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exhibit10_1.htm

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        10.1                                                                                               EXECUTION
        COPY

      

      

      AMENDMENT
        NO. 2

      

      AMENDMENT
        NO. 2, dated as of November 27, 2007 (this “Amendment”), by and among
        BOARDWALK PIPELINES, LP, a Delaware limited partnership (the “Parent
        Borrower”), TEXAS GAS TRANSMISSION, LLC, a Delaware limited liability
        company (“Texas Gas”), and GULF SOUTH PIPELINE COMPANY,
        LP,  a Delaware limited partnership (“Gulf South” and,
        together with the Parent Borrower and Texas Gas, the “Borrowers”),
        severally as Borrowers, BOARDWALK PIPELINE PARTNERS, LP, a Delaware limited
        partnership (the “MLP”), the Lenders party hereto, WACHOVIA BANK,
        NATIONAL ASSOCIATION, as administrative agent for the Lenders and the Issuers
        (in such capacity, the “Administrative Agent”), CITIBANK, N.A. and
        JPMORGAN CHASE BANK, N.A., as co-syndication agents, DNB NOR BANK ASA, as
        documentation agent, and WACHOVIA CAPITAL MARKETS LLC, CITIGROUP GLOBAL MARKETS
        INC. and J.P. MORGAN SECURITIES INC., as joint lead arrangers and joint book
        managers.

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Borrowers, the MLP, the Administrative Agent, the Lenders and the other
        parties thereto have entered into that certain Amended and Restated Revolving
        Credit Agreement, dated as of June 29, 2006 (as amended, supplemented or
        otherwise modified from time to time, the “Credit
        Agreement”);

       

      WHEREAS,
        the Borrowers have requested, among other things, a Revolving Credit Commitment
        Increase in the amount of $300,000,000; and

       

      WHEREAS,
        the Lenders have agreed, subject to the terms and conditions hereinafter
        set
        forth, to amend the Credit Agreement as set forth below.

       

      NOW,
        THEREFORE, in consideration of the foregoing, and for other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        the
        parties hereby agree as follows:

       

      1.           Defined
        Terms.  Capitalized terms used herein and not otherwise defined
        herein shall have the meanings ascribed to such terms in the Credit
        Agreement.

       

      2.           Amendments.  Effective
        as of the Effective Date (as defined below) and subject to the terms and
        conditions set forth herein, the Credit Agreement is hereby amended as
        follows:

       

      (a)           Section
        1.1 (Defined Terms) of the Credit Agreement is hereby amended by inserting
        the following definitions in the appropriate alphabetical order:

       

      “Amendment
        No. 2”:  the Amendment No. 2, dated as of November 27, 2007, by
        and among the Borrowers, the MLP, the Administrative Agent, and the Lenders
        party thereto.

       

      “Amendment
        No. 2 Effective Date”:  the “Effective Date” under and
        as defined in Amendment No. 2.”

       

      (b)           The
        definitions of “Revolving Credit Sublimit” and “Swing Line Sublimit” in
Section 1.1 (Defined Terms) of the Credit Agreement are hereby amended
        and restated in their entirety as follows:

       

      “Revolving
        CreditSublimit”:  initially, with respect to each
        Borrower, the amount set forth opposite such Borrower’s name below:

       

      
        	
                Borrower

              	
                Revolving
                  Credit Sublimit

              
	
                Parent
                  Borrower

              	
                $500,000,000

              
	
                Texas
                  Gas

              	
                $200,000,000

              
	
                Gulf
                  South

              	
                $300,000,000

              

      

      

      The
        Parent Borrower may adjust the Revolving Credit Sublimit for each Borrower
        from
        time to time upon 3 Business Days’ prior written notice to the Administrative
        Agent; provided, however, that, except as otherwise provided
        in the following proviso in connection with a Revolving Credit Commitment
        Increase, (a) the Parent Borrower’s Revolving Credit Sublimit shall not exceed
        $1,000,000,000, (b) Texas Gas’ Revolving Credit Sublimit shall not exceed
        $1,000,000,000, (c) Gulf South’s Revolving Credit Sublimit shall not exceed
        $1,000,000,000 and (d) the aggregate Revolving Credit Sublimits for all
        Borrowers shall not exceed the then effective Revolving Credit Commitments;
        provided, further, that each Revolving Credit Commitment
        Increase shall increase the maximum Revolving Credit Sublimit for each Borrower
        in the preceding proviso ratably in accordance with their respective maximum
        Revolving Credit Sublimits immediately prior to such Revolving Credit Commitment
        Increase.

       

      “Swingline
        Loan Sublimit”: $100,000,000.

       

      (c)           Section
        2.1(b) (Incremental Credit Extensions) of the Credit Agreement is hereby
        amended by (i) replacing the phrase “after giving effect to the Revolving Credit
        Commitment Increase on the Amendment No. 1 Effective Date, the aggregate
        amount
        of all Revolving Credit Commitment Increases shall not exceed $300,000,000” in
        clause (A) in the proviso therein with “after giving effect to the Revolving
        Credit Commitment Increase on the Amendment No. 2 Effective Date, the aggregate
        amount of all Revolving Credit Commitment Increases shall not exceed
        $300,000,000” and (ii) replacing the reference to “$1,000,000,000 in clause (B)
        in the proviso therein with “$1,300,000,000”.

       

      (d)           Schedule
        I (Revolving Credit Commitments) to the Credit Agreement is hereby amended
        and restated in its entirety to read as attached hereto as Annex I.

       

      3.           Conditions
        to Effectiveness of this Amendment.  This Amendment shall become
        effective as of the date (the “Effective Date”) each of the following
        conditions precedent shall have been satisfied:

       

      (a)           The
        Administrative Agent shall have received on or prior to the Effective Date
        each
        of the following, each dated the Effective Date unless otherwise indicated
        or
        agreed to by the Administrative Agent and in form and substance satisfactory
        to
        the Administrative Agent:

       

      (i)           counterparts
        of this Amendment duly executed and delivered by each of the Borrowers, the
        MLP,
        the Administrative Agent, the Issuer, the Swingline Lender, each Lender
        participating in the Revolving Credit Commitment Increase and the Required
        Lenders under the Credit Agreement;

       

      (ii)           written
        commitments duly executed by existing Lenders (or their Affiliates or Approved
        Funds) or Eligible Assignees in an aggregate amount equal to $300,000,000
        and,
        in the case of each such Eligible Assignee that is not an existing Lender,
        an
        assumption agreement in form and substance satisfactory to the Administrative
        Agent and duly executed by the Parent Borrower, the Administrative Agent
        and
        such Eligible Assignee;

       

      (iii)           a
        favorable opinion of (A) Vinson & Elkins LLP, counsel to the Loan
        Parties, and (B) in-house counsel to the Loan Parties, each addressed to
        the
        Administrative Agent, the Lenders and the Issuers and addressing such matters
        as
        the Administrative Agent may reasonably request;

       

      (iv)           a
        certificate of the Secretary or an Assistant Secretary of each Loan Party
        certifying (A) the names and true signatures of each officer of such Loan
        Party that has been authorized to execute and deliver this Amendment and
        the
        other documents required hereunder to be executed and delivered by or on
        behalf
        of such Loan Party, (B) the resolutions of such Loan Party’s Board of Directors
        (or equivalent governing body) approving and authorizing the execution, delivery
        and performance of this Amendment and the other documents required hereunder
        to
        be executed and delivered by or on behalf of such Loan Party and (C) that
        there have been no changes in the certificate of incorporation (or equivalent
        Constituent Document) and the by-laws (or equivalent Constituent Document)
        of
        such Loan Party from the certificate of incorporation (or equivalent Constituent
        Document) and the by-laws (or equivalent Constituent Document) previously
        delivered to the Administrative Agent on the Amendment No. 1 Effective Date
        (or
        if there has been such a change, attaching a certified copy
        thereof);

       

      (v)           a
        certificate of the chief financial officer of each Borrower in his capacity
        as
        such (and not in his individual capacity), in form and substance satisfactory
        to
        the Administrative Agent, attesting to the solvency of the Borrowers and
        the MLP
        after giving effect to the Revolving Credit Commitment Increase contemplated
        hereby; and

       

      (vi)           a
        certificate of a Responsible Officer of the Borrowers to the effect that
        the
        conditions set forth in Section 4.2(b) (Conditions Precedent to Each
        Extension of Credit) of the Credit Agreement have been satisfied both
        before and after giving effect to this Amendment.

       

      (b)           The
        Administrative Agent shall have received a certificate as to the good standing
        of each Loan Party, certified as of a recent date by the Secretary of State
        of
        the State of Delaware.

       

      (c)           There
        shall have been paid to the Administrative Agent, for the account of itself
        and
        the Lenders, as applicable, all fees and expenses (including reasonable fees
        and
        expenses of counsel) due and payable on or before the Effective
        Date.

       

      4.           Pro
        Rata Participations.  On the Effective Date, each Lender or
        Eligible Assignee participating in the Revolving Credit Commitment Increase
        pursuant to this Amendment shall purchase and assume from each existing Lender
        having Revolving Loans and participations in Letters of Credit and Swingline
        Loans outstanding on Effective Date, without recourse or warranty, an undivided
        interest and participation, to the extent of such Lender’s Ratable Portion of
        the new Revolving Credit Commitments (after giving effect to such Revolving
        Credit Commitment Increase), in the aggregate outstanding Revolving Loans
        and
        participations in Letters of Credit and Swingline Loans, so as to ensure
        that,
        on the Effective Date after giving effect to such Revolving Credit Commitment
        Increase, each Revolving Lender is owed only its Ratable Portion of the
        Revolving Loans and participations in Letters of Credit and Swingline Loans
        on
        the Effective Date.

       

      5.           Representations
        and Warranties.  Each Loan Party hereby represents and warrants to
        the Administrative Agent and the Lenders, on and as of the date hereof,
        that:

       

      (a)           (i)
        Such Loan Party has taken all necessary action to authorize the execution,
        delivery and performance of this Amendment, (ii) this Amendment has been
        duly
        executed and delivered by such Loan Party and (iii) this Amendment is the
        legal,
        valid and binding obligation of such Loan Party, enforceable against it in
        accordance with its terms, except as enforceability may be limited by applicable
        bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
        the
        enforcement of creditors’ rights generally and by general equitable
        principles.

       

      (b)           After
        giving effect to this Amendment, each of the representations and warranties
        made
        by any Loan Party in or pursuant to the Loan Documents (other than the
        representations and warranties set forth in Sections 3.2 and 3.6 of the Credit
        Agreement) is true and correct in all material respects on and as of the
        date
        hereof, as if made on and as of such date, except to the extent such
        representations and warranties expressly relate to an earlier date, in which
        case such representations and warranties are true and correct in all material
        respects as of such earlier date.

       

      (c)           After
        giving effect to this Amendment, no Default or Event of Default has occurred
        and
        is continuing as of the date hereof.

       

      6.           Reaffirmation.

       

      (a)           Each
        Loan Party hereby consents to the execution, delivery and performance of
        this
        Amendment and agrees that each reference to the Credit Agreement in the Loan
        Documents shall, on and after the Effective Date, be deemed to be a reference
        to
        the Credit Agreement as amended by this Amendment.

       

      (b)           Each
        Loan Party hereby acknowledges and agrees that, after giving effect to this
        Amendment, all of its respective obligations and liabilities under the Loan
        Documents to which it is a party are reaffirmed, and remain in full force
        and
        effect.

       

      7.           Continuing
        Effect.  Except as expressly set forth in this Amendment, all of
        the terms and provisions of the Credit Agreement are and shall remain in
        full
        force and effect and the Borrower shall continue to be bound by all of such
        terms and provisions.  The Amendment provided for herein is limited to
        the specific provisions of the Credit Agreement specified herein and shall
        not
        constitute an amendment of, or an indication of the Administrative Agent’s or
        the Lenders’ willingness to amend or waive, any other provisions of the Credit
        Agreement or the same sections for any other date or purpose.

       

      8.           Expenses.  The
        Borrowers agree to pay and reimburse the Administrative Agent for all its
        reasonable out-of-pocket costs and expenses incurred in connection with the
        negotiation, preparation, execution and delivery of this Amendment, and other
        documents prepared in connection herewith, and the transactions contemplated
        hereby, including, without limitation, reasonable fees and disbursements
        and
        other charges of counsel to the Administrative Agent and the charges of SyndTrak
        Online relating to the Amendment.

       

      9.           Choice
        of Law.  This Amendment and the rights and obligations of the
        parties hereto shall be governed by, and construed and interpreted in accordance
        with the law of the State of New York.

       

      10.           Counterparts.  This
        Amendment may be executed in any number of counterparts and by different
        parties
        and separate counterparts, each of which when so executed and delivered,
        shall
        be deemed an original, and all of which, when taken together, shall constitute
        one and the same instrument.  Delivery of an executed counterpart of a
        signature page to this Amendment by facsimile or e-mail shall be effective
        as
        delivery of a manually executed counterpart of this Amendment.

       

      11.           Integration.  This
        Amendment, together with the other Loan Documents, incorporates all negotiations
        of the parties hereto with respect to the subject matter hereof and is the
        final
        expression and agreement of the parties hereto with respect to the subject
        matter hereof.

       

      12.           Severability.  In
        case any provision in this Amendment shall be invalid, illegal or unenforceable,
        such provision shall be severable from the remainder of this Amendment and
        the
        validity, legality and enforceability of the remaining provisions shall not
        in
        any way be affected or impaired thereby.

       

      13.           Loan
        Document.  This Amendment is a Loan Document.

       

      14.           Waiver
        of Jury Trial.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
        TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT
        AND ANY
        OTHER LOAN DOCUMENT.

       

      [Signature
        Pages Follow]

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties have entered into this Amendment as of the date
        first above written.

       

      BOARDWALK
        PIPELINES, LP,

      as
        Borrower

      

      By:
        Boardwalk Operating GP,
        LLC,

      its
        general partner

      

      By:
        Boardwalk Pipeline Partners,
        LP,

      its
        managing member

      

      By:
        Boardwalk GP, LP,

      its
        general partner

      

      By:
        Boardwalk GP, LLC,

      its
        general partner

      

      By:                                                   
        

       

      Name:

                                         Title:

       

      TEXAS
        GAS
        TRANSMISSION, LLC,

      as
        Borrower

      

      By:                                                  
        

      Name:

      Title:

      

      GULF
        SOUTH PIPELINE COMPANY, LP,

      as
        Borrower

      

      By:
        GS PIPELINE COMPANY,
        LLC,

      its
        general partner

      

      By:                                                  
        

      Name:

      Title:

      

      BOARDWALK
        PIPELINE PARTNERS, LP

      

      By:
        Boardwalk GP, LP,

      its
        general partner

      

      By:
        Boardwalk GP, LLC,

      its
        general partner

      

      By:                                                  
        

      Name:

      Title:

      

       

      
        
                

                    [Signature
              Page to Amendment No.
              2]      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      WACHOVIA
        BANK, NATIONAL ASSOCIATION,

                                      as
        Administrative
        Agent, Issuer, Swingline Lender and  Lender

       

      

       

      

       

      By:                                              
        

       

      Name:

                                         Title:

       

      
        
                

                    [Signature
              Page to Amendment No.
              2]      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                           ,

      as
        a
        Lender

      

      

      By:                                                     
        

      Name:

      Title:

      
        
                

                    [Signature
              Page to Amendment No.
              2]      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                 

              	 

      

      
        	
                 

              	
                Annex
                  I

              

      

      
        	
                 

              	
                to

              

      

      
        	
                 

              	
                Amendment
                  No. 2

              

      

      

      

      Schedule
        I

      

      Revolving
        Credit Commitments

      

      
        	
                Lender

              	 	
                Revolving
                  Credit Commitment

              	 
	
                Wachovia
                  Bank, National Association

              	 	$	
                96,333,334

              	 
	
                Citibank,
                  N.A.

              	 	$	
                96,333,333

              	 
	
                JPMorgan
                  Chase Bank, N.A.

              	 	$	
                96,333,333

              	 
	
                DnB
                  Nor Bank ASA

              	 	$	
                90,000,000

              	 
	
                Union
                  Bank of California, N.A.

              	 	$	
                75,000,000

              	 
	
                Royal
                  Bank of Canada

              	 	$	
                60,000,000

              	 
	
                Mizuho
                  Corporate Bank, Ltd.

              	 	$	
                60,000,000

              	 
	
                UBS
                  Loan Finance LLC

              	 	$	
                55,000,000

              	 
	
                Merrill
                  Lynch Bank USA

              	 	$	
                50,000,000

              	 
	
                Morgan
                  Stanley Bank

              	 	$	
                50,000,000

              	 
	
                Credit
                  Suisse, Cayman Islands Branch

              	 	$	
                50,000,000

              	 
	
                Lehman
                  Commercial Paper Inc.

              	 	$	
                50,000,000

              	 
	
                Wells
                  Fargo Bank NA

              	 	$	
                50,000,000

              	 
	
                William
                  Street Commitment Corp.

              	 	$	
                45,000,000

              	 
	
                Deutsche
                  Bank AG New York Branch

              	 	$	
                36,000,000

              	 
	
                Bank
                  Hapoalim

              	 	$	
                25,000,000

              	 
	
                Chang
                  Hwa

              	 	$	
                15,000,000

              	 
	
                TOTAL:

              	 	$	
                1,000,000,000Filed by Bowne Pure Compliance

 

Exhibit 10.8

UGI CORPORATION

EXECUTIVE ANNUAL BONUS PLAN

(Effective as of October 1, 2006)

I. Purpose. The purpose of the UGI Corporation Executive Annual Bonus Plan (the “Plan”) is
to provide a means whereby UGI Corporation (the “Company”) may provide incentive compensation to
its eligible employees to serve as an incentive for employee performance and retention. The Plan is
intended to encourage eligible employees to contribute to the growth of the Company and the
enhancement of shareholder value. The Plan is part of a total compensation structure under which a
meaningful portion of eligible employees’ total compensation is based on achievement of performance
goals relating to the eligible employees’ business and/or area of responsibility. The Plan is
effective as of October 1, 2006.

II. Definitions. Whenever used in this Plan, the following terms will have the respective meanings
set forth below:

2.1 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended.

2.2 “Board” means the board of directors of the Company as constituted from time to time.

2.3 “Code” means the Internal Revenue Code of 1986, as amended.

2.4 “Committee” means (i) for Senior Management, the Compensation and Management Development
Committee of the Board or its successor and (ii) for eligible employees who are not members of
Senior Management, the Chief Executive Officer of the Company or his designee.

2.5 “Company” means UGI Corporation, a Pennsylvania corporation, or any successor thereto.

2.6 “Employer” means the Company and its Subsidiaries.

2.7 “Participant” means an eligible employee or other individual who provides services to the
Company or its Subsidiaries and who is described in Section III as a participant in the Plan.
Employees of UGI Utilities, Inc. and AmeriGas Propane, Inc. and their subsidiaries are not eligible
to participate in the Plan.

2.8 “Plan” means this UGI Corporation Executive Annual Bonus Plan, as in effect from time to
time.

2.9 “Senior Management” means those employees who are designated as executive officers by the
Board pursuant to Rule 16a-1 of the rules promulgated pursuant to the Securities Exchange Act of
1934, as amended.

 

 

 

2.10 “Subsidiary” means any corporation or partnership, at least 20% of the outstanding voting
stock, voting power or partnership interest of which is owned, directly or indirectly, by the
Company.

III. Participation. All salaried employees of the Company and its Subsidiaries (other than
UGI Utilities, Inc., AmeriGas Propane, Inc. and their subsidiaries) in grade level 70 or above
shall be eligible to participate in the Plan for each fiscal year. The Company’s fiscal year
begins on October 1. The Committee may also designate in writing that one or more senior level
directors or employees of a Subsidiary shall be Participants in the Plan for a fiscal year, in its
sole discretion.

IV. Annual Bonus.

4.1 Target Bonus. At the beginning of each fiscal year, the Committee shall establish target
bonuses as a percentage of each Participant’s salary for the fiscal year. Each Participant shall
be eligible to receive an annual bonus for the fiscal year based on the achievement of
business/financial performance goals, and the Participant’s individual performance goals, if
applicable, during the fiscal year. The amount actually paid to a Participant may be more or less
than the target bonus amount, depending on the extent to which the performance goals are satisfied.

4.2 Performance Goals.

(a) Business/Financial Goals. At the beginning of each fiscal year, the Committee
shall establish the business/financial performance goals for the fiscal year and leverage tables
that apply to the performance goals.

(b) Individual Goals. The Committee shall determine which Participants shall have
individual performance goals as part of their bonus calculation. At the beginning of each fiscal
year, the Committee shall establish each Participant’s individual performance goals for the year,
if applicable, and shall set leverage tables that will apply to individual performance goals. The
portion of the target bonus attributable to individual performance will be payable only if the
business/financial performance goals are achieved at the threshold level of performance.

(c) Weighting. At the time the Committee establishes performance goals for each fiscal
year, the Committee will determine the weighting for each Participant with respect to the
business/financial goals and the individual goals. The weighting of the two types of goals need
not be uniform as to all Participants.

(d) Communication of Goals. The Committee shall provide for the communication of the
performance goals and corresponding leverage tables to the Participants.

4.3 Determination and Approval of Bonus Payments.

(a) At the end of the fiscal year, the Committee shall determine the amount of each
Participant’s bonus, if any, based on the achievement of the business/financial performance goals
and, if applicable, the achievement of the individual performance goals. The Committee
shall have sole discretion to determine whether and to what extent the performance goals have
been met. The Committee may adjust the performance results for extraordinary items or other
events, as the Committee deems appropriate.

 

2

 

(b) If the threshold level of business/financial performance is not achieved, no bonuses will
be paid.

(c) With respect to Participants whose annual bonus under the Plan is based solely on the
achievement of business/financial performance goals, the Committee shall have discretion to
increase or decrease the amount of the annual bonus by 50% more or less than the amount otherwise
determined, based on the Participant’s contribution to the achievement of the business/financial
performance goals, other contributions that have a significant impact on Company performance, or
other factors.

4.4 Newly Hired Employees, Promotions and Transfers. Employees who are newly hired or who are
promoted or transferred into a position eligible to participate in the Plan during the fiscal year
may be eligible to receive a prorated bonus award calculated in whole months based on the relative
time spent in the eligible position during the fiscal year, as determined by the Committee. If a
Participant is transferred to an Affiliate of the Company (or into a position with a different
annual bonus target percentage) during the fiscal year, the Participant’s performance goals may be
adjusted to reflect the change in Employer or position. If a Participant is transferred into a
position that is not eligible to participate in the Plan during the fiscal year, the Participant
may be eligible to receive a prorated award calculated in whole months based on the relative time
spent in the eligible position during the fiscal year, as determined by the Committee.

4.5 Payment of Annual Bonus. Each annual bonus for a fiscal year shall be paid in cash to the
Participant in a single lump sum payment between September 30 and December 31 of the calendar year
in which the fiscal year ends, except as provided below.

4.6 Withholding Tax. Each Employer shall withhold from each bonus payment an amount
sufficient to satisfy all federal, state and local tax withholding requirements relating to the
bonus.

V. Termination of Employment. Except as provided below, a Participant must be employed by
the Employer on the last day of the fiscal year for which the bonus is earned in order to receive a
bonus for the year. If a Participant’s employment terminates on account of retirement, death or
disability, as determined by the Committee, the Committee may determine in its sole discretion that
a pro rata portion of the Participant’s target annual award will be paid, calculated in whole
months based on the relative time spent in the eligible position during the fiscal year. The
bonus, if any, shall be paid within 90 days following the Participant’s termination of employment
on account of retirement, death or disability.

VI. Administration. The Committee administers the Plan. The Committee shall have full
power and discretionary authority to interpret and administer the Plan, to make all determinations,
including all participation and bonus determinations, and to prescribe, amend and rescind any
rules, forms or procedures as the Committee deems necessary or appropriate for
the proper administration of the Plan and to make any other determinations and take such other
actions as the Committee deems necessary or advisable in carrying out its duties under the Plan.
Any action required of the Committee under the Plan shall be made in the Committee’s sole
discretion and not in a fiduciary capacity. All decisions and determinations by the Committee
shall be final, conclusive and binding on the Company, the Participants, and any other persons
having or claiming an interest hereunder. All bonuses shall be awarded conditional upon the
Participant’s acknowledgement, by continuing in employment with the Employer, that all decisions
and determinations of the Committee shall be final and binding on the Participant, his or her
beneficiaries and any other person having or claiming an interest in such bonus.

 

3

 

VII. General Provisions.

7.1 Transferability. No bonus under this Plan shall be transferred, assigned, pledged or
encumbered by the Participant nor shall it be subject to any claim of any creditor, and, in
particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be
free from attachment, garnishment, trustee’s process, or any other legal or equitable process
available to any creditor of such Participant. In the event of a Participant’s death, any amounts
payable under this Plan, as determined by the Committee, shall be paid to the Participant’s estate.

7.2 Unfunded Arrangement. The Plan is an unfunded incentive compensation arrangement.
Nothing contained in the Plan, and no action taken pursuant to the Plan, shall create or be
construed to create a trust of any kind. Each Participant’s right to receive a bonus shall be no
greater than the right of an unsecured general creditor of the Employer. All bonuses shall be paid
from the general funds of the Employer, and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of bonuses.

7.3 No Rights to Employment. Nothing in the Plan, and no action taken pursuant hereto, shall
confer upon a Participant the right to continue in the employ of the Employer, or affect the right
of the Employer to terminate a Participant’s employment at any time for cause or for no cause
whatsoever.

7.4 Section 409A. The Plan is intended to comply with the short-term deferral rule set forth
in the regulations under section 409A of the Code, in order to avoid application of section 409A to
the Plan. If and to the extent that any payment under this Plan is deemed to be deferred
compensation subject to the requirements of section 409A, this Plan shall be administered so that
such payments are made in accordance with the requirements of section 409A.

7.5 Termination and Amendment of the Plan. The Compensation and Management Development
Committee may amend or terminate the Plan at any time.

7.6 Successors. The Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and each Participant and his or her heirs, executors, administrators and
legal representatives.

7.7 Applicable Law. The Plan shall be construed and governed in accordance with the laws of
the Commonwealth of Pennsylvania.

 

4

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