Document:

10.2SERPAgreement

VALLEY BANK

SUPPLEMENTAL RETIREMENT PLAN

As Amended and Restated Effective October 24, 2013

THIS SUPPLEMENTAL RETIREMENT PLAN (hereinafter the “Plan”) was adopted by Valley Bank, a State Banking Corporation, organized and existing under the laws of the Commonwealth of Virginia (hereinafter sometimes referred to as the “Bank” and sometimes referred to as the “Plan Sponsor”) effective November 1, 2008.  The November 1, 2008 Plan document consolidated several individual supplemental retirement plans (the “Individual Plans”) which were adopted prior to November 1, 2008.

The Plan is amended and restated effective October 24, 2013, to include amendments made after November 1, 2008, and to clarify the Plan’s formula.  The Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986 (the “Code”) and final regulations thereunder.    

ARTICLE I
Definition of Terms

The following words and terms as used in this Plan shall have the meaning set forth below, unless a different meaning is clearly required by the context:

1.1    “Act”: The Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, or the corresponding sections of any subsequent legislation which replaces it, and, to the extent not inconsistent therewith, the regulations issued thereunder.

1.2    “Administrator”: The plan administrator provided for in Article VIII hereof.

1.3    “Bank”: Valley Bank, a bank organized under the laws of the Commonwealth of Virginia.

1.4    “Affiliate”: Any subsidiary, affiliate or other related business entity to the Corporation.

1.5    “Beneficiary”: The person or persons designated by Participant or otherwise entitled pursuant to Article IV to receive benefits under the Plan attributable to such Participant after the death of such Participant.

		
	1.
	“Board”: The present and any succeeding Board of Directors of the Bank.

1.7    “Change of Control”: A change in control of a nature that would be required to be reported (assuming such event has not been “previously reported”) in response to Item 1(a) of the Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”); provided that, notwithstanding the foregoing and without limitation, such a change in control shall be deemed to have occurred at such time as:

(i)    any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 or Rule 13d-5 under the Exchange Act as in effect on January 1, 1994), directly or indirectly, of 20% or more of the combined voting power of the Corporation’s voting securities;

(ii)    individuals who as of the date hereof, constitute the Board of Directors of the Corporation (the “Incumbent Board”) ceases for any reason to constitute at least the majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation’s shareholders, was approved by a vote of at least 75% of the directors comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Corporation in which such person is named as a nominee for director, without objection to such nomination) shall be, for the purposes of this clause (ii) considered as though such person were a member of the Incumbent Board; 

(iii)    all or substantially all of the assets of the Corporation or the assets of the Bank are sold, transferred or conveyed by any means, including but not limited to direct purchase or merger, if the transferee is not controlled by the Corporation with “control” for the purposes of this subsection meaning the ownership of more than 50% of the combined voting power of such entity’s voting securities; or

(iv)    the Corporation is merged or consolidated with another corporation or entity and as a result of such merger or consolidation less than 75% of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned, in the aggregate, by the former shareholders of the Corporation.

Notwithstanding anything in the foregoing to the contrary, no change in control shall be deemed to have occurred for purposed of this Agreement by virtue of any transaction.

(i)    which results in Participant or a group of Persons which includes      participant, acquiring, directly or indirectly, 20% or more of the combined voting power of the Corporation’s voting securities; 

(ii)    arranged  or caused by a federal bank regulatory agency possessing appropriate jurisdiction on the grounds of failing financial condition of the Corporation or Bank which results in the acquisition, directly or indirectly, of 20% or more of the combined voting power of the Corporation’s voting securities by any Person; or

(iii)    which results in the Corporation, any subsidiary of the Corporation or any profit-sharing plan, employee stock ownership plan or employee benefit plan of the Corporation or any of its subsidiaries (or any trustee of or fiduciary with respect to any such plan acting in such capacity) acquiring, directly or indirectly, 20% or more of the combined voting power of the Corporation’s voting securities.

1.8    “Code”:  The Internal Revenue Code of 1986, as the same may be amended from time to time, or the corresponding section of any subsequent Internal Revenue Code, and, to the extent not inconsistent therewith, regulations issued thereunder.

1.9    “Corporation”: Valley Financial Corporation, the parent corporation owning the Bank.

1.10    “Delayed Retirement Date”: In the event Participant continues in the active employment of the Bank beyond his Normal Retirement Date, the first day of the calendar month next following the date of termination of his employment with the Bank.

1.11    “Disability Retirement Date”: The first day of the calendar month coinciding with or the next following the date Participant retires as a result of a Disability. For purposes hereof, the existence of a “Disability” or the status of being “Disabled” shall be considered present during the period for which Participant either: 

(i)    is determined by the Federal Social Security Administration to be disabled, as that term is defined for purposes of the Federal Social Security disability benefits, and for which he receives such benefits after the required waiting period prior to his Normal Retirement Date, or

(ii)    is determined by the applicable fiduciary to be disabled for purposes of entitlement to disability benefits under any long term disability plan which is maintained by the Bank and under which Participant is covered, and for which Participant receives such benefits prior to his Normal Retirement Date for a period of not less than three months,

provided the cause of such Disability occurred when Participant was participating in this Plan. The Administrator shall have the right to require proof of continuing Disability. Failure by Participant to provide such evidence as may, from time to time, be required by the Administrator prior to Participant’s attainment of his Normal Retirement Date shall result in the discontinuance of his Disability Retirement status and the termination of his/her status as Disabled under the Plan. The determination of Disability shall be made by the Administrator in accordance with standards uniformly applied to all other employees of the Bank participating in similar plans, on the advice of one or more physicians appointed or approved by the Bank if deemed necessary or advisable by the Administrator, and the Administrator shall have the right to require further medical examinations from time to time to determine whether there has been any change in the Participant’s physical condition.

1.“Effective Date”: The Effective Date of the Plan, as amended and restated, is November 1, 2008.

1.13    “Normal Retirement Date”: The first day of the calendar month coinciding with or next following date on which the Participant attains age sixty-five (65).

1.14    “Participant”:  An employee of the Bank or an Affiliate selected to participate in the Plan in accordance with Article II.

1.“Participation Date”:  The date of an individual’s entry into the Plan as a Participant in accordance with Article II.

2.“Plan”: This document as contained herein or duly amended, which reflects a consolidation and amendment and restatement of the individual supplemental retirement plans identified on Exhibit 1.16, attached hereto.

		
	3.
	“Plan Sponsor”: Valley Bank, a state bank.

4.“Plan Year”: A twelve (12) month period commencing on January 1 and ending on December 31 of each year.

5.“Retirement Benefit”: The amount due Participant or his designated Beneficiary under the Plan, as determined pursuant to Article III hereof.

6.“Separation for Service”: Except as provided below, Separation from Service means either:  (i) the complete cessation of the performance of services by the Participant for the employer for whatever reason, or (ii) a diminished level of services where the Participant is expected to perform services at a level equal to 20% or less of the average level of service provided during the immediately preceding 36 months.

Separation from Service does not include military leave, sick leave or other bona fide leave of absence if (i) the period of such leave does not exceed six months, and (ii) there is a reasonable expectation that the Participant will return to perform service with the employer. There is a deemed Separation from Service if the leave of absence exceeds six months and the Participant has no contractual or statutory right to reemployment.  Such deemed Separation of Service occurs on the first day immediately following the six month period.  A 29-month period shall be substituted for the six-month period if the leave of absence is due to a medically determinable physical or mental impairment expected to result in death or last for a continuous period of six months or more.  For purposes of this Section 1.20, “employer” means “employer” as defined in the Treasury Regulations Section 1.409A-1(h)(3).

7.“Specified Employee”: A Participant who, as of December 31st of a calendar year, meets the requirements of Code section 416(i)(1)(A)(i), (ii), or (iii) applied in accordance with the regulations thereunder and disregarding Code section 416(i)(5).  A Participant who meets the criteria in the preceding sentence will be considered a Specified Employee for purposes of the Plan for the 12-month period commencing on the next following April 1.  Compensation for purposes of identifying the Specified Employee is defined according to Treasury Regulations section 1.415(c)-2(a) applied without regard to the safe harbor provided in Treasury Regulations section 1.415(c)-2(d), the special timing rules provided in Treasury Regulations section 1.415(c)-2(e), and the special rules provided in Treasury Regulation section 1.415(c)-2(g).  

ARTICLE II
Eligibility for Benefits

2.1    Eligibility and Date of Participation.  The Board in its discretion shall designate whether and when an employee is eligible to participate in the Plan.  The Board shall designate Participants from among those individuals who constitute a select group of management or highly compensated employees of the Bank or an Affiliate for purposes of the Employee Retirement Income Security Act of 1974, as amended; provided, however, that the Board need not designate as Participants all such individuals.  A Participant shall be eligible to receive a benefit determined under Article III of this Plan following his termination of 

employment with the Plan Sponsor in the event such termination occurs following his Normal Retirement Date, Disability or termination of his employment for any reason following completion of the required years of service set forth herein below in Article V, said payment of benefits to be paid in accordance with the provisions of Article VI.

ARTICLE III
Supplemental Retirement Benefit

3.1    Determination of Supplemental Retirement Benefit.

3.1(a)    Subject to the terms and conditions set forth herein, upon Participant’s termination of employment on or after his Normal Retirement Date he/she shall be entitled to a yearly benefit equal to fifty percent (50%) of the Participant’s final five (5) years average Compensation, reduced by Participant’s primary Social Security benefit. For Participants who have a Participation Date on or after January 1, 2003, such Participant’s yearly benefit shall be adjusted in the event such Participant’s Normal or Delayed Retirement Date occurs less than fifteen (15) years from the Participant’s Participation Date.  In this event, Participant’s yearly benefit shall be reduced by a Fraction, the Numerator of which shall be Participant’s years of employment with the Bank or the Corporation from the Participant’s Participation Date until his Normal or Delayed Retirement Date and the Denominator of which shall be fifteen (15) (hereinafter referred to as the “Target Retirement Benefit”).
    
Example: Yearly benefit x Years of employment from Participation Date  to Normal or Delayed Retirement Date.
15

The Target Retirement Benefit shall be subject to such increase or decrease as may be determined in accordance with Section 3.1(b) below or Section 5.1(b) if employment terminates prior to Participant’s Normal Retirement Date. The Target Retirement Benefit shall be paid in monthly installments for a period of one hundred and eighty (180) months.

3.1(b)    The Bank shall establish for the benefit of Participant a separate account for bookkeeping purposes and shall credit to such account for each Plan Year an amount that when aggregated with similar accruals for all Plan Years prior to Participant’s Normal Retirement Date is projected to fully fund the Target Retirement Benefit. The amount required each Plan Year to fully fund the Target Retirement Benefit for the Participant at his Normal Retirement Date shall be referred to herein as the “Target Annual Accrual.”

3.1(b)(i)  In order to ensure that the Supplemental Retirement Benefit to be paid Participant at his Normal Retirement Date properly reflects the financial performance of the Corporation during the period of Participant’s participation in the Plan, the Target Annual Accrual amount for a Participant shall be subject to increase or decrease each Plan Year through the 2011 Plan Year based upon the average of the percentages (i.e., 50%, 80%, 100%, 110%, or 125%) that were earned pursuant to the chart below for the fiscal year of the Corporation immediately preceding the Plan Year for which the Target Annual Accrual is to be determined, as well as for each prior fiscal year during the period of Participant’s participation in the Plan.  The measure of the Corporation’s financial performance shall be its Return on Equity (“ROE”) as determined for the most recent fiscal year of the Corporation immediately preceding the Plan Year in which the determination of the Target Annual Accrual is to be made. The Corporation’s ROE shall be determined by the Corporation’s auditors or certified public accountant on a consistent basis.

The “Target Annual Accrual” shall be increased or decreased each Plan Year through the 2011 Plan Year based upon the following ROE requirements for the Corporation’s preceding fiscal year:

	
						
	Under 10%
ROE
	10%-12%
ROE
	12%-15%
ROE
	15%-18%
ROE
	Over 18%
ROE
	 

	50%
	 
	 
	 
	 
	50% of Target Annual Accrual

	 
	80%
	 
	 
	 
	80% of Target Annual Accrual

	 
	 
	100%
	 
	 
	100% of Target Annual Accrual

	 
	 
	 
	110%
	 
	110% of Target Annual Accrual

	 
	 
	 
	 
	125%
	125% of Target Annual Accrual

The Administrator shall, on a prospective basis only, have the right to make adjustments to the ROE requirements set forth above at any time during the term of this Plan.

Notwithstanding the above, the amount credited to the Participant’s separate account for the 2011 Plan Year shall not be based on the ROE requirements set forth in the table above, and shall instead be equal to 75% of the Participant’s Target Annual Accrual.

3.1(b)(ii)  Nothwithstanding Section 3.1(b)(i) above, for the 2012 Plan Year and beyond, the “Target Annual Accrual” shall be determined in accordance with the chart below for each Plan Year beginning in 2012, based upon the Corporation’s actual return on average equity as a percentage of the Corporation’s budgeted return on average equity (“BROE”), in each case for the Corporation’s preceding fiscal year.  In no event will the “Target Annual Accrual” be less than 80% or greater than 100%.  An example follows in the chart below:

	
				
	Corporation’s Actual ROE for preceding fiscal year
	Corporation’s BROE
	Actual ROE / BROE
	Target Annual Accrual

	5%
	10%
	50%
	80%

	8%
	10%
	80%
	80%

	10%
	10%
	100%
	100%

	12%
	10%
	120%
	100%

The Administrator shall, on a prospective basis only, have the right to make adjustments to the BROE requirements set forth at any time during the term of this Plan.

3.1(b)(iii)  At Normal Retirement, Participant’s Supplemental Retirement Benefit to be paid in accordance with Article VI shall be the Target Retirement Benefit increased or reduced as a result of any adjustments to the Target Annual Accruals to his account based upon the annual ROE or BROE requirements for the Corporation.

3.1(b)(iv)  For the purposes of determining the Supplemental Retirement Benefit due a Participant under this Plan, the assumptions to be used by the Administrator shall be those set forth for that Participant in Exhibit 3.1(b), which shall be deemed a part of this Plan.

3.1(c)  Notwithstanding the foregoing, if Participant terminates employment prior to his Normal Retirement Date, the benefit calculated under this Article III may be subject to adjustment in accordance with the vesting schedule set forth in Article V below.

3.2    Definitions.  For purpose hereof, the following terms shall have the following meaning:

3.2(a)    “Compensation” shall, for the purpose of projecting Participant’s Target Retirement Benefit mean Participant’s total base salary, commissions, incentive awards, profit sharing awards and performance bonus (regardless of form of payment) earned by Participant for a Fiscal Year. If any of the items included 

in Compensation are later forfeited by the Participant due to early termination or clawback, Compensation will be adjusted accordingly for the forfeiture for the respective year.  Compensation shall be determined for Participant prior to any withholding or deductions and prior to any reduction for employee elective contributions to a Cafeteria Plan described in Section 125 of the Code or a qualified cash or deferred arrangement described in Section 401(k) of the Code.  However, Compensation shall exclude items of compensation as expense reimbursements and allowances, amounts contributed to or on behalf of Participant pursuant to this Plan or any other employee benefit plan or program of the Bank or Corporation in which Participant is eligible to participate, or any other similar extraordinary remuneration.

3.2(b)    “Primary Social Security Benefit” means the annual income to which Participant is entitled at normal retirement under the provisions of the Federal Social Security Act as in effect on the first day of the Plan Year in which he attains age sixty-six (66).  If Participant does not qualify for, or loses, Social Security benefits to which he is entitled under the Federal Social Security Act because of failure to make application therefore, or for any other reason, such Social Security benefits shall nevertheless be considered, for purposes of the Plan, as being received by Participant.  It is the intent of this definition that Participant’s Supplemental Retirement Benefit shall be offset by the actual social security benefits payable at that time. If Participant begins to receive the social security benefits earlier, such paid benefits will be used as an offset, and the offset will reflect the fact that the actual payments to the Participant are less (because of the early payment) than the social security benefits used to determine the offset.

ARTICLE IV
Death Benefit

4.1    Death after Commencement of Payment. If Participant dies after his Supplemental Retirement Benefit commences to be paid and before Participant has received one hundred eighty (180) monthly payments, the only benefits payable under the Plan to his Beneficiary after his death shall be the remaining monthly payments needed to ensure that one hundred eighty (180) monthly payments are made.

4.2    Supplemental Death Benefit.

4.2(a)    If Participant dies before his Normal Retirement Date and provided that Participant has designated a Beneficiary in anticipation of death, a Supplemental Death Benefit shall be paid to the Beneficiary in an annual amount equal to the excess of: 

(i)    Fifty percent (50%) of the Participant’s Compensation, (as defined in subparagraph 3.2), for the calendar year immediately preceding the year in which Participant’s death occurs, over

		
	(i)
	The Social Security Survivor Benefit.

The Supplemental Death Benefit shall be paid each year in twelve (12) monthly installments for a period of one hundred and eighty (180) months commencing on the first day of the month following Participant’s death. The Supplemental Death Benefit shall be paid in lieu of any Supplemental Retirement Benefit.

4.3    Beneficiary Designation.

4.3(a)    Participant shall be entitled to designate a Beneficiary hereunder by filing a designation in writing with the Administrator on the form provided for such purpose. Any Beneficiary designation made hereunder shall be effective only if signed and dated by Participant and delivered to the Administrator prior to the time of Participant’s death. Any Beneficiary designation hereunder shall remain effective until changed or revoked hereunder.

4.3(b)    Any Beneficiary designation may include multiple, contingent or successive Beneficiaries and may specify the proportionate distribution to each Beneficiary.

4.3(c)    A Beneficiary designation may be changed by Participant at any time, or from time to time, by filing a new designation in writing with the Administrator.

4.3(d)    If Participant dies without having designated a Beneficiary, or if the Beneficiary so designated his predeceased him/her, then his/her estate shall be deemed to be his/her Beneficiary.

4.3(e)    If a Beneficiary of Participant shall survive Participant but shall die before the Participant’s entire benefit under the Plan has been distributed, then, absent any other provision by Participant, the unpaid balance thereof shall be distributed to the such other beneficiary named by the decreased Beneficiary to received his/her interest or if none, to the estate of the decreased Beneficiary. If multiple beneficiaries are designated, absent any other provision by the Participant, those named or the survivor of them shall share equally any amounts payable hereunder.

ARTICLE V
Vesting Schedule

5.1    Vesting Generally

5.1(a)    Except as set forth below and subject to the forfeiture events described in paragraph 5.2 hereof, Participant shall be fully vested in his/her Supplemental Retirement Benefit upon the first to occur of:

(i)A Participant’s having reached his Normal Retirement Date while employed by the Bank or the Corporation, 

(ii)    A Participant’s having remained continuously employed with the Bank and/or the Corporation through the end of the first fiscal year for which a 100% “Vested %” is shown on the schedule for that Participant attached as Exhibit 5.1(b); or

(iii)    The occurrence of a Change of Control.
    
5.1(b)    Separation from Service Prior to Normal Retirement Date.

Absent an event described in Section 5.1(a) and 5.2, a Participant shall, following a voluntary Separation from Service, be entitled to receive the vested portion of his Supplemental Retirement Benefit as determined in Section 3.2 above in accordance with the vesting schedule for that Participant attached as Exhibit 5.1(b).

The payment of Supplemental Retirement Benefits for a Participant who Separates from Service prior to Normal Retirement Date shall be payable in accordance with the provisions of Article VI herein below.

5.1(c)    Separation from Service Due to Disability.

In the event of a Participant’s Separation from Service on his Disability Retirement Date on account of Disability, such Participant will have a vested right to the Supplemental Retirement Benefit described in section 3.1(a) in an amount equal to the greater of:

(i)    25%; or

(ii)    the actual vested amount for such Participant based the vesting schedule for that Participant attached as Exhibit 5.1(b).

Solely for purposes of determining Participant’s final five (5) years average Compensation in order to compute the benefit payable to him/her under this section 5.1(c), the Participant’s Disability Retirement Date shall be deemed to be the Participant’s Normal Retirement Date. The Supplemental Retirement Benefit payable to Participant as a result of his Disability shall begin on the Participant’s Normal Retirement Date and shall be paid in accordance with the provisions of Article VI set forth below.

5.2    Forfeiture of Benefits.

5.2(a)    Notwithstanding any contrary provision hereof, Supplemental Retirement with respect to Participant shall be forfeited upon the occurrence of any of the following:

(i)Participant’s voluntary termination of employment prior to meeting the vesting requirements of Section 5.1(b);

(ii)    Participant’s termination of employment with the Bank for “cause”;

(iii)    Participant’s entering “competition”, his/her making an “unauthorized disclosure of confidential information”, after his termination of or retirement from employment with the Bank, in which case all payments to or with respect to Participant shall cease and all payments made to Participant or his Beneficiary under the Plan since the occurrence of such event of forfeiture shall be returned to the Bank (provided however, forfeiture shall not occur upon Participant’s entering into competition following a Change of Control); or

(iv)    The discovery by the Bank following Participant’s termination of or retirement from employment with the Bank or following his death, that an event constituting “cause” sufficient for his termination of employment or discovery of Participant’s previous “unauthorized disclosure of confidential information” prior to his termination, retirement, or death before termination or retirement, in which case all payments under the Plan to or with respect to Participant shall cease and all payments previously made to Participant or his Beneficiary under the Plan shall be returned to the Bank.

All determinations relative to the forfeiture of Supplemental Retirement Benefits hereunder shall be made by the Board of Directors of the Company.

5.2(b)    For purposes of this Section 5.2:

(i)    “Cause” means (i) the willful and continued failure by Participant to substantially perform his duties as an employee (other than any such failure resulting from his/her incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to Participant by (a) the Board (excluding Participant), where Participant is the Chief Executive Officer of the Corporation, or (b) the Chief Executive Officer of the Corporation or his delegate, for any other Participant, and which failure has not been cured as hereinafter provided, which demand specifically identifies the manner in which the board believes that Participant has not substantially performed his duties, or (ii) the willful engaging by Participant in illegal conduct or any conduct which is demonstrably and materially injurious to the Corporation or Bank. Without limiting the generality of the foregoing, Cause shall include the issuance of a removal order or similar order by a governmental regulatory agency with appropriate jurisdiction prohibiting Participant from participating in the affairs of the Corporation or Bank. Any act or failure to act based upon authority given pursuant to a resolution 

duly adopted by the Board of the Corporation or Bank Board or based upon the advice of counsel for the Corporation or Bank shall be conclusively presumed to be done, or omitted to be done, by Participant in good faith and in the best interests of the Corporation and Bank. It is also expressly understood and acknowledged by the parties that the Participant’s attention to matters not directly related to the business of the Corporation or Bank shall not provide a basis for termination for Cause so long as the Corporation and/or Bank has approved participant’s engagement in such activities. Upon the issuance of a written demand for substantial performance, Participant shall have a reasonable period of time in which to correct such alleged violation, provided, however, that the alleged violation is neither dishonest nor criminal. The parties acknowledge and agree that thirty (30) days shall be deemed a reasonable time in which to correct any such alleged violation. If Participant is unable to correct the alleged violation within said thirty (30) day period, then if (a) the Board (excluding Participant, where Participant is the Chief Executive Officer of the Corporation, or (b) the Chief Executive Officer of the Corporation or his delegate, for any other Participant, determines that Participant is using his best efforts to make such correction and that the alleged violation can be corrected, the Board, Chief Executive Officer or delegate, as applicable, shall extend the thirty (30) day period by such time as is reasonably necessary for Participant to effect such correction as expeditiously as practicable. Notwithstanding the foregoing, after a Change in Control of the Corporation or the Bank, Participant shall not be deemed to be terminated for Cause unless and until there shall have been delivered to Participant a copy of a resolution duly adopted by the affirmative vote of not less than 75% of the entire membership of the Board (excluding Participant) at a meeting of such Board called and held for such purpose (after a reasonable notice to Participant and an opportunity for Participant, together with his/her counsel, to be heard before the board), finding that in the good faith opinion of the Board Participant was guilty of conduct set forth above and specifying the particulars thereof in detail. In such event Participant shall have a reasonable period of time in which to correct the alleged violation, provided, however, that the alleged violation is neither dishonest nor criminal. As in the case of an alleged violation prior to a Change in Control, it is agreed that thirty (30) days (extended by the Board, if necessary, as outlined above) shall be deemed a reasonable time in which to correct any such alleged violation.

(ii)    “Competition” means engaging by Participant, without the written consent of the Board, or a person authorized hereby, in a business as a more than one percent (1%) stockholder, an officer, a director, an employee, a partner, an agent, a consultant, or any other individual or representative capacity (unless Participant’s duties, responsibilities, and activities, including supervisory activities, for or on behalf of such business, are not related in any way to such competitive activity) if it involves:

(A)    Engaging in, or entering into services or providing advice pertaining to, any line of business that the Bank, the Corporation or any Affiliate actively conducts or develops in competition with the Bank, the Corporation or any Affiliate in the same geographic area (generally, within a one hundred (100) mile radius of Roanoke, Virginia) as such line of business is then conducted, or

(B)    Soliciting for employment any employees of the Bank, the Corporation or any Affiliate.

(iii)    “Unauthorized disclosure of confidential information” means the disclosure by Participant, without the written consent of the Board or a person authorized thereby, to any person other than as required by law or court order, or other than to an authorized employee of the Bank, the Corporation or an Affiliate, or to a person to whom disclosure is necessary or appropriate in connection with the performance by Participant of his duties as an employee or director of the Bank, the 

Corporation or an Affiliate (including, but not limited to, disclosure to the Corporation’s or an Affiliate’s outside counsel, accountants, or bankers of financial data properly requested by such persons and approved by an authorized officer of the Bank or the Corporation), any confidential information of the Bank or the Corporation or any Affiliate with respect to any of the products, services, customers, suppliers, marketing techniques, methods or future plans of the Bank, the Corporation or any Affiliate; provided, however, that:

(A)    Confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by Participant) or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that conducted by the Bank, the Corporation, or any Affiliate; and

(B)    Participant shall be allowed to disclose confidential information to his attorney solely for the purpose of ascertaining whether such information is confidential within the intent of the Plan, but only so long as Participant both discloses to his attorney the provisions of this paragraph and agrees not to waive the attorney-client privilege with respect thereto.

ARTICLE VI
Payment of Benefits

6.1    Time and Manner for Payment of Supplemental Benefit.

6.1(a) Subject to paragraph 6.1(d) below, if a Participant Separates from Service on or after his Normal Retirement Date, such Participant’s Supplemental Retirement Benefit shall be payable commencing the first day of the month following such Participant’s Separation from Service.  Subject to the forfeiture events of paragraph 5.2, benefits shall be payable to Participant in the form of one hundred eighty (180) monthly installments.

6.1(b)    Participant’s Supplemental Retirement Benefit, if any, shall be payable commencing on the first day of the month following his Normal Retirement Date if he Separates from Service before his Normal Retirement Date for any reason (other than death, in which case Plan provisions regarding a Supplemental Death Benefit shall apply).

6.1(c)    Any Supplemental Death Benefit shall be payable to Participant’s designated Beneficiary beginning on the first day of the month immediately following the date of Participant’s death and shall be payable for a period of one hundred eighty (180) months.

6.1(d)  To the extent that Participant is a Specified Employee on his Separation from Service, any Supplemental Retirement Benefit payable hereunder shall be paid on the later of the date specified in paragraph 6.1(a) or (b), as applicable, or the first day of the month following the six-month anniversary of the Participant’s Separation from Service.  Any amounts required to be delayed under the preceding sentence to comply with Code section 409A shall be accumulated and paid in a lump sum with interest, at the Prime Rate of Interest in effect on the Participant’s Separation from Service date and as reported in the Wall Street Journal.

6.2    Benefit Determination and Payment Procedure.  The Administrator shall make all determinations concerning eligibility for benefits under the Plan, the time or terms of payment, to Participant or Participant’s Beneficiary, in the event of Participant’s death.  No benefit shall be payable under the Plan unless the Administrator, in its sole discretion as Plan fiduciary, determines that such benefit is due.

6.3    Payments to Minors and Incompetents. If Participant or his/her designated Beneficiary is a minor or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, or is deemed so by the Administrator, benefits will be paid to such person as the Administrator may designate for the benefit of Participant or Beneficiary. Such payments shall be considered a direct payment to such Participant or Beneficiary and shall, to the extent made, be deemed a complete discharge of any liability for such payments under the Plan.

6.4    Distribution of Benefit When Distributee Cannot Be Located. The Administrator shall make all reasonable attempts to determine the identity and/or whereabouts of Participant or his/her Beneficiary entitled to benefits under the Plan, including the mailing by certified mail of a notice to the last known address shown on the Bank’s records.  If the Administrator is unable to locate such a person entitled to benefits hereunder, or if there has been no claim made for such benefits, the Bank shall continue to hold the benefit due such person, subject to any applicable statute of escheats.

6.5    Claims Procedure. Claims for benefits under the Plan must be filed with the Administrator on forms supplied by the Bank.  The Administrator shall be responsible for deciding whether such claim is within the scope provided by the Plan (a "Covered Claim") and for providing full and fair review of the decision with respect to such claim.  In addition, the Administrator shall provide a full and fair review to the extent required by the Employee Retirement Income Security Act of 1974, as amended, including without limitation Section 503 thereof, (and applicable U.S. Department of Labor Regulations).

Each claimant or other interested person shall file with the Administrator such pertinent information as the Administrator may specify, and in such manner and form as the Administrator may specify and provide, and such person shall not have any rights or be entitled to any benefits or further benefits hereunder, as the case may be, unless such information is filed by the claimant or on behalf of the claimant.  Each claimant shall supply at such times and in such manner as may be required, written proof that the benefit is covered under the Plan.  If it is determined that a claimant has not incurred a Covered Claim or if the claimant shall fail to furnish such proof as is requested, no benefits or no further benefits hereunder, as the case may be, shall be payable to such claimant.

For all purposes under the Plan, the Administrator’s decision with respect to a claim if no review is requested and its decision with respect to a claim if review is requested shall be final, binding and conclusive on all interested parties as to matters relating to the Plan.

ARTICLE VII
Funding

7.1    Funding

7.1(a)    The undertaking to pay the benefits hereunder shall be an unfunded obligation payable solely from the general assets of the Bank and shall be subject to the claims of the Bank’s creditors.

7.1(b)    Except as provided in any Trust that may be established as provided in paragraph 7.2, nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Bank and Participant or his designated Beneficiary or any other person or to give Participant or his Beneficiary any right, title or interest in any specific asset or assets of the Bank. To the extent that Participant or a Beneficiary acquires a right to receive payments from the Bank under the Plan, such rights shall be no greater than the right of any unsecured general creditor of the Bank.

7.2    Use of Rabbi Trust Permitted. Subject to the obligations described in paragraph 7.3, the Bank may in its sole discretion elect to establish and fund a “Rabbi” Trust for the purpose of providing benefits under the Plan.

7.3    Obligations upon Change of Control. Upon the occurrence of a Change of Control, the Bank shall be obligated to establish (if one does not already exist) and deposit into a “Rabbi” Trust the actuarially determined present value of Participants vested Supplemental Retirement Benefits determined as of the effective date of the Change of Control. Alternatively, the Bank may obtain a written and binding obligation from the party or parties that will exercise effective control following the Change of control, that the obligations to Participant under this Plan will be assumed and continued by such party.

ARTICLE VIII
Plan Administration

8.1    Appointment of Plan Administrator. The Bank may appoint its Board of Directors, the Human Resources Subcommittee of the Board of Directors, or one or more persons who may or may not also be members of the Board of Directors to serve as the Plan Administrator (the “Administrator”) for the purpose of carrying out the duties specifically imposed on the Administrator by this Plan, the Act and the Code. In the event more than one person is appointed, the persons shall form an administrative committee for the Plan.  The person or committee persons serving as Administrator shall serve for indefinite terms at the pleasure of the Bank, and may, by sixty (60) days prior written notice to the Bank, resign or otherwise terminate such appointment.

8.2    Bank as Plan Administrator. In the event that no Administrator is appointed or in office pursuant to paragraph 8.1, the Board of Directors of the Bank shall be the Administrator.

8.3    Compensation and Expenses. Unless otherwise determined and paid by the Board of Directors, the person or committee persons serving as the Administrator shall serve without compensation for service as such. All expenses of the Administrator shall be paid by the Bank.

8.4    Procedure if a Committee. If the Administrator is a committee other than the Human Resources Committee or other standing subcommittee established by the Board of Directors, it shall appoint from its members a chairman and a Secretary. The Secretary shall keep records as may be necessary for the acts and resolutions of such committee and be prepared to furnish reports thereof to the Bank. Except as otherwise provided, all instruments executed on behalf of such committee may be executed by its Chairman or Secretary.

8.5    Action by Majority Vote if a Committee. If the Administrator is a committee, its action in a matter, questions and decisions shall be determined by a majority vote of its members qualified to act thereon. They may meet informally or take any action without the necessity of meeting as a group.

8.6    Appointment of Successors. Upon the death, resignation or removal of a person serving as, or on a committee which serves as the Administrator of the Plan, the Bank, by its Board of Directors may, but need not, appoint a successor.

8.7    Additional Duties and Responsibilities. The Administrator shall have the following duties and responsibilities in addition to those expressly provided elsewhere in the Plan:

8.7(a)    The Administrator shall be responsible for the fulfillment of all relevant reporting and disclosure requirements set forth in the Act and the Code, the distribution thereof to Participant and his Beneficiaries and the filing thereof with the appropriate governmental officials and agencies.

8.7(b)    The Administrator shall maintain and retain necessary records respecting administration of the Plan and matters upon which disclosure is required under the Act and the Code.

8.7(c)    The Administrator shall make any elections for the Plan under the Act or the Code.

8.7(d)    The Administrator shall make all determinations regarding eligibility for benefits under the Plan.

8.7(e)    The Administrator shall have the right to settle claims against the Plan and to make such equitable adjustments in Participant’s or his/her Beneficiary’s rights or entitlements under the Plan as it deems appropriate in the event an error or omission is discovered or claimed in the operation or administration of the Plan.

8.8    Power and Discretionary Authority. The Administrator is hereby vested with all the power and authority necessary in order to carry out its duties and responsibilities in connection with the administration of the Plan, including the power to interpret the provisions of the Plan. For such purpose, the Administrator shall have the power to adopt rules and regulations consistent with the terms of the Plan.  No benefit shall be payable under the Plan unless the Administrator, in its sole discretion as a Plan fiduciary, determines that such benefit is due.

8.9    Availability of Records. The Bank shall, at the request of the Administrator, make available necessary records or other information they possess which may be required by the Administrator in order to carry out its duties hereunder.

8.10    No Action with Respect to Own Benefit.  If Participant also serves as a member of the Administrative Committee, such Participant shall not take any part as the Administrator in any discretionary action in connection with his participation as an individual. Such action shall be taken by the remaining Administrator, if any, or otherwise by the Bank Board of Directors.

8.11     Plan Interpretation and Fiduciary Discretion.  The Administrator may construe the Plan, correct defects, supply omissions or reconcile inconsistencies to the extent necessary to effectuate the Plan and such action shall be conclusive.

ARTICLE IX
Amendment and Termination of Plan

		
	1.
	Amendment or Termination of the Plan

9.1(a)    The Plan may be terminated at any time by the Board provided, however that such termination is permitted and administered in accordance with Treasury Regulation section 1.409A-3(j)(4)(ix).  Upon termination of the Plan and subject to the forfeiture events described in paragraph 5.2, above, the Supplemental Retirement Benefit or, if applicable, the Supplemental Death Benefit of each Participant shall become vested and non-forfeitable.

9.2(b)    The Plan may be amended in whole or in part from time to time by the Board effective as of any date specified.  No amendment shall operate to decrease Participant’s vested Supplemental Retirement Benefit or, if applicable, Supplemental Death Benefit determined a though Participant had terminated employment as of the earlier of the date on which the amendment is approved by the Board or the date on which an instrument of amendment is signed on behalf of the Bank.

9.3(c)    The Bank hereby delegates to the Administrator the right to modify, alter, or amend the Plan in whole or in part to make any technical modification, alteration or amendment which in the opinion of counsel for the Bank is required by law and is deemed advisable by the Administrator and to make any other  modification, alteration or amendment which does not, in the Administrator’s view, substantially increase costs, contributions or benefits and does not materially affect the eligibility, vesting or benefit accrual or allocation provisions of the Plan.

ARTICLE X
Miscellaneous

10.1    Non-assignability. The interest of Participant under the Plan are not subject to claims of the Participants’ creditors; and neither Participant, nor his Beneficiary, shall have any right to sell, assign, transfer, or otherwise convey the right to receive any payments hereunder or any interest under the Plan, which payments and interest are expressly declared to be non-assignable and non-transferable.

10.2    Right to Requirement Information and Reliance Thereon.  The Bank or the Administrator shall have the right to require Participant, his Beneficiary or other person receiving benefit payments to provide it with such information, in writing, and in such form as to may deem necessary to the administration of the Plan and may relay thereon in carrying out its duties hereunder. Any payment to or on behalf of Participant or his Beneficiary in accordance with the provisions of the Plan in good faith reliance upon any such written information provided by Participant or any other person to whom such payment is made shall be in full satisfaction of all claims by Participant and his Beneficiary; and any payment to or on behalf of a Beneficiary in accordance with the provision so the Plan in good faith reliance upon any such written information provided by such Beneficiary or any other person to whom such payment is made shall be in full satisfaction of all claims by such Beneficiary.

10.3    Notices and Elections. All notices required to be given in writing and all elections required to be made in writing, under any provision of the Plan, shall be invalid unless made on such forms as may be provided or approved by the Administrator and, in the case of a notice or election by Participant or his Beneficiary, unless executed by Participant or his Beneficiary giving such notice or making such election.

10.4    Delegation of Authority. Whenever the Bank is permitted or required to perform any act, such act may be performed by its Chief Executive Officer or other person duly authorized by its Chief Executive Officer or the Board.

10.5    Service of Process. The Administrator shall be the agent for service of process on the Plan.

10.6    Governing Law. The Plan shall be construed, enforced and administered in accordance with the laws of the Commonwealth of Virginia, and any federal law which preempts the same.

10.7    Binding Effect. The Plan shall be binding upon and inure to the benefits of the Bank, its successors and assigns, and the Participant and his heirs, executors, administrators and legal representatives.

10.8    Severability. If any provision of the Plan should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall nevertheless remain in full force and effect.

10.9    No Effect on Employment Agreement. The Plan shall not be considered or construed to modify, amend or supersede any employment agreement between the Bank and Participant heretofore or hereafter entered into unless so specifically provided.

10.10    Gender and Number. In the construction of the Plan, the masculine shall include the feminine or neuter and the singular shall include the plural and vice-versa in all cases where such meanings would be appropriate.

10.11    Titles and Captions. Titles and captions and headings herein have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.

1.Construction. The Plan has been designed to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees as described in the Act, and shall be interpreted and administered as such.

10.13    Code Section 409A.  Any benefit, payment or other right provided by the Plan shall be provided or made in a manner, and at such time, in such form and subject to such election procedures (if any), as complies with the applicable requirements of Code section 409A to avoid a plan failure described in Code section 409A(a)(1), including without limitation, deferring payment until the occurrence of a specified payment event described in Code section 409A(a)(2).  Notwithstanding any other provision hereof or document pertaining hereto, the Plan shall be so construed and interpreted to meet the applicable requirements of Code section 409A to avoid a plan failure described in Code section 409A(a)(1).

EXHIBIT 1.16

Individual Supplemental Retirement Plans Amended, Restated and Consolidated by the Plan

		
	1.
	Ellis L. Gutshall

		
	2.
	Sara P. Anderton

		
	3.
	Nancy W. Hack

		
	4.
	Mark D. Hancock

		
	5.
	Mary P. Hundley

		
	6.
	JoAnn M. Lloyd

		
	7.
	Connie W. Stanley

EXHIBIT 3.1(b)

Assumptions for computation of Supplemental Retirement Benefit (by Participant).

Participant Name:_______________________________

Projected Compensation at Normal Retirement:  ______________________ 

Target Retirement Benefit:  _______________________________________ 

Interest Factor: ________________________ 

Target Annual Accruals during Plan Term:          ______________________ 

______________________ 

______________________ 

______________________ 

                            

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Sara P. Anderton
	 
	 

	 
	 
	 
	 

	Hire Date:
	4/11/1995
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	5/18/1961
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	5/18/2026
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	7
	25%
	2015
	20
	100%

	2003
	8
	25%
	2016
	21
	100%

	2004
	9
	25%
	2017
	22
	100%

	2005
	10
	25%
	2018
	23
	100%

	2006
	11
	50%
	2019
	24
	100%

	2007
	12
	50%
	2020
	25
	100%

	2008
	13
	75%
	2021
	26
	100%

	2009
	14
	75%
	2022
	27
	100%

	2010
	15
	100%
	2023
	28
	100%

	2011
	16
	100%
	2024
	29
	100%

	2012
	17
	100%
	2025
	30
	100%

	2013
	18
	100%
	2026
	31
	100%

	2014
	19
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Ellis L. Gutshall
	 
	 

	 
	 
	 
	 

	Hire Date:
	1/13/1995
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	7/25/1950
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	7/25/2015
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	7
	25%
	2009
	14
	75%

	2003
	8
	25%
	2010
	15
	100%

	2004
	9
	25%
	2011
	16
	100%

	2005
	10
	50%
	2012
	17
	100%

	2006
	11
	50%
	2013
	18
	100%

	2007
	12
	50%
	2014
	19
	100%

	2008
	13
	75%
	2015
	20
	100%

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Nancy W. Hack
	 
	 

	 
	 
	 
	 

	Hire Date:
	2/26/1996
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	10/14/1958
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	10/14/2023
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	6
	25%
	2015
	19
	100%

	2003
	7
	25%
	2016
	20
	100%

	2004
	8
	25%
	2017
	21
	100%

	2005
	9
	25%
	2018
	22
	100%

	2006
	10
	50%
	2019
	23
	100%

	2007
	11
	50%
	2020
	24
	100%

	2008
	12
	50%
	2021
	25
	100%

	2009
	13
	75%
	2022
	26
	100%

	2010
	14
	75%
	2023
	27
	100%

	2011
	15
	100%
	 
	 
	 

	2012
	16
	100%
	 
	 
	 

	2013
	17
	100%
	 
	 
	 

	2014
	18
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Mark D. Hancock
	 
	 

	 
	 
	 
	 

	Hire Date:
	12/2/1997
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	4/5/1951
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	4/5/2016
	 
	 

	 
	 
	 
	 

	Actual Retirement Date:
	4/30/2013
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	5
	25%
	2010
	13
	80%

	2003
	6
	25%
	2011
	14
	80%

	2004
	7
	25%
	2012
	15
	100%

	2005
	8
	25%
	2013
	16
	100%

	2006
	9
	25%
	2014
	17
	100%

	2007
	10
	50%
	2015
	18
	100%

	2008
	11
	50%
	2016
	19
	100%

	2009
	12
	50%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Mary P. Hundley
	 
	 

	 
	 
	 
	 

	Hire Date:
	3/20/1995
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	10/2/1959
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	10/2/2024
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	7
	25%
	2015
	20
	100%

	2003
	8
	25%
	2016
	21
	100%

	2004
	9
	25%
	2017
	22
	100%

	2005
	10
	50%
	2018
	23
	100%

	2006
	11
	50%
	2019
	24
	100%

	2007
	12
	50%
	2020
	25
	100%

	2008
	13
	75%
	2021
	26
	100%

	2009
	14
	75%
	2022
	27
	100%

	2010
	15
	100%
	2023
	28
	100%

	2011
	16
	100%
	2024
	29
	100%

	2012
	17
	100%
	 
	 
	 

	2013
	18
	100%
	 
	 
	 

	2014
	19
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	JoAnn M. Lloyd
	 
	 

	 
	 
	 
	 

	Hire Date:
	7/20/1995
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2002
	 
	 

	 
	 
	 
	 

	Date of Birth:
	7/28/1953
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	7/28/2018
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2002
	7
	25%
	2011
	20
	100%

	2003
	8
	25%
	2012
	21
	100%

	2004
	9
	25%
	2013
	22
	100%

	2005
	10
	50%
	2014
	23
	100%

	2006
	11
	50%
	2015
	24
	100%

	2007
	12
	50%
	2016
	25
	100%

	2008
	13
	75%
	2017
	26
	100%

	2009
	14
	75%
	2018
	27
	100%

	2010
	15
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Connie W. Stanley
	 
	 

	 
	 
	 
	 

	Hire Date:
	9/15/2003
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2004
	 
	 

	 
	 
	 
	 

	Date of Birth:
	4/20/1951
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	4/20/2016
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2004
	1
	—%
	2011
	8
	80%

	2005
	2
	—%
	2012
	9
	85%

	2006
	3
	—%
	2013
	10
	90%

	2007
	4
	50%
	2014
	11
	90%

	2008
	5
	50%
	2015
	12
	90%

	2009
	6
	50%
	2016
	13
	100%

	2010
	7
	50%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	John McCaleb
	 
	 

	 
	 
	 
	 

	Hire Date:
	11/4/2004
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2005
	 
	 

	 
	 
	 
	 

	Date of Birth:
	3/8/1953
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	3/8/2018
	 
	 

	 
	 
	 
	 

	Actual Retirement Date:
	3/31/2010
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2005
	1
	—%
	2012
	8
	80%

	2006
	2
	—%
	2013
	9
	80%

	2007
	3
	—%
	2014
	10
	85%

	2008
	4
	50%
	2015
	11
	90%

	2009
	5
	50%
	2016
	12
	90%

	2010
	6
	50%
	2017
	13
	90%

	2011
	7
	50%
	2018
	14
	100%

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Kimberly B. Snyder
	 
	 

	 
	 
	 
	 

	Hire Date:
	5/1/2005
	 
	 

	 
	 
	 
	 

	Participation Date:    
	5/1/2005
	 
	 

	 
	 
	 
	 

	Date of Birth:
	7/24/1970
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	7/24/2035
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2006
	1
	—%
	2021
	16
	100%

	2007
	2
	—%
	2022
	17
	100%

	2008
	3
	—%
	2023
	18
	100%

	2009
	4
	—%
	2024
	19
	100%

	2010
	5
	25%
	2025
	20
	100%

	2011
	6
	25%
	2026
	21
	100%

	2012
	7
	25%
	2027
	22
	100%

	2013
	8
	25%
	2028
	23
	100%

	2014
	9
	25%
	2029
	24
	100%

	2015
	10
	50%
	2030
	25
	100%

	2016
	11
	50%
	2031
	26
	100%

	2017
	12
	50%
	2032
	27
	100%

	2018
	13
	75%
	2033
	28
	100%

	2019
	14
	75%
	2034
	29
	100%

	2020
	15
	100%
	2035
	30
	100%

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Andrew B. Agee
	 
	 

	 
	 
	 
	 

	Hire Date:
	11/22/2004
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2005
	 
	 

	 
	 
	 
	 

	Date of Birth:
	11/21/1961
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	11/21/2026
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2005
	1
	—%
	2016
	12
	50%

	2006
	2
	—%
	2017
	13
	75%

	2007
	3
	—%
	2018
	14
	75%

	2008
	4
	—%
	2019
	15
	100%

	2009
	5
	25%
	2020
	16
	100%

	2010
	6
	25%
	2021
	17
	100%

	2011
	7
	25%
	2022
	18
	100%

	2012
	8
	25%
	2023
	19
	100%

	2013
	9
	25%
	2024
	20
	100%

	2014
	10
	50%
	2025
	21
	100%

	2015
	11
	50%
	2026
	22
	100%

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Edward C. Martin
	 
	 

	 
	 
	 
	 

	Hire Date:
	12/16/2004
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2007
	 
	 

	 
	 
	 
	 

	Date of Birth:
	4/11/1973
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	4/11/2038
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2005
	1
	—%
	2022
	18
	100%

	2006
	2
	—%
	2023
	19
	100%

	2007
	3
	—%
	2024
	20
	100%

	2008
	4
	—%
	2025
	21
	100%

	2009
	5
	25%
	2026
	22
	100%

	2010
	6
	25%
	2027
	23
	100%

	2011
	7
	25%
	2028
	24
	100%

	2012
	8
	25%
	2029
	25
	100%

	2013
	9
	25%
	2030
	26
	100%

	2014
	10
	50%
	2031
	27
	100%

	2015
	11
	50%
	2032
	28
	100%

	2016
	12
	50%
	2033
	29
	100%

	2017
	13
	75%
	2034
	30
	100%

	2018
	14
	75%
	2035
	31
	100%

	2019
	15
	100%
	2036
	32
	100%

	2020
	16
	100%
	2037
	33
	100%

	2021
	17
	100%
	2038
	34
	100%

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	R. Grayson Goldsmith
	 
	 

	 
	 
	 
	 

	Hire Date:
	9/17/2007
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2008
	 
	 

	 
	 
	 
	 

	Date of Birth:
	9/29/1954
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	9/29/2019
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2008
	1
	—%
	2015
	8
	80%

	2009
	2
	—%
	2016
	9
	90%

	2010
	3
	—%
	2017
	10
	90%

	2011
	4
	—%
	2018
	11
	90%

	2012
	5
	25%
	2019
	12
	100%

	2013
	6
	25%
	 
	 
	 

	2014
	7
	50%
	 
	 
	 

1619802v6

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Jerry Bradley
	 
	 

	 
	 
	 
	 

	Hire Date:
	7/18/2005
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2009
	 
	 

	 
	 
	 
	 

	Date of Birth:
	3/23/1975
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	3/23/2040
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2006
	1
	—%
	2024
	19
	100%

	2007
	2
	—%
	2025
	20
	100%

	2008
	3
	—%
	2026
	21
	100%

	2009
	4
	—%
	2027
	22
	100%

	2010
	5
	25%
	2028
	23
	100%

	2011
	6
	25%
	2029
	24
	100%

	2012
	7
	25%
	2030
	25
	100%

	2013
	8
	25%
	2031
	26
	100%

	2014
	9
	25%
	2032
	27
	100%

	2015
	10
	50%
	2033
	28
	100%

	2016
	11
	50%
	2034
	29
	100%

	2017
	12
	50%
	2035
	30
	100%

	2018
	13
	75%
	2036
	31
	100%

	2019
	14
	75%
	2037
	32
	100%

	2020
	15
	100%
	2038
	33
	100%

	2021
	16
	100%
	2039
	34
	100%

	2022
	17
	100%
	2040
	35
	100%

	2026
	18
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	Kevin Meade
	 
	 

	 
	 
	 
	 

	Hire Date:
	3/31/2008
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2009
	 
	 

	 
	 
	 
	 

	Date of Birth:
	12/26/1970
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	12/26/2035
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2009
	1
	—%
	2023
	15
	100%

	2010
	2
	—%
	2024
	16
	100%

	2011
	3
	—%
	2025
	17
	100%

	2012
	4
	—%
	2026
	18
	100%

	2013
	5
	25%
	2027
	19
	100%

	2014
	6
	25%
	2028
	20
	100%

	2015
	7
	25%
	2029
	21
	100%

	2016
	8
	25%
	2030
	22
	100%

	2017
	9
	25%
	2031
	23
	100%

	2018
	10
	50%
	2032
	24
	100%

	2019
	11
	50%
	2033
	25
	100%

	2020
	12
	50%
	2034
	26
	100%

	2021
	13
	75%
	2035
	24
	100%

	2022
	14
	75%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	J. Randy Nicely
	 
	 

	 
	 
	 
	 

	Hire Date:
	11/3/2003
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2009
	 
	 

	 
	 
	 
	 

	Date of Birth:
	5/19/1970
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	5/19/2035
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2004
	1
	—%
	2022
	19
	100%

	2005
	2
	—%
	2023
	20
	100%

	2006
	3
	—%
	2024
	21
	100%

	2007
	4
	—%
	2025
	22
	100%

	2008
	5
	25%
	2026
	23
	100%

	2009
	6
	25%
	2027
	24
	100%

	2010
	7
	25%
	2028
	25
	100%

	2011
	8
	25%
	2029
	26
	100%

	2012
	9
	25%
	2030
	27
	100%

	2013
	10
	50%
	2031
	28
	100%

	2014
	11
	50%
	2032
	29
	100%

	2015
	12
	50%
	2033
	30
	100%

	2016
	13
	75%
	2034
	31
	100%

	2017
	14
	75%
	2035
	32
	100%

	2018
	15
	100%
	 
	 
	 

	2019
	16
	100%
	 
	 
	 

	2020
	17
	100%
	 
	 
	 

	2021
	18
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	John Register
	 
	 

	 
	 
	 
	 

	Hire Date:
	4/1/2005
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2011
	 
	 

	 
	 
	 
	 

	Date of Birth:
	9/11/1963
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	9/11/2028
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2006
	1
	—%
	2024
	19
	100%

	2007
	2
	—%
	2025
	20
	100%

	2008
	3
	—%
	2026
	21
	100%

	2009
	4
	—%
	2027
	22
	100%

	2010
	5
	25%
	2028
	23
	100%

	2011
	6
	25%
	2029
	24
	100%

	2012
	7
	25%
	2030
	25
	100%

	2013
	8
	25%
	2031
	26
	100%

	2014
	9
	25%
	2032
	27
	100%

	2015
	10
	50%
	2033
	28
	100%

	2016
	11
	50%
	2034
	29
	100%

	2017
	12
	50%
	2035
	30
	100%

	2018
	13
	75%
	2036
	31
	100%

	2019
	14
	75%
	2037
	32
	100%

	2020
	15
	100%
	2038
	33
	100%

	2021
	16
	100%
	2039
	34
	100%

	2022
	17
	100%
	2040
	35
	100%

	2026
	18
	100%
	 
	 
	 

EXHIBIT 5.1(b)

	
				
	Vesting Schedule (by Participant):
	 
	 

	 
	 
	 
	 

	Participant Name:    
	W. Todd Ross
	 
	 

	 
	 
	 
	 

	Hire Date:
	4/7/2008
	 
	 

	 
	 
	 
	 

	Participation Date:    
	1/1/2011
	 
	 

	 
	 
	 
	 

	Date of Birth:
	9/19/1965
	 
	 

	 
	 
	 
	 

	Normal Retirement (Age 65):
	9/19/2030
	 
	 

	
						
	

Fiscal
Year End
	

Number of Years
Service
	Vested %
	

Fiscal
Year End
	

Number of Years
Service
	Vested %

	2009
	1
	—%
	2020
	12
	50%

	2010
	2
	—%
	2021
	13
	75%

	2011
	3
	—%
	2022
	14
	75%

	2012
	4
	—%
	2023
	15
	100%

	2013
	5
	25%
	2024
	16
	100%

	2014
	6
	25%
	2025
	17
	100%

	2015
	7
	25%
	2026
	18
	100%

	2016
	8
	25%
	2027
	19
	100%

	2017
	9
	25%
	2028
	20
	100%

	2018
	10
	50%
	2029
	21
	100%

	2019
	11
	50%
	2030
	22
	100%Exhibit 4.1

 

EXECUTION VERSION

 

LEUCADIA NATIONAL CORPORATION

 

AND

 

THE BANK OF NEW YORK MELLON,

 

as Trustee

 

 

 

SUPPLEMENTAL INDENTURE NO. 2

 

Dated as of October 24, 2013

 

 

    	 

    	

    

THIS SUPPLEMENTAL INDENTURE No. 2 (this “Supplemental
Indenture No. 2”), dated as of October 24, 2013, is between LEUCADIA NATIONAL CORPORATION, a New York corporation (the
“Company”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee (the “Trustee”).

 

R E C I T A L S

 

WHEREAS, the Company has heretofore executed
and delivered to the Trustee an Indenture dated as of October 18, 2013 between the Company and the Trustee (the “Base
Indenture”), as amended and supplemented by Supplemental Indenture No. 1 dated as of October 18, 2013 (together with
the Base Indenture and this Supplemental Indenture No. 2, the “Indenture”), providing for the issuance from
time to time of series of the Company’s Securities;

 

WHEREAS, Section 9.01(g) of the Base Indenture
provides for the Company and the Trustee to enter into an indenture supplemental to the Base Indenture to establish the forms or
terms of Securities of any series as permitted by Section 2.02 or Section 3.01 of the Base Indenture;

 

WHEREAS, pursuant to Section 3.01 of the
Base Indenture, the Company wishes to provide for the issuance of a new series of Securities to be known as its 6.625% Senior Notes
due 2043 (the “Notes”), the form and terms of such Notes and the terms, provisions and conditions thereof to
be set forth as provided in this Supplemental Indenture No. 2; and

 

WHEREAS, the Company has requested that the
Trustee execute and deliver this Supplemental Indenture No. 2 and all requirements necessary to make this Supplemental Indenture
No. 2 a valid, binding and enforceable instrument in accordance with its terms, and to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee, the valid, binding and enforceable obligations of the Company, have been done and
performed, and the execution and delivery of this Supplemental Indenture No. 2 has been duly authorized in all respects;

 

NOW, THEREFORE, in consideration of the covenants
and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

    	1

    	

    

ARTICLE
1

Definitions

 

Section 1.01. Relation to Base
Indenture. This Supplemental Indenture No. 2 constitutes an integral part of the Base Indenture.

 

Section 1.02. Definition Of Terms.
For all purposes of this Supplemental Indenture No. 2:

 

(a)Capitalized terms used herein
without definition shall have the meanings set forth in the Base Indenture;

 

(b)a term defined anywhere in
this Supplemental Indenture No. 2 has the same meaning throughout;

 

(c)the singular includes the
plural and vice versa;

 

(d)headings are for convenience
of reference only and do not affect interpretation;

 

(e)the following terms have
the meanings given to them in this Section 1.02(e):

 

“Change of Control” means
the occurrence of any one of the following:

 

(i)the consummation of any transaction
(including without limitation, any merger or consolidation) the result of which is that any person (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”)) becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s outstanding
Voting Stock, measured by voting power rather than number of shares;

 

(ii)the first day on which the
majority of the members of the Company’s board of directors cease to be Continuing Directors; or

 

(iii)the adoption of a plan
relating to the liquidation or dissolution of the Company.

 

“Change of Control Offer”
shall have the meaning set forth in Section 4.01(a).

 

“Change of Control Payment”
shall have the meaning set forth in Section 4.01(a).

    	2

    	

    

“Change of Control Payment Date”
shall have the meaning set forth in Section 4.01(b)(ii).

 

“Change of Control Purchase Notice”
shall have the meaning set forth in Section 4.01(b).

 

“Change of Control Triggering Event”
means the occurrence of both a Change of Control and a Ratings Decline.

 

“Comparable Treasury Issue”
means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated
maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining
term of the Notes.

 

“Comparable Treasury Price”
means, with respect to any Redemption Date (1) the arithmetic average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations or (2) if the Company obtains fewer than
three such Reference Treasury Dealer Quotations, the arithmetic average of all such quotations for such Redemption Date.

 

“Continuing Director”
means, as of any date of determination, any member of the Company’s board of directors who:

 

(i)was a member of such board
of directors on the date of the Indenture; or

 

(ii)was nominated for election
or elected to such board of directors with the approval of a majority of the Continuing Directors who were members of such board
of directors at the time of such nomination or election.

 

“Fitch” means Fitch Ratings,
or any successor to its rating business.

 

“Global Note” shall have
the meaning set forth in Section 2.04.

 

“Indebtedness” shall have
the meaning set forth in Section 5.01.

 

“Independent Investment Banker”
means one of the Reference Treasury Dealers appointed by the Company.

    	3

    	

    

“Interest Payment Date”
shall have the meaning set forth in Section 2.05(b).

 

“Interest Period” shall
have the meaning set forth in Section 2.05(a).

 

“Investment Grade” is
defined as BBB- or higher by S&P or Fitch or Baa3 or higher by Moody’s or the equivalent of such ratings by Moody’s
or S&P or Fitch.

 

“Lien” means any mortgage,
lien, pledge, security interest, conditional sale or other title retention agreement or other security interest or encumbrance
of any kind (including any agreement to give any security interest).

 

“Make-Whole Redemption Price”
shall have the meaning set forth in Section 3.01(a).

 

“Material Subsidiary”
means any Subsidiary of the Company; provided that the Company’s investments in and advances to such Subsidiary at the date
of determination thereof, without giving effect to any write-downs in such investments or advances taken within the prior 12 months,
represent 20% or more of the Company’s total shareholders’ equity as of such time determined in accordance with generally
accepted accounting principles; provided, however, that this definition shall not include any Subsidiary if, at the time that it
became a Subsidiary, the Company contemplated commencing a voluntary case or proceeding under Title 11 of the U.S. Code or any
similar Federal or state law for the relief of debtors with respect to such Subsidiary.

 

“Maturity Date” shall
have the meaning set forth in Section 2.02.

 

“Moody’s” means
Moody’s Investors Service, Inc. or any successor to its rating business.

 

“New York Business Day”
means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized
or required by law, regulation, or executive order to be closed in New York, New York.

 

“Optional Redemption Price”
shall have the meaning set forth in Section 3.01(b).

 

“Par Redemption Price”
shall have the meaning set forth in Section 3.01(b).

    	4

    	

    

“Rating Agency” means
each of Moody’s, S&P and Fitch; provided that if any of Moody’s, S&P and Fitch ceases to provide rating services
to issuers or investors, the Company may appoint a replacement for such Rating Agency that is reasonably acceptable to the Trustee.

 

“Ratings Decline” means
within 60 days after the earlier of, (i) the occurrence of a Change of Control or (ii) public notice of the occurrence of a Change
of Control or the intention by the Company to effect a Change of Control (which period shall be extended so long as the rating
of the Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) (the “Trigger
Period”), the rating of the Notes shall be reduced by at least two Rating Agencies and the Notes shall be rated below
Investment Grade by each of the Rating Agencies. Unless at least two of the three Rating Agencies are providing a rating for the
Notes at the commencement of any Trigger Period, the Notes will be deemed to have had a Ratings Decline to below Investment Grade
by at least two of the three Rating Agencies during that Trigger Period; provided that a Ratings Decline otherwise arising by virtue
of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus
shall not be deemed a Ratings Decline for purposes of the definition of Change of Control Triggering Event hereunder) if the Rating
Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform
the Trustee or the Company in writing at the Company’s request that the reduction was the result, in whole or in part, of
any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or
not the applicable Change of Control shall have occurred at the time of the Ratings Decline).

 

“Record Date” shall mean,
with respect to any Interest Payment Date for the Notes, the eighth day, whether or not a New York Business Day, of the calendar
month in which such Interest Payment Date falls.

 

“Redemption Date” shall
mean, with respect to any redemption of Notes, the date fixed for such redemption pursuant to the Indenture and such Notes.

 

“Reference Treasury Dealer”
means Jefferies LLC, or an affiliate, which is a primary U.S. government securities dealer in the United States of America and
its successor plus two other primary U.S. government securities dealers in the United States of America designated by the Company;
provided, however, that if any of the foregoing ceases to be a primary U.S. government securities dealer in the United States of America (a “Primary
Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer.

    	5

    	

    

“Reference Treasury Dealer Quotation”
means, with respect to each Reference Treasury Dealer and any Redemption Date, the arithmetic average, as determined by the Company,
of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m. (New York City time) on the third New York Business
Day preceding such Redemption Date.

 

“S&P” means Standard
& Poor’s Ratings Group, Inc. or any successor to its rating business.

 

“Treasury Rate” means,
with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated maturity
(on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

The terms “Company,” “Trustee,”
“Indenture,” “Base Indenture,” and “Notes” shall have the respective meanings
set forth in the recitals to this Supplemental Indenture No. 2 and the paragraph preceding such recitals.

 

ARTICLE
2

General Terms and Conditions of the Notes

 

Section 2.01. Designation and Principal
Amount. The Notes may be issued from time to time upon receipt by the Trustee of an Authentication Order pursuant to Section
3.03 of the Base Indenture. There is hereby authorized a series of Securities designated as the 6.625% Senior Notes due 2043 limited
in aggregate principal amount to U.S. $250,000,000 (except for Notes authenticated and delivered in accordance with the sixth paragraph
of Section 3.01 of the Base Indenture and upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant
to Sections 3.04, 3.05, 3.06, 9.06 or 11.06 of the Base Indenture).

 

Section 2.02. Maturity. The
date upon which the Notes shall become due and payable at final maturity, together with any accrued and unpaid interest, is October
23, 2043 (the “Maturity Date”).

 

Section 2.03. Form, Payment and
Appointment. Except as provided in Section 2.04, the Notes shall be issued in fully registered, certificated form. Principal
of and interest on the Notes will be payable, the transfer of such Notes

    	6

    	

    

will be registrable, and such Notes will be exchangeable
for Notes of a like aggregate principal amount, at the office or agency of the Company maintained for such purpose in the Borough
of Manhattan, The City of New York, which shall initially be the Corporate Trust Office of the Trustee in the Borough of Manhattan,
the City of New York; provided, however, that payment of interest may be made at the option of the Company by check mailed
to the Person entitled thereto at such address as shall appear in the Security Register or by wire transfer to an account appropriately
designated by the Person entitled to payment; provided, that the Paying Agent shall have received written notice of such
account designation at least five New York Business Days prior to the date of such payment.

 

No service charge shall be made for any registration
of transfer or exchange of the Notes, but the Company may require payment from the holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith.

 

The Security Registrar and Paying Agent for
the Notes shall initially be the Trustee.

 

The Notes shall be issuable in denominations
of U.S. $2,000 and integral multiples of U.S. $1,000 in excess thereof.

 

The Specified Currency of the Notes shall
be U.S. Dollars.

 

Section 2.04. Global Note. The
Notes shall be issued initially in the form of a permanent global security in registered form (a “Global Note”),
deposited with The Depository Trust Company or such other Depositary as any officer of the Company may from time to time designate.
Unless and until such Global Note is exchanged for Notes in certificated form, such Global Note may be transferred, in whole but
not in part, and any payments on the Notes shall be made, only to the Depositary or a nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such successor Depositary.

 

Section 2.05. Interest. (a) Interest
payable on any Interest Payment Date, the Maturity Date or, if applicable, the Redemption Date, with respect to the Notes
shall be the amount of interest accrued from, and including, the immediately preceding Interest Payment Date in respect of
which interest has been paid or duly provided for (or from and including the original issue date of October 24, 2013, if
no interest has been paid or duly provided for with respect to the Notes) to, but excluding, such Interest Payment Date,
Maturity Date or, if applicable, Redemption Date, as the case may be (each, an “Interest Period”).

    	7

    	

    

(b)The Notes will bear interest
at the rate of 6.625% per year from the original issue date thereof to the Maturity Date. Interest on the Notes shall be payable
semi-annually in arrears on April 23 and October 23 of each year (each, an “Interest Payment Date”), commencing
April 23, 2014, to the Persons in whose names the relevant Notes are registered at the close of business on the Record Date for
such Interest Payment Date.

 

(c)The amount of interest payable
for any full semi-annual Interest Period will be computed on the basis of a 360-day year consisting of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual Interest Period for which interest is computed will be
computed on the basis of a 30-day month and, for any period less than a month, on the basis of the actual number of days elapsed
per 30-day month. In the event that any scheduled Interest Payment Date for the Notes falls on a day that is not a New York Business
Day, then payment of interest payable on such Interest Payment Date will be postponed to the next succeeding day which is a New
York Business Day (and no interest on such payment will accrue for the period from and after such scheduled Interest Payment Date).

 

(d)In the event that the Maturity
Date or a Redemption Date for any Note falls on a day that is not a New York Business Day, then the related payments of principal,
premium, if any, and interest may be made on the next succeeding day that is a New York Business Day (and no additional interest
will accumulate on the amount payable for the period from and after the Maturity Date or a Redemption Date, as the case may be).

 

Section 2.06. No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.

 

ARTICLE
3

Redemption of the Notes

 

Section 3.01. Optional Redemption
by Company. (a) At any time or from time to time prior to July 23, 2043, the Company shall have the right at
its option to redeem the Notes, in whole or in part, at a redemption price (the “Make-Whole Redemption Price”)
equal to the greater of:

 

(i)100% of the principal amount
of the Notes to be redeemed; and

 

(ii)the sum of the present values
of each remaining scheduled payment of principal of and interest on the Notes to be redeemed 

    	8

    	

    

(exclusive of interest accrued to
the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 45 basis points, plus accrued and unpaid interest on the principal amount of the Notes to be
redeemed to the Redemption Date.

 

With respect to any redemption occurring
prior to July 23, 2043, the Company shall give the Trustee notice of the Make-Whole Redemption Price promptly after the calculation
thereof and the Trustee shall have no responsibility for such calculation.

 

(b)At any time or from time
to time on or after July 23, 2043, the Company shall have the right at its option to redeem the Notes, in whole or in part, at
a redemption price (the “Par Redemption Price” and together with the Make-Whole Redemption Price, each an “Optional
Redemption Price”) equal to 100% of the principal amount of the Notes to be redeemed; plus, accrued and unpaid interest
on the principal amount of the Notes to be redeemed to the Redemption Date.

 

(c)On and after a Redemption
Date, interest will cease to accrue on the Notes called for redemption or any portion of the Notes called for redemption (unless
the Company defaults in the payment of the Optional Redemption Price and accrued and unpaid interest). On or before the Redemption
Date, the Company shall deposit with the Trustee money sufficient to pay the Optional Redemption Price of and (unless the Redemption
Date shall be an Interest Payment Date) accrued and unpaid interest to the Redemption Date on the Notes to be redeemed on such
date. If less than all of the Notes are to be redeemed, the Notes to be redeemed will be selected by the Trustee by such method
as the Trustee will deem fair and appropriate; provided, however, that no Notes of a principal amount of $2,000 or less shall
be redeemed in part, provided, that if at the time of redemption the Notes to be redeemed are registered as a Global Note, the
Depositary shall determine, in accordance with its procedures, the principal amount of the Notes to be redeemed held by each of
its participants that holds a position in such Notes.

 

(d)The Company will mail notice
of such redemption to the registered holders of the Notes to be redeemed not less than 30 nor more than 60 days prior to the Redemption
Date.

 

Section 3.02. No Other Redemption.
Except as set forth in Section 3.01, the Notes shall not be redeemable by the Company prior to the Maturity Date. The provisions
of this Article 3 shall supersede any conflicting provisions contained in Article 11 of the Base Indenture.

    	9

    	

    

ARTICLE
4

Change of Control Triggering Event

 

Section 4.01. Change of Control
Triggering Event. (a) Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised
its right to redeem the Notes pursuant to Article 3 hereof by giving notice thereof pursuant to Section 11.04 of the Base Indenture,
the Company will be required to make an offer (a “Change of Control Offer”) to each Holder of Notes to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such Holder’s Notes at a purchase price equal to 101%
of the aggregate principal amount thereof, together with accrued and unpaid interest thereon to the date of repurchase (the “Change
of Control Payment”).

 

(b)Within 30 days following
any Change of Control Triggering Event, the Company will be required to mail a notice (the “Change of Control Purchase
Notice”) to each Holder of Notes stating:

 

(i)that the Change of Control
Offer is being made pursuant to this Article 4;

 

(ii)the purchase price and the
purchase date, which shall be no earlier than 30 days nor later than 45 days after the date such notice is mailed (the “Change
of Control Payment Date”);

 

(iii)that any Notes not tendered
will continue to accrue interest in accordance with the terms of the Indenture;

 

(iv)that, unless the Company
defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest on and after the Change of Control Payment Date;

 

(v)that Holders will be entitled
to withdraw their election if the Paying Agent receives, not later than the close of business on the second New York Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is unconditionally withdrawing its
election to have such Notes purchased;

 

(vi)that Holders whose Notes
are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be 

    	10

    	

    

equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof; and

 

(vii)any other information material
to such Holder’s decision to tender Notes.

 

(c)Notwithstanding anything
to the contrary in this Article 4, a transaction will not be deemed to involve a Change of Control under clause (1) of the definition
thereof if (i) the Company becomes a direct or indirect wholly-owned Subsidiary of a holding company and (ii)(A) the direct or
indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same
as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction
no person (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements
of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.

 

(d)The Company will not be required
to make a Change of Control Offer following a Change of Control Triggering Event if a third party makes a Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements set forth in this Article 4 and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary in this Article
4, a Change of Control Offer may be made in advance of a Change of Control Triggering Event, conditional upon such Change of Control,
if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

 

Holders electing to have a Note or
portion thereof repurchased pursuant to a Change of Control Offer will be required to surrender the Note (which, in the case
of Notes in book-entry form, may be by book-entry transfer) to the Paying Agent at the address specified in the applicable
Change of Control Purchase Notice prior to the close of business on the New York Business Day immediately preceding the
applicable Change of Control Payment Date and to comply with other procedures set forth in such Change of Control Purchase
Notice.

 

On any Change of Control Payment Date, the
Company will, to the extent lawful:

 

(1)accept for payment all Notes or portions
of Notes properly tendered pursuant to the Change of Control Offer;

    	11

    	

    

(2)deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and

 

(3)deliver the repurchased Notes or cause
the repurchased Notes to be delivered to the Trustee for cancellation, accompanied by an Officers’ Certificate stating the
aggregate principal amount of repurchased Notes and that all conditions precedent provided for in the Notes and the Indenture relating
to such Change of Control Offer and the repurchase of Notes by the Company pursuant thereto have been complied with.

 

Interest on Notes and portions of Notes duly
tendered for repurchase pursuant to a Change of Control Offer will cease to accrue on and after the applicable Change of Control
Payment Date, unless the Company shall have failed to accept such Notes and such portions of Notes for payment, failed to deposit
the total Change of Control Payment in respect thereof or failed to deliver the Officers’ Certificate, all as required by,
and in accordance with, the immediately preceding paragraph.

 

The Company will promptly pay, or will cause
the Paying Agent to promptly pay (by application of funds deposited by the Company), to each Holder of Notes (or portions thereof)
duly tendered and accepted for payment by the Company pursuant to a Change of Control Offer, the Change of Control Payment for
such Notes, and the Company will cause the Trustee to promptly authenticate and mail (or deliver by book entry transfer, as applicable)
to each such Holder a new Note equal in principal amount to the unpurchased portion, if any, of the Notes surrendered by such
Holder; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
The Company shall, or shall cause the Trustee to, promptly mail (or cause to be delivered by book entry transfer, as applicable)
to the Holders thereof any Notes not so accepted for payment by the Company.

 

The Company will comply with the requirements
of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of Notes as a result of a Change of Control Triggering Event. To the extent that
the provisions of any such securities laws or regulations conflict with the provisions of this Article 4, the Company shall comply
with those securities laws and regulations and shall not be deemed to have breached its obligations under this Article 4 by virtue
of such conflict.

    	12

    	

    

ARTICLE
5

Covenants

 

In addition to the covenants set forth in
the Base Indenture, the Company agrees solely for the benefit of the Holders of the Notes that:

 

Section 5.01. Limitations on Liens.
The Company will not, and will not permit any Material Subsidiary to, incur, issue, assume or guarantee any indebtedness for borrowed
money (“Indebtedness”) if such Indebtedness is secured by a Lien on (including any pledge of or security interest
in) any shares of common stock of any Material Subsidiary, without providing that the Notes and, at the option of the Company,
any other Indebtedness ranking equally and ratably with such Indebtedness, is secured equally and ratably with (or prior to) such
other secured Indebtedness, except that the foregoing restriction shall not apply to (i) any Lien on any shares of common stock
of any Material Subsidiary acquired after the date of the Indenture to secure or provide for the payment of the purchase price
or acquisition cost thereof, (ii) any Lien on shares of common stock of any Material Subsidiary acquired after the date of the
Indenture existing at the time such Material Subsidiary is acquired, (iii) Liens in favor of the Company or any Subsidiary, and
(iv) any extension, renewal, substitution or replacement (or successive extensions, renewals, substitutions or replacements), in
whole or in part, of any Lien referred to in clauses (i) through (iv), inclusive.

 

ARTICLE
6

Form of Notes

 

Section 6.01. Form of Notes.

 

The Notes and the Trustee’s
Certificate of Authentication to be endorsed thereon are to be substantially in the forms attached as Exhibit A hereto, with
such changes therein as the officers of the Company executing the Notes (by manual or facsimile signature) may approve, such
approval to be conclusively evidenced by their execution thereof.

 

ARTICLE
7

Original Issue of Notes

 

Section 7.01. Original Issue of
Notes. Notes having an aggregate principal amount of U.S. $250,000,000 (subject to Sections 3.01, 3.04, 3.05, 3.06, 9.06 and
11.06 of the Base Indenture) may from time to time, upon execution of this Supplemental Indenture No. 2, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and

    	13

    	

    

 deliver said Notes to or upon
the written order of the Company pursuant to Section 3.03 of the Base Indenture without any further action by the Company (other
than as required by the Base Indenture).

 

ARTICLE
8

Supplemental Indentures

 

Section 8.01. Supplemental Indentures
with Consent of holders of Notes. As set forth in Section 9.02 of the Base Indenture, with the consent of the holders of not
less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture,
the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental to the Base
Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Base
Indenture or this Supplemental Indenture No. 2 or of modifying in any manner the rights of the holders of the Securities of each
such series under the Base Indenture.

 

ARTICLE
9

Miscellaneous

 

Section 9.01. Ratification of Indenture.
The Base Indenture, as supplemented by this Supplemental Indenture No. 2, is in all respects ratified and confirmed, and this
Supplemental Indenture No. 2 shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.
All provisions included in this Supplemental Indenture No. 2 supersede any conflicting provisions included in the Base Indenture
unless not permitted by law.

 

Section 9.02. Trustee Not
Responsible for Recitals. The recitals contained herein shall be taken as statements of the Company and the Trustee
assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of
this Supplemental Indenture No. 2. The Trustee shall not be accountable for the use or application by the Company of the
Notes or the proceeds thereof.

 

Section 9.03. Governing Law. THIS
SUPPLEMENTAL INDENTURE NO. 2 AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 9.04. Separability Clause.
In case any provision in this Supplemental Indenture No. 2 or in the Notes shall be invalid, illegal or

    	14

    	

    

 unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 9.05. Counterparts. This
Supplemental Indenture No. 2 may be executed in any number of counterparts each of which, when so executed, shall be deemed to
be an original, but all of which shall together constitute but one and the same instrument.

    	15

    	

    

IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture No. 2 to be duly executed, as of the day and year first written above.

 

	 	LEUCADIA NATIONAL CORPORATION	 
	 	 	 
	 	By:	/s/ Joseph A. Orlando	 
	 	 	Name: 	Joseph A. Orlando	 
	 	 	Title:	Vice President and Chief Financial Officer	 

 

	 	THE BANK OF NEW YORK MELLON	 
	 	 	 
	 	as Trustee	 
	 	 	 
	 	By:	/s/ Laurence J. O’Brien	 
	 	 	Name: 	Laurence J. O’Brien	 
	 	 	Title:	Vice President	 

 

[Signature Page to Supplemental Indenture
No. 2]

    	 

    	

    

EXHIBIT A

 

[IF THIS NOTE IS TO BE A GLOBAL NOTE, INSERT:]

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY OR A NOMINEE OF THE DEPOSITORY TRUST COMPANY.
THIS NOTE IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY TO A NOMINEE OF THE DEPOSITORY TRUST COMPANY OR BY A NOMINEE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITORY TRUST COMPANY
OR ANOTHER NOMINEE OF THE DEPOSITORY TRUST COMPANY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

LEUCADIA NATIONAL CORPORATION

 

6.625% Senior Note due 2043

 

	ISIN: US527288BF07	CUSIP: 527288 BF0
	 	 
	No.	$ [  ]

 

LEUCADIA NATIONAL CORPORATION, a corporation
organized and existing under the laws of New York (hereinafter called the “Company”, which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________,
or registered

    	A-1

    	

    

assigns, [the principal sum of $ ______________]1
on October 23, 2043 (such date is hereinafter referred to as the “Maturity Date”), and to pay interest
thereon from October 24, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on April 23 and October 23 of each year (each, an “Interest Payment Date”), commencing
April 23, 2014 at the rate of 6.625% per annum, on the basis of a 360-day year consisting of twelve 30-day months, until the principal
hereof is paid or duly provided for or made available for payment. The amount of interest payable for any period shorter than
a full semi-annual Interest Period for which interest is computed will be computed on the basis of a 30-day month and, for any
period less than a month, on the basis of the actual number of days elapsed per 30-day month. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the person in whose name
the relevant Notes, or any predecessor Notes, are registered at the close of business on the Record Date for such Interest Payment
Date.

 

Payment of the principal of and interest
on this Note will be made at the office or agency of the Company maintained for that purpose in The City of New York, which shall
initially be the Corporate Trust Office of the Trustee located therein, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the Person entitled thereto at such address as shall appear in the
Security Register or by wire transfer to an account appropriately designated by the Person entitled to payment.

 

Reference is hereby made to the further provisions
of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

1 USE THE FOLLOWING LANGUAGE INSTEAD FOR GLOBAL
NOTES: [the principal sum as set forth in the Schedule of Increases or Decreases In Note attached hereto]

    	A-2

    	

    

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

Dated:

 

	 	 	LEUCADIA NATIONAL CORPORATION
	 	 	 
	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein
described in the within-mentioned Indenture.

 

Dated: _____________

 

THE BANK OF NEW YORK MELLON

as Trustee

 

	By:	 	 
	 	Authorized Signatory	 

    	A-3

    	

    

REVERSE OF NOTE

 

This Note is one of a duly authorized issue
of securities of the Company (herein called the “Notes”), issued and to be issued in one or more series under
an Indenture (the “Base Indenture”), dated as of October 18, 2013, between the Company and The Bank of New York
Mellon, as Trustee (herein called the “Trustee”, which term includes any successor trustee), as amended and
supplemented by Supplemental Indenture No. 2, dated as of October 24, 2013, between the Company and the Trustee (“Supplemental
Indenture No. 2” and together with the Base Indenture, the “Indenture”), to which Indenture
reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the
Company, the Trustee and the holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $250,000,000.

 

All terms used in this Note that are defined
in the Indenture shall have the meaning assigned to them in the Indenture.

 

The Notes of this series are not entitled
to the benefit of any sinking fund.

 

At any time or from time to time prior to
July 23, 2043, the Company shall have the right at its option to redeem the Notes of this series, in whole or in part, at a redemption
price equal to the greater of:

 

(i)100% of the principal amount
of the Notes of this series to be redeemed; and

 

(ii)the sum of the present values
of each remaining scheduled payment of principal of and interest on the Notes of this series to be redeemed (exclusive of interest
accrued to the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 45 basis points, plus accrued and unpaid interest on the principal amount of the
Notes of this series to be redeemed to the Redemption Date.

 

At any time or from time to time on or after
July 23, 2043, the Company shall have the right at its option to redeem the Notes of this series, in whole or in part, at a redemption
price equal to 100% of the principal amount of the Notes of this series to be redeemed; plus, accrued and unpaid interest on the
principal amount of the Notes of this series to be redeemed to the Redemption Date.

 

Upon the occurrence of a Change of Control
Triggering Event, unless the Company has exercised its right to redeem the Notes pursuant to Article 3 of

    	A-R-1

    	

    

Supplemental Indenture No. 2 by giving notice
thereof pursuant to Section 11.04 of the Base Indenture, the Company will be required to make an offer (a “Change of Control
Offer”) to each Holder of Notes of this series to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with
accrued and unpaid interest thereon to the date of repurchase (the “Change of Control Payment”).

 

Notwithstanding anything to the contrary
in Article 4 of Supplemental Indenture No. 2, a transaction will not be deemed to involve a Change of Control under clause (1)
of the definition thereof if (i) the Company becomes a direct or indirect wholly-owned Subsidiary of a holding company and (ii)(A)
the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially
the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following
that transaction no person (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying
the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such
holding company.

 

The Company will not be required to make
a Change of Control Offer following a Change of Control Triggering Event if a third party makes a Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control
Offer made by the Company and purchases all Notes of this series validly tendered and not withdrawn under such Change of Control
Offer. Notwithstanding anything to the contrary in Article 4 of Supplemental Indenture No. 2, a Change of Control Offer may be
made in advance of a Change of Control Triggering Event, conditional upon such Change of Control, if a definitive agreement is
in place for the Change of Control at the time of making the Change of Control Offer.

 

The Indenture contains provisions for defeasance
of the obligations of the Company at any time upon compliance by the Company with certain conditions set forth therein, which provisions
apply to the Notes of this series.

 

If an Event of Default with respect to Notes
of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the holders of the Notes at any time by the Company and the Trustee with the consent of the holders of a majority in principal
amount of the Notes of each series affected thereby and at the time Outstanding. The

    	A-R-2

    	

    

Indenture also contains provisions permitting
the holders of specified percentages in principal amount of the Notes of a series at the time Outstanding, on behalf of the holders
of all Notes of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver
by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

 

As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of
this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest
on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by the holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

The Notes of this series are issuable only
in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess thereof, except as
provided for in Section 2.04 of Supplemental Indenture No. 2. As provided in the Indenture and subject to certain limitations therein
set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized
denomination, as requested by the holder surrendering the same.

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Prior to due presentment of this Note for
registration of transfer, and except as provided for in the Indenture, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue,
and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

    	A-R-3

    	

    

EXECUTION VERSION

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned assigns
and transfers this Note to:

 

 

 

 

 

 

 

(Insert assignee’s social security
or tax identification number)

 

 

 

 

 

 

 

 

 

 

(Insert address and zip code of assignee)

 

and irrevocably appoints

 

 

 

 

 

 

 

 

 

 

agent to transfer this Note on the books of
the Company. The agent may substitute another to act for him or her.

 

	Date: _____________	 	 	 
	 	Signature:	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Signature Guarantee: 	 	 

 

(Sign exactly as your name appears on the
other side of this Note)

    	 

    	

    

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.

    	5

    	

    

SCHEDULE OF INCREASES OR DECREASES IN
NOTE

 

The initial principal amount of this Note is $[         ]. The following
increases or decreases in the principal amount of this Note have been made:

 

	Date	 	Amount of 

decrease in 

principal 

amount of this

Note	 	Amount of 

increase in 

principal

amount of this

Note	 	Principal 

amount of this

Note following 

such decrease or

increase	 	Signature of

authorized

signatory of

Trustee
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

    	6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}]]