Document:

Exhibit 10.1

 

AMERICAN MULTI-CINEMA, INC.

 

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005

 

TABLE OF CONTENTS

 

	
SECTION 1.
    	
PURPOSE
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
2.1
    	
“ACTIVE PARTICIPANT”
    	
 
    	
1
    
	
2.2
    	
“ADOPTION AGREEMENT”
    	
 
    	
2
    
	
2.3
    	
“BENEFICIARY”
    	
 
    	
2
    
	
2.4
    	
“BOARD”
    	
 
    	
2
    
	
2.5
    	
“COMMITTEE”
    	
 
    	
2
    
	
2.6
    	
“COMPENSATION”
    	
 
    	
2
    
	
2.7
    	
“CREDITING DATE”
    	
 
    	
2
    
	
2.8
    	
“DEFERRED COMPENSATION ACCOUNT”   OR “ACCOUNT”
    	
 
    	
2
    
	
2.9
    	
“DISABLED”
    	
 
    	
2
    
	
2.10
    	
“EDUCATION ACCOUNT”
    	
 
    	
3
    
	
2.11
    	
“EFFECTIVE DATE”
    	
 
    	
3
    
	
2.12
    	
“EMPLOYEE”
    	
 
    	
3
    
	
2.13
    	
“EMPLOYER”
    	
 
    	
4
    
	
2.14
    	
“IN-SERVICE ACCOUNT”
    	
 
    	
4
    
	
2.15
    	
“NORMAL RETIREMENT AGE”
    	
 
    	
4
    
	
2.16
    	
“PARTICIPANT”
    	
 
    	
4
    
	
2.17
    	
“PARTICIPANT DEFERRAL AGREEMENT”
    	
 
    	
4
    
	
2.18
    	
“PARTICIPANT DEFERRAL CREDITS”
    	
 
    	
4
    
	
2.19
    	
“PARTICIPATING EMPLOYER”
    	
 
    	
5
    
					

 

 

	
2.20
    	
“PERFORMANCE-BASED COMPENSATION”
    	
 
    	
5
    
	
2.21
    	
“PLAN”
    	
 
    	
5
    
	
2.22
    	
“PLAN ADMINISTRATOR”
    	
 
    	
5
    
	
2.23
    	
“PLAN YEAR”
    	
 
    	
5
    
	
2.24
    	
“PROVIDER”
    	
 
    	
5
    
	
2.25
    	
“QUALIFYING DISTRIBUTION EVENT”
    	
 
    	
6
    
	
2.26
    	
“RETIREMENT ACCOUNT”
    	
 
    	
6
    
	
2.27
    	
“SERVICE”
    	
 
    	
6
    
	
2.28
    	
“SPECIFIED EMPLOYEE”
    	
 
    	
6
    
	
2.29
    	
“SPOUSE” OR “SURVIVING SPOUSE”
    	
 
    	
7
    
	
2.30
    	
“STUDENT”
    	
 
    	
7
    
	
2.31
    	
“TRUST”
    	
 
    	
7
    
	
2.32
    	
“TRUSTEE”
    	
 
    	
7
    
	
2.33
    	
“UNFORESEEABLE EMERGENCY”
    	
 
    	
7
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
PARTICIPATION
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.
    	
CREDITS TO DEFERRED   COMPENSATION ACCOUNT
    	
 
    	
8
    
	
 
    	
 
    	
 
    
	
4.1
    	
PARTICIPANT DEFERRAL CREDITS
    	
 
    	
8
    
	
4.2
    	
DEFERRED COMPENSATION ACCOUNT
    	
 
    	
10
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
QUALIFYING DISTRIBUTION EVENTS
    	
 
    	
10
    
	
 
    	
 
    	
 
    
	
5.1
    	
SEPARATION FROM SERVICE
    	
 
    	
10
    
	
5.2
    	
DISABILITY
    	
 
    	
10
    
	
5.3
    	
DEATH
    	
 
    	
11
    
	
5.4
    	
IN-SERVICE DISTRIBUTIONS
    	
 
    	
11
    
	
5.5
    	
EDUCATION DISTRIBUTIONS
    	
 
    	
11
    
	
5.6
    	
UNFORESEEABLE EMERGENCY
    	
 
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
QUALIFYING DISTRIBUTION EVENTS   PAYMENT OPTIONS
    	
 
    	
13
    
	
 
    	
 
    	
 
    
	
6.1
    	
PAYMENT OPTIONS
    	
 
    	
13
    
	
6.2
    	
DE MINIMIS AMOUNTS
    	
 
    	
14
    
	
6.3
    	
SUBSEQUENT ELECTIONS
    	
 
    	
15
    
	
6.4
    	
ACCELERATION PROHIBITED
    	
 
    	
15
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
VESTING
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.
    	
ACCOUNTS; DEEMED INVESTMENT;   ADJUSTMENTS TO ACCOUNT
    	
 
    	
16
    
	
 
    	
 
    	
 
    
	
8.1
    	
ACCOUNTS
    	
 
    	
16
    
	
8.2
    	
DEEMED INVESTMENTS
    	
 
    	
16
    
	
8.3
    	
ADJUSTMENTS TO DEFERRED   COMPENSATION ACCOUNT
    	
 
    	
16
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
ADMINISTRATION BY COMMITTEE
    	
 
    	
17
    
	
 
    	
 
    	
 
    
	
9.1
    	
MEMBERSHIP OF COMMITTEE
    	
 
    	
17
    
	
9.2
    	
COMMITTEE OFFICERS; SUBCOMMITTEE
    	
 
    	
17
    
	
9.3
    	
COMMITTEE MEETINGS
    	
 
    	
18
    
	
9.4
    	
TRANSACTION OF BUSINESS
    	
 
    	
18
    
	
9.5
    	
ESTABLISHMENT OF RULES
    	
 
    	
18
    
	
9.6
    	
CONFLICTS OF INTEREST
    	
 
    	
18
    
	
9.7
    	
CORRECTION OF ERRORS
    	
 
    	
18
    
	
9.8
    	
AUTHORITY TO INTERPRET PLAN
    	
 
    	
18
    
	
9.9
    	
THIRD PARTY ADVISORS
    	
 
    	
19
    
	
9.10
    	
EXPENSE REIMBURSEMENT
    	
 
    	
19
    
	
9.11
    	
INDEMNIFICATION
    	
 
    	
19
    
					

 

ii

 

	
SECTION 10.
    	
CONTRACTUAL LIABILITY; TRUST
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
10.1
    	
CONTRACTUAL LIABILITY
    	
 
    	
20
    
	
10.2
    	
TRUST
    	
 
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
ALLOCATION OF RESPONSIBILITIES
    	
 
    	
20
    
	
 
    	
 
    	
 
    
	
11.1
    	
EMPLOYER
    	
 
    	
20
    
	
11.2
    	
COMMITTEE
    	
 
    	
21
    
	
11.3
    	
PLAN ADMINISTRATOR
    	
 
    	
21
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
BENEFITS NOT ASSIGNABLE;   FACILITY OF PAYMENTS
    	
 
    	
21
    
	
 
    	
 
    	
 
    
	
12.1
    	
BENEFITS NOT ASSIGNABLE
    	
 
    	
21
    
	
12.2
    	
PAYMENTS TO MINORS AND OTHERS
    	
 
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 13.
    	
BENEFICIARY
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 14.
    	
AMENDMENT AND TERMINATION OF   PLAN
    	
 
    	
23
    
	
 
    	
 
    	
 
    
	
14.1
    	
TERMINATION IN THE DISCRETION OF   THE EMPLOYER
    	
 
    	
23
    
	
14.2
    	
NO FINANCIAL TRIGGERS
    	
 
    	
24
    
	
 
    	
 
    	
 
    
	
SECTION 15.
    	
COMMUNICATION TO PARTICIPANTS
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 16.
    	
CLAIMS PROCEDURE
    	
 
    	
24
    
	
 
    	
 
    	
 
    
	
16.1
    	
FILING OF A CLAIM FOR BENEFITS
    	
 
    	
24
    
	
16.2
    	
NOTIFICATION TO CLAIMANT OF   DECISION
    	
 
    	
24
    
	
16.3
    	
PROCEDURE FOR REVIEW
    	
 
    	
25
    
	
16.4
    	
DECISION ON REVIEW
    	
 
    	
25
    
	
16.5
    	
ACTION BY AUTHORIZED   REPRESENTATIVE OF CLAIMANT
    	
 
    	
26
    
	
 
    	
 
    	
 
    
	
SECTION 17.
    	
MISCELLANEOUS PROVISIONS
    	
 
    	
26
    
	
 
    	
 
    	
 
    
	
17.1
    	
SET OFF
    	
 
    	
26
    
	
17.2
    	
NOTICES
    	
 
    	
26
    
	
17.3
    	
LOST DISTRIBUTEES
    	
 
    	
27
    
	
17.4
    	
RELIANCE ON DATA
    	
 
    	
27
    
	
17.5
    	
RECEIPT AND RELEASE FOR PAYMENTS
    	
 
    	
27
    
	
17.6
    	
HEADINGS
    	
 
    	
28
    
	
17.7
    	
CONTINUATION OF EMPLOYMENT
    	
 
    	
28
    
	
17.8
    	
MERGER OR CONSOLIDATION;   ASSUMPTION OF PLAN
    	
 
    	
28
    
	
17.9
    	
CONSTRUCTION
    	
 
    	
28
    
	
17.10
    	
TAXES
    	
 
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 18.
    	
TRANSITION RULES
    	
 
    	
29
    
	
 
    	
 
    	
 
    
	
18.1
    	
2005 ELECTION TERMINATION
    	
 
    	
29
    
	
18.2
    	
2005 DEFERRAL ELECTION
    	
 
    	
29
    
	
18.3
    	
2005 TERMINATION OF   PARTICIPATION; DISTRIBUTION
    	
 
    	
29
    
	
18.4
    	
PAYMENT ELECTIONS
    	
 
    	
30
    
					

 

iii

 

AMERICAN MULTI-CINEMA, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

Section 1.                                          Purpose:

 

The Employer has adopted the Plan, originally effective January 1, 1994, previously amended and restated as of January 1, 2003 and as of January 1, 2005, and as hereby amended and restated a second time effective January 1, 2005, in order to provide a means by which certain eligible Employees may elect to defer receipt of current Compensation from the Employer for the purpose of providing retirement and other benefits on behalf of such Employees. The Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code (the “Code”) and that is an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(l) of the Employee Retirement Income Security Act of 1974 (“ERISA”). Notwithstanding any other provision hereof, this Plan shall be interpreted, operated and administered in a manner consistent with these intentions.

 

Section 2.                                          Definitions:

 

As used in the Plan, including this Section 2, references to one gender shall include the other and, unless otherwise indicated by the context:

 

2.1          “Active Participant” means, with respect to any day or date, a Participant who is in Service on such day or date; provided, that a Participant shall cease to be an Active Participant immediately upon a determination by the Committee that the Participant has ceased to be an Employee or that the Participant no longer meets the eligibility requirements of the Plan.

 

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2.2          “Adoption Agreement” means the written agreement pursuant to which a Participating Employer, if any, may adopt the Plan, with the consent of Employer.

 

2.3          “Beneficiary” means the person, persons, entity or entities designated or determined pursuant to the provisions of Section 13 hereof.

 

2.4          “Board” means the Board of Directors of Employer.

 

2.5          “Committee” means the Employer, or such person(s) as may be determined by Employer under Section 9 from time to time.

 

2.6          “Compensation” means base salary and any bonus (including Performance-Based Compensation) but excluding commissions, expense reimbursements or allowances, cash and non-cash fringe benefits and any stock-based incentive compensation.

 

2.7          “Crediting Date” means any business day on which an amount representing a Participant Deferral Credit is received by the Provider and on which securities are traded on a national securities exchange, or the first such day thereafter.

 

2.8          “Deferred Compensation Account” or “Account” means the account maintained with respect to each Participant under the Plan. The Deferred Compensation Account shall be credited with Participant Deferral Credits, credited or debited for deemed investment gains or losses, and adjusted for payments in accordance with the rules and elections in effect under Section 8. The Deferred Compensation Account of a Participant shall include any In-Service Account or Education Account of the Participant, if applicable.

 

2.9          “Disabled” means a Participant who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment

 

2

 

which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of Employer, all within the meaning of Section 409A of the Code and regulations thereunder ..

 

2.10        “Education Account” means a separate account to be kept for each Participant who has elected to take education distributions as described in Section 5.5.  The Education Account shall be adjusted in the same manner and at the same time as the Deferred Compensation Account under Section 8 and in accordance with the rules and elections in effect under Section 8.

 

2.11        “Effective Date” of this amendment and restatement of the Plan shall be January 1, 2005. Any amounts credited to an Account pursuant to the terms of the Plan which were not earned and vested before January 1, 2005, shall be subject to the terms of this Plan. Pre-2005 account balances are not “grandfathered” within the meaning of Code Sec. 409A and are also subject to the terms of this Plan.

 

2.12        “Employee” means an individual employed by Employer who (i) is a highly compensated or management employee of the Employer and (ii) has Compensation in the immediately preceding Plan Year in excess of the annual benefit limit prescribed for defined benefit plans under Section 415(b)(1)(A) of the Code, as adjusted from time to time ($185,000 in 2008). An individual shall cease to be an Employee upon the Employee’s termination of Service.

 

3

 

2.13        “Employer” means American Multi-Cinema, Inc. and, where appropriate in the context, any Participating Employer which adopts this Plan with Employer’s consent. American Multi-Cinema, Inc. shall have the sole authority to administer, interpret and amend the Plan, as “Employer.

 

2.14        “In-Service Account” means a separate account to be kept for each Participant who has elected to take in-service distributions as described in Section 5.4. The In-Service Account shall be adjusted in the same manner and at the same time as the Deferred Compensation Account under Section 8 and in accordance with the rules and elections in effect under Section 8.

 

2.15        “Normal Retirement Age” of a Participant means age 65.

 

2.16        “Participant” means with respect to any Plan Year an Employee who has been designated by the Committee as a Participant and who has entered the Plan or who has a Deferred Compensation Account under the Plan. A Participant who has an amount credited to his Account will remain a Participant even if his Compensation declines below the minimum annual amount normally required to be deemed “highly compensated” (and, therefore, eligible for the Plan).

 

2.17        “Participant Deferral Agreement” means a written agreement entered into between a Participant and the Employer pursuant to the provisions of Section 4.1.

 

2.18        “Participant Deferral Credits” means the amounts credited to the Participant’s Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.1.

 

4

 

2.19        “Participating Employer” means any trade or business (whether or not incorporated) which adopts this Plan with the consent of the Employer. As of the date of this restatement, there are no Participating Employers.

 

2.20        “Performance-Based Compensation” means compensation where the amount of, or entitlement to, the compensation is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least twelve months in which the Participant performs services.  Organizational or individual performance criteria are considered preestablished if established in writing within 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-based compensation may include payments based upon subjective performance criteria in accordance as provided in regulations and administrative guidance promulgated under Section 409A of the Code.

 

2.21        “Plan” means the American Multi-Cinema, Inc. Nonqualified Deferred Compensation Plan, as herein set out and as amended from time to time.

 

2.22        “Plan Administrator” means Employer, or its designee.

 

2.23        “Plan Year” means the twelve-month period ending on the last day of December and each anniversary thereof.

 

2.24        “Provider” means a third party providing administrative and other services to Employer in connection with the Plan, which currently is Principal Financial Group (or its designated affiliate), but also including any successor entity appointed by Employer in the future.

 

5

 

2.25        “Qualifying Distribution Event” means (i) the separation from Service of the Participant, (ii) the date the Participant becomes Disabled, (iii) the death of the Participant, (iv) the time specified by the Participant for an in-service or education distribution, or (v) an Unforeseeable Emergency, each to the extent provided in Section 5.

 

2.26        “Retirement Account” means the portion of the Deferred Compensation Account of a Participant, excluding any In-Service Account or any Education Account.  The Retirement Account shall be adjusted in the same manner and at the same time as the Deferred Compensation Account under Section 8 and in accordance with the rules and regulations in effect under Section 8.

 

2.27        “Service” means employment by the Employer as an Employee. For purposes of the Plan, the employment relationship is treated as continuing intact while the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee’s right to reemployment is provided either by statute or contract.

 

2.28        “Specified Employee” means an employee who meets the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder and without regard to Section 416(i)(5) of the Code) at any time during the twelve-month period ending on December 31 of each year (the “identification date”). If the person is a key employee as of any identification date, the person is treated as a Specified Employee for the twelve-month period beginning on the first day of the fourth month following the identification date, all as determined under Section 409A of the Code and regulations thereunder.

 

6

 

2.29        “Spouse” or “Surviving Spouse” means, except as otherwise provided in the Plan, a person who is the legally married spouse or surviving spouse of a Participant.

 

2.30        “Student” means the individual designated by the Participant in the Participant Deferral Agreement with respect to whom the Participant will create an Education Account.

 

2.31        “Trust” means a “rabbi” trust fund which may be established by Employer from time to time, in its discretion, pursuant to Section 10.2.

 

2.32        “Trustee” means a trustee named in any agreement establishing a Trust and such successor or additional trustee(s) as may be named pursuant to the terms of any agreement establishing the Trust.

 

2.33        “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant, the Participant’s Spouse or a dependent (as defined in Section 152(a) of the Code) of the Participant, (ii) loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

 

Section 3.                                          Participation:

 

The Committee in its discretion shall designate each Employee who is eligible to participate in the Plan. An Employee designated by the Committee as a Participant who has not otherwise entered the Plan shall enter the Plan and become a Participant as of the date determined by the Committee. A Participant who separates from Service with the Employer and who later returns to Service will not be an Active Participant under the Plan except upon satisfaction of such terms and conditions as the Committee shall

 

7

 

establish upon the Participant’s return to Service, whether or not the Participant shall have a balance remaining in the Deferred Compensation Account under the Plan on the date of the return to Service.

 

Section 4.                                          Credits to Deferred Compensation Account:

 

4.1                               Participant Deferral Credits. Each Active Participant may elect, by entering into a Participant Deferral Agreement with the Employer, to defer the receipt of Compensation from the Employer (i) as a percentage of Compensation (excluding any bonus) below the applicable Code § 402(g) limit, (ii) as a percentage of Compensation (excluding any bonus) above the applicable Code § 402(g) limit, and/or (iii) as a percentage of any bonus paid for the year, all as specified in the Participant Deferral Agreement. The amount of the Participant Deferral Credit shall be credited by the Employer to the Deferred Compensation Account maintained for the Participant pursuant to Section 8. The following special provisions shall apply with respect to the Participant Deferral Credits of a Participant:

 

4.1.1                     The Employer shall credit to the Participant’s Deferred Compensation Account on each Crediting Date an amount equal to the total Participant Deferral Credit for the period ending on such Crediting Date.

 

4.1.2                     An election pursuant to this Section 4.1 shall be made by the Participant by executing and delivering a Participant Deferral Agreement to the Committee. Except as otherwise provided in this Section 4.1, the Participant Deferral Agreement shall become effective with respect to such Participant as of the first day of January following the date such Participant Deferral Agreement is received by the Committee. A Participant’s election may be changed at any time prior to the last permissible date for making the election as permitted in this Section 4.1, and shall thereafter be irrevocable. The election of a Participant shall continue in effect for subsequent years until modified by the Participant as permitted in this Section 4.1, or until the earlier of the date the Participant separates from Service or ceases to be an Active Participant under the Plan.

 

4.1.3                     In the case of the first year in which the Participant becomes eligible to participate in the Plan, the Participant may execute and deliver a Participant Deferral Agreement to the Committee within 30 days after the date the

 

8

 

Participant enters the Plan to be effective as of the first payroll period next following the date the Participant Deferral Agreement is received by the Committee.  For Compensation that is earned based upon a specified performance period (for example, an annual bonus), where a deferral election is made in the first year of eligibility but after the beginning of the service period, the election will be deemed to apply to Compensation paid for services subsequent to the election if the election applies to the portion of the Compensation equal to the total amount of the Compensation for the service period multiplied by the ratio of the number of days remaining in the performance period after the election over the total number of days in the performance period.

 

4.1.4                     A Participant may unilaterally modify a Participant Deferral Agreement (either to terminate, increase or decrease the portion of his future Compensation which is subject to deferral) by providing a written modification of the Participant Deferral Agreement to the Employer. The modification shall become effective as of the first day of January following the date such written modification is received by the Committee.

 

4.1.5                     If the Participant performed services continuously from a date no later than the date upon which the performance criteria are established through a date no earlier than the date upon which the Participant makes an initial deferral election, a Participant Deferral Agreement relating to the deferral of Performance-Based Compensation may be executed and delivered to the Committee no later than the date which is 6 months prior to the end of the performance period, provided that in no event may an election to defer Performance-Based Compensation be made after such Compensation has become both substantially certain to be paid and readily ascertainable.

 

4.1.6                     If the Employer has a fiscal year other than the calendar year, Compensation relating to service in the fiscal year of the Employer (such as a bonus based on the fiscal year of the Employer), of which no amount is paid or payable during the fiscal year, may be deferred at the Participant’s election only if the election to defer is made not later than the close of the Employer’s fiscal year next preceding the first fiscal year in which the Participant performs any services for which such Compensation is payable.

 

4.1.7                     Compensation payable after the last day of the Participant’s taxable year solely for services provided during the final payroll period containing the last day of the Participant’s taxable year (i.e., December 31) is treated for purposes of this Section 4.1 as Compensation for services performed in the subsequent taxable year.

 

4.1.8                     The Committee may from time to time establish policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which Participant Deferral Credits may be made. If a Participant becomes Disabled or applies for and is eligible for a distribution on account of an

 

9

 

Unforseeable Emergency during a Plan Year, the Participant’s deferral election for such plan Year shall be cancelled.

 

4.1.9                     The requirements of Section 4.1.2 relating to the timing of the Participant Deferral Agreement shall not apply to any deferral elections made on or before March 15, 2005, provided that (a) the amounts to which the deferral election relate have not been paid or become payable at the time of the election, (b) the Plan was in existence on or before December 31, 2004, (c) the election to defer compensation is made in accordance with the terms of the Plan as in effect on December 31, 2005 (other than a requirement to make a deferral election after March 15, 2005), (d) the Plan is otherwise operated in accordance with the requirements of Section 409A of the Code, and (e) the Plan is amended to comply with Section 409A in accordance with Q&A 19 of Notice 2005-1.

 

4.2          Deferred Compensation Account.  All Participant Deferral Credits will be credited to the Deferred Compensation Account of the Participant as provided in Section 8.

 

Section 5.                                          Qualifying Distribution Events:

 

5.1          Separation from Service. If the Participant separates from Service with the Employer, the balance in the Deferred Compensation Account shall be paid to the Participant by Employer as provided in Section 6. Notwithstanding the foregoing, no distribution shall be made earlier than six months after the date of separation from Service (or, if earlier, the date of death) with respect to a Participant who is a Specified Employee of a corporation the stock in which is traded on an established securities market or otherwise. Any payments to which a Specified Employee would be entitled during the first six months following the date of separation from Service shall be accumulated and paid on the first day of the seventh month following the date of separation from service.

 

5.2          Disability. If the Participant becomes Disabled while in Service, the balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 6.

 

10

 

5.3          Death. If the Participant dies while in Service, the Employer shall pay a benefit to the Participant’s Beneficiary in an amount equal to the balance in the Participant’s Deferred Compensation Account as of the date of death. Payment of such benefit shall be made by the Employer as provided in Section 6. If a Participant dies following his separation from Service for any reason, and before all payments under the Plan have been made, the balance in the Deferred Compensation Account shall be paid by the Employer to the Participant’s Beneficiary in a single lump sum.

 

5.4          In-Service Distributions. A Participant may designate in the Participant Deferral Agreement to have a specified amount credited to the Participant’s In-Service Account for in-service distribution in a lump sum payment at the date specified by the Participant. In no event may an in-service distribution be made prior to two years following the establishment of the In-Service Account of the Participant.  Notwithstanding the foregoing, if a Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance in the In-Service Account has been distributed, then the balance in the In-Service Account on the date of the Qualifying Distribution Event shall be distributed to the Participant in the same manner and at the same time as the balance in the Deferred Compensation Account is distributed under Section 6 and in accordance with the rules and elections in effect under Section 6.

 

5.5          Education Distributions. A Participant may designate in the Participant Deferral Agreement to have a specified amount credited to the Participant’s Education Account for education distributions the date specified by the Participant. If the Participant designates more than one Student, the Education Account will be divided into a separate Education Account for each Student, and the Participant may designate in the 

 

11

 

Participant Deferral Agreement the percentage or dollar amount to be credited to each Education Account. In the absence of a clear designation, all credits made to the Education Account shall be equally allocated to each Education Account. The Employer shall pay to the Participant the balance in the Education Account with respect to the Student at the time and in the manner designated by the Participant in the Participant Deferral Agreement. If the Participant elects to receive education distributions in annual installment payments (over four to six years), the payment of each annual installment shall be made on the anniversary of the date of the first installment payment, and the amount of the annual installment shall be adjusted on such anniversary for credits or debits to the Participant’s Education Account pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the balance in the Education Account on such date by the number of annual installments remaining to be paid hereunder; provided that the last annual installment due under the Plan shall be the entire amount credited to the Participant’s Education Account on the date of payment. Notwithstanding the foregoing, if the Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance of the Education Account has been distributed, then the balance in the Education Account on the date of the Qualifying Distribution Event shall be distributed to the Participant in the same manner and at the same time as the Deferred Compensation Account is distributed under Section 6 and in accordance with the rules and elections in effect under Section 6.

 

5.6          Unforeseeable Emergency. A distribution from the Deferred Compensation Account may be made to a Participant in the event of an Unforeseeable Emergency, subject to the following provisions:

 

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5.6.1                     A Participant may, at any time prior to his separation from Service for any reason, make application to the Committee to receive a distribution in a lump sum of all or a portion of the vested balance in the Deferred Compensation Account (determined as of the date the distribution, if any, is made under this Section 5.6) because of an Unforeseeable Emergency. A distribution because of an Unforeseeable Emergency shall not exceed the amount required to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution, after taking into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by stopping current deferrals to the Plan under Section 4.1.8.

 

5.6.2                     The Participant’s request for a distribution on account of Unforeseeable Emergency must be made in writing to the Committee. The request must specify the nature of the financial hardship, the total amount requested to be distributed from the Deferred Compensation Account, and the total amount of the actual expense incurred or to be incurred on account of the Unforeseeable Emergency.

 

5.6.3                     If a distribution under this Section 5.6 is approved by the Committee, such distribution will be made as soon as practicable following the date it is approved. The processing of the request shall be completed as soon as practicable from the date on which the Committee receives the properly completed written request for a distribution on account of an Unforeseeable Emergency.. If a Participant’s separation from Service occurs after a request is approved in accordance with this Section 5.6.3, but prior to distribution of the full amount approved, the approval of the request shall be automatically null and void and the benefits which the Participant is entitled to receive under the Plan shall be distributed in accordance with the applicable distribution provisions of the Plan.

 

5.6.4                     The Committee may from time to time adopt additional policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which such distributions may be made so that the Plan may be conveniently administered.

 

Section 6.                                          Qualifying Distribution Events Payment Options:

 

6.1          Payment Options. The Participant shall elect in the Participant Deferral Agreement the method under which the vested balance in the Deferred Compensation Account will be distributed, either in a lump sum payment or in equal annual installments over a term not to exceed ten (10) years. Payment shall be made in the manner elected by

 

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the Participant and shall commence upon the date of the Qualifying Distribution Event. A payment shall be treated as made upon the date of the Qualifying Distribution Event if it is made on such date or a later date within the same calendar year or. if later, by the 15th day of the third calendar month following the Qualifying Distribution Event. A payment may be further delayed to the extent permitted in accordance with regulations and guidance under Section 409A of the Code. The Participant may elect a different method of payment for each Qualifying Distribution Event. If the Participant elects the installment payment option, the payment of each annual installment shall be made on the anniversary of the date of the first installment payment, and the amount of the annual installment shall be adjusted on such anniversary for credits or debits to the Participant’s account pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the balance in the Deferred Compensation Account on such date by the number of annual installments remaining to be paid hereunder; provided that the last annual installment due under the Plan shall be the entire amount credited to the Participant’s account on the date of payment. In the event the Participant fails to make a valid election of the payment method, the distribution will be made in a single lump sum payment upon the Qualifying Distribution Event.

 

6.2          De Minimis Amounts. Notwithstanding any payment election made by the Participant, the balance in the Deferred Compensation Account of the Participant will be distributed in a single lump sum payment if the payment accompanies the termination of the Participant’s entire interest in the Plan and the amount of such payment does not exceed the limit set forth in Section 402(g)(l)(b) of the Code from time to time.. Such payment shall be made on or before the later of (i) December 31 of the calendar year in

 

14

 

which the Participant separates from Service from the Employer, or (ii) the date that is 2-1/2 months after the Participant separates from Service from the Employer.

 

6.3          Subsequent Elections. With the consent of the Committee, a Participant may delay or change the method of payment of the Deferred Compensation Account subject to the following requirements:

 

6.3.1                     The new election may not take effect until at least 12 months after the date on which the new election is made.

 

6.3.2                     If the new election relates to a payment for a Qualifying Distribution Event other than the death of the Participant, the Participant becoming Disabled, or an Unforeseeable Emergency, the new election must provide for the deferral of the first payment for a period of at least five years from the date such payment would otherwise have been made.

 

6.3.3                     If the new election relates to a payment from the In-Service Account or Education Account, the new election must be made at least 12 months prior to the date of the first scheduled payment from such account.

 

For purposes of this Section 6.3 and Section 6.4, a payment is each separately identified amount to which the Participant is entitled under the Plan; provided, that entitlement to a series of installment payments is treated as the entitlement to a single payment.

 

6.4                               Acceleration Prohibited. The acceleration of the time or schedule of any payment due under the Plan is prohibited except as provided in regulations and administrative guidance promulgated under Section 409A of the Code. It is not an acceleration of the time or schedule of payment if the Employer waives or accelerates any vesting requirements applicable to a benefit under the Plan.

 

Section 7.                                          Vesting:

 

A Participant shall be fully vested in his Deferred Compensation Account including all income, gains and losses attributable thereto.

 

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Section 8.                                          Accounts; Deemed Investment; Adjustments to Account:

 

8.1          Accounts. The Committee shall establish a book reserve account, entitled the ‘“Deferred Compensation Account,” on behalf of each Participant. The Committee shall also establish an In-Service Account and Education Account as a part of the Deferred Compensation Account of each Participant, if applicable. The amount credited to the Deferred Compensation Account shall be adjusted pursuant to the provisions of Section 8.3.

 

8.2          Deemed Investments. The Deferred Compensation Account of a Participant shall be credited with an investment return determined as if the Account were invested in one or more investment funds made available by the Committee. The Participant shall elect the investment funds in which his Deferred Compensation Account shall be deemed to be invested. Such election shall be made in the manner prescribed by the Committee and shall take effect upon the entry of the Participant into the Plan. The investment election of the Participant shall remain in effect until a new election is made by the Participant. In the event the Participant fails for any reason to make an effective election of the investment return to be credited to his account, the investment return shall be determined by the Committee.

 

8.3          Adjustments to Deferred Compensation Account. With respect to each Participant who has a Deferred Compensation Account under the Plan, the amount credited to such account shall be adjusted by the following debits and credits, at the times and in the order stated:

 

8.3.1                     The Deferred Compensation Account shall be debited each business day with the total amount of any payments made from such account since the last preceding business day to him or for his benefit.

 

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8.3.2                     The Deferred Compensation Account shall be credited on each Crediting Date with the total amount of any Participant Deferral Credits to such account since the last preceding Crediting Date.

 

8.3.3                     The Deferred Compensation Account shall be credited or debited on each day securities are traded on a national stock exchange with the amount of deemed investment gain or loss resulting from the performance of the investment funds elected by the Participant in accordance with Section 8.2. The amount of such deemed investment gain or loss shall be determined by the Committee and such determination shall be final and conclusive upon all concerned.

 

Section 9.                                          Administration by Committee:

 

9.1          Membership of Committee. A Committee may be designated by Employer, consisting of at least three individuals appointed by Employer to serve at its pleasure, but unless Employer determines otherwise, Employer’s existing “Investment Committee”, which monitors the investments of Employer’s qualified retirement plans, will serve as the Committee hereunder. The Committee shall be responsible for the general administration and interpretation of the Plan and for carrying out its provisions, except to the extent all or any of such obligations are specifically imposed on the Board.

 

9.2          Committee Officers; Subcommittee. The Committee (if not the Investment Committee) may elect a Chairman and may elect an acting Chairman. The Committee may also elect a Secretary, and an acting Secretary, either of whom may be but need not be a member of the Committee. The Committee may appoint from its membership such subcommittees with such powers as the Committee shall determine, and may authorize one or more of its members or any agent to execute or deliver any instruments or to make any payment on behalf of the Committee. The Committee may from time to time employ agents and expressly delegate to such agents (including employees of Employer) such administrative or other duties as it sees fit.

 

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9.3          Committee Meetings. The Committee may hold such meetings at such places and at such intervals as it may from time to time determine.

 

9.4          Transaction of Business. All resolutions or other actions taken by the Committee at any meeting shall be by vote of a majority of those present at any such meeting and entitled to vote. Resolutions may be adopted or other action taken without a meeting upon written consent thereto signed by all of the members of the Committee.

 

9.5          Establishment of Rules. Subject to the limitations of the Plan, the Committee may from time to time establish rules or by-laws for the administration of the Plan and the transaction of its business.

 

9.6          Conflicts of Interest.  No individual member of the Committee shall have any right to vote or decide upon any matter relating solely to himself or to any of his rights or benefits under the Plan (except that such member may sign unanimous written consent to resolutions adopted or other action taken without a meeting), except relating to the terms of his Participant Deferral Agreement.

 

9.7          Correction of Errors. The Committee may correct errors and, so far as practicable, may adjust any benefit or credit or payment accordingly. The Committee may in its discretion waive any notice requirements in the Plan; provided, that a waiver of notice in one or more cases shall not be deemed to constitute a waiver of notice in any other case.

 

9.8          Authority to Interpret Plan. Subject to the claims procedure set forth in Section 16, the Plan Administrator and the Committee shall have the duty and discretionary authority to interpret and construe the provisions of the Plan and to decide any dispute which may arise regarding the rights of Participants hereunder, including the

 

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discretionary authority to construe the Plan and to make determinations as to eligibility and benefits under the Plan. The Committee’s prior exercise of discretionary authority shall not obligate it to exercise its authority in a like manner thereafter. Determinations by the Plan Administrator and/or the Committee shall be binding and conclusive upon all interested persons.

 

9.9          Third Party Advisors. The Committee may engage, and rely upon the advice and work product of, an attorney, accountant, actuary or any other technical advisor on matters regarding the operation of the Plan and to perform such other duties as shall be required in connection therewith, and may employ such clerical and related personnel as the Committee shall deem requisite or desirable in carrying out the provisions of the Plan.

 

9.10        Expense Reimbursement. The Committee shall be entitled to reimbursement by Employer for its reasonable expenses properly and actually incurred in the performance of its duties in the administration of the Plan.

 

9.11        Indemnification. No member of the Committee shall be personally liable by reason of any contract or other instrument executed by him or on his behalf as a member of the Committee nor for any mistake of judgment made in good faith, and the Employer shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums for which are paid from the Employer’s assets), each member of the Committee and each other officer, employee, or director of the Employer to whom any duty or power relating to the administration or interpretation of the Plan may be delegated or allocated, against any unreimbursed or uninsured cost or expense (including any sum paid in settlement of a claim with the prior written approval 

 

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of the Board) arising out of any act, or omission to act, in connection with the Plan unless arising out of such person’s own fraud, bad faith, willful misconduct or gross negligence.

 

Section 10.                                   Contractual Liability; Trust:

 

10.1        Contractual Liability. The obligation of the Employer to make payments hereunder shall constitute a contractual liability of the Employer to the Participant. Such payments shall be made from the general funds of the Employer, and the Employer shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and the Participant shall not have any interest in any particular assets of the Employer by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Employer, such right shall be no greater than the right of an unsecured creditor of the Employer.

 

10.2        Trust. The Employer may establish a Trust with a Trustee, pursuant to such terms and conditions as are set forth in the Trust Agreement, for the purpose of assisting in meeting its obligations hereunder. Any Trust, if and when established, is intended to be treated as a “grantor trust” for purposes of the Code, and all assets of the Trust would be held in the United States. The establishment of the Trust would not be intended to cause Participants to realize current income on amounts contributed thereto, and any Trust shall be so interpreted and administered.

 

Section 11.                                   Allocation of Responsibilities:

 

The persons or entities responsible for the Plan and the duties and responsibilities allocated to each are as follows:

 

11.1        Employer (by action of the Board, the Employer’s Chief Executive Officer, or by the designee of either).

 

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(i)                                     To amend the Plan;

 

(ii)                                  To appoint and remove members of the Committee; if any,

 

and

 

(iii)                               To terminate the Plan as permitted in Section 14.

 

11.2                        Committee.

 

(i)                                     To designate Participants;

 

(ii)                                  To interpret the provisions of the Plan and to determine the rights of the Participants under the Plan, except to the extent otherwise provided in Section 16 relating to claims procedure;

 

(iii)                               To administer the Plan in accordance with its terms, except to the extent powers to administer the Plan are specifically delegated to another person or persons as provided in the Plan;

 

(iv)                              To account for the amount credited to the Deferred Compensation Account of a Participant; and

 

(v)                                 To direct the Employer in the payment of benefits.

 

11.3        Plan Administrator.

 

(i)                                     To file such reports as may be required with the United States Department of Labor, the Internal Revenue Service and any other government agency to which reports may be required to be submitted from time to time; and

 

(ii)                                  To administer the claims procedure to the extent provided in Section 16.

 

Section 12.                                   Benefits Not Assignable; Facility of Payments:

 

12.1        Benefits Not Assignable. No portion of any benefit credited or paid under the Plan with respect to any Participant shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void, nor shall any portion of such benefit be in any manner payable to 

 

21

 

any assignee, receiver or any one trustee, or be liable for his debts, contracts, liabilities, engagements or torts.

 

12.2        Payments to Minors and Others. If any individual entitled to receive a payment under the Plan shall be physically, mentally or legally incapable of receiving or acknowledging receipt of such payment, the Committee, upon the receipt of satisfactory evidence of such individual’s incapacity and satisfactory evidence that another person or institution is maintaining the individual and that no guardian or committee has been appointed for him or her, may cause any payment otherwise payable to such individual to be made to such person or institution so maintaining the individual. Payment to such person or institution shall be in full satisfaction of all claims by or through the Participant to the extent of the amount thereof.

 

Section 13.                                   Beneficiary:

 

The Participant’s beneficiary shall be the person, persons or entity designated by the Participant on the beneficiary designation form provided by and filed with the Committee or its designee. If the Participant does not designate a beneficiary, the beneficiary shall be his or her Surviving Spouse. If the Participant does not designate a beneficiary and has no Surviving Spouse, the beneficiary shall be the Participant’s estate. The designation of a beneficiary may be changed or revoked only by filing a new beneficiary designation form with the Committee or its designee. If a beneficiary (the “primary beneficiary”) is receiving or is entitled to receive payments under the Plan and dies before receiving all of the payments due, the balance to which the primary beneficiary is entitled shall be paid to the contingent beneficiary, if any, named in the Participant’s current beneficiary designation form. If there is no contingent beneficiary, the balance shall be paid to the estate of the primary beneficiary. Any beneficiary may 

 

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disclaim all or any part of any benefit to which such beneficiary shall be entitled hereunder by filing a written disclaimer with the Committee before payment of such benefit is to be made. Such a disclaimer shall be made in a form satisfactory to the Committee and shall be irrevocable when filed. Any benefit disclaimed shall be payable from the Plan in the same manner as if the beneficiary who filed the disclaimer had predeceased the Participant.

 

Section 14.                                   Amendment and Termination of Plan:

 

Employer may amend any provision of the Plan or terminate the Plan at any time; provided, that in no event shall such amendment or termination reduce the balance in any Participant’s Deferred Compensation Account as of the date of such amendment or termination, nor shall any such amendment affect the terms of the Plan relating to the payment of such Deferred Compensation Account. Notwithstanding the foregoing, the following special provisions shall apply:

 

14.1        Termination in the Discretion of the Employer. Except as otherwise provided in Sections 14.2, Employer in its discretion may terminate the Plan and distribute benefits to Participants subject to the following requirements:

 

14.1.1              All arrangements sponsored by Employer that would be aggregated with the Plan under Section 1.409A-l(c) of the Treasury Regulations are terminated.

 

14.1.2              No payments other than payments that would be payable under the terms of the Plan if the termination had not occurred are made within 12 months of the termination date.

 

14.1.3              All benefits under the Plan are paid within 24 months of the termination date.

 

14.1.4              Employer does not adopt a new arrangement that would be aggregated with the Plan under Section 1.409A-l(c) of the Treasury Regulations providing for the deferral of compensation at any time within five years following the date of termination of the Plan.

 

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14.1.5              If Employer terminates the Plan within 30 days preceding or 12 months following a “change of control” as described in Section 409A(a)(2)(A)(v) of the Code any resulting distribution to Participants shall comply with the requirements of Section 409A and regulations thereunder.

 

14.2        No Financial Triggers. Employer may not terminate the Plan and make distributions to a Participant due solely to (and proximate to) a change in the financial health of Employer.

 

Section 15.                                   Communication to Participants:

 

Employer will make a copy of the Plan available for inspection by Participants and their beneficiaries upon written request during reasonable hours at the principal office of Employer or through other reasonable means.

 

Section 16.                                   Claims Procedure:

 

The following claims procedure shall apply with respect to the Plan:

 

16.1        Filing of a Claim for Benefits. If a Participant or beneficiary (the “claimant”) believes that he or she is entitled to benefits under the Plan which are not being paid or which are not being credited for his or her benefit, the claimant shall file a written claim therefore with the Plan Administrator.

 

16.2        Notification to Claimant of Decision. Within 90 days after receipt of a claim by the Plan Administrator (or within 180 days if special circumstances require an extension of time), the Plan Administrator will notify the claimant of the decision with regard to the claim. In the event of such special circumstances requiring an extension of time, there will be furnished to the claimant prior to expiration of the initial 90-day period written notice of the extension, which notice will set forth the special circumstances and the date by which the decision will be furnished. If such claim is wholly or partially denied, notice thereof will be in writing and worded in a manner calculated to be 

 

24

 

understood by the claimant, and will set forth: (i) the specific reason or reasons for the denial; (ii) specific reference to pertinent provisions of the Plan on which the denial is based; (iii) 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; and (iv) an explanation of the procedure for review of the denial and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under ERISA following an adverse benefit determination on review. Notwithstanding the forgoing, if the claim relates to a Participant who is Disabled, the Plan Administrator will notify the claimant of the decision within 45 days (which may be extended for an additional 30 days if required by special circumstances).

 

16.3        Procedure for Review. Within 60 days following receipt by the claimant of notice denying his or her claim, in whole or in part, or, if such notice shall not be given, within 60 days following the latest date on which such notice could have been timely given, the claimant may appeal denial of the claim by filing a written application for review with the Committee. Following such request for review, the Committee will fully and fairly review the decision denying the claim. Prior to the decision of the Committee, the claimant shall be given an opportunity to review pertinent documents and to submit issues and comments in writing.

 

16.4        Decision on Review. The decision on review of a claim denied in whole or in part by the Plan Administrator will be made in the following manner:

 

16.4.1              Within 60 days following receipt by the Committee of the request for review (or within 120 days if special circumstances require an extension of time), the Committee will notify the claimant in writing of its decision with regard to the claim. In the event of such special circumstances requiring an extension of time, written notice of the extension will be furnished to the claimant prior to the commencement of the extension. Notwithstanding the forgoing, if the claim 

 

25

 

relates to a Participant who is Disabled, the Committee will notify the claimant of the decision within 45 days (which may be extended for an additional 45 days if required by special circumstances).

 

16.4.2              With respect to a claim that is denied in whole or in part, the decision on review will (i) set forth specific reasons for the decision, (ii) will be written in a manner calculated to be understood by the claimant, (iii)will cite specific references to the pertinent Plan provisions on which the decision is based, (iv) will contain a statement that the claimant is entitled to receive, upon written 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, and (v) a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain the information about such procedures, as well as a statement of the claimant’s right to bring an action under ERISA section 502(a).

 

16.4.3              All decisions of the Committee are final and conclusive.

 

16.5        Action by Authorized Representative of Claimant.  All actions set forth in this Section 16 to be taken by the claimant may likewise be taken by a representative of the claimant duly authorized to act in his or her behalf on such matters. The Plan Administrator and the Committee may require such evidence as either may reasonably deem necessary or advisable of the authority to act of any such representative.

 

Section 17.                                   Miscellaneous Provisions:

 

17.1        Set off. Notwithstanding any other provision of this Plan, Employer may reduce the amount of any payment otherwise payable to or on behalf of a Participant hereunder (net of any required withholdings) by the amount of any loan, cash advance, extension of credit or other obligation of the Participant to the Employer that is then due and payable, and the Participant shall be deemed to have consented to such reduction.

 

17.2        Notices.  Each Participant who is not in Service and each Beneficiary shall be responsible for furnishing the Committee or its designee with his current address for the mailing of notices and benefit payments. Any notice required or permitted to be given to such Participant or Beneficiary shall be deemed given if directed to such address 

 

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and mailed by regular United States mail, first class, postage prepaid. If any check mailed to such address is returned as undeliverable to the addressee, mailing of checks will be suspended until the Participant or Beneficiary furnishes the proper address. This provision shall not be construed as requiring the mailing of any notice or notification otherwise permitted to be given by posting or by other publication.

 

17.3        Lost Distributees. A benefit shall be deemed forfeited if the Plan Administrator is unable to locate the Participant or Beneficiary to whom payment is due on or before the fifth anniversary of the date payment is to be made or commence; provided, that the deemed investment rate of return pursuant to Section 8.2 shall cease to be applied to the Participant’s account following the first anniversary of such date; provided further, however, that such benefit shall be reinstated if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.

 

17.4                        Reliance on Data. The Employer, the Committee and the Plan Administrator shall have the right to rely on any data provided by the Participant or by any Beneficiary. Representations of such data shall be binding upon any party seeking to claim a benefit through a Participant, and the Employer, the Committee and the Plan Administrator shall have no obligation to inquire into the accuracy of any representation made at any time by a Participant or Beneficiary.

 

17.5                        Receipt and Release for Payments. Subject to the provisions of Section 17.1, any payment made from the Plan to or with respect to any Participant or Beneficiary, or pursuant to a disclaimer by a Beneficiary, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Plan and the Employer with respect to the Plan. The recipient of any payment from the Plan may be required by the 

 

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Committee, as a condition precedent to such payment, to execute a receipt and release with respect thereto in such form as shall be acceptable to the Committee.

 

17.6        Headings. The headings and subheadings of the Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.

 

17.7        Continuation of Employment.  The establishment of the Plan shall not be construed as conferring any legal or other rights upon any Employee or any persons for continuation of employment, nor shall it interfere with the right of the Employer to discharge any Employee or to deal with him without regard to the effect thereof under the Plan.

 

17.8        Merger or Consolidation; Assumption of Plan. In the event Employer consolidates or merges into or with another corporation or entity, or transfers all or substantially all of its assets to another corporation, partnership, trust or other entity (a “Successor Entity”), such Successor Entity may assume the rights, obligations and liabilities of the Employer under the Plan and upon such assumption, the Successor Entity shall become obligated to perform the terms and conditions of the Plan.

 

17.9        Construction. The provisions of the Plan shall be construed and enforced in accordance with the laws of the State of Missouri, except to the extent that such laws are superseded by ERISA and the applicable requirements of the Code.

 

17.10      Taxes. The Employer or other payor may withhold a benefit payment under the Plan or a Participant’s wages, or Employer may reduce a Participant’s account balance, in order to meet any federal, state or local tax withholding obligation with respect to Plan benefits, as permitted under Section 409A of the Code. Employer or any 

 

28

 

other payor shall report Plan payments and other Plan-related information to the appropriate governmental agencies as required under applicable laws.

 

Section 18.                                   Transition Rules.

 

18.1        2005 Election Termination. Notwithstanding Section 4.1.4, at any time during 2005, a Participant may terminate a Participation Agreement, or modify a Participation Agreement to reduce the amount of Compensation subject to the deferral election, so long as the Compensation subject to the terminated or modified Participation Agreement is includible in the income of the Participant in 2005 or, if later, in the taxable year in which the amounts are earned and vested.

 

18.2        2005 Deferral Election. The requirements of Section 4.1.2 relating to the timing of the Participation Agreement shall not apply to any deferral election made on or before March 15,2005, provided that (a) the amounts to which the deferral election relate have not been paid or become payable at the time of the election, (b) the Plan was in existence on or before December 31, 2004, (c) the decision to defer compensation is made in accordance with the terms of the Plan in effect on December 31, 2005 (other than a requirement to make a deferral election after March 15, 2005), and (d) the Plan is otherwise operated in accordance with the requirements of Section 409A of the Code.

 

18.3        2005 Termination of Participation; Distribution. Notwithstanding anything in the Plan to the contrary, at any time during 2005, a Participant may terminate his or her participation in the Plan and receive a distribution of his or her Deferred Compensation Account balance on account of that termination, so long as the full amount of such distribution is includible in the Participant’s income in 2005 or, if later, in the taxable year of the Participant in which the amount is earned and vested.

 

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18.4        Payment Elections. Not withstanding any of the foregoing provisions of the Plan to the contrary, a Participant may elect, on or before December 31, 2007, the time or form of payment of amounts subject to Section 409A of the Code provided that such election applies only to amounts that would not otherwise be payable in the year of the election and the election does not cause an amount to be paid in the year of the election that would not otherwise be payable in such year.

 

IN WITNESS WHEREOF, this Agreement has been executed as of the 24 day of December, 2008.

 

	
 
    	
American Multi-Cinema, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla Sanders
    
	
 
    	
 
    	
Authorized Officer
    

 

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CERTIFICATE OF

AMENDMENT NO. ONE

TO THE

AMERICAN MULTI-CINEMA, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005)

 

The undersigned, Carla Sanders, hereby certifies that she is the duly appointed Vice President, HR Services of American Multi-Cinema, Inc. (the “Company”) and that the following action has been taken:

 

WHEREAS, the Company has established the American Multi-Cinema, Inc. Nonqualified Deferred Compensation Plan, as amended and restated effective January 1, 2005 (the “Plan”); and

 

WHEREAS, pursuant to Section 14 of the Plan, the Company may amend the Plan at any time; and

 

WHEREAS, the Company desires to amend the Plan at this time in order to modify the Plan’s eligibility provisions.

 

NOW, THEREFORE, BE IT RESOLVED that, effective as of January 1, 2010, the Plan shall be and is hereby amended as follows:

 

1.                                      The first sentence of Section 2.12 of the Plan shall be amended so as to now read as follows:

 

“Employee” means an individual employed by the Employer who (i) is a highly compensated or management employee of the Employer, (ii) earns Compensation in the immediately preceding Plan Year of at least $160,000 (or such higher amount as may be determined and communicated prospectively by the Committee from time to time), and (iii) has a projected base salary for the current Plan Year of at least $160,000 (or such higher amount as may be determined and communicated prospectively by the Committee from time to time).

 

IN WITNESS WHEREOF, I have hereunto affixed my signature as Vice President, HR Services as of this 23 day of September, 2009.

 

	
 
    	
AMERICAN   MULTI-CINEMA, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla Sanders
    
	
 
    	
 
    	
Carla   Sanders, Vice President,
    
	
 
    	
 
    	
HR Services
    

 

 

AMENDMENT NO.2

AMERICAN MULTI-CINEMA, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005)

 

The Plan named above gives the Employer the right to amend it at any time. According to that right, the Plan is amended effective January 1, 2012, as follows:

 

By amending the first sentence of Section 4.1 to now read as follows:

 

Each Active Participant may elect, by entering into a Participant Deferral Agreement with the Employer, to defer the receipt of Compensation from the Employer (i) as a percentage of Compensation (excluding any bonus), and/or (ii) as a percentage of any bonus paid for the year, all as specified in the Participant Deferral Agreement.

 

This amendment is made an integral part of the aforesaid Plan and is controlling over the terms of said Plan with respect to the particular items addressed expressly herein. All other provisions of the Plan remain unchanged and controlling.

 

Unless otherwise stated on any page of this amendment, eligibility for benefits and the amount of any benefits payable to or on behalf of an individual who is an inactive Participant on the effective date(s) stated above, shall be determined according to the provisions of the aforesaid Plan as in effect on the day before he became an inactive Participant.

 

Signing this amendment, the Employer, as plan sponsor, has made the decision to adopt this plan amendment. The Employer is acting in reliance on its own discretion and on the legal and tax advice of its own advisors, and not that of any member of the Principal Financial Group or any representative of a member company of the Principal Financial Group.

 

Signed this 25 day of July, 2011.

 

	
 
    	
American   Multi-Cinema, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla   Sanders
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
V.P. HR   Services
    
	
 
    	
 
    	
Title
    

 

1

 

AMENDMENT NO.3

 

AMERICAN MULTI-CINEMA, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005)

 

The Plan named above gives the Employer the right to amend it at any time. According to that right, the Plan is amended effective October 1, 2012, as follows:

 

By striking, in its entirety, the final sentence from Section 17.5 of the Plan.

 

This amendment is made an integral part of the aforesaid Plan and is controlling over the terms of said Plan with respect to the particular items addressed expressly herein. All other provisions of the Plan remain unchanged and controlling.

 

Unless otherwise stated on any page of this amendment, eligibility for benefits and the amount of any benefits payable to or on behalf of an individual who is an inactive Participant on the effective date(s) stated above, shall be determined according to the provisions of the aforesaid Plan as in effect on the day before he became an inactive Participant.

 

Signing this amendment, the Employer, as plan sponsor, has made the decision to adopt this plan amendment. The Employer is acting in reliance on its own discretion and on the legal and tax advice of its own advisors, and not that of any member of the Principal Financial Group or any representative of a member company of the Principal Financial Group.

 

Signed this 25th day of September, 2012.

 

	
 
    	
American   Multi-Cinema, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla   Sanders
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title
    

 

 

FOURTH AMENDMENT TO THE

AMERICAN MULTI-CINEMA, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005)

 

WHEREAS, American Multi-Cinema, Inc. (the “Employer”) has established the American Multi-Cinema, Inc., Nonqualified Deferred Compensation Plan, as amended and restated effective January 1, 2005 (the “Plan”); and

 

WHEREAS, pursuant to Section 14 of the Plan, the Employer may amend the Plan at any time; and

 

WHEREAS, the Employer desires to amend the Plan at this time in order to modify the Plan’s eligibility provision.

 

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2014, as follows:

 

1.                                      The first sentence of Section 2.12 of the Plan shall be amended so as to now read as follows:

 

“Employee” means an individual employed by the Employer who is at the level of Vice President or higher.

 

2.                                      Except as hereinabove amended, the provisions of the Plan shall continue in full force and effect.

 

IN WITNESS WHEREOF, the Employer by its duly authorized officer, has caused this Fourth Amendment to be executed on the 23 day of December, 2013.

 

	
 
    	
American   Multi-Cinema, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla   Sanders
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
S.V.P.,   Human Resources
    
	
 
    	
 
    	
Title
    

 

 

AMENDMENT NO.5 TO

 

THE AMERICAN MULTI-CINEMA, INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

 

WHEREAS, American Multi-Cinema, Inc. (the “Employer”) heretofore adopted the American Multi-Cinema, Inc. Non-Qualified Deferred Compensation Plan (the “Plan”), effective as of January 1, 2005;

 

and

 

WHEREAS, the Employer reserved the right to amend the Plan; and

 

WHEREAS, the Employer ·previously amended the Plan by adoption of four subsequent amendments;

 

and

 

WHEREAS, the Employer desires to amend the Plan to authorize Employer contributions;

 

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2015, as follows:

 

1.                                      A new Section 2.13A is added to read as follows:

 

2.13A “Employer Contribution Account” means a separate account to be kept for a Participant who receives an Employer contribution credit as described in Section 4.3. The Employer Contribution Account shall be credited or debited for deemed investment gains or losses in accordance with the rules rules and elections under Section 8. Except as otherwise provided in Section 4.3 or elsewhere in the Plan, a Participant’s Employer Contribution Account shall be administered in the same manner as his or her Deferred Compensation Account.

 

2.                                      A new Section 4.3 is added to the Plan to read as follows:

 

4.3                               Employer Contribution Credits. Notwithstanding any provision of the Plan to the contrary, for any Plan Year, the Employer may elect to credit to the Employer Contribution Account Account of each Participant, or any Participant designated by the Employer, an amount as determined by the Employer. Any such credit shall be made entirely at the discretion of the Employer and the amount of such credit, if any, may be different for different Participants. A Participant’s Employer Contribution Account, if any, shall be paid a single lump sum upon the occurrence of a Qualifying Distribution Event; provided that such Account shall not be subject to any in-service or education distribution election of a Participant and provided further that payment of such Account to a Specified Employee upon separation from Service shall be delayed for six months in accordance with Section 5.1.

 

3.                                      Except as hereinabove amended, the provisions of the Plan shall continue in full force and effect.

 

1

 

IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused this Amendment to be executed on the 17 day of December, 2014.

 

	
 
    	
AMERICAN MULTI-CINEMA, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carla   Sanders
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
SVP,   Human Resources
    

 

2Exhibit 10.2

UNITED STATES

TESSERA TECHNOLOGIES, INC. 
 
2003 EQUITY INCENTIVE PLAN 
 
STOCK OPTION GRANT NOTICE AND  
STOCK OPTION AGREEMENT 
Tessera Technologies, Inc., a Delaware corporation (the “Company”), pursuant to its 2003 Equity Incentive Plan (as amended to date, the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of the Company’s Common Stock ("Shares") set forth below (the “Option”).  This Option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.
	
		
	Participant:
	%%FIRST_NAME%-% %%LAST_NAME%-%

	Employee ID:
	%%EMPLOYEE_IDENTIFIER%-%

	Grant Date:
	%%OPTION_DATE%-%

	Vesting Commencement Date:
	%%VEST_BASE_DATE%-%

	Exercise Price per Share:
	%%OPTON_PRICE,’$999,999,999.99’%-%

	Total Number of Shares Subject to the Option:
	%%TOTAL_SHARES_GRANTED%-%

	Total Exercise Price:
	%%TOTAL_OPTION_PRICE,’$999,999,999.99’%-%

	Expiration Date:
	%%EXPIRE_DATE_PERIOD1%-%

Type of Option:     Nonstatutory Stock Option

       Vesting Schedule:  The Option shall vest and become exercisable with respect to twenty-five percent (25%) of the total Shares subject to the Option on each anniversary of the Vesting Commencement Date, subject to Participant’s continued status as a Service Provider through each of such vesting dates, such that the Option shall be fully vested and exercisable with respect to all of the Shares subject to the Option as of the fourth anniversary of the Vesting Commencement Date.
ELECTRONIC ACCEPTANCE OF AWARD:

By clicking on the "ACCEPT" box on the "Grant Acceptance: View/Accept Grant" Page, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice.  Participant acknowledges that he or she has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, each of which are posted on www.etrade.com, and has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan.  Participant further acknowledges that he or she has been provided with a copy of the prospectus for the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Stock Option Agreement.  Below are instructions on how to access the Plan and the prospectus:
1. Log into your E*TRADE account.
2. Click on Employee Stock Plans.
3. Click on Company Info.
4. Click on Documents.
5. Click on 2003 Plan.

EXHIBIT A 
 
TESSERA TECHNOLOGIES, INC.
STOCK OPTION AGREEMENT
Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Tessera Technologies, Inc., a Delaware corporation (the “Company”), has granted to the Participant an option under the Company’s 2003 Equity Incentive Plan (as amended to date, the “Plan”) to purchase the number of Shares indicated in the Grant Notice.
ARTICLE I. 
GENERAL
1.1    Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2    Incorporation of Terms of Plan.  The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE II.     
GRANT OF OPTION
2.1    Grant of Option.  In consideration of the Participant’s past and/or continued employment with or service to the Company or any Parent or Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to the Participant the Option to purchase any part or all of an aggregate of the number of Shares set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement.  The Option shall be a Nonstatutory Stock Option.
2.2    Exercise Price.  The exercise price of the Shares subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the Shares subject to the Option shall not be less than 100% of the Fair Market Value of Share on the Grant Date.  
2.3    Consideration to the Company.  In consideration of the grant of the Option by the Company, the Participant agrees to render faithful and efficient services to the Company or any Parent or Subsidiary.  Nothing in the Plan or this Agreement shall confer upon the Participant any right to continue in the employ or service of the Company or any Parent or Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Parents and Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Parent or Subsidiary and the Participant.
ARTICLE III.     
PERIOD OF EXERCISABILITY
3.1    Commencement of Exercisability.
(a)    Subject to Sections 3.2, 3.3, 5.7 and 5.10 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.
(b)    No portion of the Option which has not become vested and exercisable as of the date on which the Participant ceases to be a Service Provider shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and the Participant.
3.2    Duration of Exercisability.  The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative.  Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof.
3.3    Expiration of Option.  The Option may not be exercised to any extent by anyone after the first to occur of the following events:
(a)    The expiration of ten years from the Grant Date; 
(b)    The expiration of three months from the date of the Participant ceases to be a Service Provider, unless such termination occurs by reason of the Participant’s death or Disability; or
(c)    The expiration of one year from the date of the Participant ceases to be a Service Provider by reason of the Participant’s death or Disability. 
ARTICLE IV.     
EXERCISE OF OPTION
4.1    Person Eligible to Exercise.  Except as provided in Sections 5.2(b), during the lifetime of the Participant, only the Participant may exercise the Option or any portion thereof.  After the death of the Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by the Participant’s personal representative or by any person empowered to do so under the deceased the Participant’s will or under the then applicable laws of descent and distribution.
4.2    Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof.
4.3    Manner of Exercise.  The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company) of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof:
(a)    An Exercise Notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator; 
(b)    The receipt by the Company of full payment for the Shares with respect to which the Option or portion thereof is exercised, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof; 
(c)    The payment of any applicable withholding tax as provided under Section 4.5 hereof;
(d)    Any other written representations as may be required in the Administrator’s reasonable discretion to evidence compliance with the Securities Act or any other applicable law rule, or regulation; and
(e)    In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Option.
Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.
4.4    Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Participant, subject to Section 17(c) of the Plan:
(a)    by cash or check made payable to the Company;
(b)    through the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate exercise price of the Shares with respect to which the Option or portion thereof is being exercised; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale;
(c)    with the consent of the Administrator, by tendering to the Company vested Shares held for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes, as determined by the Administrator, having Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares with respect to which the Option or portion thereof is being exercised;
(d)    with the consent of the Administrator, by requesting that the Company withhold a number of Shares issuable upon the exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Shares with respect to which the Option or portion thereof is being exercised; or
(e)    in any combination of the foregoing.
4.5    Tax Withholding.  Notwithstanding any other provision of this Agreement, and subject to Section 17(d) of the Plan:
(a)    The Company and its Subsidiaries shall be entitled to withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement. The Company and its Subsidiaries may withhold or Participant may make such payment in one or more of the forms specified below:
(i)    by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises; 
(ii)    by the deduction of such amount from other compensation payable to Participant; 
(iii)    with respect to any withholding taxes arising in connection with the exercise of the Option, through the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; 
(iv)    with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by tendering to the Company vested Shares held for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes, as determined by the Administrator, having Fair Market Value on the date of surrender not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries; 
(v)    with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by requesting that the Company withhold a number of Shares issuable upon the exercise of the Option having Fair Market Value on the date of exercise not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries; or
(vi)    in any combination of the foregoing. 
(b)    With respect to any withholding taxes arising in connection with the Option, in the event Participant does not provide timely payment of all sums required pursuant to Section 4.5(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 4.5(a)(ii) or Section 4.5(a)(v) above, or any combination of the foregoing as the Company may determine to be appropriate.  In the event the exercise price will be satisfied under Section 4.4(d) or any tax withholding obligation arising in connection with the Option will be satisfied under Section 4.5(a)(v) above, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of Shares from those Shares that are issuable upon exercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the exercise price or the tax withholding obligation, as applicable, and to remit the proceeds of such sale to the Company or, if applicable, the Subsidiary with respect to which the withholding obligation arises.  Participant’s acceptance of this Option constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 4.5(b), including the transactions described in the previous sentence, as applicable.  To avoid negative accounting treatment, the Company shall determine the applicable tax withholding based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes.
4.6    Conditions to Issuance of Stock Certificates.  The Company shall not be required to issue or deliver any Shares purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such Shares are then listed; (b) the completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the U.S. Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; (d) the lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience; and (e) receipt by the Company of full payment for such Shares and payment of any applicable withholding tax, in accordance with Sections 4.4 and 4.5 hereof.
4.7    Issuance of Shares.  Shares issued upon exercise of the Option shall be issued to Participant or Participant’s beneficiaries, as the case may be, at the sole discretion of the Administrator, in either (a) uncertificated form, with the shares recorded in the name of Participant in the books and records of the Company’s transfer agent; or (b) certificate form.
4.8    Rights as Stockholder.  The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of any part of the Option unless and until such Shares shall have been issued by the Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13(a) of the Plan.  
ARTICLE V.     
OTHER PROVISIONS
5.1    Tax Representations.  Participant has reviewed with Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 
5.2    Option Not Transferable.
(f)    The Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the Shares underlying the Option have been issued, and all restrictions applicable to such Shares have lapsed.  Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.
(g)    During the lifetime of Participant, only Participant may exercise the Option or any portion thereof, unless it has been disposed of with the consent of the Administrator pursuant to a DRO.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
5.3    Adjustments.  The Participant acknowledges that the Option is subject to modification and termination in certain events as provided in this Agreement and Section 13 of the Plan.
5.4    Notices.  Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given when sent via email or upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to Participant to his or her address shown in the Company records, and to the Company at its principal executive office.  By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.4.  
5.5    Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
5.6    Governing Law and Jurisdiction.  The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. The courts of the State of California shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the Plan.  The jurisdiction agreement contained in this Section 3.5 is made for the benefit of the Company and its Parents and Subsidiaries only, which accordingly retains the right to bring proceedings in any other court of competent jurisdiction.  By accepting the grant of an Award and not renouncing it, Participant is deemed to have agreed to submit to such jurisdiction.
5.7    Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
5.8    Amendments, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of the Participant.    
5.9    Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth in Section 5.2 hereof, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.
5.10    Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule
5.11    Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries.
5.12    Entire Agreement.  The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.
5.13    Notices.  Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given when sent via email or upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to Participant to his or her address shown in the Company records, and to the Company at its principal executive office.  Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given when sent via email or upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to Participant to his or her address shown in the Company records, and to the Company at its principal executive office.  By a notice given pursuant to this Section 5.13, either party may hereafter designate a different address for notices to be given to that party.  
5.14    Forfeiture and Claw-Back Provisions. Participant hereby acknowledges and agrees that the Award is subject to the provisions of Section 23 of the Plan.
5.15    Broker-Assisted Sales.  In the event of any broker-assisted sale of Shares in connection with the payment of the exercise price as provided in Section 4.4(b) or (d) or the payment of withholding taxes as provided in Section 4.5(a)(iii) or (v) or: (a) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or exercise of the Option, as applicable, occurs or arises or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (c) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the proceeds of such sale exceed the applicable tax withholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (e) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (f) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation or exercise price, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the tax withholding obligation arises an amount in cash sufficient to satisfy any remaining portion of the exercise price or the Company’s or the applicable Subsidiary’s tax withholding obligation.
5.16    Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. 
5.17    Insider Trading Restrictions/Market Abuse Laws.  Participant acknowledges that, depending on his or her country of residence, Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to acquire or sell Shares or rights to Shares under the Plan during such times when Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant's country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  Participant further acknowledges that it is Participant's responsibility to comply with any applicable restrictions, and Participant is advised to speak to his or her personal advisor on this matter.

SD\1581085.2

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