earlier distribution or to defer distribution pursuant to Section 8.3(b).” 
  
 Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Fourth Amendment. 
  
 IN WITNESS
WHEREOF, the Company has caused this Fourth Amendment to be executed on the date set forth below. 
  

									
	 	 	 	 	 AVON PRODUCTS, INC.

					
	 Dated:
	 	 March 17, 2005
	 	 	 	 By:
	 	 Andrea Jung

					
	 	 	 	 	 	 	 Title:
	 	 Chairman & CEO

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