Document:

exv10w11

 

EXHIBIT 10.11

HMN FINANCIAL, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

WORKING COPY

(Through Ninth Amendment)

Effective as of January 1, 1994

First Amendment dated January 25, 1996

Second Amendment dated December 18, 1997

Third Amendment dated February 23, 1999

Fourth Amendment dated October 23, 2001

Fifth Amendment dated February 26, 2002

Sixth Amendment dated April 15, 2002

Seventh Amendment dated December 29, 2005

Eighth Amendment dated July 24, 2007

Ninth Amendment dated February 26, 2008

NOTE: This document is a “working copy” that compiles the most recent restatement of the plan and
various amendments that have been adopted since that restatement through the amendment referenced
above into a single document for the convenience of the reader.

 

 

HMN FINANCIAL, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	PREAMBLE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I DEFINITION OF TERMS AND CONSTRUCTION
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	(a) “Act”
	 	 	1	 
	(b) “Administrator”
	 	 	1	 
	(c) “Annual Additions”
	 	 	1	 
	(d) “Authorized Leave of Absence”
	 	 	2	 
	(e) “Beneficiary”
	 	 	2	 
	(f) “Board of Directors”
	 	 	2	 
	(g) “Break”
	 	 	2	 
	(h) “Code”
	 	 	2	 
	(i) “Compensation”
	 	 	2	 
	(j) “Date of Hire”
	 	 	2	 
	(k) “Disability”
	 	 	2	 
	(l) “Disability Retirement Date”
	 	 	2	 
	(m) “Early Retirement Date”
	 	 	2	 
	(n) “Effective Date”
	 	 	3	 
	(o) “Eligibility Period”
	 	 	3	 
	(p) “Employee”
	 	 	3	 
	(q) “Employer”
	 	 	3	 
	(r) “Employer Securities”
	 	 	3	 
	(s) “Entry Date”
	 	 	3	 
	(t) “Exempt Loan”
	 	 	3	 
	(u) “Former Participant”
	 	 	3	 
	(v) “Fund”
	 	 	3	 
	(w) “Hour of Service”
	 	 	3	 
	(x) “Investment Adjustments”
	 	 	4	 
	(y) “Limitation Year”
	 	 	4	 
	(z) “Normal Retirement Date”
	 	 	4	 
	(aa) “Participant”
	 	 	4	 
	(bb) “Plan”
	 	 	4	 
	(cc) “Plan Year”
	 	 	4	 
	(dd) “Qualified Domestic Relations Order”
	 	 	4	 
	(ee) “Retirement”
	 	 	4	 
	(ff) “Service”
	 	 	4	 
	(gg) “Sponsor”
	 	 	4	 
	(hh) “Trust Agreement”
	 	 	4	 
	(ii) “Trustee”
	 	 	4	 
	(jj) “Valuation Date”
	 	 	4	 
	(kk) “Year of Service”
	 	 	4	 
	(ll) “Leased Employee”
	 	 	5	 
	(mm) “Affiliate”
	 	 	5	 
	1.2 Plurals and Gender
	 	 	5	 
	1.3 Incorporation of Trust Agreement
	 	 	5	 
	1.4 Headings
	 	 	5	 
	1.5 Severability
	 	 	5	 
	1.6 References to Governmental Regulations
	 	 	5	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE II PARTICIPATION
	 	 	5	 
	2.1 Commencement of Participation
	 	 	5	 
	2.2 Termination of Participation
	 	 	6	 
	2.3 Resumption of Participation
	 	 	6	 
	2.4 Determination of Eligibility
	 	 	6	 
	 
	 	 	 	 
	ARTICLE III CREDITED SERVICE
	 	 	6	 
	3.1 Service Counted for Eligibility Purposes
	 	 	6	 
	3.2 Service Counted for Vesting Purposes
	 	 	6	 
	3.3 Credit for Pre-Break Service
	 	 	7	 
	3.4 Service Credit During Authorized Leaves
	 	 	7	 
	3.5 Service Credit During Maternity or Paternity Leave
	 	 	7	 
	3.6 Ineligible Employees
	 	 	7	 
	3.7 Periods of Military Service
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV CONTRIBUTIONS
	 	 	7	 
	4.1 Employee Stock Ownership Contributions
	 	 	7	 
	4.2 Time and Manner of Employee Stock Ownership Contributions
	 	 	8	 
	4.3 Records of Contributions
	 	 	8	 
	4.4 Erroneous Contributions
	 	 	8	 
	 
	 	 	 	 
	ARTICLE V ACCOUNTS, ALLOCATIONS AND INVESTMENTS
	 	 	9	 
	5.1 Establishment of Separate Participant Accounts
	 	 	9	 
	5.2 Establishment of Contribution Holding and Suspense Accounts
	 	 	9	 
	5.3 Allocation of Earnings, Losses and Expenses
	 	 	10	 
	5.4 Allocation of Forfeitures
	 	 	10	 
	5.5 Allocation of Annual Employee Stock Ownership Contributions
	 	 	10	 
	5.6 Limitation on Annual Additions
	 	 	10	 
	5.7 Erroneous Allocations
	 	 	13	 
	5.8 Value of Participant’s Interest in Fund
	 	 	13	 
	5.9 Investment of Account Balances
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VI RETIREMENT, DEATH AND DESIGNATION OF BENEFICIARY
	 	 	14	 
	6.1 Normal Retirement
	 	 	14	 
	6.2 Early Retirement
	 	 	14	 
	6.3 Disability Retirement
	 	 	14	 
	6.4 Death Benefits
	 	 	14	 
	6.5 Designation of Death Beneficiary and Manner of Payment
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VII VESTING AND FORFEITURES
	 	 	15	 
	7.1 Vesting on Death, Disability and Normal Retirement
	 	 	15	 
	7.2 Vesting on Termination of Participation
	 	 	15	 
	7.3 Disposition of Forfeitures
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VIII EMPLOYEE STOCK OWNERSHIP PROVISIONS
	 	 	15	 
	8.1 Right to Demand Employer Securities
	 	 	15	 
	8.2 Voting Rights
	 	 	16	 
	8.3 Nondiscrimination in Employee Stock Ownership Contributions
	 	 	16	 
	8.4 Dividends
	 	 	16	 
	8.5 Exempt Loans
	 	 	17	 
	8.6 Exempt Loan Payments
	 	 	17	 
	8.7 Put Option
	 	 	18	 
	8.8 Diversification Requirements
	 	 	18	 
	8.9 Independent Appraiser
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IX PAYMENTS AND DISTRIBUTIONS
	 	 	19	 
	9.1 Payments on Termination of Service — In General
	 	 	19	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	9.2 Commencement of Payments
	 	 	19	 
	9.3 Mandatory Commencement of Benefits
	 	 	19	 
	9.4 Required Beginning Dates
	 	 	21	 
	9.5 Form of Payment
	 	 	21	 
	9.6 Medium of Distribution
	 	 	21	 
	9.7 Payments Upon Termination of Plan
	 	 	21	 
	9.8 Distributions Pursuant to Qualified Domestic Relations Orders
	 	 	21	 
	9.9 Cash-Out Distributions
	 	 	22	 
	9.10 ESOP Distribution Rules
	 	 	22	 
	9.11 Withholding
	 	 	22	 
	9.12 Waiver of 30-day Notice
	 	 	23	 
	9.13 Direct Transfer Option
	 	 	23	 
	 
	 	 	 	 
	ARTICLE X PROVISIONS RELATING TO TOP-HEAVY PLANS
	 	 	23	 
	10.1 Top-Heavy Rules to Control
	 	 	23	 
	10.2 Top-Heavy Plan Definitions
	 	 	23	 
	10.3 Calculation of Accrued Benefits
	 	 	24	 
	10.4 Determination of Top-Heavy Status
	 	 	25	 
	10.5 Determination of Super Top-Heavy Status
	 	 	26	 
	10.6 Minimum Contribution
	 	 	26	 
	10.7 Vesting
	 	 	26	 
	 
	 	 	 	 
	ARTICLE XI ADMINISTRATION
	 	 	27	 
	11.1 Appointment of Administrator
	 	 	27	 
	11.2 Resignation or Removal of Administrator
	 	 	27	 
	11.3 Appointment of Successors: Terms of Office, Etc.
	 	 	27	 
	11.4 Powers and Duties of Administrator
	 	 	27	 
	11.5 Action by Administrator
	 	 	28	 
	11.6 Participation by Administrators
	 	 	28	 
	11.7 Agents
	 	 	28	 
	11.8 Allocation of Duties
	 	 	28	 
	11.9 Delegation of Duties
	 	 	28	 
	11.10 Administrator’s Action Conclusive
	 	 	28	 
	11.11 Compensation and Expenses of Administrator
	 	 	28	 
	11.12 Records and Reports
	 	 	29	 
	11.13 Reports of Fund Open to Participants
	 	 	29	 
	11.14 Named Fiduciary
	 	 	29	 
	11.15 Information from Employer
	 	 	29	 
	11.16 Reservation of Rights by Employer
	 	 	29	 
	11.17 Liability and Indemnification
	 	 	29	 
	11.18 Service as Trustee and Administrator
	 	 	29	 
	 
	 	 	 	 
	ARTICLE XII CLAIMS PROCEDURE
	 	 	30	 
	12.1 Notice of Denial
	 	 	30	 
	12.2 Right to Reconsideration
	 	 	30	 
	12.3 Review of Documents
	 	 	30	 
	12.4 Decision by Administrator
	 	 	30	 
	12.5 Notice by Administrator
	 	 	30	 
	 
	 	 	 	 
	ARTICLE XIII AMENDMENTS, TERMINATION AND MERGER
	 	 	30	 
	13.1 Amendments
	 	 	30	 
	13.2 Consolidation, Merger or Other Transactions of Employer
	 	 	31	 
	13.3 Consolidation or Merger of Trust
	 	 	31	 
	13.4 Bankruptcy or Insolvency of Employer
	 	 	31	 
	13.5 Voluntary Termination
	 	 	31	 
	13.6 Partial Termination of Plan or Permanent Discontinuance of Contributions
	 	 	32	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE XIV MISCELLANEOUS
	 	 	32	 
	14.1 No Diversion of Funds
	 	 	32	 
	14.2 Liability Limited
	 	 	32	 
	14.3 Incapacity
	 	 	32	 
	14.4 Spendthrift Clause
	 	 	32	 
	14.5 Benefits Limited to Fund
	 	 	32	 
	14.6 Cooperation of Parties
	 	 	32	 
	14.7 Payments Due Missing Persons
	 	 	33	 
	14.8 Governing Law
	 	 	33	 
	14.9 Nonguarantee of Employment
	 	 	33	 
	14.10 Counsel
	 	 	33	 

iv

 

HMN FINANCIAL, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

PREAMBLE

     Effective as of January 1, 1994, HMN Financial, Inc., a Delaware corporation, (the “Sponsor”),
has adopted the HMN Financial, Inc. Employee Stock Ownership Plan in order to enable Participants
to share in the growth and prosperity of the Sponsor and its wholly owned subsidiary, Home Federal
Savings Bank, and to provide Participants with an opportunity to accumulate capital for their
future economic security by accumulating funds to provide retirement, death and disability
benefits. The Plan is a stock bonus plan designed to meet the requirements of an employee stock
ownership plan as described at Section 4975(e)(7) of the Code and Section 407(d) (6) of ERISA. The
primary purpose of the employee stock ownership plan is to invest in employer securities. The
Sponsor intends that the Plan will qualify under Sections 401(a) and 501(a) of the Code and will
comply with the provisions of ERISA. The Plan has been drafted to comply with the Tax Reform Act
of 1986, the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of
1987, the Technical and Miscellaneous Revenue Act of 1988, the Revenue Reconciliation Act of 1989,
and the Omnibus Budget Reconciliation Act of 1993.

     The terms of this Plan shall apply only with respect to Employees of the Employer on and after
January 1, 1994.

ARTICLE I

DEFINITION OF TERMS AND CONSTRUCTION

1.1 Definitions.

     Unless a different meaning is plainly implied by the context, the following terms as used in
this Plan shall have the following meanings:

     (a) “Act” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor statute.

     (b) “Administrator” shall mean the administrative committee provided for in
Article XI.

     (c) “Annual Additions” shall mean the sum of the following amounts allocated to a
Participant for a Limitation Year under this Plan and all other defined contribution plans
maintained by the Employer in which he or she participates:

     (1) Annual Additions include:

          (A) Employer contributions.

          (B) Forfeitures, if any.

          (C) Voluntary non-deductible (Employee) contributions, if any.

          (D) Amounts attributable to medical benefits as described in Sections 415(l) and
419A(d)(1) of the Code.

     (2) Notwithstanding the foregoing, Annual Additions do not include:

          (A) The direct transfer of a benefit or employee contributions from a qualified plan to
the Plan.

          (B) Reinvested dividends on Employer Securities.

          (C) Restorative payments made to restore losses to the Plan resulting from actions by a
fiduciary for which there is reasonable risk of liability for breach of a fiduciary duty
under Title I of ERISA or under other applicable federal or state law.

          (D) Rollover contributions (as described in Sections 401(a)(31), 402(c)(1), 403(a)(4),
403(b)(8), 408(d)(3) or 457(e)(16) of the Code, or any other Code section that permits
rollovers).

          (E) Employer contributions that are used by the Trust to pay interest on an Exempt Loan
or any forfeitures of Employer Securities purchased with the proceeds of an Exempt Loan,
provided that not more than one-third of the Employer contributions are allocated to
Participants who are among the group of

1

 

Employees determined to be “highly compensated employees” within the meaning of Section
414(q) of the Code.

     An Annual Addition with respect to a Participant’s Accounts shall be deemed credited thereto
with respect to a Limitation Year if it is allocated to the Participant’s accounts under the terms
of the plan as of any date within such Limitation Year.

     (d) “Authorized Leave of Absence” shall mean an absence from Service with respect to
which the Employee may or may not be entitled to Compensation and which meets any one of the
following requirements:

          (1) Service in any of the armed forces of the United States for up to 36 months,
provided that the Employee resumes Service within 90 days after discharge, or such longer
period of time during which such Employee’s employment rights are protected by law; or

          (2) Any other absence or leave expressly approved and granted by the Employer which
does not exceed 24 months, provided that the Employee resumes Service at or before the end
of such approved leave period. In approving such leaves of absence, the Employer shall treat
all Employees on a uniform and nondiscriminatory basis.

     (e) “Beneficiary” shall mean such persons as may be designated by the Participant to
receive benefits after the death of the Participant, or such persons designated by the
Administrator to receive benefits after the death of the Participant, all as provided in Section
6.5.

     (f) “Board of Directors” shall mean the Board of Directors of the Sponsor.

     (g) “Break” shall mean a Plan Year during which an Employee fails to complete more
than 500 Hours of Service.

     (h) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time,
or any successor statute.

     (i) “Compensation” shall mean the amount of remuneration paid to an Employee by the
Employer during a Plan Year, on or after the date on which the Employee becomes a Participant, for
services rendered to the Employer during such Plan Year, including base salary, bonuses, overtime
and any amount of compensation contributed pursuant to a salary reduction election to any plan
which meets the requirements of Code section 125, 132(f)(4) or 401(k), but excluding amounts paid
by the Employer or accrued with respect to this Plan or any other qualified or non-qualified
unfunded plan of deferred compensation or other employee welfare plan to which the Employer
contributes, payments for group insurance, medical benefits, reimbursement for expenses, and other
forms of extraordinary pay, and excluding amounts accrued for a prior year.

     Notwithstanding the foregoing, the Compensation of a Participant for the Plan Year that
commences January 1, 2001, shall not exceed $170,000. Effective for Plan Years commencing during
or after 2002, the Compensation of a Participant for a Plan Year shall not exceed $200,000,
adjusted for each Plan Year to take into account any increase provided for that year in accordance
with the Code and regulations prescribed by the Secretary of the Treasury. The dollar increase in
effect on January 1 of any calendar year shall apply to Plan Years beginning in that calendar year.
If a Plan Year is shorter than 12 months, the limit under this subsection for that year shall be
multiplied by a fraction, the numerator of which is the number of months in the short Plan Year and
the denominator of which is 12.

     (j) “Date of Hire” shall mean the date on which a person shall perform his first Hour
of Service. Notwithstanding the foregoing, in the event a person incurs one or more consecutive
Breaks after his initial Date of Hire which results in the forfeiture of his pre-Break Service
pursuant to Section 3.3, his “Date of Hire” shall thereafter be the date on which he completes his
first Hour of Service after such Break or Breaks.

     (k) “Disability” shall mean a physical or mental impairment which prohibits a
Participant from engaging in any occupation for wages or profit and which has caused the Social
Security Administration to classify the individual as “disabled” for purposes of Social Security.

     (l) “Disability Retirement Date” shall mean the first day of the month after which a
Participant incurs a Disability.

     (m) “Early Retirement Date” shall mean the first day of the month coincident with or
next following the date on which a Participant attains age 55 and completes 5 Years of Service.

2

 

     (n) “Effective Date” shall mean January 1, 1994.

     (o) “Eligibility Period” shall mean the period of 12 consecutive months commencing on
an Employee’s Date of Hire. Succeeding eligibility computation periods after the initial
eligibility computation period shall be based on Plan Years which include the first anniversary of
an Employee’s Date of Hire.

     (p) “Employee” shall mean any person employed by the Employer, including officers, but
excluding Leased Employees and directors in their capacity as such; provided further, however, that
the term “Employee” shall not include any employee included in a unit of employees covered by a
collective bargaining agreement with the Employer that does not expressly provide for participation
of such employees in this Plan, where there has been good-faith bargaining between the Employer and
the employees’ representatives on the subject of retirement benefits. Notwithstanding anything
herein to the contrary, an individual is not an Employee during any period during which the
individual is classified by the Employer as an independent contractor or as any other status in
which the person is not treated as a common law employee of the Employer for purposes of
withholding of taxes, regardless of the correct legal status of the individual. The previous
sentence applies to all periods of such service of an individual who is subsequently reclassified
as an employee, whether the reclassification is retroactive or prospective.

     (q) “Employer” shall mean HMN Financial, Inc., a Delaware corporation, and its wholly
owned subsidiary, Home Federal Savings Bank, or any successors to the aforesaid corporations by
merger, consolidation or otherwise, which may agree to continue this Plan, or any affiliated or
subsidiary corporation or business organization of any Employer which, with the consent of the
Sponsor, shall agree to become a party to this Plan.

     (r) “Employer Securities” shall mean the common stock issued by HMN Financial, Inc.

     (s) “Entry Date” shall mean each January 1 and July 1, so long as this Plan shall
remain in effect.

     (t) “Exempt Loan” shall mean a loan described at Section 4975(d)(1) of the Code to the
Trustee to purchase Employer Securities for the Plan, made or guaranteed by a disqualified person,
as defined at Section 4975(e)(2) of the Code, including, but not limited to, a direct loan of cash,
a purchase money transaction, an assumption of an obligation of the Trustee, an unsecured guarantee
or the use of assets of such disqualified person as collateral for such a loan.

     (u) “Former Participant” shall mean any previous Participant whose participation has
terminated but who has a vested interest in the Plan which has not been distributed in full.

     (v) “Fund” shall mean the Fund maintained by the Trustee pursuant to the Trust
Agreement in order to provide for the payment of the benefits specified in the Plan.

     (w) “Hour of Service” shall mean each hour for which an Employee is directly or
indirectly paid or entitled to payment by an Employer for the performance of duties or for reasons
other than the performance of duties (such as vacation time, holidays, sickness, disability, paid
lay-offs, jury duty and similar periods of paid non-working time). To the extent not otherwise
included, Hours of Service shall also include each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. Hours of working time shall
be credited on the basis of actual hours worked, even though compensated at a premium rate for
overtime or other reasons. In computing and crediting Hours of Service for an Employee under this
Plan, the rules set forth in Sections 2530.200b-2(b) and (c) of the Department of Labor Regulations
shall apply, said Sections being herein incorporated by reference. Hours of Service shall be
credited to the Plan Year or other relevant period during which the services were performed or the
nonworking time occurred, regardless of the time when Compensation therefor may be paid. Any
Employee for whom no hourly employment records are kept by the Employer shall be credited with 190
Hours of Service for each calendar month in which he would have been credited with a least one Hour
or Service under the foregoing provisions, if hourly records were available. Effective January 1,
1985, for absences commencing on or after that date, solely for purposes of determining whether a
Break for participation and vesting purposes has occurred in an Eligibility Period or Plan Year, an
individual who is absent from work for maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to such individual but for such absence,
or in any case in which such hours cannot be determined, 8 Hours of Service per day of such
absence. For purposes of this Section 1.1(w), an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth
of a child of the individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or placement. The Hours of
Service credited under this provision shall be credited (1) in the computation

3

 

period in which the absence begins if the crediting is necessary to prevent a Break in that
period, or (2) in all other cases, in the following computation period.

     (x) “Investment Adjustments” shall mean the increases and/or decreases in the value of
a Participant’s accounts attributable to earnings, gains, losses and expenses of the Fund, as set
forth in Section 5.3.

     (y) “Limitation Year” shall mean the Plan Year.

     (z) “Normal Retirement Date” shall mean the first day of the month coincident with or
during which a Participant attains age 65 and completes the fifth anniversary of his participation
in the Plan.

     (aa) “Participant” shall mean an Employee who has met all of the eligibility
requirements of the Plan and who is ‘currently included in the Plan as provided in Article II
hereof.

     (bb) “Plan” shall mean the HMN Financial, Inc. Employee Stock Ownership Plan, as
described herein or as hereafter amended from time to time.

     (cc) “Plan Year” shall mean any 12 consecutive month period commencing on January 1
and ending on December 31.

     (dd) “Qualified Domestic Relations Order” shall mean any judgment, decree or order
(including approval of a property settlement agreement) that relates to the provision of child
support, alimony, marital property rights to a spouse, former spouse, child or other dependent of
the Participant (all such persons hereinafter termed “alternate payee”) and is made pursuant to a
State domestic relations law (including community property law) and, further, that creates or
recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee the
right to receive all or a portion of the benefits payable with respect to a Participant and that
clearly specifies the following:

          (1) the name and last known mailing address (if available) of the Participant and the
name and mailing address of each alternate payee to which the order relates;

          (2) the amount or percentage of the Participant’s benefits to be paid to an alternate
payee or the manner in which the amount is to be determined; and

          (3) the number of payments or period for which payments are required.

     A domestic relations order is not a Qualified Domestic Relations Order if it:

          (1) requires the Plan to provide any type or form of benefit or any option not
otherwise provided under the Plan; or,

          (2) requires the Plan to provide increased benefits; or

          (3) requires payment of benefits to an alternate payee that is required to be paid to
another alternate payee under a previously existing Qualified Domestic Relations Order.

     (ee) “Retirement” shall mean termination of employment which qualifies as early,
normal or Disability retirement as described in Article VI.

     (ff)  “Service” shall mean employment with the Employer.

(gg) “Sponsor” shall mean HMN Financial, Inc., a Delaware corporation.

     (hh) “Trust Agreement” shall mean the agreement, dated June 2, 1994 by and between HMN
Financial, Inc., a Delaware corporation, and First Bankers Trust Co, N.A.

     (ii) “Trustee” shall mean the Trustee or Trustees by whom the assets of the Plan are
held, as provided in the Trust Agreement, or his or their successors.

     (jj) “Valuation Date” shall mean the last day of each Plan Year. The Trustee may make
additional valuations, at the instruction of the Administrator, but in no event may the
Administrator request additional valuations by the Trustee more frequently than quarterly.
Whenever such date falls on a Saturday, Sunday or holiday, the preceding business day shall be the
Valuation Date.

     (kk) “Year of Service” shall mean any Plan Year during which an Employee has completed
at least 1,000 Hours of Service, except as otherwise specified in Article III. In the
determination of Years of Service for

4

 

eligibility and vesting purposes under this Plan, the term “Year of Service” shall also mean
any Plan Year during which an Employee has completed at least 1,000 Hours of Service with an
Affiliate.

     (ll) “Leased Employee” shall mean any person defined as such by Code Section 414(n).
In general, a Leased Employee is any person who is not otherwise an employee of the Employer or an
Affiliate (referred to collectively as the “recipient”) and who pursuant to an agreement between
the recipient and any other person (“leasing organization”) has performed services for the
recipient (or for the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full-time basis for a period of at least one year and such services
are performed under primary direction or control by the recipient. For purposes of the
requirements listed in Code Section 414(n)(3), any Leased Employee shall be treated as an employee
of the recipient, and contributions or benefits provided by the leasing organization which are
attributable to services performed for the recipient shall be treated as provided by the recipient.
However, if Leased Employees constitute less than 20% of the recipient’s non-highly compensated
work force within the meaning of Code Section 414(n)(5)(C)(ii), those Leased Employees covered by a
plan described in Code section 414(n)(5) shall be disregarded. Notwithstanding the foregoing, no
Leased Employee shall be an Employee or a Participant in this Plan.

     (mm) “Affiliate” shall mean any trade or business entity under common control with
the Employer, or under common control with a predecessor employer (if so required by regulations
prescribed by the Secretary of the Treasury) while it is such. For this purpose, a trade or
business entity (whether a corporation, partnership, sole proprietorship or otherwise) is under
“common control” with another trade or business entity (i) if both entities are corporations which
are members of a controlled group of corporations as defined in Code section 414(b), or (ii) if
both entities are trades or businesses (whether or not incorporated) which are under common control
as defined in Code section 414(c), or (iii) if both entities are members of an affiliated service
group as defined in Code section 414(m), or (iv) if both entities are required to be aggregated
pursuant to regulations under Code section 414(o). Service for all entities under common control
shall be treated as service for a single employer to the extend required by the Code; provided,
however, that an individual shall not be a Participant in the Plan by reason of this section. In
applying the first sentence of this section for purposes of Section 5.6 of the Plan, the provisions
of subsections (b) and (c) of section 414 of the Code are deemed to be modified as provided in Code
section 415(h).

1.2 Plurals and Gender.

     Where appearing in the Plan and the Trust Agreement, the masculine gender shall include the
feminine and neuter genders, and the singular shall include the plural, and vice versa, unless the
context clearly indicates a different meaning.

1.3 Incorporation of Trust Agreement.

     The Trust Agreement, as the same may be amended from time to time, is intended to be and
hereby is incorporated by reference into this Plan and for all purposes shall be deemed a part of
the Plan.

1.4 Headings.

     The headings and sub-headings in this Plan are inserted for the convenience of reference only
and are to be ignored in any construction of the provisions hereof.

1.5 Severability.

     In case any provision of this Plan shall be held illegal or void, such illegality or
invalidity shall not affect the remaining provisions of this Plan, but shall be fully severable,
and the Plan shall be construed and enforced as if said illegal or invalid provisions had never
been inserted herein.

1.6 References to Governmental Regulations.

     References in this Plan to regulations issued by the Internal Revenue Service, the Department
of Labor, or other governmental agencies shall include all regulations, rulings, procedures,
releases and other position statements issued by any such agency.

ARTICLE II

PARTICIPATION

2.1 Commencement of Participation.

     (a) Any Employee who completes at least 1,000 Hours of Service during his Eligibility Period
or during any Plan Year beginning after his Date of Hire shall initially become a Participant on
the Entry Date

5

 

coincident with or next following the later of the following dates, provided he is employed by
the Employer on that Entry Date:

          (1) The date which is 12 months after his Date of Hire; and

          (2) The date on which he attains age 21.

     (b) Any Employee who had satisfied the requirements set forth in Section 2.1(a) during the
12-month period prior to the Effective Date shall become a Participant on the Effective Date,
provided he is still employed by the Employer on the Effective Date.

2.2 Termination of Participation.

     After commencement or resumption of his participation, an Employee shall remain a Participant
during each consecutive Plan Year thereafter until the earliest of the following dates:

     (a) His actual Retirement date;

     (b) His date of death; or

     (c) The last day of a Plan Year during which he incurs a Break.

2.3 Resumption of Participation.

     (a) Any Participant whose employment terminates and who resumes Service before he incurs a
Break shall resume participation immediately on the date he is reemployed.

     (b) Except as otherwise provided in Section 2.3(c), any Participant who incurs one or more
Breaks and resumes Service shall resume participation retroactively as of the first day of the
first Plan Year in which he completes a Year of Service after such Break(s).

     (c) Any Participant who incurs one or more Breaks and resumes Service, but whose pre-Break
Service is not reinstated to his credit pursuant to Section 3.3, shall be treated as a new Employee
and shall again be required to satisfy the eligibility requirements contained in Section 2.1 before
resuming participation on the appropriate Entry Date, as specified in Section 2.1.

2.4 Determination of Eligibility.

     The Administrator shall determine the eligibility of Employees in accordance with the
provisions of this Article. For each Plan Year, the Employer shall furnish the Administrator a
list of all Employees, indicating the original date of their reemployment with the Employer and any
Breaks they may have incurred.

ARTICLE III

CREDITED SERVICE

3.1 Service Counted for Eligibility Purposes.

     Except as provided in Section 3.3, all Years of Service completed by an Employee shall be
counted in determining his eligibility to become a Participant on and after the Effective Date,
whether such Service was completed before or after the Effective Date. Further, Years of Service
completed prior to January 1, 1998, with the former Marshalltown Finance Corporation and its
subsidiary, Marshalltown Savings Plan FSB, shall be treated as Years of Service with an Employer in
determining his eligibility to become a Participant on and after January 1, 1998.

3.2 Service Counted for Vesting Purposes.

     All Years of Service completed by an Employee (including Years of Service completed prior to
the Effective Date) shall be counted in determining his vested interest in this Plan, except the
following:

     (a) Service which is disregarded under the provisions of Section 3.3;

     (b) Service prior to the Effective Date of this Plan if such Service would have been
disregarded under the “break in service” rules (within the meaning of Section 1.41l(a)-5(b)(6) of
the Treasury Regulations).

     Further, Years of Service completed prior to January 1, 1998, with the former Marshalltown
Finance Corporation and its subsidiary, Marshalltown Savings Bank FSB, shall be treated as Years of
Service with an Employer in determining his vested interest in the Plan.

6

 

3.3 Credit for Pre-Break Service.

     Upon his resumption of participation following one or a series of consecutive Breaks, an
Employee’s pre-Break Service shall be reinstated to his credit for all purposes of this Plan only
if either:

     (a) He was vested in any portion of his accrued benefit at the time the Break(s) began; or

     (b) The number of his consecutive Breaks does not equal or exceed the greater of 5 or the
number of his Years of Service credited to him before the Breaks began.

     Except as provided in the foregoing, none of an Employee’s Service prior to one or a series of
consecutive Breaks shall be counted for any purpose in connection with his participation in this
Plan thereafter.

3.4 Service Credit During Authorized Leaves.

     An Employee shall receive no Service credit under Section 3.1 or 3.2 during any Authorized
Leave of Absence. However, solely for the purpose of determining whether he has incurred a Break
during any Plan Year in which he is absent from Service for one or more Authorized Leaves of
Absence, he shall be credited with 40 Hours of Service for each week during any such leave period.
Notwithstanding the foregoing, if an Employee fails to return to Service on or before the end of a
leave period, he shall be deemed to have terminated Service as of the first day of such leave
period and his credit for Hours of Service, determined under this Section 3.4, shall be revoked.
Notwithstanding anything contained herein to the contrary, an Employee who is absent by reason of
military service as set forth in Section 1.1(d)(1) shall be given Service credit under this Plan
for such military leave period to the extent, and for all purposes, required by law.

3.5 Service Credit During Maternity or Paternity Leave.

     Effective for absences beginning on or after January 1, 1985, for purposes of determining
whether a Break has occurred for participation and vesting purposes, an individual who is on
maternity or paternity leave as described in Section 1.1(w), shall be deemed to have completed
Hours of Service during such period of absence, all in accordance with Section 1.1(w).
Notwithstanding the foregoing, no credit shall be given for such Hours of Service unless the
individual furnishes to the Administrator such timely information as the Administrator may
reasonably require to determine:

     (a) that the absence from Service was attributable’ to one of the maternity or paternity
reasons enumerated in Section 1.1 (w); and

     (b) the number of days for which such absence lasted.

     In no event, however, shall any credit be given for such leave other than for determining
whether a Break has occurred.

3.6 Ineligible Employees.

     Notwithstanding any provisions of this Plan to the contrary, any person who is employed by the
Employer, but who is ineligible to participate in this Plan, either because of his failure

     (a) To meet the eligibility requirements contained in Article II; or

     (b) To be an Employee, as defined in Section 1.1(p), shall, nevertheless, earn Years of
Service for eligibility and vesting purposes pursuant to the rules contained in this Article III.
However, such a person shall not be entitled to receive any contributions hereunder unless and
until he becomes a Participant in this Plan, and then, only during his period of participation.

3.7 Periods of Military Service.

     Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be provided in accordance with Code
Section 414(u).

ARTICLE IV

CONTRIBUTIONS

4.1 Employee Stock Ownership Contributions.

     (a) Subject to all of the provisions of this Article IV, for each Plan Year commencing on or
after the Effective Date, the Employer shall make an Employee Stock Ownership contribution to the
Fund, in such amount as may be determined by the Board of Directors in its discretion. Such
contribution shall be in the form of cash or

7

 

Employer Securities. In determining the value of Employer Securities transferred to the Fund
as an Employee Stock Ownership contribution, the Administrator may determine the average of closing
prices of such securities for a period of up to 90 consecutive days immediately preceding the date
on which the securities are contributed to the Fund. In the event that the Employer Securities are
not readily tradable on an established securities market, the value of the Employer Securities
transferred to the Fund shall be determined by an independent appraiser in accordance with Section
8.9.

     (b) In no event shall such contribution by the Employer exceed for any Plan Year the maximum
amount that may be deducted by the Employer under Section 404 of the Code, nor shall such
contribution cause the Employer to violate its regulatory capital requirements. Each Employee
Stock Ownership contribution by the Employer shall be deemed to be made on the express condition
that the Plan, as then in effect, shall be qualified under Sections 401 and 501 of the Code and
that the amount of such contribution shall be deductible from the Employer’s income under Section
404 of the Code.

4.2 Time and Manner of Employee Stock Ownership Contributions.

     (a) The Employee Stock Ownership contribution (if any) for each Plan Year shall be paid to the
Trustee in one lump sum or installments at any time on or before the expiration of the time
prescribed by law (including any extensions) for filing of the Employer’s federal income tax return
for its fiscal year ending concurrent with or during such Plan Year. Any portion of the Employee
Stock Ownership contribution for each Plan Year that may be made prior to the last day of the Plan
Year shall be maintained by the Trustee in the Contribution Holding Account described in Section
5.2 until the last day of such Plan Year.

     (b) If an Employee Stock Ownership contribution for a Plan Year is paid after the close of the
Employer’s fiscal year which ends concurrent with or during such Plan Year but on or prior to the
due date (including any extensions) for filing of the Employer’s federal income tax return for such
fiscal year, it shall be considered, for allocation purposes, as an Employee Stock Ownership
contribution to the Fund for the Plan Year for which it was computed and accrued, unless such
contribution is accompanied by a statement to the Trustee, signed by a representative of the
Employer, which specifies that the Employee Stock Ownership contribution is made with respect to
the Plan Year in which it is received by the Trustee. Any Employee Stock Ownership contribution
paid by the Employer during any Plan Year but after the due date (including any extensions) for
filing of its federal income tax return for the fiscal year of the Employer ending on or before the
last day of the preceding Plan Year shall be treated, for allocation purposes, as an Employee Stock
Ownership contribution to the Fund for the Plan Year in which the contribution is paid to the
Trustee.

     (c) Notwithstanding anything contained herein to the contrary, no Employee Stock Ownership
contribution shall be made for any year during which a “limitations account” created pursuant to
Section 5.6(c)(2) is in existence until the balance of such limitations account has been
reallocated in accordance with Section 5.6(c)(2).

4.3 Records of Contributions.

     The Employer shall deliver at least annually to the Trustee, with respect to the contributions
contemplated in Section 4.1, a certificate of the Administrator, in such form as the Trustee shall
approve, setting forth:

     (a) The aggregate amount of contributions, if any, to the Fund for such Plan Year;

     (b) The names, Internal Revenue Service identifying numbers and current residential addresses
of all Participants in the Plan;

     (c) The amount and category of contributions to be allocated to each such Participant; and

     (d) Any other information reasonably required for the proper operation of the Plan.

4.4 Erroneous Contributions.

     (a) Notwithstanding anything herein to the contrary, upon the Employer’s request, a
contribution which was made by a mistake of fact, or conditioned upon the qualification of the Plan
or any amendment thereof, under Code Section 401, or upon the deductibility of the contribution
under Section 404 of the Code, shall be returned to the Employer by the Trustee within one year
after the payment of the contribution, the denial of the qualification or the disallowance of the
deduction (to the extent disallowed), whichever is applicable; provided, however, that in the case
of disqualification of the Plan based upon any amendment hereto, the Employer shall not be entitled
to the return of its Employee Stock Ownership contribution unless an Application for Determination
with respect to the Plan amendment had been filed with the Internal Revenue Service within one year
after the adoption

8

 

of such amendment by the Employer. Any portion of a contribution returned pursuant to this
Section 4.4 shall be adjusted to reflect its proportionate share of the losses of the fund, but
shall not be adjusted to reflect any earnings or gains. Notwithstanding any provisions of this
Plan to the contrary, the right or claim of any Participant or Beneficiary to any asset of the Fund
or any benefit under this Plan shall be subject to and limited by this Section 4.4.

     (b) In no event shall voluntary Employee contributions be accepted. Any such voluntary
Employee contributions (and any earnings attributable thereto) mistakenly received by the Trustee
shall promptly be returned to the Participant.

ARTICLE V

ACCOUNTS, ALLOCATIONS AND INVESTMENTS

5.1 Establishment of Separate Participant Accounts.

     The Administrator shall establish and maintain separate individual accounts for Participants
in the Plan and for each Former Participant in accordance with the provisions of this Article V.
Such separate accounts shall be for accounting purposes only and shall not require a segregation of
the Fund, and no Participant, Former Participant or Beneficiary shall acquire any right to or
interest in any specific assets of the Fund as a result of the allocations provided for under this
Plan, except where segregation is expressly provided for in this Plan.

     (a) Employee Stock Ownership Accounts.

          The Administrator shall establish a separate Employee Stock Ownership Account in the Fund for
each Participant. The account shall be credited as of the last day of each Plan Year with the
amounts allocated to the Participant under Sections 5.4 and 5.5. The Administrator may establish
subaccounts hereunder, an Employer Stock Account reflecting a Participant’s interest in Employer
Securities held by the Trust and an Other Investments Account reflecting the Participant’s interest
in his Employee Stock Ownership Account other than Employer Securities.

     (b) Distribution Accounts.

          In any case where distribution of a terminated Participant’s vested interest in the Plan is to
be deferred, the Administrator shall establish a separate, nonforfeitable account in the Fund to
which the balance in his Employee Stock Ownership Account in the Plan shall be transferred after
such Participant incurs a Break. Unless the Former Participant’s distribution accounts are
segregated for investment purposes pursuant to section 9.4, they shall share in Investment
Adjustments.

     (c) Other Accounts.

          The Administrator shall establish such other separate accounts for each Participant as may be
necessary or desirable for the convenient administration of the Fund.

     5.2 Establishment of Contribution Holding and Suspense Accounts.

     The Administrator shall establish separate accounts as follows:

     (a) Contribution Holding Account.

     The Administrator shall establish a Contribution Holding Account. There shall be credited to
such Contribution Holding Account any Employee Stock Ownership contributions that may be made prior
to the last day of the Plan Year, as provided in Section 4.2. The Contribution Holding Account
shall share proportionately as to time and amount in any Investment Adjustments. As of the last
day of each Plan Year, the balance of the Contribution Holding Account shall be added to any other
Employee Stock Ownership contributions that may have been made for that Plan Year and allocated to
the Employee Stock Ownership Accounts of Participants as provided in Section 5.5.

     (b) Exempt Loan Suspense Account.

     For each Exempt Loan taken by the Plan, the Administrator shall establish a separate Exempt
Loan Suspense Account. Exempt Loan payments shall be attributed to the appropriate Exempt Loan
Suspense Account in accordance with Sections 8.5 and 8.6. All Employer Securities released for a
given Plan Year from all the ESOP Exempt Loan Suspense Accounts pursuant to Sections 8.5 and 8.6
shall be pooled and allocated as of the last day of such Plan Year to the Employee Stock Ownership
Accounts of Participants as provided in Section 5.5.

9

 

5.3 Allocation of Earnings, Losses and Expenses.

     As of each Valuation Date, any increase or decrease in the net worth of the aggregate Employee
Stock Ownership Accounts held in the Fund attributable to earnings, losses, expenses and unrealized
appreciation or depreciation in each such aggregate Account, as determined by the Trustee pursuant
to the Trust Agreement, shall be credited to or deducted from the appropriate suspense accounts and
all Participants’ Employee Stock Ownership Accounts (except segregated distribution accounts
described in Section 5.1(b) and the “limitations account” described in Section 5.6(c)(4)) in the
proportion that the value of each such Account (determined immediately prior to such allocation and
before crediting any Employee Stock Ownership contributions and forfeitures for the current Plan
year but after adjustment for any transfer to or from such Accounts and for the time such funds
were in such Accounts) bears to the value of all Employee Stock Ownership Accounts.

5.4 Allocation of Forfeitures.

     As of the last day of each Plan Year, all forfeitures attributable to the Employee Stock
Ownership Accounts which are then available for reallocation shall be, as appropriate, added to the
Employee Stock Ownership contribution (if any) for any such year and allocated among the
Participants’ Employee Stock Ownership Accounts, as appropriate, in the manner provided in Sections
5.5 and 5.6.

5.5 Allocation of Annual Employee Stock Ownership Contributions.

     As of the last day of each Plan Year for which the Employer shall make an Employee Stock
Option Ownership contribution, the Administrator shall allocate the Employee Stock Ownership
contribution (including reallocable forfeitures) for such Plan year to the Employee Stock Ownership
account of each Participant who completed at least 1,000 Hours of Service during that Plan Year,
provided that he is still employed by the Employer on the last day of the Plan Year. Such
allocation shall be made in the same proportion that each such Participant’s Compensation for such
Plan Year bears to the total Compensation of all such Participants for such Plan Year, subject to
Section 5.6. Notwithstanding the foregoing, if a Participant attains his Normal Retirement Date
and terminates Service prior to the last day of the Plan Year but after completing 1,000 Hours of
Service, he shall be entitled to an allocation based on his Compensation earned prior to his
termination and during the Plan Year. Notwithstanding the foregoing, if a Participant attains age
62 and has completed 10 years of service with the Company and terminates service prior to the last
day of the Plan Year, but after completing 1,000 Hours of Service, he shall be entitled to an
allocation based on his Compensation earned prior to his termination and during the Plan Year.
Notwithstanding the foregoing, if a Participant attains age 60 and has completed 15 Years of
Service with the Company and terminates service prior to the last day of the Plan Year, but after
completing 1,000 Hours of Service, he shall be entitled to an allocation based on his Compensation
earned prior to his termination and during the Plan Year. Furthermore, if a Participant completes
1,000 Hours of Service and is on a Leave of Absence on the last day of the Plan Year because of
pregnancy or other medical reason, such a Participant shall be entitled to an allocation based on
his Compensation earned during such Plan Year. Notwithstanding the foregoing, for the Plan Year
that begins January 1, 1998 and ends December 31, 1998, the following special rules apply: (i) as
of June 30, 1998, the Administrator shall allocate the Employee Stock Ownership contribution (not
including reallocable forfeitures) accrued for services performed in the months from January to
June of that year (including services performed in June and payable in July) for each Employee who
completed at least 500 Hours of Service during those months, provided that he is still employed by
the Employer on June 30, 1998; and (ii) the Administrator shall allocate the Employee Stock
Ownership contribution (not including reallocable forfeitures) accrued for services performed in
the months from July to December of 1998 as of the last day of the Plan Year for each Employee who
completed at least 1,000 Hours of Service during the Plan Year, provided that he is still employed
by the Employer on the last day of the Plan Year. Forfeitures for 1998 shall be allocated as of
the last day of the Plan Year in accordance with Section 5.4.

5.6 Limitation on Annual Additions.

     (a) Notwithstanding any provisions of this Plan to the contrary, the total Annual Additions
credited to a Participant’s accounts under this Plan (and under any other defined contribution plan
to which the Employer or an Affiliate contributes) for any Limitation Year shall not exceed the
lesser of:

          (1) $30,000 for Plan Years ending prior to 2001, $35,000 for Plan Years ending in 2001
or commencing in 2001 and ending in 2002, and $40,000 for Plan Years commencing in 2002 or
later, adjusted for each subsequent Plan Year to reflect cost of living increases for that
Plan Year provided under Code section 415(d) or published by the Secretary of the Treasury.

10

 

          (2) 25% of the Compensation of such Participant for Plan Years commencing prior to
2002, and 100% of the Compensation of such Participant for Plan Years commencing in 2002 or
later. This paragraph (2) shall not apply to any contribution for medical benefits after
separation from service within the meaning of Code sections 401(h) or 419A(f)(2) which is
otherwise treated as an Annual Addition.

     (b) Solely for the purpose of this Section 5.6, the term “Compensation” is defined as wages,
salaries, and fees for professional services and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services actually rendered in the course of
employment with the Employer to the extent that the amounts are includable in gross income (or to
the extent the amount would have been received and includible in gross income but for an election
under Sections 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b) of the Code).

          (1) “Compensation” specifically includes, but is not limited to:

               (A) Commissions paid to salespeople, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements or other expense allowances under a nonaccountable plan (as
described in Treas. Regs. § 1.62-2(c));

               (B) Amounts described in Sections 104(a)(3), 105(a), or 105(h) of the Code, but
only to the amount that these amounts are includible in gross income;

               (C) Amounts paid or reimbursed by the Employer for moving expenses incurred by
an Employee, but only to the extent that at the time of the payment it is reasonable
to believe that these amounts are not deductible by the Employee under Section 217
of the Code;

               (D) The value of a nonqualified stock option granted to an Employee, but only
to the extent that the value of the option is includible in gross income of the
Employee for the taxable year of the stock option grant;

               (E) The amount includible in the gross income of the Employee upon making the
election described in Section 83(b) of the Code;

               (F) Amounts that are includible in the gross income of an Employee under the
rules of Sections 409A or 457(f)(1)(A) of the Code or because the amounts are
constructively received by the Employee; and

               (G) Amounts paid after the Employee’s severance from employment, but only
including regular pay for services during the Employee’s regular working hours, or
pay for services outside the Employee’s regular working hours, (such as overtime or
shift differential), commissions, bonuses, or other similar payments, and only if
such pay would have been paid to the Employee prior to severance from employment if
the Employee had continued in employment with the Employer. Such pay is
Compensation only if paid by the later of (i) 2 1/2 months after the Employee’s
severance from employment with the Employer or (ii) the end of the Limitation Year
that includes the date of the Employee’s severance from employment.

Notwithstanding anything in this section to the contrary, “Compensation” will not
exceed the amount permitted to be taken into account for any Limitation Year under
Section 401(a)(17) of the Code.

(2) “Compensation” specifically excludes:

               (A) Employer contributions (other than elective contributions described in
Sections 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) of the Code to a plan of
deferred compensation (including a simplified employee pension described in Section
408(k) of the Code or a simple retirement account described in Section 408(p) of the
Code), to the extent not includible in the Employee’s gross income for the taxable
year in which contributed, and any distributions from a plan of deferred
compensation regardless of whether the distribution amounts are includible in the
gross income of the Employee when distributed;

               (B) Amounts realized from the exercise of a nonqualified stock option, or when
restricted stock (or property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;

11

 

               (C) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option;

               (D) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee and are not salary reduction amounts
described in Section 125 of the Code);

               (E) Amounts received after an Employee’s severance from employment for unused
accrued bona fide sick, vacation or other leave; and

               (F) Other items of remuneration similar to items described in (b)(2)(a)-(d)
above.

     (c) In the event that the limitations on Annual Additions described in this Section 5.6(a)
above are exceeded for any reason allowed under any applicable guidance with respect to any
Participant in any Limitation Year, then the contributions allocable to the Participant for such
year shall be reduced to the minimum extent required by such limitations in the following order of
priority:

          (1) If any further reductions in Annual Additions are necessary, then the Employee
Stock Ownership contributions and forfeitures allocated during such Limitation Year to the
Participant’s Employee Stock Ownership Account shall be reduced. The amount of any such
reductions in the Employee Stock Ownership contributions and forfeitures shall be
reallocated to all other Participants in the same manner as set forth under Sections 5.4 and
5.5.

          (2) Any amounts which cannot be reallocated to other Participants in a current
Limitation Year in accordance with Section 5.6(c)(1) above because of the limitations
contained in Sections 5.6(a) and (d) shall be credited to an account designated as the
“limitations account” and carried forward to the next and subsequent Limitation Years until
it can be reallocated to all Participants as set forth in Sections 5.4, and 5.5, as
appropriate. No Investment Adjustments shall be allocated to this limitations account. In
the next and subsequent Limitation Years, all amounts in the limitations account must be
allocated in the manner described in Sections 5.4 and 5.5, as appropriate, before any
Employee Stock Ownership contributions may be made to this Plan for that Limitation Year.

          (3) The Administrator shall determine to what extent the Annual Additions to any
Participant’s Employee Stock Ownership Account must be reduced in each Limitation Year. The
Administrator shall reduce the Annual Additions to all other qualified, tax-exempt
retirement plans maintained by the Employer in accordance with the terms contained therein
for required reductions or reallocations mandated by Section 415 of the Code before reducing
any Annual Additions in this Plan.

          (4) In the event this Plan is voluntarily terminated by the Employer under Section
13.5, any amounts credited to the limitations account described in Section 5.6(c)(2) above
which have not be reallocated as set forth herein shall be distributed to the Participants
who are still employed by the Employer on the date of termination, in the proportion that
each Participant’s Compensation bears to the Compensation of all Participants.

          (5) For Limitation Years beginning on or after January 1, 2008, corrections for excess
Annual Additions, if any, will be made as provided above (to the extent not inconsistent
with applicable Treasury Regulations or other guidance) and under the appropriate program
described in IRS Revenue Procedure 2006-27 (or subsequent guidance).

     (d) The Annual Additions credited to a Participant’s accounts for each Limitation Year are
further limited so that in the case of an Employee who is a Participant in both this Plan and any
qualified defined benefit plan (hereinafter referred to as a “pension plan”) of the Employer, the
sum of (1) and (2) below will not exceed 1.0:

          (1) (A) The projected annual normal retirement benefit of a Participant under the
pension plan, divided by

           (B) The lesser of:

                        (i) The product of 1.25 multiplied by the dollar limitation in effect
under Section 415(b)(1)(A) of the Code for such Limitation Year, or

                        (ii) The product of 1.4 multiplied by the amount of compensation which
may be taken into account under Section 415(b)(1)(B) of the Code for the
Participant for such Limitation Year; plus

12

 

          (2) (A) The sum of Annual Additions credited to the Participant under this Plan for all
Limitation Years, divided by:

            (B) The sum of the lesser of the following amounts determined for such Limitation Year
and for each prior year of service with the Employer:

                      (i) The product of 1.25 multiplied by the dollar limitation in effect
under Section 415(b)(1)(A) of the Code for such Limitation Year, or

                      (ii) The product of 1.4 multiplied by the amount of compensation which
may be taken into account under Section 415(b)(1)(B) of the Code for the
Participant for such Limitation Year.

     The Administrator may, in calculating the defined contribution plan fraction described in
Section 5.6(d)(2), elect to use the transitional rule pursuant to Section 415(e)(6) of the Code, if
applicable. If the sum of the fractions produced above will exceed 1.0, even after the use of the
“fresh start” rule contained in Section 235 of the Tax Equity and Fiscal Responsibility Act of 1982
(“TEFRA”), if applicable, then the same provisions as stated in Section 5.6(c) above shall apply.
If, even after the reductions provided for in Section 5.6(c), the sum of the fractions still exceed
1.0, then the benefits of the Participant provided under the pension plan shall be reduced to the
extent necessary, in accordance with Treasury Regulations issued under the Code. Solely for the
purposes of this Section 5.6(d), the term “years of service” shall mean all years of service
defined by Treasury Regulations issued under Section 415 of the Code.

     This subsection ceased to apply effective January 1, 2000.

     (e) In the event that the Employer is a member of (1) a controlled group of corporations or a
group of trades or businesses under common control (as described in Section 414(b) or (c) of the
Code, as modified by Section 415(h) thereof), or (2) an affiliated service group (as described in
Section 414(m) of the Code), the Annual Additions credited to any Participant’s accounts in any
such Limitation Year shall be further limited by reason of the existence of all other qualified
retirement plans maintained by such affiliated corporations, other entities under common control or
other members of the affiliated service group, to the extent such reduction is required by Section
415 of the Code and the regulations promulgated thereunder. The Administrator shall determine if
any such reduction in the Annual Additions to a Participant’s accounts is required for this reason,
and if so, the same provisions as stated in 5.6(c) and (d) above shall apply.

5.7 Erroneous Allocations.

     No Participant shall be entitled to any Annual Additions or other allocations to his accounts
in excess of those permitted under Sections 5.3, 5.4, 5.5, and 5.6. If it is determined at anytime
that the Administrator and/or Trustees have erred in accepting and allocating any contributions or
forfeitures under this Plan, or in allocating Investment Adjustments, or in excluding or including
any person as a Participant, then the Administrator, in a uniform and nondiscriminatory manner,
shall determine the manner in which such error shall be corrected and shall promptly advise the
Trustee in writing of such error and of the method for correcting such error. The accounts of any
or all Participants may be revised, if necessary, in order to correct such error.

5.8 Value of Participant’s Interest in Fund.

     At any time, the value of a Participant’s interest in the Fund shall consist of the aggregate
value of his Employee Stock Ownership Account and his distribution account, if any, determined as
of the next-preceding Valuation Date. The Administrator shall maintain adequate records of the
cost basis of Employer Securities allocated to each Participant’s Employer Stock Ownership Account.

5.9 Investment of Account Balances.

     The Employee Stock Ownership Accounts shall be invested primarily in Employer Securities.
Employer Securities shall constitute at least 51% of the assets of all Employee Stock Ownership
Accounts. All sales of Employer Securities by the Trustee attributable to the Employee Stock
Ownership Accounts of all Participants shall be charged pro rata to the Employee Stock Ownership
Accounts of all Participants.

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ARTICLE VI

RETIREMENT, DEATH AND DESIGNATION OF BENEFICIARY

6.1 Normal Retirement.

     A Participant who reaches his Normal Retirement Date and who shall retire at that time shall
thereupon be entitled to retirement benefits based on the value of his interest in the Fund,
payable pursuant to the provisions of Section 9.1. A Participant who remains in Service after his
Normal Retirement Date shall not be entitled to any retirement benefits until his actual
termination of Service thereafter (except as provided in Section 9.3(g)) and he shall meanwhile
continue to participate in this Plan.

6.2 Early Retirement.

     A Participant who reaches his Early Retirement .Date may retire at such time (or, at his
election, as of the first day of any month thereafter prior to his Normal Retirement Date) and
shall thereupon be entitled to retirement benefits based on the value of his interest in the Fund,
payable pursuant to the provisions of Section 9.1.

6.3 Disability Retirement.

     In the event a Participant incurs a Disability, he may retire on his Disability Retirement
Date and shall thereupon be entitled to retirement benefits based on the value of his interest in
the Fund, payable pursuant to the provisions of Section 9.1.

6.4 Death Benefits.

     (a) Upon the death of a Participant before his Retirement or other termination of Service, the
value of his interest in the Fund shall be payable pursuant to the provisions of Section 9.1. The
Administrator shall direct the Trustee to distribute his interest in the Fund to any surviving
Beneficiary designated by the Participant or, if none, to such persons designated by the
Administrator pursuant to Section 6.5.

     (b) Upon the death of a Former Participant, the Administrator shall direct the Trustee to
distribute any undistributed balance of his interest in the Fund to any surviving Beneficiary
designated by him or, if none, to such persons designated by the Administrator pursuant to Section
6.5.

     (c) The Administrator may require such proper proof of death and such evidence of the right of
any person to receive the interest in the Fund of a deceased Participant or Former Participant as
the Administrator may deem desirable. The Administrator’s determination of death and of the right
of any person to receive payment shall be conclusive.

6.5 Designation of Death Beneficiary and Manner of Payment.

     (a) Each Participant shall have the right to designate a Beneficiary or Beneficiaries to
receive the sum or sums to which he may be entitled upon his death. The Participant may also
designate the manner in which any death benefits under this Plan shall be payable to his
Beneficiary, provided that such designation is in accordance with Section 9.4. Such designation of
Beneficiary and manner of payment shall be in writing and delivered to the Administrator, and shall
be effective when received by the Administrator. The Participant shall have the right to change
such designation by notice in writing to the Administrator. Such change of Beneficiary or the
manner of payment shall become effective upon its receipt by the Administrator. Any such change
shall be deemed to revoke all prior designations.

     (b) If a Participant shall fail to designate validly a Beneficiary or if no designated
Beneficiary survives the Participant, his interest in the Fund shall be paid to the person or
persons in the first of the following classes of successive preference Beneficiaries surviving at
the death of the Participant: the Participant’s (1) widow or widower, (2) children, (3) parents,
and (4) estate. The Administrator shall decide what Beneficiaries, if any, shall have been validly
designated, and its decision shall be binding and conclusive on all persons.

     (c) Notwithstanding the foregoing, if a Participant has been married throughout the 12 month
period preceding the date of his death, the sum or sums to which he may be entitled under this Plan
upon his death shall be paid to his spouse, unless the Participant’s spouse shall have consented to
the election of another Beneficiary. Such a spousal consent shall be in writing and shall be
witnessed either by a representative of the Plan or a notary public. If it is established to the
satisfaction of the Administrator that such spousal consent cannot be obtained because there is no
spouse, because the spouse cannot be located, or other reasons prescribed by governmental
regulations, the consent of the spouse may be waived, and the Participant may designate a
Beneficiary or Beneficiaries other than his spouse.

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ARTICLE VII
VESTING AND
FORFEITURES

7.1 Vesting on Death, Disability and Normal Retirement.

     Unless his participation in this Plan shall have terminated prior thereto, upon a
Participant’s death, Disability or upon his attainment of Normal Retirement Date (whether or not he
actually retires at that time) while he is still employed by the Employer, the Participant’s entire
interest in the Fund shall be fully vested and nonforfeitable.

7.2 Vesting on Termination of Participation.

     Upon termination of his participation in this Plan for any reason other than death,
Disability, or Normal Retirement, a Participant shall be vested in a percentage of his Employee
Stock Ownership Account based on the Years of Service (including Years of Service prior to the
Effective Date) credited to him for vesting purposes at the time of his termination of
participation.

     (a) For any Participant who completes at least one Hour of Service on or after January 1, 2015
(or, if earlier, the date on which any Exempt Loan that was outstanding on January 1, 2007 is
repaid), the following vesting schedule applies:

	 	 	 	 	 
	Years of Service Completed	 	Percentage Vested
	Less than 3
	 	      0%
	 
	 	 	 	 
	3 or more
	 	100%

     (b) For any Participant who does not meet the requirement in subsection (a), the following
vesting schedule applies:

	 	 	 	 	 
	Years of Service Completed	 	Percentage Vested
	Less than 5
	 	      0%
	 
	 	 	 	 
	5 or more
	 	100%

     Any portion of the Participant’s Employee Stock Ownership Account which is not vested at the
time he incurs a Break shall thereupon be forfeited and disposed of pursuant to Section 7.3.
Distribution of the vested portion of a terminated Participant’s interest in the Plan may be
authorized by the Administrator in any manner permitted under Section 9.1.

7.3 Disposition of Forfeitures.

     (a) In the event a Participant incurs a Break and subsequently resumes both his Service and
his participation in the Plan prior to incurring at least 5 Breaks, the forfeitable portion of his
Employee Stock Ownership Account shall be reinstated to the credit of the Participant as of the
date he resumes participation.

     (b) In the event a Participant terminates Service and subsequently incurs a Break and
receives a distribution, or in the event a Participant does not terminate Service, but incurs at
least 5 Breaks, or in the event that a Participant terminates Service and incurs at least 5 Breaks
but has not received a distribution, then the forfeitable portion of his Employer Account,
including Investment Adjustments, shall be reallocated to other Participants, pursuant to Section
5.4 as of the date the Participant incurs such Break or Breaks, as the case may be.

     (c) In the event a former Participant who had received ,a distribution from the Plan is
rehired, he shall repay the amount of his distribution before the earlier of 5 years after the date
of his rehire by the Employer, or the close of the
first period of 5 consecutive Breaks commencing after the withdrawal in order for any
forfeited amounts to be restored to him.

ARTICLE VIII

EMPLOYEE STOCK OWNERSHIP PROVISIONS

8.1 Right to Demand Employer Securities.

     A Participant entitled to a distribution from his Employee Stock Ownership Account shall be
entitled to demand that his interest in the Account be distributed to him in the form of Employer
Securities, all subject to Section 9.10. In the event that the Employer Securities are not readily
tradable on an established market, the

15

 

Participant shall be entitled to require that the Employer repurchase the Employer Securities under
a fair valuation formula, as provided by governmental regulations. The Participant or Beneficiary
shall be entitled to exercise the put option described in the preceding sentence for a period of
not more than 60 days following the date of distribution of Employer Securities to him. If the put
option is not exercised within such 60-day period, the Participant or Beneficiary may exercise the
put option during an additional period of not more than 60 days after the beginning of the first
day of the first Plan Year following the Plan Year in which the first put option period occurred,
all as provided in regulations promulgated by the Secretary of the Treasury.

8.2 Voting Rights.

     Each Participant with an Employee Stock Ownership Account shall be entitled to direct the
Trustee as to the manner in which the Employer Securities in such Account are to be voted. Employer
Securities held in the Employee Stock Ownership Suspense Account or the Exempt Loan Suspense
Account shall be voted by the Trustee on each issue with respect to which shareholders are entitled
to vote, in the proportion that the Participants had voted the shares allocated to their Accounts
with respect to such issue. Prior to the initial allocation of shares, the Trustee shall be
entitled to vote the shares in the Suspense Account without prior direction from the Participants
or the Administrator.

8.3 Nondiscrimination in Employee Stock Ownership Contributions.

     In the event that the amount of the Employee Stock Ownership contributions that would be
required in any Plan Year to make the scheduled payments on an Exempt Loan would exceed the amount
that would otherwise be deductible by the Employer for such Plan Year under Code Section 404, then
no more than one-third of the Employee Stock Ownership contributions for the Plan Year, which is
also the Employer’s taxable year, shall be allocated to the group consisting of those Employees
who, during the Plan Year or the preceding Plan Year, meet any one of the following requirements:
(a) The employee at any time during the current or prior Plan Year was a more than 5-percent owner
as defined in Code Section 414(q)(2), or was the spouse, child, parent or grandparent of such an
owner to whom the owner’s stock is attributed pursuant to Code Section 318 (regardless of the
Compensation of the owner or family member).

     (b) The employee received Compensation from the employer in excess of $80,000 for the prior
Plan Year. The employee must also have been in the top 20 percent of employees of the employer who
performed services for the employer in such prior Plan Year, when ranked on the basis of
Compensation paid during the Plan Year. For purposes of determining the top 20 percent of employees
under Code Section 414(q)(3), the Plan will disregard any non-resident aliens who receive no earned
income from the employer which constitutes income from sources within the United States.

     (c) The individual is a former employee who had a separation year prior to the current Plan
Year and such individual performed services for the employer and was a highly compensated employee
within the meaning of Code Section 414(q) for either (i) such separation year, or (ii) any Plan
Year ending on or after the individual’s 55th birthday. A “separation year” is the Plan Year in
which the individual separates from service with the employer. With respect to an
individual who separated from service before January 1, 1987, the individual will be included
as a highly compensated employee only if the individual was a more than 5-percent owner or
received Compensation in excess of $50,000 during (i) the employee’s separation year (or the year
preceding such separation year), or (ii) any year ending on or after such individual’s 55th
birthday (or the last year ending before such individual’s 55th birthday).

     (d) The dollar amount specified in subsection (b) shall be indexed for cost of living increases
for each calendar year after 1997 as provided in the applicable Treasury regulations. For any Plan
Year, the applicable dollar amount shall be the dollar amount in effect for the calendar year in
which the Plan Year commences.

     (e) For purposes of this section, “employer” includes the Employer and all Affiliates, and
“employee” includes Leased Employees.

     (f) For purposes of this section, “Compensation” means the amount defined as such under
Section 5.6.

8.4 Dividends.

     Dividends paid with respect to Employer Securities credited to a Participant’s Employee Stock
Ownership account as of the record date for the dividend payment may be paid in cash to the
Participants, pursuant to the

16

 

directions of the Board of Directors of the Sponsor. If the Board of Directors shall direct that
the aforesaid dividends shall be paid directly to Participants, the quarterly dividends paid with
respect to such Employer Securities shall be paid to the Plan, from which dividend distributions in
cash shall be made to the Participants with respect to the Employer Securities in their Employee
Stock Ownership Accounts within 90 days of the close of the Plan Year in which the dividends were
paid. Dividends on Employer Securities obtained pursuant to an Exempt Loan and still held in the
Suspense Account may be used to make payments on an Exempt Loan, as described in Section 8.5.

8.5 Exempt Loans.

     (a) The Sponsor may direct the Trustee to obtain Exempt Loans. The Exempt Loan may
take the form of (i) a loan from a bank or other commercial lender to purchase Employer Securities
(ii) a loan from the Employer to the Plan; or (iii) an installment sale of Employer Securities to
the Plan. The proceeds of any such Exempt Loan shall be used, within a reasonable time after the
Exempt Loan is obtained, only to purchase Employer Securities, repay the Exempt Loan, or repay any
prior Exempt Loan. Any such Exempt Loan shall provide for no more than a reasonable rate of
interest and shall be without recourse against the Plan. The number of years to maturity under
the Exempt Loan must be definitely ascertainable at all times. The only assets of the Plan that may
be given as collateral for an Exempt Loan are Employer Securities acquired with the proceeds of the
Exempt Loan and Employer Securities that were used as collateral for a prior Exempt Loan repaid
with the proceeds of the current Exempt Loan. Such Employer Securities so pledged shall be placed
in an Exempt Loan Suspense Account. No person or institution entitled to payment under an Exempt
Loan shall have recourse against Trust assets other than the aforesaid collateral, Employer Stock
Ownership contributions (other than contributions of Employer Securities) that are available under
the Plan to meet obligations under the Exempt Loan and earnings attributable to such collateral and
the investment of such contributions. All Employee Stock Ownership contributions paid during the
Plan Year in which an Exempt Loan is made (whether before or after the date the proceeds of the
Exempt Loan are received), all Employee Stock Ownership contributions paid thereafter until the
Exempt Loan has been repaid in full, and all earnings from investment of such Employee Stock
Ownership contributions, without regard to whether any such Employee Stock Ownership contributions
and earnings have been allocated to Participants’ Employee Stock Ownership Accounts, shall be
available to meet obligations under the Exempt Loan as such obligations accrue, or prior to the
time such obligations accrue, unless otherwise provided by the Employer at the time any such
contribution is made. Any pledge of Employer Securities shall provide for the release of shares so
pledged upon the payment of any portion of the Exempt Loan.

     (b) For each Plan Year during the duration of the Exempt Loan, the number of shares of
Employer Securities released from such pledge shall equal the number of encumbered shares held
immediately before release for the current Plan Year multiplied by a fraction. The numerator of the
fraction is the sum of principal and interest paid in such Plan Year. The denominator of the
fraction is the sum of the numerator plus the principal and interest to be paid for all future
years. Such years will be determined without taking into account any possible extension or renewal
periods. If interest on any Exempt Loan is variable, the interest to be paid in future years under
the Exempt Loan shall be computed by using the interest rate applicable as of the end of the Plan
Year.

     (c) Notwithstanding the foregoing, the Trustee may obtain an Exempt Loan pursuant to the terms
of which the number of Employer Securities to be released from encumbrance shall be determined
solely with reference to principal
payments. In the event that such an Exempt Loan is obtained, annual payments of principal and
interest shall be at a cumulative rate that is not less rapid at any time than level payments of
such amounts for not more than 10 years. The amount of interest in any such annual loan repayment
shall be disregarded only to the extent that it would be determined to be interest under standard
loan amortization tables. The requirement set forth in the preceding sentence shall not be
applicable from the time that, by reason of a renewal, extension, or refinancing, the sum of the
expired duration of the Exempt Loan, the renewal period, the extension period, and the duration of
a new Exempt Loan exceeds 10 years.

8.6 Exempt Loan Payments.

     (a) Payments of principal and interest on any Exempt Loan during a Plan Year shall be made by
the Trustee (as directed by the Administrator) only from (1) Employee Stock Ownership contributions
to the Trust made to meet the Plan’s obligation under an Exempt Loan (other than contributions of
Employer Securities) and from any earnings attributable to Employer Securities held as collateral
for an Exempt Loan and investments of such contributions (both received during or prior to the Plan
Year); (2) the proceeds of a subsequent Exempt Loan made to repay a prior Exempt Loan; and (3) the
proceeds of the sale of any Employer Securities held as collateral for an Exempt Loan. Such
contribution and earnings shall be accounted for separately by the Plan until the Exempt Loan is
repaid.

17

 

     (b) Employer Securities released by reason of the payment of principal or interest on an
Exempt Loan from amounts allocated to Participants’ Employee Stock Ownership Accounts shall
immediately upon payment be allocated as set forth in Section 5.5.

     (c) The Employer shall contribute to the Trust sufficient amounts to enable the Trust to pay
principal and interest on any such Exempt Loans as they are due, provided however that no such
contribution shall exceed the limitations in Section 5.6. In the event that such contributions by
reason of the limitations in Section 5.6 are insufficient to enable the Trust to pay principal and
interest on such Exempt Loan as it is due, then upon the Trustee’s request the Employer shall:

     (1) Make an Exempt Loan to the Trust in sufficient amounts to meet such principal and interest
payments. Such new Exempt Loan shall be subordinated to the prior Exempt Loan. Securities released
from the pledge of the prior Exempt Loan shall be pledged as collateral to secure the new Exempt
Loan. Such Employer Securities will be released from this new pledge and allocated to the Employee
Stock Ownership Accounts of the Participants in accordance with applicable provisions of the
Plan;

     (2) Purchase any Employer Securities pledged as collateral in an amount necessary to
provide the Trustee with sufficient funds to meet the principal and interest repayments. Any
such sale by the Plan shall meet the requirements of Section 408(e) of ERISA; or

     (3) Any combination of the foregoing. However, the Employer shall not, pursuant to the provisions
of this subsection, do, fail to do or cause to be done any act or thing which would result
in a disqualification of the Plan as an Employee Stock Ownership Plan under the Code.

     (d) Except as provided in Section 8.1 above and notwithstanding any amendment to or
termination of the Plan which causes it to cease to qualify as an Employee Stock Ownership plan
within the meaning of Section 4975(e)(7) of the Code, or any repayment of an Exempt Loan, no shares
of Employer Securities acquired with the proceeds of an Exempt Loan obtained by the Trust to
purchase Employer Securities may be subject to a put, call or other option, or buy-sell or similar
arrangement while such shares are held by the Plan or when such Shares are distributed from the
Plan.

8.7 Put Option.

     If a Participant exercises a put option (as set forth in Section 8.1) with respect to Employer
Securities that were distributed as part of a total distribution pursuant to which a Participant’s
Employee Stock Ownership Account is distributed to him in a single taxable year, the Employer or
the Plan may elect to pay the purchase price of the Employer Securities over a period not to exceed
5 years. Such payments shall be made in substantially equal installments not less frequently than
annually over a period beginning not later than 30 days after the exercise of the put option.
Reasonable interest shall be paid to the Participant with respect to the unpaid balance of the
purchase price and adequate security shall be provided with respect thereto. In the event that a
Participant exercises a put option with respect to Employer Securities that are distributed as part
of an installment distribution, the amount to be paid for such securities shall be paid not later
than 30 days after the exercise of the put option.

8.8 Diversification Requirements.

     Each Participant who has completed at least 10 years of participation in the Plan and has attained age
55 may elect within 90 days after the close of each Plan Year during his “qualified election
period” to direct the Plan as to the investment of at least 25 percent of his Employee Stock
Ownership Account (to the extent such percentage exceeds the amount to which a prior election under
this Section 8.8 had been made). For purposes of this Section 8.8, the term “qualified
election period” shall mean the 5-Plan-Year period beginning with the Plan Year after the Plan Year
in which the Participant attains age 55 (or, if later, beginning with the Plan Year after the first
Plan Year in which the Employee first completes at least 10 years of participation in the Plan). In
the case of the Employee who has attained age 60 and completed 10 years of participation in the
prior Plan Year and in the case of the election year in which any other Participant who has met the
minimum age and service requirements for diversification can make his last election hereunder, he
shall be entitled to direct the Plan as to the investment of at least 50 percent of his Employee
Stock Ownership Account (to the extent such percentage exceeds the amount to which a prior
election under this Section 8.8 had been made). The Plan shall make available at least 3 investment
options (not inconsistent with regulations prescribed by the Department of Treasury) to each
Participant making an election hereunder. The Plan shall be deemed to have met the requirements of
this Section if the portion of the Participant’s Employee Stock Ownership Account covered by the
election hereunder is distributed to the Participant or his designated Beneficiary within 90 days
after the period during which the election may be made. In the absence of such a distribution, the

18

 

Trustee shall implement the Participant’s election within 90 days following the expiration of the
qualified election period.

8.9 Independent Appraiser.

     An independent appraiser meeting the requirements of Code 170(a)(1) shall value the Employer
Securities in those Plan Years when such securities are not readily tradable on an established
securities market.

ARTICLE IX

PAYMENTS AND DISTRIBUTIONS

9.1 Payments on Termination of Service — In General.

     All benefits provided under this Plan shall be funded by the value of a Participant’s vested
interest in the Fund. As soon as practicable after a Participant’s Retirement, death or termination of Service, the Administrator shall ascertain the value of his vested interest in the Fund,
as provided in Article V, and the Administrator shall hold or dispose of the same in accordance
with the following provisions of this Article IX.

9.2 Commencement of Payments.

     (a) Distributions upon Retirement or Death. Upon a Participant’s Retirement or Death, payment
of benefits under this Plan shall, unless the Participant otherwise elects (in accordance with
Section 9.3), commence no later than 6 months after the close of the Plan Year in which occurs the
date of the Participant’s Retirement or death.

     (b) Distribution following Termination of Service.
Unless a Participant elects otherwise, if a Participant terminates Service prior to Retirement or
death, he shall be accorded an opportunity to commence receipt of distributions from his Accounts
within six (6) months after the Valuation Date next following the date of his termination of
service. A Participant who terminates Service with a deferred vested benefit shall be entitled to
receive from the Administrator a statement of his benefits. In the event that a Participant elects
not to commence receipt of distributions from his Accounts in accordance with this Section 9.2(b),
after the Participant incurs a Break, the Administrator shall transfer his deferred vested interest
to a distribution account. If the value of a Participant’s vested Accounts (including any rollover
accounts, if permitted under the Plan) do not exceed $1,000 on the Valuation Date next following
the date of his termination of Service (or if the value is later determined to be $1,000 or less),
the Plan Administrator may distribute the vested portion of his Accounts as soon as
administratively feasible without the consent of the Participant or his spouse.

     (c) Distribution of Accounts Greater Than $1,000. If the value of a Participant’s vested
Accounts exceeds $1,000, and the Account balance is immediately distributable, the Participant must
consent to any distribution of such Account balance. The Plan Administrator shall notify the
Participant of the right to defer any distribution until the Participant’s Account balance is no
longer immediately distributable. The consent of the Participant shall not be required to the
extent that a distribution is required to satisfy Code § 401(a)(9) or Code § 415.

9.3 Mandatory Commencement of Benefits.

     (a) Unless a Participant elects otherwise, in writing, distribution of benefits will begin no
later than the 60th day after the latest of the close of the Plan Year in which (i) the Participant
attains age 65, (ii) occurs the tenth anniversary of the year in which the Participant commenced
participation in the Plan Year, or (iii) the Participant terminates Service with the Employer.

     (b) In the event that the Plan shall be subsequently amended to provide for a form of
distribution other than a lump sum, as of the first distribution calendar year, distributions, if
not made in a lump sum, may be made only over one of the following periods (or a combination
thereof):

	 	(i)	 	the life of the Participant,
	 
	 	(ii)	 	the life of the Participant and the designated beneficiary,
	 
	 	(iii)	 	a period certain not extending beyond the life expectancy of the
Participant, or
	 
	 	(iv)	 	a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated beneficiary.

19

 

     (c) In the event that the Plan shall be subsequently amended to provide for a form of
distribution other than a lump sum, if the participant’s interest is to be distributed in other
than a lump sum, the following minimum distribution rules shall apply on or after the required
beginning date:

     (i) If a Participant’s benefit is to be distributed over (1) a period not extending
beyond the life expectancy of the Participant or the joint life and last survivor expectancy of the
Participant and the Participant’s designated beneficiary or (2) a period not extending beyond the
life expectancy of the designated beneficiary, the amount. required to be distributed for each
calendar year, beginning with distributions for the ‘first distribution calendar year, must at
least equal the quotient obtained by dividing the Participant’s benefit by the applicable life
expectancy.

     (ii) For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first distribution calendar year
shall not be less than the quotient obtained by dividing the Participant’s benefit by the
lesser of (1) the applicable life expectancy or (2) if the Participant’s spouse is not the
designated beneficiary, the applicable divisor determined from the table set forth in Q&A-4
of section 1.401(a)(9)-2 of the Proposed Regulations. Distributions after the death of the
participant shall be distributed using the applicable life expectancy in subsection (iii)
above as the relevant divisor without regard to Proposed Regulations 1.401(a)(9)-2.

     (iii) The minimum distribution required for the Participant’s first distribution
calendar year must be made on or before the Participant’s required beginning date. The
minimum distribution for other calendar years, including the minimum distribution for the
distribution calendar year in which the employee’s required beginning date occurs, must be
made on or before December 31 of the distribution calendar year.

     (d) If a Participant dies after a distribution has commenced in accordance with Section
8.3(b) but before his entire interest has been distributed to him, the remaining portion. of such
interest shall be distributed to his Beneficiary at least as rapidly as under the method of
distribution in effect as of the date of his death.

     (e) If a Participant shall die before the distribution of his interest in the Plan has begun,
the entire interest of the Participant shall be distributed by December 31 of the calendar year
containing the fifth anniversary of the death of the Participant, except in the following events:

     (i) If any portion of the Participant’s interest is payable to (or for the benefit of) a designated
beneficiary over a period not extending beyond the life expectancy of such beneficiary and such
distributions begin not later than December 31 of the calendar year immediately following the
calendar year in which the Participant died.

     (ii) If any portion of the Participant’s interest is payable to (or for the benefit of)
the Participant’s spouse over a period not extending beyond the life expectancy of such
spouse and such distributions begin no later than December 31 of the calendar year in which
the Participant would have attained age 70-1/2.

     If the Participant has not made a distribution election by the time of his death, the
Participant’s designated beneficiary shall elect the method of distribution no later than the
earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this Article or (2) December 31 of the
calendar year which contains the fifth anniversary of the date of death of the Participant. If the
Participant has no designated beneficiary, or if the designated beneficiary does not elect a method
of distribution, distribution of the Participant’s entire interest shall be completed by December
31 of the calendar year containing the fifth anniversary of the Participant’s death.

     (f) For purposes of this Article, the life expectancy. of a Participant and his spouse may be redetermined
but not more frequently than annually. The life expectancy (or joint and last survivor expectancy)
shall be calculated using the attained age of the Participant (or designated beneficiary) as of the
Participant’s (or designated beneficiary’s) birthday in the applicable calendar year reduced by one
for each calendar year which has elapsed since the date life expectancy was first calculated. If
life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be the first distribution calendar year,
and if life expectancy is being recalculated, such succeeding calendar year. Unless otherwise
elected by the Participant (or his spouse, if applicable) by the time distributions are required to
begin, life expectancies shall be recalculated annually. Any such election not to recalculate shall
be irrevocable and shall apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.

20

 

     (g) For purposes of Section 9.3(b) and 9.3(e), any amount paid to a child shall be treated as
if it had been paid to a surviving spouse if such amount will become payable to the surviving
spouse upon such child reaching majority (or other designated event permitted under regulations).

     (h) For distributions beginning before the Participant’s death, the first distribution
calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the
first distribution calendar year is the calendar year in which distributions are required to begin
pursuant to this Article.

9.4 Required Beginning Dates.

     For purposes of this section, a Participant’s “required beginning date” is April 1 of the
calendar year following the later of (i) the calendar year in which the Participant attained age
701/2, or (ii) the calendar year in which the Participant terminates Service with the Employer.
However, clause (ii) of the previous sentence does not apply to any Participant who is a more than
5-percent owner of the Employer (as defined in Code Section 416) with respect to the Plan Year
ending in the calendar year in which the Participant attains age 701/2. Any Participant who had begun
receiving minimum distributions for years prior to 1999, but who is not required to receive such
distributions under the provisions of this subsection, may file a written election with the Company
to stop those distributions until the required beginning date under this subsection.

9.5 Form of Payment.

     Each Participant’s vested interest shall be distributed in a lump sum payment.
Notwithstanding the preceding sentence, but subject to Section 9.3, the Administrator may not
distribute a lump sum when the value of a Participant’s vested Accounts is in excess of $1,000
without the Participant’s consent. This form of payment shall be the normal form of distribution.
Furthermore, however, in the event that the Administrator must commence distributions with respect
to an Employee who has attained age 70-1/2 and is still employed by the Employer, if the Employee
does not elect a lump sum distribution, payments shall be made in installments in such amounts as
shall satisfy the minimum distribution rules of Section 9.3.

9.6 Medium of Distribution.

     The distribution (including any direct rollover) will be made, pursuant to the Participant’s
election, in either one or a combination of the following: (i) cash, or (ii) whole shares of
Employer Securities (with any fractional share paid in cash). If the Participant does not elect a
medium of distribution, the distribution will be made in cash.

 9.7 Payments Upon Termination of Plan.

      Upon termination of this Plan pursuant to Sections 13.2, 13.4, 13.5 or 13.6, the
Administrator shall continue to perform its duties and the Trustee shall make all payments upon the
following terms, conditions and provisions: All interests of Participants shall immediately become
fully vested; the value of the interests of all Participants shall be determined within 60 days
after such termination, and the Administrator shall have the same powers to direct the Trustee in
making payments as contained in Sections 9.1 and 13.5.

9.8 Distributions Pursuant to Qualified Domestic Relations Orders.

     Upon receipt of a domestic relations order, the Administrator shall notify promptly the
Participant and any alternate payee of receipt of the order and the Plan’s procedure for
determining whether the order is a Qualified Domestic Relations Order. While the issue of whether
a domestic relations order is a Qualified Domestic Relations Order is being determined, if the
benefits would otherwise be paid, the Administrator shall segregate in a separate account in the
Plan the amounts that would be payable to the alternate payee during such period if the order were
a Qualified Domestic Relations Order. If within 18 months the order is determined to be a
Qualified Domestic Relations Order, the amounts so segregated, along with the interest or
investment earnings attributable thereto shall be paid to the alternate payee. Alternatively, if
within 18 months, it is determined that the order is not a Qualified Domestic Relations Order or if
the issue is still unresolved, the amounts segregated under this Section 9.8, with the earnings
attributable thereto, shall be paid to the Participant or Beneficiary who would have been entitled
to such amounts if there had been no order. The determination as to whether the order is qualified
shall be applied prospectively. Thus, if the Administrator determines that the order is a Qualified
Domestic Relations Order after the 18-month period, the Plan shall not be liable for payments to
the alternative payee for the period before the order is determined to be a Qualified Domestic
Relations Order.

21

 

9.9 Cash-Out Distributions.

     If a Participant receives a distribution of the entire present value of his vested Account
balances under this Plan because of the termination of his participation in the Plan, the Plan
shall disregard a Participant’s Service with respect to which such cash-out distribution shall have
been made, in computing his accrued benefit under the Plan in the event that a Former Participant
shall again become an Employee and become eligible to participate in the Plan. Such a distribution
shall be deemed to be made on termination of participation in the Plan if it is made not later than
the close of the second Plan Year following the Plan Year in which such termination occurs. The
forfeitable portion of a Participant’s accrued benefit shall be restored upon repayment to the Plan
by such former Participant of the full amount of the cash-out distribution, provided that the
former Participant again becomes an Employee. Such repayment must be made by the Employee not later
than the end of the 5-year period beginning with the date of the distribution. Forfeitures required
to be restored by virtue of such repayment shall be restored from the following sources in the
following order of preference: (i) current forfeitures; (ii) additional employee stock ownership
contributions, as appropriate and as subject to Section 5.6; and (iii) investment earnings of the
Fund. In the event that a Participant’s interest in the Plan is totally forfeitable, a Participant
shall be deemed to have received a distribution of zero upon his termination of Service. In the
event of a return to Service within 5 years of the date of his deemed distribution, the Participant
shall be deemed to have repaid his distribution in accordance with the rules of this Section 9.9

 9.10 ESOP Distribution Rules.

      Notwithstanding any provision of this Article IX to the contrary, the
distribution of a Participant’s Employee Stock Ownership Account (unless the Participant elects
otherwise in writing), shall commence as soon as administratively feasible as of the first
Valuation Date coincident with or next following his death, disability or termination of Service,
but not later than 1 year after the close of the Plan Year in which the Participant separates from
Service by reason of the attainment of his Normal Retirement Date, disability, death or separation
from Service. In addition, the medium of all distributions hereunder shall be determined pursuant
to Section 9.6.

9.11 Withholding.

     (a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee’s election under this Article IX, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an “eligible rollover
distribution” paid directly to an “eligible retirement plan” specified by the distributee in a
“direct rollover.”

     (b) An “eligible rollover distribution” is any distribution of all or any
portion of the balance to the credit of the distributee, except that an eligible rollover
distribution does not include any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life expectancy of the
distributee or the joint life expectancies of the distributee and the distributee’s designated
beneficiary, or for a specified period of ten years or more; any distribution to the extent such
distribution is required under Code section 401(a)(9); and the portion of any distribution that is
not includible in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).

     (1) Any withdrawal from the Participant’s accounts due to financial hardship prior to
age 591/2 is not an eligible rollover distribution.

     (2) A portion of a distribution shall not fail to be an eligible rollover distribution
merely because the
portion consists of after-tax employee contributions which are not includible in gross
income. However, such portion may be transferred only to an individual retirement account or
annuity described in Code section 408(a) or (b), or to a qualified defined contribution plan
described in Code section 401(a) or 403(a) that agrees to separately account for the amounts
so transferred, including separately accounting for the portion of such distribution which
is includible in gross income and the portion of such distribution which is not so
includible.

     (c) An “eligible retirement plan” is an individual retirement account described in Code
section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust described in Code section 401(a) with
respect to a defined contribution plan, that accepts the distributee’s eligible rollover
distribution. An eligible retirement plan also means an annuity contract described in Code section
403(b), or an eligible plan under Code section 457(b) which is maintained by a state, a political
subdivision of a state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to account separately for amounts transferred into such plan from this Plan.
Prior to January 1, 2002, in the case of

22

 

an eligible rollover distribution to the surviving spouse, an eligible retirement plan is limited
to an individual retirement account or individual retirement annuity.

     (d) For purposes of this Section 9.11, a distributee includes a Participant or former
Participant. In addition, the Participant’s or former Participant’s surviving spouse and the
Participant’s or former Participant’s spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code, are “distributees”
with regard to the interest of the spouse or former spouse.

     (e) For purposes of this Section 9.11, a “direct rollover” is a payment by the Plan to the
“eligible retirement plan” specified by the distributee.

9.12 Waiver of 30-day Notice.

     If a distribution is one to which sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice required under section l.411(a)-11(c)
of the Income Tax Regulations is given, provided that: (1) the Plan Administrator clearly informs
the Participant that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution (and, if applicable,
a particular distribution option), and (2) the Participant, after receiving the notice,
affirmatively elects a distribution.

9.13 Direct Transfer Option.

     A Beneficiary who is not a spouse of a deceased Participant, but who is a “designated
beneficiary” under Code section 401(a)(9)(E) may elect, at the time and in the manner prescribed by
the Administrator, to have all or any portion of the “transfer-eligible” amount payable from the
Plan transferred directly to an individual retirement account described in Code section 408. For
this purpose, the “transfer-eligible” amount is:

     (a) During the calendar year containing the date of the Participant’s death, the Beneficiary’s
full interest in the Plan.

     (b) During the next calendar year, the Beneficiary’s full interest in the Plan, provided,
however, that if the Beneficiary wants to apply the “life expectancy” rule of Code section
401(a)(9)(B)(iii) to the individual retirement account, the “transfer-eligible” amount is the
balance of the Beneficiary’s, less the required minimum distribution due to the Beneficiary, as
determined under Code section 401(a)(9).

     (c) During the subsequent three calendar years, the full balance of the Beneficiary’s Account.

     (d) During the calendar year containing the fifth anniversary of the Participant’s death, the
“transfer-eligible” amount is zero, because the Beneficiary’s Account must be fully distributed
from the Plan.

     A Beneficiary electing a direct transfer under this Section 9.13 must provide the
Administrator with the information necessary to accomplish the direct transfer in such manner and
in accordance with such rules as may be prescribed for this purpose by the Administrator.

ARTICLE X

PROVISIONS RELATING TO TOP-HEAVY PLANS

10.1 Top-Heavy Rules to Control.

     Anything contained in this Plan to the contrary notwithstanding, if for any Plan Year the Plan
is a top-heavy plan, as determined pursuant to Section 416 of the Code and the regulations
thereunder in effect for the particular Plan Year, then the Plan must meet the requirements of this
Article X for such Plan Year.

10.2 Top-Heavy Plan Definitions.

     Unless a different meaning is plainly implied by the context, the following terms as used in
this Article X shall have the following meanings:

     (a) “Accrued Benefit” shall mean the account
balances or accrued benefits of an Employee, calculated pursuant to Section 10.3.

     (b) “Determination Date” shall mean, with respect to any particular Plan Year of this Plan,
the last day of the preceding Plan Year (or, in the case of the first Plan Year of the Plan, the
last day of the first Plan Year). In addition, the term “Determination Date” shall mean, with
respect to any particular plan year of any plan (other than this Plan) in a Required Aggregation
Group or a Permissive Aggregation Group, the last day of the plan year of such plan which falls
within the same calendar year as the Determination Date for this Plan.

23

 

     (c) “Employer” shall mean the Employer (as defined in Section 1.1(q)) and any entity which is
(1) a member of a controlled group including such Employer, while it is a member of such controlled
group (within the meaning of Section 414(b) of the Code), (2) in a group of trades or businesses
under common control with such Employer, while it is under common control (within the meaning of
Section 414(c) of the Code), and (3) a member of an affiliated service group including such
Employer, while it is a member of such affiliated service group (within the meaning of Section
414(m) of the Code).

     (d) “Key Employee” shall mean any Employee or former Employee (or any Beneficiary of such
Employee or former Employee, as the case may be) who, at any time during the Plan Year or during
the 4 immediately preceding Plan Years is one of the following:

     (1) An officer of the Employer who
has compensation greater than 150% of the amount in effect under Code 415(c)(1)(A) for the Plan
Year; provided, however, that no more than 50 Employees (or, if lesser, the greater of 3 or 10% of
the Employees) shall be deemed officers;

     (2) One of the 10 Employees having annual compensation (as
defined in Section 414(q)(7) of the Code) in excess of the limitation in effect under Section
415(c)(1)(A) of the Code, and owning (or considered as owning, within the meaning of Section 318 of
the Code) the largest interests in the Employer;

     (3) Any Employee owning (or considered as owning,
within the meaning of Section 318 of the Code) more than 5% of the outstanding stock of the
Employer or stock possessing more than 5% of the total combined voting power of ‘all stock of the
Employer; or

     (4) Any Employee having annual compensation (as defined in Section 414(q)(7) of the
Code) of more than $150,000 and who would be described in Section 10.2(d)(3) if “1%” were
substituted for “5%” wherever the latter percentage appears.

     For purposes of applying Section 318 of the Code to the provisions of this Section 10.2(d),
Section 318(a)(2)(C) of the Code shall be applied by substituting “5%” for “50%” wherever the
latter percentage appears. In addition, for purposes of this Section 10.2(d), the provisions of
Section 414(b), (c) and (m) shall not apply in determining ownership interests in the Employer.
However, for purposes of determining whether an individual has compensation in excess of $150,000,
or whether an individual is a Key Employee under Section 10.2(d)(1) and (2), compensation from each
entity required to be aggregated under Sections 414(b), (c) and (m) of the Code shall be taken into
account. Notwithstanding anything contained herein to the contrary, all determinations as to
whether a person is or is not a Key Employee shall be resolved by reference to Section 416 of the
Code and any rules and regulations promulgated thereunder.

     (e) “Non-Key Employee” shall mean any Employee or former Employee (or any Beneficiary of such
Employee or former Employee, as the case may be) who is not considered to be a Key Employee with
respect to this Plan.

     (f) “Permissive Aggregation Group” shall mean all plans in the Required Aggregation Group and
any other
plans maintained by the Employer which satisfy Sections 401(a)(4) and 410 of the Code when
considered together with the Required Aggregation Group.

     (g) “Required Aggregation Group” shall mean each plan (including any terminated plan) of the
Employer in which a Key Employee is (or in the case of a terminated plan, had been) a Participant
in the Plan Year containing the Determination Date or any of the 4 preceding Plan Years, and each
other plan of the Employer which enables any plan of the Employer in which a Key Employee is a
Participant to meet the requirement of Sections 401(a)(4) and 410 of the Code.

10.3 Calculation of Accrued Benefits.

     (a) An Employee’s Accrued Benefit shall be equal to:

     (1) With respect to this Plan or any other defined contribution plan (other than a
defined contribution pension plan) in a Required Aggregation Group or a Permissive Aggregation
Group, the Employee’s account balances under the respective plan, determined as of the most
recent plan valuation date within a 12-month period ending on the Determination Date,
including contributions actually made after the valuation date but before the Determination
Date (and, in the first plan year of a plan, also including any contributions made after the
Determination Date which are allocated as of a date in the first plan year).

24

 

     (2) With respect to any defined contribution pension plan in a Required Aggregation
Group or a Permissive Aggregation Group, the Employee’s account balances under the plan,
determined as of the most recent plan valuation date within a 12-month period ending on the
Determination Date, including contributions which have not actually been made, but which are
due to be made as of the Determination Date.

     (3) With respect to any defined benefit plan in a Required Aggregation Group or a
Permissive Aggregation Group, the present value of the Employee’s accrued benefits under the
plan, determined as of the most recent plan. valuation date within a 12-month period ending
on the Determination Date, pursuant to the actuarial assumptions used by such plan, and
calculated as if the Employee terminated Service under such plan as of the valuation date
(except that, in the first plan year of a plan, a current Participant’s estimated Accrued
Benefit Plan as of the Determination Date shall be taken into account).

     (4) If an individual has not performed any services for the Employer at any time during
the one-year period ending on the Determination Date with respect to a Plan Year, any
account balance or accrued benefit for such individual shall not be taken into account for
such Plan Year.

(b) The Accrued Benefit of any Employee shall be further adjusted as follows:

     (1) The Accrued Benefit shall be calculated to include all amounts attributable to both
Employer and Employee contributions, but shall exclude amounts attributable to voluntary
deductible Employee contributions, if any.

     (2) The Accrued Benefit shall be increased by the aggregate distributions made with
respect to an Employee under the plan or plans, as the case may be, during the 5-year period
ending on the Determination Date.

     (3) Rollover and direct plan-to-plan transfers shall be taken into account as follows:

     (A) If the transfer is initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another unrelated employer, the
transferring plan shall continue to count the amount transferred; the receiving plan
shall not count the amount transferred.

     (B) If the transfer is not initiated by the Employee or is made between plans
maintained by related employers, the transferring plan shall no longer count the
amount transferred; the receiving plan shall count the amount transferred.

     (4) Any distribution due to severance from employment, death or disability which was
made prior to the one-year period ending on the Determination Date shall be disregarded for
purposes of applying this subsection (b). Paragraphs (1) and (2) of this subsection shall
also apply to distributions under a terminated plan which, had it not been terminated, would
have been aggregated with this Plan under Code section 416(a)(2)(A)(i).

     (c) If any individual has not performed services for the Employer at any. time during the
5-year period ending on the Determination Date, any accrued benefit for such individual (and the
account of such individual) shall not be taken into account.

10.4 Determination of Top-Heavy Status.

     This Plan shall be considered to be a top-heavy plan for any Plan Year if, as of the
Determination Date, the value of the Accrued Benefits of Key Employees exceeds 60% of the value of
the Accrued Benefits of all eligible Employees under the Plan. Notwithstanding the foregoing, if
the Employer maintains any other qualified plan, the determination of whether this Plan is
top-heavy shall be made after aggregating all other plans of the Employer in the Required
Aggregation Group and, if desired by the Employer as a means of avoiding top-heavy status, after
aggregating any other plan of the Employer in the Permissive Aggregation Group. If the required
Aggregation Group is top-heavy, then each plan contained in such group shall be deemed to be
top-heavy, notwithstanding that any particular plan in such group would not otherwise be deemed to
be top-heavy. Conversely, if the Permissive Aggregation Group is not top-heavy, then no plan
contained in such group shall be deemed to be top-heavy, notwithstanding that any particular plan
in such group would otherwise be deemed to be top-heavy. In no event shall a plan included in a
top-heavy Permissive Aggregation Group be deemed a top-heavy plan unless such plan is also included
in a top-heavy Required Aggregation Group.

25

 

10.5 Determination of Super Top-Heavy Status.

     The Plan shall be considered to be a super top-heavy plan if, as of the Determination Date,
the Plan would meet the test specified in Section 10.4 above for classification as a top-heavy
plan, except that “90%” shall be substituted for “60%” whenever the latter percentage appears.

10.6 Minimum Contribution.

     (a) For any year in which the Plan is top-heavy, each Non-Key Employee who has met the age and
service requirements, if any, contained in the Plan, shall be entitled to a minimum contribution
(which may include forfeitures otherwise allocable) equal to a percentage of such Non-Key
Employee’s compensation (as defined in Section 415 of the Code) as follows:

     (1) If the Non-Key Employee is not covered by a defined benefit plan maintained by the
Employer, then the minimum contribution under this Plan shall be 3% of such Non-Key
Employee’s compensation.

     (2) If the Non-Key Employee is covered by a defined benefit plan maintained by the
Employer, then the minimum contribution under this Plan shall be 5% of such Non-Key
Employee’s compensation.

     (b) Notwithstanding the foregoing, the minimum contribution otherwise allocable to a Non-Key
Employee under this Plan shall be reduced in the following circumstances:

     (1) The percentage minimum contribution required under this Plan shall in no event
exceed the percentage contribution made for the Key Employee for whom such percentage is the
highest for the Plan Year after taking into account contributions under other defined
contribution plans in this Plan’s Required Aggregation Group; provided, however, that this
Section 10.7(b)(1) shall not apply if this Plan is included in a Required Aggregation Group
and this Plan enables a defined benefit plan in such Required Aggregation Group to meet the
requirements of Section 401(a)(4) or 410 of the Code.

     (2) No minimum contribution shall be required (or the minimum contribution shall be
reduced, as the case may be) for a Non-Key Employee under this Plan for any Plan Year if the
Employer maintains another qualified plan under which a minimum benefit or contribution is
being accrued or made on account of such Plan Year, in whole or in part, on behalf of the
Non-Key Employee, in accordance with Section 416(c) of the Code.

     (c) For purposes of this Section 10.6, there shall be disregarded (1) any Employer
contributions attributable to a salary reduction or similar arrangement, or (2) any Employer
contributions to or any benefits under Chapter 21 of the Code (relating to the Federal Insurance
Contributions Act), Title II of the Social Security Act, or any other federal or state law.
Notwithstanding the foregoing, elective contributions on behalf of Key Employees shall be taken
into account in determining the minimum required contribution.

     (d) For purposes of this Section 10.6, minimum contributions shall be required to be made on
behalf of only those Non-Key Employees who have not terminated Service as of the last day of the
Plan Year. If a Non-Key Employee is otherwise entitled to receive a minimum contribution pursuant
to this Section 10.6(d), the fact that such Non-Key Employee failed to complete 1,000 Hours of
Service or failed to make any mandatory or elective contributions under this Plan, if any are so
required, shall not preclude him from receiving such minimum contribution.

10.7 Vesting.

     (a) For any Plan Year in which the Plan is a top-heavy plan, a Participant’s Employer account
shall continue to vest according to the following schedule:

	 	 	 	 	 
	Years of Service Completed	 	Percentage Vested
	Less than 3
	 	      0%
	 
	 	 	 	 
	3 or more
	 	100%

     (b) For purposes of Section 10.7(a), the term “year of service” shall have the same meaning as
set forth in Section 1.1(kk), as modified by Section 3.2.

26

 

     (c) If for any Plan Year the Plan becomes top-heavy and the vesting schedule set forth in
Section 10.7(a) becomes effective, then, even if the Plan ceases to be top-heavy in any subsequent
Plan Year, the vesting schedule set forth in Section 10.7(a) shall remain applicable with respect
to any Participant who has completed 3 Years of Service.

ARTICLE XI

ADMINISTRATION

11.1 Appointment of Administrator.

     This Plan shall be administered by a committee consisting of up to 5 persons, whether or not
Employees or Participants, who shall be appointed from time to time by the Board .of Directors to
serve at its pleasure. The Sponsor may require that each person appointed as an Administrator
shall signify his acceptance by filing an acceptance with the Sponsor. The term “Administrator” as
used in this Plan shall refer to the members of the committee, either individually or collectively,
as appropriate. In the event that the Sponsor shall elect not to appoint any individuals to
constitute a committee to administer the Plan, the Sponsor shall serve as the Administrator
hereunder.

11.2 Resignation or Removal of Administrator.

     An Administrator shall have the right to resign at any time by giving notice in writing,
mailed or delivered to the Employer and to the Trustee. Any Administrator who was an employee of
the Employer at the time of his appointment shall be deemed to have resigned as an Administrator
upon his termination of Service. The Board of Directors may, in its discretion, remove any
Administrator with or without cause, by giving notice in writing, mailed or delivered to the
Administrator and to the Trustee.

11.3 Appointment of Successors: Terms of Office, Etc.

     Upon the death, resignation or removal of an Administrator, the Employer may appoint, by Board
of Directors’ resolution, a successor or successors. Notice of termination of an Administrator and
notice of appointment of a successor shall be made by the Employer in writing, with copies mailed
or delivered to the Trustee, and the successor shall have all the rights and privileges and all of
the duties and obligations of the predecessor.

11.4 Powers and Duties of Administrator.

     The Administrator shall have the following duties and responsibilities in connection with the
administration of this Plan:

     (a) To promulgate and enforce such rules, regulations and procedures as shall be proper for
the efficient administration of the Plan, such rules, regulations and procedures to apply uniformly
to all Employees, Participants and Beneficiaries;

     (b) To determine all questions arising in the administration, interpretation and application
of the Plan, including questions of eligibility and of the status and rights of Participants,
Beneficiaries and any other persons hereunder;

     (c) To decide any dispute arising hereunder strictly in accordance with the terms of the Plan;
provided, however, that no Administrator shall participate in any matter involving any questions
relating solely to his own participation or benefits under this Plan;

     (d) To advise the Employer and the Trustee regarding the known future needs for funds to be
available for distribution in order that the Trustee may establish investments accordingly;

     (e) To correct defects, supply omissions and reconcile inconsistencies to the extent necessary
to effectuate the Plan;

     (f) To advise the Employer of the maximum deductible contribution to the Plan for each fiscal
year;

     (g) To direct the Trustee concerning all payments which shall be made out of the Fund pursuant
to the provisions of this Plan;

     (h) To advise the Trustee on all terminations of Service by Participants, unless the Employer
has so notified the Trustee;

     (i) To confer with the Trustee on the settling of any claims against the Fund;

27

 

     (j) To make recommendations to the Board of Directors with respect to proposed amendments to
the Plan and the Trust Agreement;

     (k) To file all reports with government agencies, Employees and other parties as may be
required by law, whether such reports are initially the obligation of the Employer, the Plan or the
Trustee; and

     (l) To have all such other powers as may be necessary to discharge its duties hereunder.

     Except as expressly otherwise provided herein, the Administrator shall have full discretion to
control and manage the operation and administration of the Plan and to make all decisions and
determinations incident thereto. In carrying out its Plan responsibilities, the Administrator
shall have full discretionary authority to construe the terms of the Plan and to make any factual
determinations necessary to determine eligibility for benefits or the amount of any benefits. It
is intended that the Administrator have discretion to the fullest extent permitted by law and that
the Administrator’s exercise of its discretion be given deference to the greatest extent allowed
under the law. This discretion includes, but is not limited to, the authority to make any rules,
regulations or computations that the Administrator deems necessary to administer the Plan.

11.5 Action by Administrator.

     The Administrator may elect a Chairman and Secretary from among its members and may adopt
rules for the conduct of its business. A majority of the members then serving shall constitute a
quorum for the transaction of business. All resolutions or other action taken by the Administrator
shall be by vote of a majority of those present at such meeting and entitled to vote. Resolutions
may be adopted or other action taken without a meeting upon written consent signed by at least a
majority of the members. All documents, instruments, orders, requests, directions, instructions
and other papers shall be executed on behalf of the Administrator by either the Chairman or the
Secretary of the Administrator, if any, or by any member or agent of the Administrator duly
authorized to act on the Administrator’s behalf.

11.6 Participation by Administrators.

     No Administrator shall be precluded from becoming a Participant in the Plan if he would be
otherwise eligible, but he shall not be entitled to vote or act upon matters or to sign any
documents relating specifically to his own participation under the Plan, except when such matters
or documents relate to benefits generally. If this disqualification results in the lack of a
quorum, then the Board of Directors shall appoint a sufficient number of temporary Administrators
who shall serve for the sole purpose of determining such a question.

11.7 Agents.

     The Administrator may employ agents and provide for such clerical, legal, actuarial,
accounting, medical, advisory or other services as it deems necessary to perform its duties under
this Plan. The cost of such services and all other expenses incurred by the Administrator in
connection with the administration of the Plan shall be paid from the Fund, unless paid by the
Employer.

11.8 Allocation of Duties.

     The duties, powers and responsibilities reserved to the Administrator may be allocated among
its members so long as such allocation is pursuant to written procedures adopted by the
Administrator, in which case, except as may be required by the Act, no Administrator shall have any
liability, with respect to any duties, powers or responsibilities not allocated to him, for the
acts of omissions of any other Administrator.

11.9 Delegation of Duties.

     The Administrator may delegate any of its duties to other employees of the Employer, to the
Trustee with its consent, or to any other person or firm, provided that the Administrator shall
prudently choose such agents and rely in good faith on their actions.

11.10 Administrator’s Action Conclusive.

     Any action on matters within the authority of the Administrator shall be final and conclusive
except as provided in Article XII.

11.11 Compensation and Expenses of Administrator.

     No Administrator who is receiving compensation from the Employer as a full-time employee, as a
director or agent, shall be entitled to receive any compensation or fee for his services hereunder.
Any other Administrator

28

 

shall be entitled to receive such reasonable compensation for his services as an Administrator
hereunder as may be mutually agreed upon between the Employer and such Administrator. Any such
compensation shall be paid from the Fund, unless paid by the Employer. Each Administrator shall be
entitled to reimbursement by the Employer for any reasonable and necessary expenditures incurred in
the discharge of his duties.

11.12 Records and Reports.

     The Administrator shall maintain adequate records of its actions and proceedings in
administering this Plan and shall file all reports and take all other actions as it deems
appropriate in order to comply with the Act, the Code and governmental regulations issued
thereunder.

11.13 Reports of Fund Open to Participants.

     The Administrator shall keep on file, in such form as it shall deem convenient and proper, all
annual reports of the Fund received by the Administrator from the Trustee, and a statement of each
Participant’s interest in the Fund as from time to time determined. The annual reports of the Fund
and the statement of his own interest in the Fund, as well as a complete copy of the Plan and the
Trust Agreement and copies of annual reports to the Internal Revenue Service, shall be made
available by the Administrator to the Employer for examination by each Participant during
reasonable hours at the office of the Employer, provided, however, that the statement of a
Participant’s interest shall not be made available for examination by any other Participant.

11.14 Named Fiduciary.

     The Administrator is the named fiduciary for purposes of the Act and shall be the designated
agent for receipt of service of process on behalf of the Plan. It shall use ordinary care and
diligence in the performance of its duties under this Plan. Nothing in this Plan shall preclude
the Employer from indemnifying the Administrator for all actions under this Plan, or from
purchasing liability insurance to protect it with respect to its duties under this Plan.

11.15 Information from Employer.

     The Employer shall promptly furnish all necessary information to the Administrator to permit
it to perform its duties under this Plan. The Administrator shall be entitled to rely upon the
accuracy and completeness of all information furnished to it by the Employer, unless it knows or
should have known that such information is erroneous.

11.16 Reservation of Rights by Employer.

     Where rights are reserved in this Plan to the Employer, such rights shall be exercised only by
action of the Board of Directors, except where the Board of Directors, by written resolution,
delegates any such rights to one or more officers of the Employer or to the Administrator. Subject
to the rights reserved to the Board 6f Directors acting on behalf of the Employer as set forth in
this Plan, no member of the Board of Directors shall have any duties or responsibilities under this
Plan, except to the extent he shall be acting in the capacity of an Administrator or Trustee.

11.17 Liability and Indemnification.

     (a) The Administrator shall perform all duties required of it under this Plan in a prudent
manner. To the extent not prohibited by the Act, the Administrator shall not be responsible in any
way for any action or omission of the Employer, the Trustee or any other fiduciaries in the
performance of their duties and obligations set forth in this Plan and in the Trust Agreement. To
the extent not prohibited by the Act, the Administrator shall also not be responsible for any act
or omission of any of its agents, or with respect to reliance upon advice of its counsel (whether
or not such counsel is also counsel to the Employer or the Trustee), provided that such agents or
counsel were prudently chosen by the Administrator and that the Administrator relied in good faith
upon the action of such agent or the advice of such counsel.

     (b) The Administrator shall not be relieved from responsibility or liability for any
responsibility, obligation or duty imposed upon it under this Plan or under the Act. Except for
its own gross negligence, willful misconduct or willful breach of the terms of this Plan, the
Administrator shall be indemnified and held harmless by the Employer against liability or losses
occurring by reason of any act or omission of the Administrator to the extent that such
indemnification does not violate the Act or any other federal or state laws.

11.18 Service as Trustee and Administrator.

     Nothing in this Plan shall prevent one or more Trustees from serving as Administrator under
this Plan.

29

 

ARTICLE XII

CLAIMS PROCEDURE

12.1 Notice of Denial.

     If a Participant or his Beneficiary is denied any benefits under this Plan, either in whole or
in part, the Administrator shall advise the claimant in writing of the amount of his benefit, if
any, and the specific reasons for the denial. The Administrator shall also furnish the claimant at
that time with a written notice containing:

     (a) A specific reference to pertinent Plan provisions;

     (b) A description of any additional material or information necessary for the claimant to
perfect his claim, if possible, and an explanation of why such material or information is needed;
and

     (c) An explanation of the Plan’s claim review procedure.

12.2 Right to Reconsideration.

     Within 60 days of receipt of the information described in 12.1 above, the claimant shall, if
he desires further review, file a written request for reconsideration with the Administrator.

12.3 Review of Documents.

     So long as the claimant’s request for review is pending (including the 60-day period described
in Section 12.2 above), the claimant or his duly authorized representative may review pertinent
Plan documents and the Trust Agreement (and any pertinent related documents) and may submit issues
and comments in writing to the Administrator.

12.4 Decision by Administrator.

     A final and binding decision shall be made by the Administrator within 60 days of the filing
by the claimant of his request for reconsideration; provided, however, that if the Administrator
feels that a hearing with the claimant or his representative present is necessary or desirable,
this period shall be extended an additional 60 days.

12.5 Notice by Administrator.

     The Administrator’s decision shall be conveyed to the claimant in writing and shall include
specific reasons for the decision, written in a manner calculated to be understood by the claimant,
with specific references to the pertinent Plan provisions on which the decision is based.

ARTICLE XIII

AMENDMENTS, TERMINATION AND MERGER

13.1 Amendments.

     The Employer reserves the right at any time and from time to time, and retroactively if deemed
necessary or appropriate by it, to the extent permissible under law, to conform with governmental
regulations or other policies, to amend in whole or in part any or all of the provisions of this
Plan, provided that:

     (a) No amendment shall make it possible for any part of the Fund to be used for, or diverted
to, purposes other than for the exclusive benefit of Participants or their Beneficiaries under the
Trust Agreement, except to the extent provided in Sections 4.4 and 5.6(c) (5);

     (b) No amendment may, directly or indirectly, reduce the vested portion of any Participant’s
interest as of the effective date of the amendment or change the vesting schedule with respect to
the future accrual of Employer contributions for any Participants unless each Participant with 3 or
more Years of Service with the Employer is permitted to elect to have the vesting schedule in
effect before the amendment used to determine his vested benefit; and

     (c) No amendment may eliminate an optional form of benefit.

     (d) No amendment may increase the duties of the Trustee without its consent.

     (e) No amendment that shall change any of the following types of provisions shall be made more
than once every 6 months, other than to comport with changes in the Code, the Act or the
regulations thereunder: (i) any provision stating the amount and price of Employer Securities to
be awarded to designated officers and directors or categories of officers and directors; (ii) any
provisions specifying the timing of awards or allocations to officers and

30

 

directors; (iii) any provision setting forth a formula that determines the amount, price and
timing of allocations or awards, using objective criteria such as earnings of the issuer, value of
the Employer Securities, Years of Service, job classification and Compensation levels.

     Amendments may be made in the form of Board of Directors’ resolutions or separate written
document. Copies of all amendments shall be delivered to the Trustee.

13.2 Consolidation, Merger or Other Transactions of Employer.

     Nothing in this Plan shall prevent the consolidation, merger, reorganization or liquidation of
the Employer, or prevent the sale by Employer of any or all of its property. Any successor
corporation or other entity formed and resulting from any such transaction shall have the right to
become a party to this Plan by adopting the same by resolution and by appointing a new Trustee as
though the Trustee had resigned in accordance with the Trust Agreement, and by executing a proper
supplemental agreement with the Trustee. If, within 180 days from the effective date of such
transaction, such new entity does not become a party to this Plan as above provided, this Plan
shall automatically be terminated and the Trustee shall make payments to the persons entitled
thereto in accordance with Section 9.5.

13.3 Consolidation or Merger of Trust.

     In the event of any merger or consolidation of the Fund with, or transfer in whole or in part
of the assets and liabilities of the Fund to, another trust fund held under any other plan of
deferred compensation maintained or to be established for the benefit of all or some of the
Participants of this Plan, the assets of the Fund applicable to such Participants shall be
transferred to the other trust fund only if:

     (a) Each Participant would receive a benefit under such successor trust fund immediately after
the merger, consolidation or transfer which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation or transfer (determined as if
this Plan and such transferee trust fund had then terminated);

     (b) Resolutions of the Board of Directors under this Plan, or of any new or successor employer
of the affected Participants, shall authorize such transfer of assets, and, in the case of the new
or successor employer of the affected Participants, its resolutions shall include an assumption of
liabilities with respect to such Participants’ inclusion in the new employer’s plan; and

     (c) Such other plan and trust are qualified under Sections 401(a) and 501(a) of the Code.

13.4 Bankruptcy or Insolvency of Employer.

     In the event of (a) the Employer’s legal dissolution or liquidation by any procedure other
than a consolidation or merger, (b) the Employer’s receivership, insolvency, or cessation of its
business as a going concern, or (c) the commencement of any proceeding by or against the Employer
under the federal bankruptcy laws, and similar federal or state statute, or any federal or state
statute or rule providing for the relief of debtors, compensation of creditors, arrangement,
receivership, liquidation or any similar event which is not dismissed within 30 days, this Plan
shall terminate automatically on such date (provided, however, that if a proceeding is brought
against the Employer for reorganization under Chapter 11 of the United States Bankruptcy Code or
any similar federal or state statute, then this Plan shall terminate automatically if and when said
proceeding results in a liquidation of the Employer, or the approval of any Plan providing
therefor, or the proceeding is converted to a case under Chapter 7 of the Bankruptcy Code or any
similar conversion to a liquidation proceeding under federal or state law including, but not
limited to, a receivership proceeding). In the event of any such termination as provided in the
foregoing sentence, the Trustee shall make payments to the persons entitled thereto in accordance
with Section 9.5 hereof.

13.5 Voluntary Termination.

     The Board of Directors reserves the right to terminate this Plan at any time by giving to the
Trustee and the Administrator notice in writing of such desire to terminate. The Plan shall
terminate upon the date of receipt of such notice, the interests of all Participants shall become
fully vested, and the Trustee shall make payments to each Participant or Beneficiary in accordance
with Section 9.5. Alternatively, the Employer, in its discretion, may determine to continue the
Trust Agreement and to continue the maintenance of the Fund, in which event distributions shall be
made upon the contingencies and in all the circumstances which would have been entitled such
distributions on a fully vested basis, had there been no termination of the Plan.

31

 

13.6 Partial Termination of Plan or Permanent Discontinuance of Contributions.

     In the event that a partial termination of the Plan shall be deemed to have occurred, or if
the Employer shall discontinue completely its contributions hereunder, the right of each affected
Participant to his interest in the Fund shall be fully vested. The Employer, in its discretion,
shall decide whether to direct the Trustee to make immediate distribution of such portion of the
Fund assets to the persons entitled thereto or to make distribution in the circumstances and
contingencies which would have controlled such distributions if there had been no partial
termination or discontinuance of contributions.

ARTICLE XIV

MISCELLANEOUS

14.1 No Diversion of Funds.

     It is the intention of the Employer that it shall be impossible for any part of the corpus or
income of the Fund to be used for, or diverted to, purposes other than for the exclusive benefit of
the Participants or their Beneficiaries, except to extent that a return of the Employer’s
contribution is permitted under Sections 4.4 and 5.6(c)(5).

14.2 Liability Limited.

     Neither the Employer nor the Administrator, nor any agents, employees, officers, directors or
shareholders of any of them, nor the Trustee, nor any other person shall have any liability or
responsibility with respect to this Plan, except as expressly provided herein.

14.3 Incapacity.

     If the Administrator shall receive evidence satisfactory to it that a Participant or
Beneficiary entitled to receive any benefit under the Plan is, at the time when such benefit
becomes payable, a minor, or is physically or mentally incompetent to receive such benefit and to
give a valid release therefor, and that another person or an institution is then maintaining or has
custody of such Participant or Beneficiary, and that no guardian, committee or other representative
of the estate of such Participant or Beneficiary shall have been duly appointed, the Administrator
may direct the Trustee to make payment of such benefit otherwise payable to such Participant or
Beneficiary, to such other person or institution, including a custodian under a Uniform Gifts to
Minor Act, or corresponding legislation (who shall be an adult, a guardian of the minor or a trust
company), and the release of such other person or institution shall be a valid and complete
discharge for the payment of such benefit.

14.4 Spendthrift Clause.

     Except as permitted by the Act or the Code, no benefits or other amounts payable under the
Plan shall be subject in any manner to anticipation, sale, transfer, assignment, pledge,
encumbrance, charge or alienation. If the Administrator determines that any person entitled to any
payments under the Plan has become insolvent or bankrupt or has attempted to anticipate, sell,
transfer, assign, pledge, encumber, charge or otherwise in any manner alienate any benefit or other
amount payable to him under the Plan or that there is any danger of any levy or attachment or other
court process or encumbrance on the part of any creditor of such person entitled to payments under
the Plan against any benefit or other accounts payable to such person, the Administrator may, at
any time, in its discretion, direct the Trustee to withhold any or all payments to such person
under the Plan and apply the same for the benefit of such person, in such manner and in such
proportion as the Administrator may deem proper.

14.5 Benefits Limited to Fund.

     All contributions by the Employer to the Fund shall be voluntary, and the Employer shall be
under no legal liability to make any such contributions. The benefits of this Plan shall be only
as can be provided by the assets of the Fund, and no liability for the payment of benefits under
the Plan or for any loss of assets due to any action or inaction of the Trustee shall be imposed
upon the Employer.

14.6 Cooperation of Parties.

     All parties to this Plan and any party claiming interest hereunder agree to perform any and
all acts and execute any and all documents and papers which are necessary and desirable for
carrying out this Plan or any of its provisions.

32

 

14.7 Payments Due Missing Persons.

     The Administrator shall direct the Trustee to make a reasonable effort to locate all persons
entitled to benefits under the Plan; however, notwithstanding any provision in the Plan to the
contrary, if, after a period of 5 years from the date such benefit shall be due, any such persons
entitled to benefits have not been located, their rights under the Plan shall stand suspended.
Before this provision becomes operative, the Trustee shall send a certified letter to all such
persons at their last known address advising them that their interest in benefits under the Plan
shall be suspended. Any such suspended amounts shall be held by the Trustee for a period of 3
additional years (or a total of 8 years from the time the benefits first became payable), and
thereafter such amounts shall be reallocated among current Participants in the same manner that a
current contribution would be allocated. However, if a person subsequently makes a valid claim
with respect to such reallocated amounts and any earnings thereon, the Plan earnings or the
Employer’s contribution to be allocated for the year in which the claim shall be paid shall be
reduced by the amount of such payment. Any such suspended amounts shall be handled in a manner not
inconsistent with regulations issued by the Internal Revenue Service and Department of Labor.

14.8 Governing Law.

     This Plan has been executed in the State of Minnesota and all questions pertaining to its
validity, construction and administration shall be determined in accordance with the laws of that
State, except to the extent superseded by the Act.

14.9 Nonguarantee of Employment.

     Nothing contained in this Plan shall be construed as a contract of employment between the
Employer and any Employee, or as a right of any Employee to be continued in the employment of the
Employer, or as a limitation of the right of the Employer to discharge any of its Employees, with
or without cause.

14.10 Counsel.

     The Trustee and the Administrator may consult with legal counsel, who may be counsel for the
Employer and for the Administrator or the Trustee (as the case may be), with respect to the meaning
or construction of this Plan and the Trust Agreement, their respective obligations or duties
hereunder or with respect to any action or proceeding or any question of law, and they shall be
fully protected with respect to any action taken or omitted by them in good faith pursuant to the
advice of legal counsel.

     IN WITNESS WHEREOF, the Sponsor has caused these presents to be executed by its duly
authorized officers and its corporate seal to be affixed on this ___day of April, 1994.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	HMN FINANCIAL, INC.	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Roger P. Weise
	 	 
	 

Roxanne M. Hellickson,

Secretary

	 	 	 	 	 	President	 	 
	[Corporate Seal]
	 	 	 	 	 	 	 	 

33exv10w11

 

Exhibit 10.11

LVT UNIT AGREEMENT

between

CONOCOPHILLIPS COMPANY

and

CALUMET PENRECO, LLC

January 1, 2008

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I — DEFINITIONS
	 	 	1	 
	ARTICLE II — TERM/USE
	 	 	2	 
	ARTICLE III — SERVICES
	 	 	2	 
	ARTICLE IV — COST OF SERVICES
	 	 	4	 
	ARTICLE V — EXPENDITURE AUTHORITY
	 	 	5	 
	ARTICLE VI — AUDIT PROVISIONS
	 	 	5	 
	ARTICLE VII — INSURANCE
	 	 	5	 
	ARTICLE VIII — CLAIMS
	 	 	5	 
	ARTICLE IX — EXCLUSION OF WARRANTIES
	 	 	6	 
	ARTICLE X — FORCE MAJEURE
	 	 	6	 
	ARTICLE XI — TAXES
	 	 	6	 
	ARTICLE XII — ASSIGNMENT
	 	 	6	 
	ARTICLE XIII — NOTICE
	 	 	7	 
	ARTICLE XIV — GOVERNING LAW
	 	 	7	 
	ARTICLE XV — TITLE
	 	 	7	 
	ARTICLE XVI — ALLOCATION OF LIABILITES, ETC.
	 	 	7	 
	ARTICLE XVII — MODIFICATION TO FACILITIES
	 	 	8	 
	ARTICLE XVIII — ARBITRATION
	 	 	9	 
	ARTICLE XIX — MISCELLANEOUS PROVISIONS
	 	 	9	 

 

 

LVT UNIT AGREEMENT

     This Agreement is made to be effective as of January 1, 2008 (the “Effective Date”), between
CONOCOPHILLIPS COMPANY, a Delaware corporation with offices at 600 North Dairy Ashford Road,
Houston, Texas (“ConocoPhillips”) and Calumet Penreco, LLC, a Delaware limited liability company
with offices at 2780 Waterfront Parkway East Drive, Suite 200, Indianapolis, Indiana (“Calumet”).

PURPOSE:

     The purpose of this Agreement is to set out the terms and conditions under which
ConocoPhillips will operate and maintain the LVT Facility for Calumet.

     NOW, THEREFORE, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     As used in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):

     Section 1.1 “Agreement” means this LVT Unit Agreement between Calumet and
ConocoPhillips and all Exhibits attached hereto.

     Section 1.2 “Barrel” means 42 U.S. gallons of 231 cubic inches per gallon corrected to 60° Fahrenheit.

     Section 1.3 “Calumet” has the meaning ascribed to that term in the first paragraph of this Agreement.

     Section 1.4 “ConocoPhillips” has the meaning ascribed to that term in the first paragraph of this Agreement.

     Section 1.5 “Effective Date” has the meaning ascribed to that term in the first paragraph of this Agreement.

     Section 1.6 “Environmental Laws” means all laws, rules, regulations, statutes,
ordinances, decrees or orders of any Governmental Entity relating to (i) the control of any
potential pollutant or protection of the air, water or land, (ii) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation, and (iii) exposure to
hazardous, toxic or other substances alleged to be harmful, and includes without limitation,
(1) the terms and conditions of any license, permit, approval, or other authorization by any
Governmental Entity, and (2) judicial, administrative, or other regulatory decrees, judgments, and
orders of any Governmental Entity. The term “Environmental Laws” shall include, but not be limited
to the following statutes and the regulations promulgated thereunder: the Clean Air Act, 42 U.S.C.
§ 7401 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the Resource Conservation and
Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Superfund Amendments and Reauthorization Act,
42 U.S.C. § 11011 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Water
Pollution Control Act, 33 U.S.C. § 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et
seq., the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42
U.S.C. § 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., and
any state, county, or local regulations similar thereto.

     Section 1.7 “Gallon” means a U.S. standard gallon of 231 cubic inches per gallon
corrected for temperature to 60° Fahrenheit in accordance with the latest edition of
ASTM-D-1250 Petroleum Measurement Table 6B.

     Section 1.8 “Lake Charles Refinery” means the petroleum refinery owned and operated by
ConocoPhillips at Lake Charles, Louisiana.

     Section 1.9 “Loading Facilities” means both Rail Loading Rack and Truck Loading Rack.

     Section 1.10 “LVT Facility” means the LVT Unit and associated tanks (tank # **, **,
**, **, **) and loading Facilities described on the attached Exhibit A together with any additions
and improvements.

1

 

     Section 1.10.1 “LVT Feedstock Agreement” means the Feedstock Purchase Agreement (LVT
Feedstock), dated of even date herewith, between ConocoPhillips and Calumet.

     Section 1.11 “LVT Unit” means the inside battery limits of the low sulfur kerosene
hydrogeneration and fractionation processing unit inside the Lake Charles Refinery.

     Section 1.12 “Month” means a calendar month.

     Section 1.13 “Parties” means both ConocoPhillips and Calumet.

     Section 1.14 “Party” means either ConocoPhillips or Calumet.

     Section 1.15 “Rail Loading Rack” means the piping, meters and other equipment of the
Lake Charles Refinery necessary to transfer finished Solvents from tankage into rail cars, together
with any additions and improvements.

     Section 1.16 “Solvent” means those products manufactured by the LVT Facility which
comprise petroleum derived, non-fuels products in the 250° Fahrenheit to 750°
Fahrenheit boiling range and with a viscosity less than 60 SUS at 100° Fahrenheit including
some molex used in blending; the term “Solvent” excludes benzene, toluene, xylene and high
aromatics compressor wash oil.

     Section 1.17 “Specifications” means the specifications for Solvents as provided to
ConocoPhillips by Calumet in Exhibit B.

     Section 1.18 “Term” has the meaning set forth in Section 2.1. 

     Section 1.18 “Truck Loading Rack” means ConocoPhillips Transportation facilities
piping, meters and other equipment necessary to transfer finished Solvents from tankage into
trucks, together with any additions and improvements.

     Section 1.19 “Unit 25” means the LVT Facility, as identified in the accounting records of the Lake Charles Refinery.

ARTICLE II

TERM/USE

     Section 2.1 The term of this Agreement (the “Term”) shall begin on the Effective Date
and shall terminate concurrently with the termination of the LVT Feedstock Agreement.

     Section 2.2 ConocoPhillips hereby dedicates the exclusive use of the LVT Facility to
Calumet for the Term.

     Section 2.3 ConocoPhillips hereby gives Calumet joint use with ConocoPhillips of the
Loading Facilities for the Term.

ARTICLE III

SERVICES

     Section 3.1 ConocoPhillips hereby agrees to operate and maintain the LVT Facility for
the production, handling, analyzing, and storage of Solvents at the LVT Facility as provided in
this Agreement. ConocoPhillips hereby agrees to load the Solvents through the Loading Facilities
as provided in this Agreement.

     Section 3.2 ConocoPhillips’ status shall be that of an independent contractor, and the
relationship of ConocoPhillips and Calumet shall not be construed as that of principal and agent or
that of master and servant.

     Section 3.3 ConocoPhillips shall exercise its best judgment to operate and maintain
the LVT Facility in a safe and prudent manner in accordance with applicable governmental laws and
regulations and accepted petroleum industry standards and practices and in a manner consistent with
the generally applicable policies and procedures of ConocoPhillips and the policies and procedures
of the Lake Charles Refinery relating to operations, health, safety and security at the Lake
Charles Refinery.

     Section 3.4 ConocoPhillips shall perform the following services for Calumet:

2

 

          3.4.1 Operate the LVT Facility as directed by Calumet.

          3.4.2 Load Solvents for shipment.

          3.4.3 Blend in railcars according to recipes, as provided by Calumet.

          3.4.4 Coordinate all actions concerning shipments with Calumet’s customer service
representative, and prepare bills of lading prior to shipment of Solvents.

          3.4.5 Analyze and perform quality control tests specified in Exhibit C hereto attached on
Calumet’s Solvents manufactured at the LVT Facility as per the test procedures specified therein.
Certificates of analysis will be provided for finished product tanks and blended product railcars
or trucks.

          3.4.6 Routine maintenance and upkeep to the LVT Facility.

          3.4.7 Act as general contractor for LVT Facility projects.

          3.4.8 Recommend necessary maintenance turnarounds and perform as approved by Calumet.

          3.4.9 Perform Calumet required turnarounds including catalyst replacement. Both Parties will
work together to insure optimal timing of turnarounds and all operation and maintenance efforts.

          3.4.10 Make available operating data similar to that necessary for the remainder of the
refinery.

          3.4.11 Undertake new Solvent test runs at the LVT Unit at Calumet’s request.

          3.4.12 Retain Solvents samples of one quart each at the LVT Facility for a thirty (30) day
period. If Calumet desires to retain the samples, they will notify the refinery within that thirty
(30) day period as to where to send the specific retained samples.

          3.4.13 Receive feedstocks.

          3.4.14 Perform any other service historically performed at the LVT Facility or Loading
Facility as requested by Calumet.

     Section 3.5 ConocoPhillips shall provide Calumet by the sixth working day of each
Month a summary of all volumes of each of the Solvents produced in prior month together with a
feedstock inventory and Solvents inventory.

     Section 3.6 ConocoPhillips shall promptly notify Calumet of all Solvents shipments by
telefaxing a copy of the shipment bill of lading to Calumet within two working days.

     Section 3.7 ConocoPhillips shall test the raw materials shown in Exhibit C hereto
attached.

     Section 3.8 ConocoPhillips shall operate and maintain the LVT Facility on behalf of
Calumet under the direction and control of Calumet. ConocoPhillips and Calumet shall each
designate a representative to coordinate all activities related to the manufacture and distribution
of Solvents and shall furnish each other the representative’s names. Calumet’s representative
shall inform the ConocoPhillips representative of Calumet’s production requirements and operational
changes and coordinate scheduling requirements with the Loading Facilities.

     Section 3.9 Calumet has the right to retain, tank, and load into truck and railcars
overhead material as product and (subject to the terms of the LVT Feedstock Agreement) to
supplement or replace LVT Unit feed as desired, provided that Calumet shall bear all costs
associated with construction of tankage, piping and loading or unloading facilities necessary for
such activities.

     Section 3.10 Calumet may require operational changes within the existing product
Specification ranges. Calumet shall furnish ConocoPhillips with the Specifications for the
Solvents. Specifications shown in Exhibit B may be altered only by Calumet. In case Calumet
elects to change the Specifications shown in Exhibit B, it is understood that:

3

 

          (i) Calumet will be responsible for all material meeting the previous Specifications and any
costs associated with product downgrade will be at Calumet expense.

          (ii) Additional cost may be required to meet the new Specifications and both Parties will meet
to agree in good faith on such costs.

     Section 3.11 ConocoPhillips agrees to ship only Solvents with Specifications shown in
attached Exhibit B. Prior approval from Calumet must be obtained for any other shipments. The
cost associated with the product downgrade of any Solvents which do not meet the Specifications is
the responsibility of Calumet.

     Section 3.12 In emergency situations, ConocoPhillips may act without Calumet’s
direction to the extent reasonably necessary to protect human life and the integrity of the LVT
Facility and Loading Facilities.

ARTICLE IV

COST OF SERVICES

     Section 4.1 All costs incurred by ConocoPhillips in accordance with this Agreement
shall be reimbursed to ConocoPhillips by Calumet. ConocoPhillips is not to make a profit or incur
a loss in carrying out its duties under this Agreement. In October of each calendar year,
beginning in October 2008, the costs referenced in Exhibits C through G will be reviewed and such
Exhibits will be revised to reflect actual costs; the revised costs shall be effective beginning
January 1 of the following calendar year, provided that to the extent specifically allowed in
Exhibits C through G, costs will be adjusted retroactively and paid or credited as appropriate.

     Section 4.2 All maintenance and repairs will be billed at actual cost including
benefits and taxes. Charges to the LVT Unit are directed to Unit 25. Charges for LVT tankage and
pumping will be segregated as a subset of the tank farm and directed to the LVT. Calumet will be
invoiced by the tenth (10th) work day of the month for the work performed during the previous
month. Payment will be due within five (5) working days from the date the invoice is received.

     Section 4.3 The operating manpower costs include the appropriate payroll, benefits,
overtime, training, and payroll tax charges for the LVT Unit and tank farm personnel including
operators, supervisors and engineers. These costs are based on the appropriate proportion of
pieces of equipment or board controllers which each position is responsible for, as detailed in the
examples set forth in Exhibit D. These costs will be forecast at the beginning of each year so
that a single charge for the year may be calculated with one twelfth of the cost due each month.
Calumet will be invoiced by the tenth (10th) work day of each month for one twelfth (1/12th) of the
annual estimate. Calumet will reimburse ConocoPhillips within five (5) working days from the date
the invoice is received. At the end of each calendar year the actual labor rates, benefits, and
overtime will be known and any difference versus the forecast calculated with appropriate payment
made by Calumet to the Operator or by the Operator to Calumet for the actual costs incurred.

     Section 4.4 The catalyst cost will be a direct cost to Calumet.

     Section 4.5 Laboratory costs include the laboratory operator costs to conduct a
specific slate of tests for the LVT Facility feed and products at the production levels as defined
in attached Exhibit C. The laboratory operator costs are calculated and billed in the same manner
as the manpower costs in Section 4.3.

     Section 4.6 Loading Facilities charges include costs for loading rail cars,
supervising common carrier truck loading and maintaining and repairing both the rail rack and truck
rack as shown in the examples set forth in Exhibit F. The Loading Facility costs are calculated
and billed in the same manner as the manpower costs in Section 4.3.

     Section 4.7 The hydrogen and associated volume gain adjustment and fuel gas utility
requirements and costs are addressed in Exhibit E. These costs will be actual costs with measured
consumption, and prices based on the actual third party cost. Each month’s actual costs will be
invoiced by the tenth (10th) day and paid by Calumet on the fifth (5th) working day after receipt
of invoice.

     Section 4.8 There will be no charge for small usage utilities such as instrument air,
utility stream, hot oil belt, sour water, utility water, fire water and current level of cooling
water usage.

4

 

     Section 4.9 Costs for electricity will be calculated using the original LVT Facility
design usage rate for electricity times the actual electricity cost per kwh based on the total
refinery electricity cost including facility charges and taxes, excluding the EEDS discount as
shown in Exhibit E.

     Section 4.10 Costs for nitrogen usage are allocated on a ratio of the number of
downtimes for the LVT Unit to the rest of the nitrogen users in the refinery as detailed in Exhibit
E.

     Section 4.11 The invoice from ConocoPhillips to Calumet for electricity and nitrogen
will be calculated and billed in the same manner as the manpower costs in Section 4.3.

     Section 4.12 Any other costs which are attributable to the LVT Facility or Calumet’s
use of Loading Facilities will be passed on to Calumet for payment.

ARTICLE V

EXPENDITURE AUTHORITY

     ConocoPhillips has expenditure authority of $50,000 per repair or maintenance instance, above
which they must receive verbal approval from Calumet manager or designee to be followed by written
approval. Calumet has three (3) days to provide a response. If Calumet has not responded during
the referenced time, the request will be deemed to have been approved. ConocoPhillips has capital
expenditure authority of $50,000 for investment work orders (IWOs) from Calumet’s approved annual
capital budget.

ARTICLE VI

AUDIT PROVISIONS

     Calumet shall have the right to audit, at Calumet’s expense, expenditures paid and charges
made for Calumet’s account for the services performed hereunder. An audit may occur no more often
than once in each calendar year and no later than six months after the termination of this
Agreement. Such audits will take place during normal business hours on mutually agreed dates at
the ConocoPhillips locations where the appropriate transactional records are located. Calumet will
give ConocoPhillips a minimum of thirty (30) days’ written notice of its intent to audit, the audit
to cover a period no longer than the previous one unaudited year.

ARTICLE VII

INSURANCE

     The fee specified herein does not include any insurance on the LVT Facility, Loading
Facilities, or the Solvents and raw materials covered by this Agreement while they are in the
possession of ConocoPhillips. It is understood and agreed that insurance, if any be desired by
Calumet, shall be carried by Calumet at its own expense. Calumet shall secure a waiver by any such
insurance carrier of its right of subrogation against ConocoPhillips, except that such waiver shall
not apply to ConocoPhillips’ gross negligence or willful misconduct.

ARTICLE VIII

CLAIMS

     ConocoPhillips shall have no liability to Calumet for any loss of or defect in quality of the
Solvents or raw materials or feedstocks except as such defect in quality was caused by
ConocoPhillips’ gross negligence or willful misconduct.

ARTICLE IX

EXCLUSION OF WARRANTIES

     ConocoPhillips makes no warranty of any kind with respect to the Solvents including WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHER WARRANTY OF QUALITY, WHETHER
EXPRESSED OR IMPLIED. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES.

5

 

ARTICLE X

FORCE MAJEURE

     Section 10.1 Neither Party shall be liable to the other for failure or delay in
performance hereunder to the extent that the failure or delay is due to force majeure, which is
herein defined to include, but is not limited to, war (whether declared or undeclared), fire,
flood, lightning, earthquake, storm, or any act of God; strikes, lockouts, or other labor
difficulties; civil disturbances, riot, sabotage, accident; any official order, directive, or
industry-wide request; or suggestion by any governmental authority or instrumentality thereof which
in the reasonable judgment of the Party affected makes it necessary to cease or reduce performance;
any disruption or breakdown of labor; any inability to secure materials by reason of or any other
contingency beyond the control of the affected Party which interferes with the performance
hereunder.

     Section 10.2 Performance under this Agreement shall be suspended (except for the
payment of money due or to become due for past performance hereunder) during the period of such
force majeure to the extent made necessary by the force majeure; provided the settlement of
strikes, lockouts, industrial disputes, or disturbances shall be entirely within the discretion of
the Party so settling to accede to the demands of any opposing party when such course is
inadvisable in the discretion of the Party having the difficulty.

     Section 10.3 No curtailment, suspension, or acceptance of performance pursuant to this
Article shall operate to extend the period of or to terminate this Agreement. Performance under
this Agreement shall resume to the extent made possible by the end or amelioration of the force
majeure event.

     Section 10.4 As soon as practicable after the occurrence of any event of the force
majeure, the Party claiming force majeure shall notify the other Party in writing of such event
and, to the extent possible, inform the other Party of the expected duration of the force majeure
event and the performance to be affected by the suspension or curtailment under this Agreement.

     Section 10.5 The Party claiming force majeure shall notify the other Party in writing
of the end of the force majeure event and shall provide the other Party with a schedule for the
resumption of performance under this Agreement.

     Section 10.6 In the event of disruption or breakdown of labor, the Party affected will
use reasonable efforts to allocate the available work force so as to continue performance
hereunder.

ARTICLE XI

TAXES

     Section 11.1 Any and all taxes, fees, or other charges imposed or assessed by
governmental or regulatory bodies, the taxable incident of which is the performance hereunder,
regardless of the character or measure of the levy or assessment, shall be borne by Calumet.

     Section 11.2 Notwithstanding any other provision of this Agreement, any tax or
governmental charge (except income taxes) or increase in the same which becomes effective after the
Effective Date, and which has the effect of increasing the cost to ConocoPhillips of producing
Solvents will be added to the direct expense and be borne by Calumet.

ARTICLE XII

ASSIGNMENT

     Section 12.1 Neither Party may assign this Agreement without the prior written consent
of the other Party, provided that either Party may assign this Agreement to an affiliate of such
assigning Party or to any person that acquires all or substantially all of such Party’s business.
Neither Party shall unreasonably withhold its consent to an assignment of this Agreement.

     Section 12.2 No assignment of this Agreement shall relieve the assigning Party of its
obligations under this Agreement.

ARTICLE XIII

NOTICE

     Section 13.1 Any notice, request, instruction, correspondence, or other document to be
given hereunder by either Party to the other (herein collectively called “Notice”) shall be in
writing and delivered personally or mailed by certified mail, postage prepaid and return receipt
requested, or by telegram or facsimile as follows:

6

 

If to ConocoPhillips, addressed to:

ConocoPhillips Company

P.O. Box 2197, Houston, Texas 77252

600 North Dairy Ashford Road, Houston, Texas 77079

	 	 	 
	Attention:

	 	Manager, Financial Planning and Analysis
	 

	 	Lubricants and Specialty Products Business Unit
	Facsimile:

	 	(281) 293-3474

If to Calumet, addressed to:

Calumet Penreco, LLC

c/o Calumet Specialty Products Partners, L.P.

2780 Waterfront Pkwy. E. Dr., Suite 200

Indianapolis, IN 46214

	 	 	 
	Attention:

	 	Vice President and CFO
	Phone:

	 	(317) 328-5660
	Facsimile:

	 	(317) 328-5676

     Section 13.2 Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram, facsimile, or telex shall be effective upon actual receipt if
received during the recipient’s normal business hours or at the beginning of the recipient’s next
business day after receipt if not received during the recipient’s normal business hours. Either
Party may change any address to which Notice is to be given to it by giving notice as provided
above of such change of address.

     Section 13.3 The foregoing is not intended to preclude normal informal communication
with respect to operational matters.

ARTICLE XIV

GOVERNING LAW

     All provisions of this Agreement shall be governed by and construed in accordance with the
laws of the State of Texas, excluding any conflicts-of-law rule or principle that might apply the
laws of another jurisdiction.

ARTICLE XV

TITLE

     Title and risk of loss to the Solvents and raw materials and Feedstocks handled hereunder
shall always remain in Calumet while at the LVT Facility even though ConocoPhillips has custody.

ARTICLE XVI

ALLOCATION OF LIABILITIES, INDEMNITIES, DEFENSE OF ACTIONS

     Section 16.1 Allocation of Risks and Liabilities. The Parties hereto agree
that, as between each other, liabilities for certain risks shall be allocated in the manner set
forth below, regardless of who may be at fault, or otherwise responsible under any statute,
contract, rule, or theory of law, except that neither Party shall be excused from liability for its
own gross negligence or willful misconduct.

          16.1.1 ConocoPhillips’ Liabilities. The liabilities listed in subparagraphs (i), (ii)
and (iii) below and arising out of and under this Agreement are hereby allocated to ConocoPhillips.

               (i) Personal injury to, emotional or psychological injury to, illness of or death of anyone,
excluding Calumet’s employees.

               (ii) Loss of, damage to or loss of use of personal and real property, excluding the LVT
Facility, Feedstocks, Solvents and the Loading Facilities (to the extent that Calumet is entitled
to use of the Loading Facilities).

               (iii) All liabilities arising in connection with Environmental Laws, including but not limited
to fines, penalties and remediation costs, personal injuries (excluding personal injury to,
emotional or psychological injury to, illness of or death of Calumet’s employees) and property
damage.

7

 

          16.1.2 Calumet’s Liabilities. The liabilities listed in subparagraph (i) below and
arising out of and under this Agreement are hereby allocated to Calumet.

               (i) Loss of, damage to, or loss of use of, the LVT Facility, Feedstocks, Solvents and the
Loading Facilities (to the extent that Calumet is entitled to use of the Loading Facilities).

               (ii) Personal injury to, emotional or psychological injury to, illness of or death of
Calumet’s employees.

     Section 16.2 Indemnifications.

          16.2.1 ConocoPhillips’ Indemnity of Calumet. ConocoPhillips agrees to indemnify and
hold harmless Calumet and any or all Calumet subsidiaries and affiliates, individually and jointly,
and the directors, officers, employees, contractors, or agents of any of them from and against any
claims, demands, suits, losses, or liabilities (and for all expense of suits, attorneys’ fees, and
all costs), including but not limited to claims, demands, suits, losses, or liabilities incurred by
ConocoPhillips, its underwriters, or insurers, or any parties claiming through or under
ConocoPhillips, caused by or resulting from, growing out of, or incidental to the liabilities
allocated to ConocoPhillips under Subsection 16.1.1 above.

          16.2.2 Calumet’s Indemnity of ConocoPhillips. Calumet agrees to indemnify and hold
harmless ConocoPhillips and any or all ConocoPhillips subsidiaries and affiliates, individually and
jointly, and the directors, officers, employees, contractors, or agents of any of them from and
against any claims, demands, suits, losses, or liabilities (and for all expense of suits,
attorneys’ fees, and all costs), including but not limited to claims, demands, suits, losses, or
liabilities incurred by Calumet, its underwriters, or insurers, or any parties claiming through or
under Calumet, caused by or resulting from, growing out of, or incidental to the liabilities
allocated to Calumet under Subsection 16.1.2 above.

          16.2.3 The indemnifying Party shall also, at its sole cost and expense, investigate, handle,
respond to, and provide defense for any claim, demand, or suit loss or liability for which it gives
indemnity herein.

          16.2.4 Each Party shall notify the other Party immediately of any claim, demand, or suit loss
or liability that may be presented to it by any employee of the other Party, affording such Party
full opportunity to assume the defense of such claim, demand, or suit and to protect itself under
the obligations of this Article.

     16.3 ConocoPhillips shall be liable for the cleanup of any spills or hazards occurring on
ConocoPhillips property and the filing of notification of the spill and any reports pertaining
thereto with government agencies.

     16.4 Calumet represents and warrants that the manufacture, use and sale of the Solvents will
not infringe any patent rights of any third party, and Calumet shall exonerate, indemnify and hold
ConocoPhillips harmless from and against any claims or suits based on patent infringement which may
be brought against ConocoPhillips in connection with ConocoPhillips’ performance under this
Agreement.

ARTICLE XVII

MODIFICATIONS TO FACILITIES

     Section 17.1 If improvements, alterations, or additions to the LVT Facilities are
required to meet the needs of Calumet’s business during the Term of this Agreement, Calumet and
ConocoPhillips shall negotiate in good faith in an attempt to agree to make such alterations,
additions, and modifications in a safe, expeditious, and cost efficient manner. The expense of
such alterations, additions, and modifications shall be borne by Calumet, using cash provided by
Calumet.

     Section 17.2 If as a result of governmental rules, regulations, or orders it becomes
necessary to make improvements, alterations, or additions to the LVT Facilities or Loading
Facilities during the Term of this Agreement in order for the LVT Facilities to produce Calumet’s
Solvents, ConocoPhillips shall cooperate with Calumet to make such alterations, additions, and
modifications. To the extent such alterations, additions, or modifications are to the sole benefit
of Calumet, the expense of such alterations, additions, or modifications shall be borne by Calumet.
If the required alterations, additions, or modifications are of benefit to both Parties, then the
expenses shall be borne proportionately by the Parties to the use.

8

 

     Section 17.3 If improvements, alterations or additions to Loading Facilities are
required to meet the needs of Calumet business during the term of the Agreement, Calumet and
ConocoPhillips shall negotiate in good faith in an attempt to agree to make such alterations,
additions and modifications in a safe, expeditious and cost efficient manner. The expense of such
alterations, additions or modifications shall be borne proportionately by Calumet and
ConocoPhillips based on beneficial use. Calumet will provide cash for its portion of the costs.

     Section 17.4 If the cost to ConocoPhillips of providing the LVT Facilities for the
production of Calumet’s Solvents should increase or decrease as a result of Section 17.1, 17.2, or
17.3, ConocoPhillips has the right to increase the fee referred to in Article IV by the amount of
the increase and the obligation to decrease the fee by the amount of the actual decrease. The
increase in fee will be limited to actual costs incurred by ConocoPhillips.

     Section 17.5 ConocoPhillips will own all modifications made pursuant to this Article
17 unless Calumet notifies ConocoPhillips that Calumet will retain title. Any ConocoPhillips
benefit from tax depreciation will be credited back to Calumet as they occur.

ARTICLE XVIII

ARBITRATION

     Section 18.1 Negotiation. If any dispute relating to this Agreement arises
between the Parties, the Parties will first enter into good faith negotiations to resolve the
dispute in a commercially reasonable manner. The negotiations will be held by representatives of
each Party who have the authority to settle any claims arising out of the dispute.

     Section 18.2 Arbitration. If a dispute cannot be resolved through good faith
negotiations, the dispute will be submitted for resolution by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators will apply the laws of the State of Texas to resolve the dispute. The arbitration will
take place in Houston, Texas, no later than one hundred twenty (120) days after a request for
arbitration is filed by a Party with the American Arbitration Association. Judgement upon an
arbitration award shall be final and may be entered in any court having jurisdiction over the Party
against which enforcement thereof is sought. This arbitration provision will survive the
termination of this Agreement and the dissolution of the Parties.

     Section 18.3 Alternative Arbitration. As an alternative to the arbitration
procedure set forth in paragraph 18.2 above, the Parties may (but will not be required to) agree to
an expedited dispute resolution process which will be completed no later than thirty (30) days
after the date the Parties agree in writing to pursue this expedited process. Under the expedited
process, the dispute will be submitted to a panel consisting of one executive level manager from
each Party who has the authority to settle any claims arising out of the dispute. These managers
will attempt to resolve the dispute within seven (7) business days after the date the Parties agree
to pursue the expedited process. If the managers are unable to resolve the dispute with this time
period, such dispute will be submitted to a single arbitrator from a pre-approved list of
qualified, independent arbitrators. The arbitrator will conduct the remainder of the expedited
process in Houston, Texas, and will apply the laws of the State of Texas and the Commercial
Arbitration Rules of the American Arbitration Association to resolve the dispute. The decision of
the arbitrator will be final and may be entered into any court having jurisdiction over the Party
against which enforcement thereof is sought.

ARTICLE XIX

MISCELLANEOUS PROVISIONS

     Section 19.1 The section headings contained in this Agreement are for the convenience
of the Parties only and shall not be interpreted as part of this Agreement.

     Section 19.2 This Agreement shall not be modified except by written instrument
executed by duly authorized representatives of the respective Parties.

     Section 19.3 Waiver by one Party of the other’s breach of any provision of this
Agreement shall not be deemed a waiver of any subsequent or continuing breach of such provision or
of the breach of any other provision or provisions hereof.

     Section 19.4 In the event of a conflict between the terms of this Agreement and any
Exhibit attached hereto, the terms of the Agreement shall be controlling.

9

 

     Section 19.5 Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

     Section 19.6 This Agreement may be executed in any number of counterparts, and each of
such counterparts shall for all purposes be deemed to be an original.

     Section 19.7 This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the respective Parties hereto.

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be effective as of the
day and year first above written.

CONOCOPHILLIPS COMPANY

By: /s/ G.T. Goff

Title: Vice President

CALUMET PENRECO, LLC

By: /s/ R. Patrick Murray, II

Title: Vice President & CFO

10

 

EXHIBIT A

LVT PROCESS DESCRIPTION

DESCRIPTION

**

 

 

EXHIBIT B

SOLVENTS SPECIFICATIONS

TABLE 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Conosol C-	 	Conosol C-	 	Conosol C-	 	 	 	 	 	150-
	Property	 	Test Method	 	145	 	170	 	200	 	170 Exempt	 	B
	Flash Point, PM °F
	 	ASTM D-93	 	 	—	 	 	170 min	 	200 min	 	170 min	 	 	—	 
	Flash Point, TCC °F
	 	ASTM D-56	 	148 min	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Distillation IBP °F
	 	ASTM D-86	 	370 min	 	385 min	 	440 min	 	385 min	 	348 min
	EP °F
	 	 	 	470 max	 	 	—	 	 	 	—	 	 	 	—	 	 	572 max
	Aromatics, wt%
	 	ConocoPhillips UV	 	0.5 max	 	0.5 max	 	0.5 max	 	 	—	 	 	 	—	 
	Sulfur, ppm
	 	ASTM D-4045	 	0.5 max	 	0.5 max	 	0.5 max	 	0.5 max	 	 	—	 
	Saybolt Color
	 	ASTM D-156	 	 	+ 30	 	 	 	+ 30	 	 	 	+ 30	 	 	 	+ 30	 	 	 	+ 30	 
	Aromatics, vol%
	 	ASTM D-1319	 	 	—	 	 	 	—	 	 	 	—	 	 	8 max	 	22 max

Based on Revision 8/14/95

 

 

EXHIBIT C

LABORATORY COSTS

LAB OPERATOR PAYROLL

The cost for laboratory testing is based on the amount of lab operator time required to run LVT
unit samples and product testing. No special lab equipment is required. Total tester time is
assumed to be ** operator, including benefits and overtime. Hourly pay, benefits, and overtime will
be estimated at the start of each year. Actuals will be determined at the end of each year and
costs will be adjusted retroactively.

The specific tests conducted by the laboratory and the frequency are documented in Table 2 and
Table 3. This defines the basis for the 0.5 personnel necessary to conduct LVT unit testing.
Should the testing requirements change substantially either in frequency or actual type of test the
resulting cost change will be redetermined to reflect more accurately the true cost.

Examples of cost calculations are set forth in Table 4.

 

 

Table 2 documents the tests which are conducted on each finished tank of product or each blended
product rail car or truck load in order to provide a certificate of analysis (COA) on the products.

TABLE 2

LAB COA TESTING SCHEDULE (LVT UNIT)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ASTM	 	 	 	 	 	 	 	 	 	C-170 Rail	 	170 ES Rail
	 	 	Test Mtd.	 	C-200 Tank	 	C-145 Tank	 	Car	 	Car
	Distillation
	 	D 86	 	 	X	 	 	 	X	 	 	 	X	 	 	 	X	 
	API Gravity
	 	D 4052	 	 	X	 	 	 	X	 	 	 	X	 	 	 	X	 
	Flash — PM
	 	D 93	 	 	X	 	 	 	 	 	 	 	X	 	 	 	X	 
	Aromatics
	 	ConocoPhillips	 	 	X	 	 	 	X	 	 	 	X	 	 	 	 	 
	Flash — TCC
	 	D 56	 	 	 	 	 	 	X	 	 	 	 	 	 	 	 	 
	Saybolt Color
	 	D156	 	 	X	 	 	 	X	 	 	 	X	 	 	 	X	 
	FIA
	 	D 1319	 	 	 	 	 	 	 	 	 	 	 	 	 	 	X	 
	Trace Sulfur <.2 ppmw
	 	D 4045	 	 	X	 	 	 	X	 	 	 	X	 	 	 	X	 
	Aniline Point
	 	D 611	 	 	X	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pour Point
	 	D 97	 	 	X	 	 	 	 	 	 	 	 	 	 	 	 	 
	Freeze
	 	D 2386	 	 	X	 	 	 	X	 	 	 	 	 	 	 	 	 
	Viscosity @ 100
	 	D 455	 	 	X	 	 	 	 	 	 	 	 	 	 	 	 	 

Based on 1996 sales the approximate number of finished product tanks tested was 34 each of C-145
and C-200. The approximate number of blended product rail cars/trucks was 76.

 

 

TABLE 3

LAB TESTING SCHEDULE (LVT UNIT OPERATIONS)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ASTM	 	 	 	 	 	 	 	 	 	Feed	 	 
	 	 	Test Mtd.	 	C-200 Prod’n	 	C-145 Prod’n	 	Tank 61	 	D-110 Ovhd
	Distillation
	 	D 86	 	1/WK	 	 	2/D	 	 	 	 	 	 	 	 	 
	API Gravity
	 	D 4052	 	3/WK	 	3/WK	 	 	 	 	 	 	 	 
	Flash — PM
	 	D 93	 	 	2/D	 	 	 	 	 	 	 	 	 	 	 	 	 
	Aromatics
	 	ConocoPhillips	 	5/WK	 	5/WK	 	 	 	 	 	 	 	 
	Flash — TCC
	 	D 56	 	 	 	 	 	 	2/D	 	 	 	 	 	 	 	 	 
	Saybolt Color
	 	D156	 	 	 	 	 	1/WK	 	 	 	 	 	 	 	 
	GC
	 	D 1945	 	 	 	 	 	 	 	 	 	 	 	 	 	1/WK
	FIA
	 	D 1319	 	 	 	 	 	 	 	 	 	3/WK	 	 	 	 
	Trace Sulfur <.2 ppmw
	 	D 4045	 	 	 	 	 	 	 	 	 	5/WK	 	 	 	 

 

 

    Schedule C/Table 4/Page 1 — Lab Operator
    Payroll Calculation Adjusted each Year

 

	 	 	 	 	 	 	 	 	 
	
    Contract Formula:
	
 
	
 
	
 
	
    Input
    
	
 
	
 
	
 
	
 

	 

	

    Base Payroll =

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
    Source

	
 
	
 
	
 
	
 
	
              ** 
	
 
	
 
	
 
	
    Verify with Lab Supervisor

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
    hr
	
 
	
    Payroll Clerks

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
    hr/yr
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
    =
	
 
	
              ** 
	
 
	
    yr
	
 
	
 

	 
	

    Benefits=

	
 
	
 
	
 
	
              ** 
	
 
	
    Base Payroll plus OT
	
 
	
 

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
    Benefit Rate
	
 
	
    O&O Analyst

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              ** 
	
 
	
    yr
	
 
	
 

	 
	

    Overtime=

	
 
	
 
	
 
	
              ** 
	
 
	
    Base Payroll
	
 
	
 

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
    % Overtime
	
 
	
    Payroll Clerks

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              ** 
	
 
	
    yr
	
 
	
 

	 
	

    Payroll Taxes=

	
 
	
 
	
 
	
              ** 
	
 
	
    Total Pay
	
 
	
 

	
 
	
 
	
    X
	
 
	
              ** 
	
 
	
    % Payroll Taxes
	
 
	
    O&O Analyst

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
      ** 
	
 
	
    yr
	
 
	
 

	

    Total Payroll Costs=

	
 
	
 
	
 
	
      ** 
	
 
	
 
	
 
	
 

 

    Weighted
    Average Rate
    

 

	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    Number of Days
	
 
	
 

	 

	

    2002

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	

    2003

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
              **          

	 
	

    2003

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	

    2004

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
              **          

	 
	

    2004

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	

    2005

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
              **          

	 
	

    2005

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	

    2006

	
 
	
              **
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
              **
	
 
	
              **          

	
 
	
 
	
 
	
 
	
 
	
 
	
              **          

 

    Schedule C/Table
    4/Page 2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
    2004

    
	
 
	
 
	
    2005

    
	
 
	
 
	
    2005

    
	
 
	
 
	
    2005

    
	
 
	
 
	
 
	
 

	
 
	
 
	
    Actual
	
 
	
 
	
    Forecast
	
 
	
 
	
    Actual
	
 
	
 
	
    Actual(VCIP)
	
 
	
 
	
 
	
         Notes

	 

	

    Base Payroll =

	
 
	
 
	
              **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
 
	
 
	
    **     

	 
	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    hr
	
 
	
    **

	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    hr/yr
	
 
	
 

	

    =

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    yr
	
 
	
 

	 
	

    Benefits=

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    Base Payroll plus OT
	
 
	
 

	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    Benefit Rate
	
 
	
    **

	
 
	
 
	
 
	
              **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    yr
	
 
	
 

	 
	

    Overtime=

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    Base Payroll
	
 
	
 

	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    % Overtime
	
 
	
 

	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    yr
	
 
	
 

	 
	

    Payroll Taxes=

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    Total Pay
	
 
	
 

	

    X

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    % Payroll Taxes
	
 
	
 

	 
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
    yr
	
 
	
 

	

    VCIP

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
         **
	
 
	
    Total Pay(b4 VCIP)
	
 
	
 

	

    X

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
              **
	
 
	
    %VCIP
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
         **
	
 
	
    yr
	
 
	
 

	

    Total Payroll Costs

	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
         **
	
 
	
 
	
         **
	
 
	
 
	
 
	
 

	

    Additional VCIP Costs

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
         **
	
 
	
 
	
 
	
 

 

	 	 	 	 	 
	
 
	
    NOTES (2/27/2007
	
    ):

	
 
	
    The methodology for calculating Penreco’s share changed to
    the percentage of tests performed on behalf of Penreco to the
    tests performed for the LCMC. The percentage to be used will be
    based on the previous calendar year total tests performed.

 

Schedule C/Table 4/Page 3 — Lab Operator Payroll Calculation Adjusted each Year
Change in Contract

	 	 	 	 	 	 	 
	2006	 	2007	 	 	 
	Actual	 	Forecast	 	 	 
	**
	 	 	*	*	 	Total Controllable Costs in **
	**
	 	 	*	*	 	Rate based on % of test performed for Penreco
	**
	 	 	*	*	 	Total Costs Allocated

 

EXHIBIT D

OPERATING MANPOWER COSTS

Examples of cost calculations are set forth in the accompanying spreadsheets.

SECTION 1 — LVT OPERATOR PAYROLL

LVT operator payroll is based on the sum of the fraction of operating positions for the outside
operator, console operator, and top operator. Total payroll costs include costs for operating the
unit, operator training, benefits and taxes. Any setups/special assignment payroll costs would be
charged and collected to the LVT Unit.

These cost calculations should be reviewed annually and should be updated to reflect changes in
organization or support requirements. Hourly pay, benefits, and overtime will be estimated at the
start of each year. Actuals will be determined at the end of each year and costs will be adjusted
retroactively.

Outside Operator

The outside operator for the LVT unit also has responsibilities for the following units: Primary
Tower, HOB, #2 HDS, #2 Reformer and W-81. The percent of time spent on the LVT unit is
proportional to the number of pieces of major equipment in his area.

O/O = # of pieces of equipment in LVT/# equipment in outside area

**

Console Operator

The Console operator is responsible for the board operation of all the units in the #2 Reformer
progression. The amount of time spent on the LVT unit is proportional to the number of control
loops.

C/O = # of controllers in LVT/# controllers in #2 Reformer area

**

Top Operator

The Top Operator has responsibility for the operation of all the units in the progression. The
time the top operator spends on the LVT unit is assumed to be proportional to the number of pieces
of equipment.

T/O = # of equipment in LVT/# equipment in #2 Ref area

**

Trainees

Trainees are staffed in each progression to cover sickness, vacation and other vacancies. The cost
of the trainees should be allocated to the LVT unit based on the ratio of shift positions and the
number of trainees required to staff the progression.

SECTION 2 — TANK FARM OPERATOR PAYROLL

Tank Farm operator payroll is based on the manpower required for the normal operation of the LVT
tankage and pumps. Manpower requirements include the sum of the payroll for the operating manpower
for the rundown area operator, permit operator, and top operator that are devoted to the operation
of the LVT tanks. These cost calculations should be reviewed annually and should be updated to
reflect changes in organization or support requirements. Hourly pay, benefits, and overtime will
be estimated at the start of each year. Actuals will be determined at the end of each year and
costs will be adjusted retroactively.

The Rundown and Top Operator positions are staffed around the clock. The permit operator is a 40
hr/wk position.

 

 

Tank Farm Operator Payroll is calculated as:

Tank Farm Payroll = Rundown Oper + Top Oper + Permit Oper + Trainee cost

Rundown Area Operator

The tank farm outside operator for the LVT tankage also has responsibilities for the tanks in the
“Rundown” area of the tank farm. The percent of time spent on the LVT tankage is proportional to
the number of tanks in the rundown area. This position is staffed around the clock.

Rundown Oper = # of LVT tanks/# tanks in Rundown area

**

Oper Payroll = Base Pay + Benefits + Overtime

Top Operator

The Top Operator has responsibility for the operation of the entire Tank Farm area. The time the
top operator spends on the LVT tankage is proportional to the number of tanks.

T/O = # LVT tanks/# Tanks in the Tank Farm area

**

Oper Payroll = Base Pay + Benefits + Overtime

Permit Operator

The Permit operator is responsible for permitting mechanical work in the entire Tank Farm area.
The amount of time spent on the LVT tankage is proportional to the number of tanks in the Tank Farm
area. The permit operator works 40 hr/wk.

P/O = # of LVT tanks/# tanks in Tank Farm Area

**

Oper Payroll = Base Pay + Benefits + Overtime

Trainees

Trainees are staffed in each progression to cover sickness, vacation and other vacancies. The cost
of the trainees should be allocated to the LVT tankage based on the ratio of shift positions and
the number of trainees required to staff the progression.

LVT Tk Trainee Cost = Pay + Benefits + Payroll Taxes

SECTION 3 — AREA C SUPPORT COSTS

Costs for operating the LVT unit include the costs for supervision of the operators, process and
mechanical engineering. These cost calculations should be reviewed annually and should be updated
to reflect changes in organization or support requirements.

 

 

Area C Staffing

The refinery is divided into operating areas, each of which is staffed by positions such as Area
Manager, Maintenance Superintendent, Maintenance Supervisors, Planners, Operations Supervisors,
Lead Process Engineer, Area Process Engineers, Reliability Engineers, Instrument Tech.

Operations Supervisor

One Operations Supervisor is responsible for supervision of the operators and the unit performance
in the No.2 Reformer progression. His duties include: setting priorities and scheduling
maintenance work, troubleshooting unit operating and reliability problems, ensuring operator
training, PSM, and environmental requirements are fulfilled.

The amount of time the Operations Supervisor devotes to the LVT unit is proportional to the number
of control loops in LVT versus the control loops in the Reformer progression.

Process Engineer

The Area process engineer is responsible for monitoring and troubleshooting unit operations. His
duties include: monitoring unit performance, working with the operators, Production Supt, and
Operations Supervisor to optimize unit performance, maintaining PSM compliance by updating the
Process Technology Packages, completing Management of Change requirements, and participating in
Process Hazard reviews as necessary. He may do some small scope process design work.

Calumet must arrange for more extensive process designs to be done by the refinery central
engineering group or by an outside engineering firm. Those costs are not included here, and must
be arranged separately.

The amount of time the Area Process engineer devotes to the LVT unit is assumed to be proportional
to the number of control loops in LVT versus his area of responsibility.

Lead Process Engineer

The Lead Process Engineer is responsible for setting technical priorities, unit performance, and
catalyst selection.

The amount of time the Lead Process Engineer devotes to the LVT unit is assumed to be proportional
to the number of LVT control loops, and complexity of the Reformer progression vs the total
operating area of the area in which the LVT unit is located.

Reliability Engineer

The Reliability Engineer is responsible for the reliability and mechanical operation of the
equipment in the Reformer area. His responsibilities include: troubleshooting equipment problems,
working with operators, Maintenance Supervisor,and vendors to improve equipment performance,
completing Management of Change requirements, and participating in Process Hazards Analysis as
required. He may also do small scope mechanical designs.

Calumet must arrange for more extensive mechanical designs to be done by the refinery central
engineering group or by an outside engineering firm. Those costs are not included here, and must
be arranged separately.

The amount of time the Area Reliability engineer devotes to the LVT unit is assumed to be
proportional to the number of pieces of equipment in LVT versus his area of responsibility.

SECTION 4 — AREA D SUPPORT COSTS

Costs for operating the LVT tankage and rail car loading facility include the costs for supervision
of the operators, tank maintenance, process and mechanical engineering. These cost calculations
should be reviewed annually and should be updated to reflect changes in organization or support
requirements.

 

 

Tank/Rail Car Facility Staffing

The area in which the tank farm and raill car facility are located is staffed with positions
including Area Manager, Maintenance Superintendent, Maintenance Supervisors, Planners, Operations
Supervisors, Reliability Engineers, Instrument Tech, Scheduler, and Admin Support. The positions
responsibilities are the same as those described in Section 3.

Operations Supervisor

Operations Supv time is proportional to the number of LVT tanks versus the total number tanks in
the tank farm area. The Tank Farm progression is detailed in the following table.

Oper Supv = # LVT Tanks/# Total Tanks in Tank Farm

**

Reliability Engineers/Maintenance Superintendent

The support for LVT tankage is assumed to be proportional to the number of LVT tanks.

LVT Support = # LVT Tanks/Total # Tanks * % time to Tk FM * # people supporting LVT Facilities

SECTION 5 — FINANCE/YIELDS

The refinery Finance/Accounting group will be responsible for the contract management and tracking
of the LVT unit yields, utility consumption and other costs, invoicing and payments.

 

 

EXHIBIT E

UTILITIES COSTS

Examples of cost calculations are set forth in the accompanying spreadsheets.

SECTION 1 - FUEL GAS COSTS

Fuel Gas to the LVT furnace (H-15) is measured by FI-25005. The fuel will be priced at **.

Monthly costs will be calculated as:

Fuel Gas Cost = FI-25005 Metered MSCF/Month * Monthly Avg MMBtu/SCF * $/MMBtu for **

SECTION 2 - COOLING WATER/ELECTRICITY COSTS

Electricity and cooling water are not directly measured. These costs will be calculated based on
the original design usage as shown below:

LVT Unit Class A Design Data

Design fresh feed rate to the LVT unit is ** bpd.

Design electricity usage is ** kwh.

Design cooling water circulation is ** gpm.

Cooling Water

Design cooling water circulation for the LVT unit is ** gpm. Current LVT usage is so small no
pumps or fans would be turned off if the LVT unit no longer ran, chemical savings is negligible.
Therefore, no charges for cooling water will be made at current usage rates.

Future increased usage would be charged using the formula:

                    ( (** x $/kwh) + **) x mgpm x 60 x 24 = $/day

Electricity Costs

Annual electricity charges for the LVT unit will be calculated based design electricity usage,
anticipated onstream time, and estimated electricity costs per kwh. Each month, ** of these costs
will be charged to the LVT unit. At the end of the year, these costs will be adjusted
retroactively to reflect the actual onstream time and actual electricity costs, as shown in bold.

Electricity cost per kwh is to be based on the total refinery electricity cost including facility
charges and taxes, excluding the EEDS discount.

Per the LVT Design, design electricity usage is ** kwh/day based on a ** BPD feed rate.

Annual Electricity Costs = ** kwh * 24 hr/day * 365 day/year * onstream factor * $/kwh

Annual Electricity Costs = ** kwh/yr * onstream factor * $/kwh

SECTION 3 — NITROGEN COSTS

Nitrogen costs for the LVT unit are calculated as a percent of the total refinery nitrogen usage.
The LVT usage is assumed to be proportional to the number of downtimes times the LVT EDC versus the
total number of downtimes for other nitrogen users times their EDC.

 

 

An annual nitrogen cost will be calculated each year. The LVT unit will be charged ** of the
annual fee each month. At the end of the year, the LVT unit costs will be adjusted retroactively
to reflect actual refinery nitrogen costs and number of unit downtimes, as indicated in bold.

LVT Nitrogen Usage = LVT #Downtimes * LVT EDC/(Sum of Downtimes * EDC) * ** (to account for tank
farm and waste water usage) * Refinery Nitrogen.

LVT Nitrogen Usage = ** * Refinery N2

LVT Nitrogen Usage = ** * Refinery Nitrogen

(1) Number of LVT Downtimes are from PI. 1994 numbers are annualized on 7 months of data.

(2) Other unit downtimes are from the refinery downtime schedule.

(3) **% usage is added for tank farm and waste water.

 

 

SECTION 4 — LVT HYDROGEN COSTS

LVT Hydrogen costs are the cost of hydrogen supply less the value of the hydrogen purge stream
returned to the refinery hydrogen system.

Hydrogen Supply Costs to LVT Unit

Hydrogen supply costs include the cost for purchased hydrogen, based on the weighted average 3rd
party cost for the refinery, excluding **, including any take or pay penalty, plus the costs for
compression and compressor maintenance.

Hydrogen Supply Cost = Metered MSCF * 3rd Party $/MSCF H2

+ Take or Pay Fees

+ H2 Compression Costs

+ %LVT of Avg Comp Maint Costs

Hydrogen supply costs will be calculated monthly using the metered hydrogen flow, actual
electricity prices, and estimated hydrogen price. The following month, the hydrogen cost will be
corrected to reflect the actual hydrogen supply price.

Metered Hydrogen Supply to LVT

Hydrogen supply to the LVT unit is currently set and metered using orifice meter FC25017.

Monthly hydrogen supply rates will be calculated using FI-25017.

Hydrogen Price

The refinery currently obtains hydrogen from several sources. The cost of the hydrogen supplying
the LVT unit is considered incremental hydrogen and is priced at the weighted average outside
purchase price of all third party sources. ** is excluded since that price is not necessarily
representative of an independent third party due to the multiple contractual relationship between
our two companies. To cover anticipated hydrogen needs of the refinery and Excel Paralubes, a take
or pay option is sometimes utilized. This cost would also be shared by the LVT operation.

Hydrogen Compression Costs

The hydrogen supplying the LVT unit is compressed from ** to ** psia using the ** stage of
reciprocating compressors **. Hydrogen purity is normally **%+.

Hydrogen compression costs are calculated per MSCFD using the GPSA Engineering Data Book, Section
4, assuming a **% efficiency.

Hydrogen Compression BHP = ** BHP/MMSCFD.

Electrical Usage = (BHP/MMSCFD * ** * 100/**) * MMSCFD

Electrical Usage = (** BHP/MMSCFD * ** * 100/**) * MMSCFD

Electrical Usage = ** Kwh/MMSCFD

Hydrogen Compression Costs = ** Kwh/MSCFD * Metered MSCFD * $/Khw

Average Compressor Maintenance Costs

The percent of maintenance costs calculated for the LVT supply hydrogen stream is proportional to
the total flow of hydrogen pumped by the compressors. One compressor typically runs **% loaded,
the second compressor typically runs **% loaded, pumping a total of ** MMSCFD in all ** stages,
based on design data.

LVT % of Compressor Maint Cost = LVT flow/Total Compressor Flow

 

 

H2 Supply Costs

Hydrogen supply costs are estimated as shown below.

H2 Supply Costs = (Metered MSCFD * H2 Price)* 365 day/yr

                                + (** Kwh/MSCFD * Metered MSCFD * $/Kwh*24)*365

                                + LVT Comp Maintenance

Hydrogen Purge Credit

A stream of hydrogen is purged from the LVT and is amine treated and sent to the refinery’s PSA
system to remove light ends, before being recycled to the hydrogen makeup system. The remaining
hydrogen and light ends are recovered to the fuel system. The PSA system consists of two PSA units,
referred to as the New and Old PSA, and a tail gas compressor which allows the PSA to operate at
lower pressure and increased efficiency. Per the design, the PSA units will operate at an average
efficiency of **% with the tail gas compressor in operation.

LVT Purge Credit = Value of H2 recovered

+ Value of PSA purge to Fuel

 – Operating Costs for PSA

 – Capital Recovery costs (PSA, amine, compressors)

Hydrogen purge credit will be calculated monthly using the metered hydrogen purge flow, actual fuel
gas price, actual electricity prices, and estimated hydrogen price. The following month, the
hydrogen cost will be corrected to reflect the actual hydrogen supply price. The factors to be
updated monthly are underlined in bold.

This calculation is based on design operating data for the PSA units. The PSA efficiency and flow
rates used in this calculation should be reviewed after a baseline operation is established with
the tail gas compressor in operation.

Metered LVT Hydrogen Purge

The LVT purge hydrogen stream is metered by **.

Value of H2 recovered

Value of H2 recovered = Metered LVT Purge H2 MSCFD * Purge %H2 * Avg PSA efficiency *
Hydrogen Price $/MSCF 3rd Party H2

Value of PSA purge to Fuel

Value of PSA purge to Fuel

= (LVT Purge MSCFD * % H2 * ** * Btu/scf

+ LVT Purge MSCFD * %HC * Btu/scf)*$/BTU Purch Fuel Gas

Operating Costs for PSA

PSA treating costs are calculated as the average PSA operating costs, average adsorbent costs, plus
tail gas compressor costs, proportional to the LVT flow vs the total flow through the combined PSA
units.

PSA Costs = Avg Maint/Op costs

+ Avg Adsorbent Costs

+ Tail Gas compression costs

LVT PSA Costs = LVT purge flow/Total PSA Flow * PSA Costs

 

 

Avg Maintenance/Op Costs

Normal maintenance costs are for valve maintenance, troubleshooting, and normal preventive
maintenance.

Tail Gas Compression Costs

Tail gas compression costs are based on the design horsepower data and PSA flows.

Capital Recovery

No Capital Recovery fee is charged to the JV since the value of the LVT facilities are donated as
part of the agreement.

SECTION 5 — VOLUME GAIN CREDIT

Through the reactions occurring in the LVT process, the volume of product produced is greater than
the volume of feed. The volume gain is the increased liquid produced above the feed volume (100.00
LV %) by reducing the aromatics and producing saturated (paraffin and cyclic) hydrocarbons that
results in reduced density (increased API) of the treated liquids.

Per the LVT Feedstock Agreement, Calumet will purchase the LVT products produced. To account for
the volume gain, a credit will be calculated monthly based on actual hydrogen consumption,
theoretical volume gain, and the feedstock prices specified in the LVT Feedstock Agreement.

Volume Gain Credit will be calculated as:

Actual Hydrogen Consumption SCF * Volume Gain Gal/SCF * $/Gal Feedstock

The factors underlined in bold will be updated monthly.

For example, volume gain credit is calculated to be:

** SCF/yr * **/SCF * $**/gal = $**/year

Hydrogen Consumption

Actual hydrogen consumption will be calculated monthly using the flow rates of PSA hydrogen to the
LVT unit less the amount of LVT purge hydrogen using the meters specified in Section 4. The LVT
purge hydrogen stream is **% hydrogen, based on 1996 data.

H2 Consumption = (Metered PSA H2 MSCF — Metered LVT Purge MSCF * H2% in purge H2 stream)

Volume Gain Calculation

Since it is infeasible to calculate the actual volume gain due to meter accuracy, a theoretical
volume gain will be used. The calculation shown below is based on the information from the
catalyst vendor data and engineering calculations.

This is a procedure to account for weight and volume gain produced by the chemical hydrogen
consumption. The weight gain is produced by the amount of chemical hydrogen that is above the feed
weight (100.00 WT %). The volume gain is the increased liquid produced above the feed volume
(100.00 LV %) by reducing the aromatics and producing saturated (paraffin and cyclic) hydrocarbons
that results in reduced density (increased API) of the treated liquids.

This procedure requires a consistent set of feed and product gravities from a representative
material balance.

 

 

EXAMPLE

I. Calculate Weight Gain

	 	 	 	 	 	 	 
	 

	 	1 lb. H2
	 	=
	 	** SCF / MW     =          **/**
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** SCF H2
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** M SCF H2
	 
	 	 	 	 	 	 
	 

	 	1 lb. Molex Feed
	 	=
	 	** gal/bbl / feed density
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** gal/bbl / ** lb/bbl
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** gal/lb. of Molex
	 
	 	 	 	 	 	 
	 

	 	Therefore,	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	1 lb. H2
	 	=
	 	** gal of Molex
	 

	 	 	 	or	 	 
	 

	 	1 M SCF H2
	 	=
	 	** gal / ** M SCF/lb. H2
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** gal Molex Feed

II.Calculate Volume Gain

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	BPSD	 	LBS/BBL	 	 	 	 
	 

	 	Feed
	 	**
	 	**(1)
	 
	 	 	 	 	 	 
	 

	 	Products:	 	 	 	 
	 

	 	           Stripped Overhead
	 	**
	 	**
	 

	 	          LVT-200
	 	**
	 	**
	 
	 	 	 	 	 	 
	 

	 	          Average
	 	**
	 	**(1)
	 
	 	 	 	 	 	 
	 

	 	          Fraction Volume Gain
	 	=
	 	Feed Density/Product Density
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** / **
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	**
	 
	 	 	 	 	 	 
	 

	 	          Volume Gain Based on Feed:	 	 	 	 
	 

	 	 	 	=
	 	** gal gain/gal feed
	 
	 	 	 	 	 	 
	 

	 	          Therefore,	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	          @ ** SCF/BBL(1) chemical consumption (** SCF/gal)
	 
	 	 	 	 	 	 
	 

	 	               1 M SCF H2
	 	=
	 	product volume gain/gal feed/hydrogen

consumption/gal feed
	 
	 	 	 	 	 	 
	 

	 	               1 M SCF H2
	 	=
	 	**/** SCF/gal x 1000 SCF/MSCF
	 
	 	 	 	 	 	 
	 

	 	               1 M SCF H2
	 	=
	 	** gal Molex feed

 

 

Note:

(1) Bold = 3 pieces of data on hydrogen consumption and density are based on process
design and calculations from known properties and reactions of aromatic components in LVT feedstock
boiling range; and as supported by ConocoPhillips pilot plant data and UCI pilot plant data.

III. Value of Gain

	 	 	 	 	 	 	 
	 

	 	1 M SCF H2
	 	=
	 	Weight gain + Volume gain
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** + **
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** gal Molex

IV. Calculated Volume Gain

	 	 	 	 	 	 	 
	 	 	Design hydrogen consumption is ** SCF/BBL of feed or ** SCF/gal of feed.
	 
	 	 	 	 	 	 
	 	 	1 SCF H2 creates ** gallons of liquid from weight gain and lower density.
	 
	 	 	 	 	 	 
	 

	 	Percent volume expansion
	 	=
	 	H2 consumption x volume expansion
	 

	 	 	 	 	 	factor x 100
	 
	 	 	 	 	 	 
	 

	 	 	 	=
	 	** SCF/gal x ** x 100
	 
	 	 	 	 	 	 
	 

	 	Calculated Volume Gain
	 	=
	 	**%

Summary

1 gallon feed + ** SCF H2                          =           ** gallon product

V. Total Volume Gain

During normal operation and shutdown, liquid is lost to the flare or sewer.

Allowance for unaccounted physical loss is assumed to be ** %.

Net Volume Gain           =           **  —  **           =           ** %

Therefore, net volume gain is calculated to be ** gal/SCF of Hydrogen consumption.

SECTION 6 — METER CALIBRATION PROCEDURE

The costs described in Section 4 and Section 5 are based on the fuel gas meter, PSA hydrogen meter,
and LVT purge hydrogen meter. Meter calibration and adjustments to cost calculations for flow
measurement inaccuracies will be per standard industry practice.

ConocoPhillips will maintain the meters described above. Any expenses will be paid by Calumet.

ConocoPhillips will keep the meters accurate and in repair and will test as appropriate.
ConocoPhillips will give advance notice before the time of each test so that Calumet , if it
elects, may have a representative present to witness the test. Calumet will have the right to
challenge the accuracy of the meters, and when challenged, the meters will be tested and repaired
as necessary.

Any of the meters found on test to register not more than 3% high or low will be deemed to be
correct as to past measurements but will be corrected to read accurately in the future. If any
tested meter proves to be more than 3% high or low, adjustment will be made by applying the
percentage of error to the calculated volume of product delivered during the period the meter was
reading inaccurately; up to a

 

 

maximum of 180 days prior to the test date. If the period for which
the meter was reading inaccurately cannot be determined, then the percentage of error will be
applied to the volume delivered for one-half the elapsed time since the date of the last meter
calibration, up to 180 days.

Each party shall have the right to install a check meter, at their own expense, near the delivery
point. If a check meter is installed, then in the event of a failure of the normal meter to read
accurately, the check meter will be used to calculate the volumes delivered.

If the transfer meter is out for repairs, is being tested, or becomes inoperable and a check meter
has not been installed, then the volume of product delivered will be determined by the best data
available, using most feasible method:

(1) Simply correcting the error, if the percentage of error is ascertainable by calibration test,
or mathematical calculation.

(2) Determining the volumes delivered by reference to deliveries during the most similar period
preceding the period when the meter read accurately.

SECTION 7 - LVT CATALYST COSTS

ConocoPhillips and contract maintenance costs will be charged directly to the unit via the **
system. Any setup maintenance supervisor time would also be charged directly to Unit 25.

 

 

EXHIBIT F

LOADING FACILITIES CHARGES

Costs shown in bold italics are estimated annual costs be charged monthly.

Cost factors shown in bold will be updated annually.

Loading facility charges include costs for operator payroll for rail car loading, rail rack
maintenance, and truck rack maintenance. These cost calculations should be reviewed annually and
should be updated to reflect changes in organization or support requirements. Hourly pay,
benefits, and overtime will be estimated at the start of each year. Actuals will be determined at
the end of each year and costs will be adjusted retroactively. Additionally, at the end of each
year the charges will be corrected to reflect percent usage of the truck rack facility, and actual
truck rack and rail rack maintenance expenditures.

Loader

The loader is responsible for loading rail cars of Solvents and other refinery products. This
position is staffed 7 days a week, days only. Solvents cars require twice the loading time of
other products.

Base Oper Payroll = #Oper Positions x $/hr x 2080 hr/yr,plus benefits and overtime.

Loader Payroll = (#Solvents Cars *2)/(#Solvents Cars * 2 + # Other Cars) * Base Payroll

Truck Rack Maintenance Costs:

At cost, based on Calumet’s pro rata use.

Loading Rack Maintenance Costs

Maintenance and operating costs for the rail rack will be shared between ConocoPhillips and Calumet
based on the number of rail cars loaded. Initially, rail rack maintenance will be an estimated
annual cost to be charged monthly.

Costs will be collected to a specific charge number to obtain an accurate account of actual costs.
If this proves effective, rail rack maintenance costs would be calculated as:

LVT Rail Rack Costs = # LVT Cars/# Total Cars * Rail Rack Maintenance Costs

        + Maintenance Benefits

        + Payroll Taxes

LVT Rail Rack Costs = # LVT Cars/# Total Cars * Rail Rack Maintenance Costs

         + Rail Maintenance/Total Tk Fm Maintenance * Maint Benefits

         + % Payroll Taxes * ConocoPhillips Maintenance Labor

 

 

EXHIBIT G

MAINTENANCE COSTS

Costs shown in bold italics are estimated annual costs be charged monthly.

Cost factors shown in bold will be updated annually.

Cost factors shown in bold underlined will be updated monthly.

Costs shown in normal italics are for estimating purposes only.

Maintenance Costs

All maintenance and repairs will be billed at actual cost. Total maintenance costs include
ConocoPhillips and contract materials, labor, supplies, and equipment rental associated with
routine maintenance, turnaround work, and unit operation. These costs are currently reported in
the refinery’s ** and ** accounting systems. ConocoPhillips labor charges will include payroll
costs, benefits, and taxes for craftsmen, setup supervisors and setup operators working in the LVT
facilities.

LVT Unit Maintenance and Turnaround Charges

Charges for routine maintenance, turnaround, and normal costs for unit operation for the LVT Unit
are directed to Unit 25. The maintenance benefits for ConocoPhillips craftsmen performing work in
the LVT unit are charged to Unit 25 and will be included in the maintenance costs. Payroll taxes
will be calculated based on maintenance labor.

Setup operators are normally required to follow major turnaround work. This time is not included
in the calculated operator payroll costs shown in Exhibit D. Setup operator pay and benefits will
be charged to Unit 25. Operator payroll taxes will be calculated based on operator labor and
benefits.

	 	 	 	 	 
	LVT Unit Maintenance Costs

	 	=
	 	Unit 25 Charges (including maintenance benefits)
	 

	 	 	 	+ Maintenance Payroll Taxes
	 

	 	 	 	+ Setup Operator Payroll Taxes
	 
	LVT Unit Maintenance Costs

	 	=
	 	Unit 25 Charges (including maintenance and operator benefits)
	 

	 	 	 	+ % Payroll Taxes * ConocoPhillips Maintenance Labor
	 

	 	 	 	+ % Payroll Taxes * Setup Operator Labor

LVT Tank Farm Charges

Charges for LVT tankage and pumping will be segregated to dedicated charge numbers. LVT tankage
refers the the tanks, pumps, piping, and instrumentation equipment in LVT service.

LVT Tankage Maintenance

Maintenance involving LVT Tankage and pumps for typical LVT tanks (**, **, **, **, **) and any
other tank in LVT service will be charged to unit number **. All of these costs will be billed to
the JV. Any setup supervisor and setup operator payroll will be charged to the same charge number.

	 	 	 	 	 
	LVT Tankage Maintenance

	 	=
	 	LVT Tk Maintenance Charges
	 

	 	 	 	+ Maintenance Benefits and Payroll Taxes
	 

	 	 	 	+ Setup Operator Payroll, benefits, and payroll taxes

LVT Tankage Maintenance costs are calculated as:

	 	 	 	 	 
	 

	 	 	 	= LVT Tk Maintenance Charges 
	 

	 	 	 	+ LVT Tk ConocoPhillips Maintenance Labor Benefits
	 

	 	 	 	+ % Payroll Taxes * ConocoPhillips Maintenance Labor
	 

	 	 	 	+ Setup Operator Payroll (if any)
	 

	 	 	 	+ Setup Operator Benefits
	 

	 	 	 	+% Payroll Taxes * Setup Operator Pay

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