Document:

exv10w8

 

Exhibit 10.8

AMPAC FINE CHEMICALS LLC PENSION PLAN

FOR SALARIED EMPLOYEES

 

 

AMPAC FINE CHEMICALS LLC PENSION PLAN

FOR SALARIED EMPLOYEES

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I
	 	GENERAL MATTERS AND PURPOSE	 	 	1	 
	 
	 	 	 	 	 	 
	1.1
	 	General	 	 	1	 
	1.2
	 	Purpose of Plan	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	EFFECTIVE DATE	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	DEFINITIONS	 	 	3	 
	 
	 	 	 	 	 	 
	3.1
	 	Actuarial Equivalent	 	 	3	 
	3.2
	 	Aerojet Plan	 	 	4	 
	3.3
	 	AFC Plan	 	 	4	 
	3.4
	 	Affiliated Company	 	 	4	 
	3.5
	 	Annual Earnings	 	 	4	 
	3.6
	 	Annuity Starting Date	 	 	5	 
	3.7
	 	Average Annual Earnings	 	 	5	 
	3.8
	 	Average Social Security Wage Base	 	 	6	 
	3.9
	 	Beneficiary	 	 	6	 
	3.10
	 	Board of Directors	 	 	6	 
	3.11
	 	Break in Service	 	 	6	 
	3.12
	 	Company	 	 	7	 
	3.13
	 	Credited Service	 	 	7	 
	3.14
	 	Cumulative Service	 	 	9	 
	3.15
	 	Disabled Participant	 	 	11	 
	3.16
	 	Employee	 	 	12	 
	3.17
	 	Hour of Service	 	 	12	 
	3.18
	 	Joint Annuitant	 	 	14	 
	3.19
	 	Leased Employee	 	 	14	 
	3.20
	 	Leave of Absence	 	 	15	 
	3.21
	 	Member Company	 	 	15	 
	3.22
	 	Minimum Benefit	 	 	15	 
	3.23
	 	Normal Monthly Pension Benefit	 	 	15	 
	3.24
	 	Participant	 	 	16	 
	3.25
	 	Pension Benefit	 	 	16	 
	3.26
	 	Pension Plan Committee	 	 	16	 

iv 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	3.27
	 	Plan	 	 	16	 
	3.28
	 	Plan Administrator	 	 	16	 
	3.29
	 	Plan Year	 	 	16	 
	3.30
	 	Program D	 	 	16	 
	3.31
	 	Qualified Election	 	 	16	 
	3.32
	 	Retired Participant	 	 	18	 
	3.33
	 	Sponsor	 	 	18	 
	3.34
	 	Spouse	 	 	18	 
	3.35
	 	Trust Agreement	 	 	18	 
	3.36
	 	Trustee	 	 	18	 
	3.37
	 	Trust Fund	 	 	18	 
	3.38
	 	Vested Percentage	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	PARTICIPATION IN PROGRAM “D”	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	MEMBER COMPANY CONTRIBUTIONS	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	RETIREMENT	 	 	22	 
	 
	 	 	 	 	 	 
	6.1
	 	Normal Retirement Date	 	 	22	 
	6.2
	 	Early Retirement Date	 	 	22	 
	6.3
	 	Late Retirement Date	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	DETERMINATION OF PENSION INCOME	 	 	23	 
	 
	 	 	 	 	 	 
	7.1
	 	General	 	 	23	 
	7.2
	 	Normal Monthly Pension Benefit	 	 	24	 
	7.3
	 	Minimum Benefit	 	 	24	 
	7.4
	 	Early Retirement	 	 	28	 
	7.5
	 	Retirement on Late Retirement Date	 	 	28	 
	7.6
	 	Maximum Benefit Limitations	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	DISABILITY PROVISION	 	 	31	 
	 
	 	 	 	 	 	 
	8.1
	 	Disability Provision	 	 	31	 
	8.2
	 	Determination of Total and Permanent Disability	 	 	31	 
	8.3
	 	Early Commencement of Benefits	 	 	32	 
	8.4
	 	Verification of Disability	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 	VESTING AND VESTED TERMINATION	 	 	34	 
	 
	 	 	 	 	 	 
	9.1
	 	Vesting and Vested Percentage	 	 	34	 
	9.2
	 	Early Commencement of Benefits	 	 	34	 

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	 	 	 	 	Page
	ARTICLE X
	 	PAYMENT OF BENEFITS	 	 	35	 
	 
	 	 	 	 	 	 
	10.1
	 	Normal Form of Payment	 	 	35	 
	10.2
	 	Optional Forms of Payment	 	 	35	 
	10.3
	 	Qualified Election Not to Take Joint and Survivor Annuity	 	 	37	 
	10.4
	 	Designation of Joint Annuitant	 	 	38	 
	10.5
	 	Conditions of Qualified Election	 	 	38	 
	10.6
	 	Limitations on Distribution of Benefits	 	 	38	 
	10.7
	 	Direct Rollovers	 	 	42	 
	10.8
	 	Consent to Certain Distribution of Benefits	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE XI
	 	NO PAYMENT OF BENEFITS DURING EMPLOYMENT	 	 	47	 
	 
	 	 	 	 	 	 
	11.1
	 	No Commencement of Benefits During Employment	 	 	47	 
	11.2
	 	Suspension of Benefits	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE XII
	 	SPOUSAL DEATH BENEFIT	 	 	48	 
	 
	 	 	 	 	 	 
	12.1
	 	Spousal Death Benefit	 	 	48	 
	12.2
	 	Marriage Requirement	 	 	49	 
	12.3
	 	Certain Elections	 	 	49	 
	12.4
	 	Cost of Benefit	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE XIII
	 	DESIGNATION OF BENEFICIARY	 	 	51	 
	 
	 	 	 	 	 	 
	13.1
	 	Designation of Beneficiary	 	 	51	 
	13.2
	 	Failure of Designation	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE XIV
	 	TRANSFER OF EMPLOYMENT	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE XV
	 	AFFILIATED SERVICE	 	 	53	 
	 
	 	 	 	 	 	 
	15.1
	 	Definitions	 	 	53	 
	15.2
	 	Credited Service	 	 	53	 
	15.3
	 	Cumulative Service	 	 	53	 
	 
	 	 	 	 	 	 
	ARTICLE XVI
	 	APPLICATION FOR BENEFITS	 	 	55	 
	 
	 	 	 	 	 	 
	16.1
	 	Application for Benefits	 	 	55	 
	16.2
	 	Action on Application	 	 	57	 
	16.3
	 	Claim Review Procedure	 	 	58	 

vi 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE XVII
	 	ADMINISTRATION	 	 	63	 
	 
	 	 	 	 	 	 
	17.1
	 	The Pension Plan Committee	 	 	63	 
	17.2
	 	Pension Plan Committee Procedure	 	 	63	 
	17.3
	 	Pension Plan Committee Powers	 	 	63	 
	17.4
	 	Allocation and Delegation of Duties	 	 	65	 
	17.5
	 	Expenses	 	 	65	 
	17.6
	 	Accounts	 	 	65	 
	17.7
	 	Periodic Review	 	 	65	 
	17.8
	 	Investment Administration	 	 	66	 
	17.9
	 	Compensation and Expenses of Fiduciaries	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE XVIII
	 	AMENDMENT	 	 	68	 
	 
	 	 	 	 	 	 
	ARTICLE XIX
	 	RIGHT TO DISCONTINUE OR TERMINATE; ALLOCATION OF ASSETS UPON TERMINATION	 	 	70	 
	 
	 	 	 	 	 	 
	19.1
	 	No Contractual Obligation	 	 	70	 
	19.2
	 	Vesting Upon Termination of Plan	 	 	70	 
	19.3
	 	Allocation of Assets Upon Plan Termination	 	 	70	 
	19.4
	 	Distribution of Residual Assets	 	 	71	 
	 
	 	 	 	 	 	 
	ARTICLE XX
	 	GENERAL MATTERS	 	 	72	 
	 
	 	 	 	 	 	 
	20.1
	 	No Enlargement of Employee Rights	 	 	72	 
	20.2
	 	Benefits from Trust Fund	 	 	72	 
	20.3
	 	No Alienation	 	 	72	 
	20.4
	 	Facility of Payment	 	 	73	 
	20.5
	 	Location of Payee	 	 	74	 
	20.6
	 	Payment of Small Benefits	 	 	75	 
	20.7
	 	The Trust Agreement	 	 	76	 
	20.8
	 	Application of Forfeitures	 	 	76	 
	20.9
	 	Irrevocability	 	 	76	 
	20.10
	 	Merger Restriction	 	 	77	 
	20.11
	 	Article Headings	 	 	78	 
	20.12
	 	Gender	 	 	78	 
	20.13
	 	Amendments	 	 	78	 
	20.14
	 	Applicable Law	 	 	78	 
	20.15
	 	Veterans’ Reemployment Rights	 	 	78	 
	 
	 	 	 	 	 	 
	ARTICLE XXI
	 	LIMITATIONS ON BENEFITS	 	 	79	 
	 
	 	 	 	 	 	 
	21.1
	 	Basic Limitation	 	 	79	 

vii 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	21.2
	 	Membership in Other Plans	 	 	80	 
	21.3
	 	Payment Prior to Age Sixty-Two or After Age Sixty-Five	 	 	80	 
	21.4
	 	Exception	 	 	81	 
	21.5
	 	Adjustment in the Limitation	 	 	81	 
	21.6
	 	Adjustment	 	 	81	 
	21.7
	 	Special Affiliation Rule	 	 	81	 
	21.8
	 	Compensation	 	 	82	 
	 
	 	 	 	 	 	 
	ARTICLE XXII
	 	SPECIAL QUALIFICATION PROVISION	 	 	83	 
	 
	 	 	 	 	 	 
	ARTICLE XXIII
	 	TOP-HEAVY PLAN RULES	 	 	85	 
	 
	 	 	 	 	 	 
	23.1
	 	Applicability	 	 	85	 
	23.2
	 	Definitions	 	 	85	 
	23.3
	 	Top-Heavy Status	 	 	86	 
	23.4
	 	Minimum Benefits	 	 	89	 
	23.5
	 	Vesting Rules	 	 	91	 
	23.6
	 	Non-Eligible Employees	 	 	91	 

SCHEDULES (A, B, C, D)

viii 

 

AMPAC FINE CHEMICALS LLC PENSION PLAN

FOR SALARIED EMPLOYEES

ARTICLE I

GENERAL MATTERS AND PURPOSE

     1.1 General. This document sets forth the provisions of the Ampac Fine Chemicals LLC
Pension Plan for Salaried Employees (“Plan”) as in effect from and after December 1, 2005. This
document reflects provisions of the Plan applicable to salaried employees at Ampac Fine Chemicals
LLC.

     This Plan was established on December 1, 2005 and received a transfer of assets and
liabilities from the GenCorp Consolidated Pension Plan with respect to certain participants therein
who became salaried employees of Ampac Fine Chemicals LLC on December 1, 2005.

     1.2 Purpose of Plan. The purpose of the Plan is to provide pension benefits for
eligible salaried employees of Ampac Fine Chemicals LLC and for eligible salaried employees of
Member Companies, as defined herein.

9 

 

ARTICLE II

EFFECTIVE DATE

     The effective date of the Ampac Fine Chemicals LLC Pension Plan for Salaried Employees is
December 1, 2005.

10

 

ARTICLE III

DEFINITIONS

     The following words and phrases as used in this instrument shall have the meaning stated in
this Article III unless it shall appear from the context that they have a plainly different
meaning:

     3.1 Actuarial Equivalent. “Actuarial Equivalent” means an amount which, at the date
of determination, is actuarially equivalent to the Pension Benefit or any other benefit required to
be calculated hereunder, computed using the interest rate and the mortality table specified below:

     (a) Except as provided in subsection (b), the interest rate shall be 8 1/2% and the
mortality table shall be the Group Annuity Table for 1983, set back by two years for a
Participant and four years for a spouse or other joint participant.

     (b) For determinations of actuarial equivalents in the form of lump sum payments, the
actuarial factors shall be determined using whichever of the factors described below results
in the largest value: (i) the factors specified in subsection (a); or (ii) the mortality
table specified in subsection (a) and the interest rate published by the Pension Benefit
Guaranty Corporation (as of the first day of the Plan Year in which such determination is
made) for the purpose of determining the present value of benefits for terminating
single-employer plans; or (iii) the applicable mortality table and the applicable interest
rate, as defined below:

     (A) The term “applicable mortality table” shall mean the table prescribed by
the Secretary of the Treasury under Code Section 417(e)(3). As of

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December 1, 2005, the applicable mortality table is the table prescribed in
Rev. Rul. 2001-62.

     (B) The term “applicable interest rate” mean the annual rate of interest on
30-year Treasury securities as specified by the Commissions of Internal Revenue for
the month preceding the Plan Year in which falls the Annuity Starting Date for the
distribution.

     3.2 Aerojet Plan. “Aerojet Plan” shall mean the Aerojet-General Corporation
Consolidated Pension Plan.

     3.3 AFC Plan. “AFC Plan” shall mean the Aerojet Fine Chemical LLC Consolidated
Pension Plan.

     3.4 Affiliated Company. “Affiliated Company” shall mean (a) any corporation which is
included in a controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code), which group also includes the Company, (b) any trade or business which is
under common control with the Company (within the meaning of Section 414(c) of the Internal Revenue
Code), and (c) any member of an affiliated service group (within the meaning of Section 414(m) or
the Internal Revenue Code) which includes the Company.

     3.5 Annual Earnings.

     (a) “Annual Earnings” shall mean the actual salary paid to a Participant during a Plan
Year by a Member Company (including bonuses, commissions and overtime payments paid by a
Member Company to the Participant during the Plan Year) plus amounts which would have been
paid to the Participant during the Plan Year but for his elections to defer such amounts to
be contributed on a pre-tax basis to an Ampac Fine Chemicals LLC employee benefit plan under
Code sections 125, 132(f)(4), 401(k), 403(b)

12

 

and 457. The term “Annual Earnings” shall not include payments with respect to any
period during which the individual is not eligible, as provided in Article IV, to accrue
benefits hereunder. The amount of a Participant’s Annual Earnings shall be annualized to
represent a full Plan Year. For the purpose of calculating Annual Earnings for a period
prior to December 1, 2005, Annual Earnings shall include amounts earned as compensation for
services performed in the employment of a “Member Company” to the extent such amounts are
included in “Annual Earnings” as those terms were defined in Program D as in effect on
November 30, 2005.

     (b) The Annual Earnings of a Participant for a Plan Year, which is taken into account
for any purpose, shall not exceed $200,000, as adjusted for cost-of-living increases in
accordance with Section 401(a)(17) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to annual compensation for the Plan Year that begins within such
calendar year. For purposes of determining benefit accruals under this Plan, compensation
or earnings for any prior determination period under a predecessor plan will be subject to
the limitations of this Subsection.

     3.6 Annuity Starting Date. “Annuity Starting Date” shall mean the first day of the
first period for which an amount is payable as an annuity, or in the case of a benefit not payable
as an annuity, the first day on which all events have occurred which entitle the Participant to
such benefit.

     3.7 Average Annual Earnings. “Average Annual Earnings” shall mean the average of a
Participant’s Annual Earnings (in all cases annualized to represent a full Plan Year) for the five
(5) Plan Years immediately preceding the date of the Participant’s termination of employment with a
Member Company.

13

 

     3.8 Average Social Security Wage Base. For purposes of Section 7.3, “Average Social
Security Wage Base” means, for each Plan Year, the average, rounded to the nearest whole multiple
of $600.00, of the Social Security taxable wage bases for the 35 consecutive calendar years ending
with the calendar year in which such Plan Year begins.

     3.9 Beneficiary. “Beneficiary” shall mean the person (other than a Joint Annuitant)
designated by a Participant, in accordance with Article XIII and pursuant to a Qualified Election,
to receive any benefits payable in the event of the death of the Participant, his Spouse, and his
designated Joint Annuitant, as the case may be.

     3.10 Board of Directors. “Board of Directors” shall mean the Board of Directors of
American Pacific Corporation.

     3.11 Break in Service. “Break in Service” or “Break” shall mean a Plan Year during
which a Participant completes fewer than five hundred (500) Hours of Service. Solely for purposes
of determining whether a Participant has sustained a Break in Service, an Employee’s Hours of
Service shall also include the following (to the extent not included in the definition of Hours of
Service in this Article III):

     (a) Any period of layoff (not exceeding twenty-four (24) months) provided that the
Employee returns to the employ of a Member Company or Affiliated Company within such
twenty-four (24) month period;

     (b) Any period of absence (other than an absence described in subsection (c) below)
pursuant to a Leave of Absence, provided that the Employee returns to the employ of a Member
Company or an Affiliated Company immediately upon expiration of such Leave of Absence, and

14

 

     (c) Any period of absence, by reason of the pregnancy of the Employee, by reason of the
birth of a child of the Employee, by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or for purposes of caring for
such child for a period beginning immediately following the birth or placement of such
child.

     The number of additional Hours of Service deemed completed pursuant to subsections (a)
and (b) above, shall be in accordance with the Employee’s customary schedule of employment.
The number of additional Hours of Service deemed completed pursuant to subsection (c) above,
shall be in accordance with the Employee’s customary schedule of employment, provided,
however that no more than five hundred and one (501) Hours of Service shall be deemed to
have been completed with respect to absences with respect to a single pregnancy, birth or
placement described in subsection (c). Hours deemed completed pursuant to subsection (c)
shall be credited to the Plan Year in which the absence from work begins if the Employee
would be prevented from incurring a Break in Service in such Plan Year solely because of
such additional Hours, and in any other case, in the immediately following Plan Year. The
Pension Plan Committee may require, as a condition of recognizing any Hours pursuant to
subsection (c), that the Employee provide such information as the Pension Plan Committee
reasonably requests to establish the reason for the absence and the number of days for which
there was such an absence.

     3.12 Company. “Company” shall mean Ampac Fine Chemicals LLC.

     3.13 Credited Service. “Credited Service” shall mean the number of years of Credited
Service of a Participant determined in accordance with this Section, which shall be considered in
determining a Participant’s benefits under this Plan. A Participant shall be deemed to accrue a

15

 

full year of Credited Service in each Plan Year in which he completes at least two thousand
eighty (2,080) Hours of Service. In addition, in any Plan Year in which the Participant completes
less than two thousand eighty (2,080) Hours of Service, a Participant shall be deemed to complete
one-twelfth (1/12) of a year of Credited Service for each one hundred seventy-three (173) Hours of
Service completed during such Plan Year. With respect to employees who were employed by Aerojet
Fine Chemicals LLC on June 1, 2000 and who became Participants on December 1, 2005 as the result of
the transfer of assets and liabilities to this Plan from Program D, “Credited Service” shall also
include “Credited Service” as of November 30, 2005 as that term was defined in Program D as in
effect on that date as set forth in Schedule D. In the case of an employee who became an employee
of Aerojet Fine Chemicals LLC after June 1, 2000 and who became a Participant on December 1, 2005
as the result of a transfer of assets and liabilities to this Plan from Program D, “Credited
Service” shall also include “Credited Service” earned after becoming an employee of Aerojet Fine
Chemicals LLC, as that term was defined in Program D as in effect on November 30, 2005 as set forth
in Schedule D but shall not include any prior service that may have been recognized under the
Aerojet Plan or the Pension Plan for Salaried Employees of GenCorp Inc. (subsequently known as the
GenCorp Consolidated Pension Plan (Program “B”). Credited Service shall also include Credited
Service accrued in the case of certain total and permanent disability as provided in Section 8.1.
For purposes of determining a Participant’s Credited Service the following rules shall apply:

     (a) Hours of Service shall not be taken into account which are accrued by a Participant
for service other than as an Employee, as defined in this instrument, or which are accrued
during any period that the Employee is covered under any other pension or

16

 

retirement plan to which the Company contributes, except a federal, state, social
security or similar welfare program;

     (b) In the case of any Participant who has a Break in Service and who, immediately
preceding such Break does not have a vested right to Pension Benefits under this Plan, the
Credited Service of such Participant accrued under this Plan prior to such Break shall not
be taken into account if the number of consecutive Breaks in Service exceeds the greater of
(i) five (5) or (ii) the aggregate number of years of Cumulative Service (including
Cumulative Service deemed to be earned by reason of service for a Member Company or an
Affiliated Company pursuant to Article XVI) prior to such Break. Such aggregate number of
years of Cumulative Service prior to such Break shall not include any years of Cumulative
Service not required to be taken into account under this subsection (d) by reason of any
prior Break in Service.

     (c) In the case of any Participant who has a Break in Service and who, immediately
preceding such Break does not have a vested right to Pension Benefits under this Plan, the
Credited Service of such Participant prior to such Break shall not be taken into account
until the end of a twelve (12) consecutive month period commencing after such Break in which
the Participant completes at least one thousand (1,000) Hours of Service.

     (d) A Participant shall be eligible to accrue Credited Service as provided in this
Section 3.10 for periods of employment after the Participant’s Normal Retirement Date.

     A Participant shall in no event be deemed to accrue more than one (1) full year of Credited
Service with respect to any Plan Year.

17

 

     3.14 Cumulative Service. “Cumulative Service” shall mean the number of years of
Cumulative Service of an Employee determined in accordance with this Section and Article XVI, which
shall be considered in determining an Employee’s vesting in benefits under this Plan. An Employee
shall be deemed to accrue a full year of Cumulative Service in each Plan Year in which he completes
at least one thousand (1,000) Hours of Service. In addition, in any Plan Year in which the
Employee completes less than one thousand (1,000) Hours of Service, an Employee shall be deemed to
complete one-twelfth (1/12th) of a year of Cumulative Service for each one hundred seventy-three
(173) Hours of Service completed during such Plan Year. With respect to employees who became
Participants on December 1, 2005 as the result of the transfer of assets and liabilities to this
Plan from Program D “Cumulative Service” shall also include “Cumulative Service” as of November 30,
2005 as that term was defined in Program D as in effect on that date and as set forth in Schedule
D.

     For purposes of determining an Employee’s Cumulative Service, the following rules shall apply:

     (a) In the case of any Employee who has a Break in Service and who, immediately
preceding such Break does not have a vested right to benefits under this Plan, the
Cumulative Service of such Employee prior to such Break shall not be taken into account if
the number of consecutive Breaks in Service exceeds the greater of (i) five (5) or (ii) the
aggregate number of years of Cumulative Service (including Cumulative Service deemed to be
earned by reason of service for a Member Company or an Affiliated Company pursuant to
Article XVI) prior to such Break. Such aggregate number of years of Cumulative Service
prior to such Break shall be deemed not to include any years of

18

 

Cumulative Service not required to be taken into account under this subsection (a) by
reason of any prior Break in Service; and

     (b) In the case of any Employee who has a Break in Service and who, immediately
preceding such Break does not have a vested right to benefits under this Plan, the
Cumulative Service of such Employee prior to such Break shall not be taken into account
until the end of a twelve (12) consecutive month period commencing after such Break in which
the Employee completes at least one thousand (1,000) Hours of Service.

     An Employee shall in no event be deemed to accrue more than one (1) full year of
Cumulative Service with respect to any Plan Year.

     Solely for purposes of determining a Participant’s Vested Percentage, the Participant’s
Cumulative Service shall include any period during which the Participant was performing
services for a Member Company pursuant to an arrangement between the Member Company and a
leasing organization, whether or not the Participant was a Leased Employee during such
period.

     Employment with any Affiliated Company or any other entity required to be aggregated
with the Company pursuant to Code Section
414(o), will be treated as employment with the
Company solely for purposes of determining a Participant’s Cumulative Service for vesting
purposes under this Plan; provided, however, that unless otherwise specifically provided
under the Plan, any individual receiving credited Hours of Service under this provision
shall not be eligible to participate in the Plan or eligible to accrue benefits under the
Plan unless the individual is an Employee of a Member Company.

19

 

     3.15 Disabled Participant. “Disabled Participant” shall mean a Participant whom the
Pension Plan Committee determines has suffered a total and permanent disability within the meaning
of Section 8.2 while he is a Participant in Employee status.

     3.16 Employee. “Employee” shall mean any person who is employed by a Member Company
and who is compensated upon a salaried basis; provided in each case that the Member Company is
required by applicable law to deduct federal income tax and social security tax amounts. The term
“Employee” may, with the approval of the Pension Plan Committee, include any Employee who is loaned
to another organization or entity for a period of time. However, unless otherwise designated by
the Board of Directors, “Employee” does not include an individual who becomes employed by a Member
Company through the:

     (a) Legal dissolution and winding up of an Affiliated Company which was not a Member
Company; or

     (b) Merger into a Member Company of any other corporation or Affiliated Company which
is not a Member Company; or

     (c) Transfer of all or part of the assets to a Member Company by another company
together with a group of the transferor’s employees.

     3.17 Hour of Service. “Hour of Service” shall mean (a) each hour for which an
Employee is paid, or entitled to payment, by the Company for the performance of duties as an
Employee, (b) each hour for which an Employee is paid or entitled to payment by the Company on
account of a period of time during which no duties are performed, and (c) each hour for which back
pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company.
Overtime work shall be credited as straight time.

20

 

          The determination of an Employee’s “Hours of Service” shall be governed by the following
rules:

     (1) Hours of Service to be recognized during any period of time during which no
duties are performed by the Employee shall be determined and credited pursuant to
Department of Labor Regulations Sections 2530.200b-2(b) and (c), 29 C.F.R. §§
2530.200b-2(b) and (c), with the following special provisions:

     (i) An Employee shall be deemed to complete eight (8) Hours of Service
for each paid holiday not worked;

     (ii) An Employee shall be deemed to complete forty (40) Hours of Service
for each week of paid vacation or week of paid sick leave not worked;

     (iii) An Employee shall be deemed to complete forty (40) Hours of
Service for each week of military service with respect to which he is
entitled to credit for such Hours of Service under applicable federal law
(but only for such purposes as credit is required to be given under such
law);

     (iv) An Employee shall be deemed to complete forty (40) Hours of Service
for each week absent from work due to illness or accident and for which he is
entitled to Workers’ Compensation benefits, subject to a maximum of six (6)
months for each accident or illness.

     (v) No more than five hundred and one (501) Hours of Service shall be
credited to an Employee on account of any single continuous period during
which the Employee performs no duties.

21

 

     (2) No Employee shall be deemed to earn Hours of Service solely by reason of
receiving payments pursuant to a plan maintained for the purpose of complying with
applicable worker’s compensation, unemployment compensation or disability insurance
laws, nor shall an Employee be deemed to earn Hours of Service by reason of the
receipt of payments which reimburse such Employee for medical or medically related
expenses incurred by the Employee.

     (3) With respect to any period of service, an Employee shall not receive credit
for Hours of Service pursuant to more than one provision of this definition.

     (4) An Employee who is not paid on the basis of a specified amount for each
hour worked, shall, in lieu of any other method of computing Hours of Service (but
subject to the limitations set forth in paragraph (1), above) be credited with
forty-five (45) Hours of Service for each week or portion thereof during which such
Employee performs one or more Hours of Service as an Employee.

     3.18 Joint Annuitant. “Joint Annuitant” shall mean the person designated by a
Participant, pursuant to an election (including, where required, a Qualified Election) of an option
provided by Section 11.2, to receive an annuity for life upon the death of the Participant after
his retirement.

     3.19 Leased Employee. “Leased Employee” means any person (other than an Employee of
a Member Company) who has performed services for a Member Company (or for a Member Company and
related persons as determined under Code Section 414(n)(6) which services (i) are performed under
an agreement between a Member Company and a leasing

22

 

organization on a substantially full-time basis for a period of at least one (1) year, and
(ii) are performed under the direction and control of the Member Company.

     Any Leased Employee will not be treated as an Employee of a Member Company for purposes of
eligibility to participate in the Plan or for purposes of accrual of benefits under the Plan.
However, a Leased Employee will be treated as an Employee of a Member Company for purposes of Code
Sections 401(a), 410, 411, 415, and 416; provided, however, that a Leased Employee will not be
treated as employed by the Member Company if (i) the Leased Employee is covered by a money purchase
pension plan maintained by the leasing organization that provides (A) a nonintegrated employer
contribution of at least 10% of compensation, as defined in Code Section 415(c)(3), including
amounts contributed pursuant to a salary reduction agreement that are excludible from the
employee’s gross income under Code Sections 125, 402(e)(3), 401(h)(1)(B) or 403(b); (B) immediate
participation; and (C) full and immediate vesting, and (ii) Leased Employees do not constitute
more than twenty percent (20%) of the leasing organization’s nonhighly compensated employees, as
that term is defined under Code Section 414(q).

     3.20 Leave of Absence. “Leave of Absence” shall mean a period of absence from regular
employment which is approved by a Member Company. The employment of an Employee whose approved
Leave of Absence is terminated without his returning to regular employment with the Company shall
be terminated effective at the commencement of such Leave of Absence.

     3.21 Member Company. “Member Company” shall mean the Company, any Affiliated Company,
or any division or unit of the Company or of an Affiliated Company which

23

 

may be included in this Plan by designation by the Board of Directors, and in the case of an
Affiliated Company, by adoption of this Plan by such Affiliated Company.

     3.22 Minimum Benefit. “Minimum Benefit” shall mean the monthly Minimum Benefit
determined in accordance with Section 7.3.

     3.23 Normal Monthly Pension Benefit. “Normal Monthly Pension Benefit” shall mean the
benefit described in Section 7.1.

     3.24 Participant. “Participant” shall mean a person who has become eligible to
participate in this Plan in accordance with the provisions of Article IV, and who has not yet been
paid in full any benefits to which he is entitled under the terms of this Plan.

     3.25 Pension Benefit. “Pension Benefit” shall mean the Normal Monthly Pension Benefit
or the Minimum Benefit, whichever is applicable.

     3.26 Pension Plan Committee. “Pension Plan Committee” shall mean the Committee
described in Section 17.1.

     3.27 Plan. “Plan” shall mean the Ampac Fine Chemicals LLC Pension Plan for Salaried
Employees.

     3.28 Plan Administrator. “Plan Administrator” shall mean the Sponsor or such other
entity or person the Board of Directors may designate.

     3.29 Plan Year. “Plan Year” shall mean the fiscal year of the Plan. The Plan Year
shall be the twelve (12) month period commencing each October 1 and ending the following September
30. The first Plan year will be the period beginning December 1, 2005 and ending on September 30,
2006.

     3.30 Program D. “Program D” shall mean the GenCorp Consolidated Pension Plan (Program
D).

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     3.31 Qualified Election. “Qualified Election” shall mean a Participant’s election,
designation or waiver made under this Plan in accordance with the requirements of this Section and
in the manner and form as prescribed by the Pension Plan Committee.

     (a) To the extent required under Section 417 of the Internal Revenue Code, no election,
designation or waiver shall be deemed to be a Qualified Election unless the Spouse, if any,
of the Participant consents in writing to such election, designation or waiver and
acknowledges the effect of such election, designation or waiver. The Spouse’s consent to an
election, designation or a waiver must be witnessed by a notary public.

     (b) Notwithstanding this consent requirement, if the Participant warrants to the
Pension Plan Committee that such written consent may not be obtained because there is no
Spouse or the Spouse cannot be located or for any other reason as the Pension Plan Committee
determines to be consistent with the requirements of Section 417 of the Code, a related
election, designation or waiver without spousal consent may be deemed a Qualified Election;
provided, however, that the Pension Plan Committee may require the Participant in such case
to produce such evidence of the Spouse’s unavailability or other circumstances as the
Pension Plan Committee deems to be appropriate.

     (c) A Qualified Election under this provision will be valid only with respect to the
Spouse who consented to the Qualified Election, or in the event of a Qualified Election in
which the Spouse’s consent has not been obtained, with respect to a designated Spouse (e.g.,
that Spouse who cannot be located).

     (d) A revocation of a prior election, designation or waiver may be made by a
Participant without the consent of the Spouse at any time before the commencement of
benefits, but any subsequent election, designation or waiver shall again be subject to the

25

 

foregoing rules. Subject to the foregoing (relating to a change by a Participant), the
consent by a Spouse to an election, designation or waiver shall be irrevocable. The number
of revocations and subsequent elections, designations or waivers shall not be limited during
any applicable election period.

     (e) An election, designation or waiver which, by reason of a failure to obtain required
spousal consent could not be given effect when made, may later be given effect if at the
relevant date the Participant has no Spouse or is not then otherwise required to have
spousal consent.

     3.32 Retired Participant. “Retired Participant” shall mean a Participant who has
retired and who is receiving benefits under this Plan.

     3.33 Sponsor “Sponsor” shall mean American Pacific Corporation.

     3.34 Spouse. “Spouse” shall mean, as required by the context of specific provisions
of this instrument, the person to whom the Participant is lawfully married on the date on which
payment of benefits commences or for purposes of the spousal death benefit under Article XIII, the
person to whom such deceased Participant is married on the date of such Participant’s death.

     3.35 Trust Agreement. “Trust Agreement” shall mean the trust agreement effective as
of December 1, 2005, by and between the Ampac Fine Chemicals LLC and/or American Pacific
Corporation and the trustee designated therein, or such other trust agreement or agreements that
may be established from time to time hereunder and as the same may from time to time be amended
and/or restated.

     3.36 Trustee. “Trustee” shall mean the individuals and/or entity designated in the
Trust Agreement, any successor named as provided in the Trust Agreement, and which executes a

26

 

Trust Agreement as Trustee, or any other Trustee or Trustees designated in any trust agreement
or trust agreements which may be established to carry out the purposes of this Plan.

     3.37 Trust Fund. “Trust Fund” shall mean all cash and securities and all other assets
of whatever nature deposited with or acquired by the Trustee or Trustees in the capacity of Trustee
of this Plan and all accumulated income thereon.

     3.38 Vested Percentage. “Vested Percentage” shall mean the percentage of a
Participant’s accrued Pension Benefit which is vested and nonforfeitable, determined according to
Article X.

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ARTICLE IV

PARTICIPATION IN PROGRAM “D”

     Every Employee who was a participant in Program D on November 30, 2005 and who became an
Employee on December 1, 2005 shall become a Participant in this Plan and become eligible to accrue
benefits under this Plan on December 1, 2005.

     Every other Employee shall become a Participant in this Plan and become eligible to accrue
benefits hereunder, as of the first day of the month coinciding with or next following his most
recent date of hire. No person shall be eligible to accrue benefits under this Plan during any
period of time during which he is accruing benefits under any other pension or retirement plan to
which the Company contributes (including the Ampac Fine Chemicals Pension Plan for Bargaining
Employees), except a federal or state, social security or similar welfare program; nor shall any
person be eligible to accrue benefits under this Plan during any period of time that such person is
not an Employee, as defined in Article II, except as expressly provided in Article IX (relating to
total and permanent disability).

28

 

ARTICLE V

MEMBER COMPANY CONTRIBUTIONS

     The Member Companies will from time to time contribute such amounts as are required under the
provisions of the Employee Retirement Income Security Act of 1974, and at their option may
contribute additional amounts as they deem desirable. All Member Company Contributions made
hereunder shall be deposited with the Trustee and held as part of the Trust Fund.

29

 

ARTICLE VI

RETIREMENT

     6.1 Normal Retirement Date. The Normal Retirement Date of any Participant shall be
the first day of the month coinciding with or next following his sixty-fifth (65th) birthday.
Normal Retirement Age is age sixty-five (65).

     6.2 Early Retirement Date. Any Participant who is an Employee, who was credited with
an hour of service under Program D for services before December 1, 1992, and who, on or after
December 1, 1974, has attained age 55 and completed at least 5 years of Cumulative Service may
elect to retire on an Early Retirement Date. A Participant who was not credited with an hour of
service under Program D for services before December 1, 1992 may not elect to retire on an Early
Retirement Date until he has attained age 55 and completed at least 10 years of Cumulative Service.
Such Early Retirement Date shall be the first day of any month selected by the Participant which
occurs before his Normal Retirement Date and after his satisfaction of the applicable age and
service requirements set forth in this Section 6.2

     6.3 Late Retirement Date. A Participant who remains employed by the Company or an
Affiliated Company beyond the date which would have been his Normal Retirement Date may retire as
of the first day of any month thereafter, and the date of such subsequent retirement shall be his
Late Retirement Date.

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ARTICLE VII

DETERMINATION OF PENSION INCOME

     7.1 General. Upon his Normal Retirement Date each Participant shall be entitled to a
Pension Benefit. The Normal Monthly Pension Benefit shall be determined as set forth in Section
7.2. The Pension Benefit to which a Participant shall be entitled will be the Normal Monthly
Pension Benefit, or the Minimum Benefit determined as set forth in Section 7.3, whichever is
greater plus, in the case of a Participant who became an employee of Aerojet Fine Chemicals LLC
after June 1, 2000 and who became a Participant on December 1, 2005, the amount of the normal
monthly pension benefit accrued to the Participant as of November 30, 2005 under the provisions of
the GenCorp Consolidated Pension Plan (without regard to Programs C and D) in effect on that date
and as set forth in Schedule D.

     The Pension Benefit to which any Participant, who was employed by the Aerojet Fine Chemicals
LLC on June 1, 2000, is entitled under this Plan shall be offset and reduced by the amount of
Pension Benefit such Participant is entitled to receive under the Aerojet Plan, assuming that
payment of such Pension Benefit under the Aerojet Plan commences at the same time the Participant
commences to receive his Pension Benefit under this Plan; provided, however, that for this purpose
the value of that part of any Participant’s Pension Benefit under the Aerojet Plan that is
attributable to Variable Benefit units shall be fixed as of December 1, 1999.

     The form in which benefits are payable is provided in Article X. The amount of benefits
described below in Sections 7.2 through 7.5 is the amount of benefits payable in the form of a
single life annuity.

31

 

     7.2 Normal Monthly Pension Benefit. The Normal Monthly Pension Benefit which a
Participant accrues during a Plan Year shall be credited to him as of each such Plan Year. The
total Normal Monthly Pension Benefit of a Participant shall be equal to the sum of the following:

     (a) The amount of the normal monthly pension benefit accrued to the Participant as of
November 30, 2005, under the provisions of Program D as in effect on that date and as set
forth in Schedule D.

     (b) A monthly amount equal to the sum of:

     (i) 1/12 of 1.625% of the lesser of his Annual Earnings and the Average Social
Security Wage Base for such Plan Year, multiplied by the number of months of his
Credited Service in such Plan Year from December 1, 2005 through the month in which
he attains 35 years of Credited Service;

     (ii) 1/12 of 2.0% of the excess, if any, of his Annual Earnings over the
Average Social Security Wage Base for such Plan Year, multiplied by the number of
months of his Credited Service in such Plan Year from December 1, 2005 through the
month in which he attains 35 years of Credited Service;

     (iii) 1/12 of 2.0% of his Annual Earnings for such Plan Year, multiplied by the
number of months of his Credited Service in such Plan Year following the month in
which he attains 35 years of Credited Service.

     7.3 Minimum Benefit. A Participant’s Minimum Benefit shall be the benefit calculated
in accordance with subsection (a), (b), or (c), below, whichever is greatest. For this purpose, if
the formula refers to a “plan year” prior to December 1, 2005, such “plan year” shall be the period
beginning December 1, and ending the following November 30.

32

 

     (a) A monthly benefit equal to forty-four dollars ($44.00) per year of Credited
Service.

     (b) 1/12 of the sum of (i), (ii) and (iii) where

     (i) equals the Participant’s years and twelfths of years of Credited
Service not in excess of 35 years, multiplied by 1.125% of that portion of
his Average Annual Earnings not in excess of the Average Social Security Wage
Base,

     (ii) equals the Participant’s years and twelfths of years of Credited
Service, not in excess of 35 years, multiplied by 1.5% of that portion, if
any, of his Average Annual Earnings in excess of the Average Social Security
Wage Base, and

     (iii) equals the Participant’s years and twelfths of years of Credited
Service in excess of 35 years, multiplied by 1.5% of his Average Annual
Earnings.

     (c) A monthly benefit equal to the sum of (i) and (ii) where

     (i) equals the sum of (A) and (B) where

     (A) equals 1/12 of 1.2% of the Participant’s Annual Earnings not in
excess of $15,000 during each Plan Year prior to December 1, 1989 for which
he was credited with Credited Service, and

     (B) equals 1/12 of 2.0% of the Participant’s Annual Earnings in excess
of $15,000 during each Plan Year prior to December 1, 1989 for which he was
credited with Credited Service, and

     (ii) equals the sum of (A) and (B) and (C) where

33

 

     (A) equals 1/12 of 1.625% of the lesser of his Annual Earnings and the
Average Social Security Wage Base for each Plan Year commencing after
November 30, 1989, multiplied by the number of months of his Credited Service
in such Plan Year through the month in which he attains 35 years of Credited
Service.

     (B) equals 1/12 of 2.0% of the excess, if any, of his Annual Earnings
over the Average Social Security Wage Base for each Plan Year commencing
after November 30, 1989, multiplied by the number of months of his Credited
Service in such Plan Year through the month in which he attains 35 years of
Credited Service; and

     (C) equals 1/12 of 2.0% of his Annual Earnings for each Plan Year
commencing after November 30, 1989, multiplied by the number of months of
his Credited Service in such Plan Year following the month in which he
attains 35 years of Credited Service.

     If a Participant whose employment terminates is subsequently rehired, the determination of his
Pension Benefit made on or after the time of his prior termination will be disregarded and a
subsequent determination will be made on or after his later termination or later retirement at
Retirement Date taking into account all service until such time, and such later determination shall
be controlling.

As of each October 1, the benefits being paid to any person shall be compared to the benefits
that would be paid to such person if such person’s benefits were based on a Minimum Benefit
applicable to such person. For the Plan Year commencing as of such October 1, benefits shall be
based on the applicable Minimum Benefit if an increase in benefits would
thereby result.
For

34

 

 purposes of applying the provisions of the two preceding sentences, unless expressly provided
to the contrary in resolutions of the Board of Directors, no adopted change in any of the pension
benefit calculations shall apply to or with respect to a Participant whose employment for the
Company and all Affiliated Companies has terminated prior to the effective date of such change.

     7.4 Early Retirement.

     (a) If a person employed by a Member Company or an Affiliated Company elects to receive
his Pension Benefit by retiring at an Early Retirement Date he shall receive his Vested
Percentage of his Pension Benefit commencing on his Early Retirement Date or on such later
date prior to his Normal Retirement Date which he shall designate. Such Pension Benefit
shall be determined in the same manner as the Pension Benefit (whether Normal Monthly
Pension Benefit or Minimum Benefit) payable on Normal Retirement Date, but shall be reduced
by reason of the commencement of such benefits prior to Normal Retirement Date. Such
reduction shall be in the amount of four-tenths of one percent (0.4%) for each month that
the commencement of such Participant’s Pension Benefit precedes the first day of the month
coinciding with or next following his sixty-second (62nd) birthday, with no reduction by
virtue of its commencement on or after such a person’s sixty-second (62nd) birthday.

     (b) In the case of a person whose employment for the Company and all Affiliated
Companies terminates with a vested right to a Pension Benefit (but who at the time of such
termination is not eligible to retire on an Early Retirement Date) and who elects to receive
such Pension Benefit commencing on the first day of any month coinciding with or following
his fifty-fifth (55th) birthday, as provided in Section 9.2, the
monthly amount of Pension Benefit (whether Normal Monthly Pension Benefit or

35

 

Minimum
Benefit) shall be a reduced percentage of the Pension Benefit otherwise payable. Such
reduced percentage shall be determined in accordance with Schedule A attached hereto and not
in accordance with the percentage reduction set forth in the preceding subsection (a) of
this Section 7.4.

     (c) A Participant who has a Spouse shall not be required to furnish the written consent
of his Spouse to any election regarding the commencement of benefits prior to age sixty-five
(65) provided such benefits are payable in the normal form under Section 10.1(a) or pursuant
to the Participant’s Qualified Election to receive payment in an optional form under Section
10.2.

     7.5 Retirement On Late Retirement Date. If a Participant retires on a date which is
subsequent to his Normal Retirement Date, the benefit to which he may be entitled shall commence as
of the first day of the month coinciding with or next following the date of his actual retirement
as though such date were his Normal Retirement Date; provided, however, in the case of a
Participant who is a Five Percent Owner, as defined in Section 23.2(b), benefits shall commence no
later than the April 1 following the calendar year in which the Participant attains age seventy and
one-half (70-1/2) even if he has not actually retired.

     7.6 Maximum Benefit Limitations. The maximum annual amount of Pension Benefits
payable as a single life annuity described in Article X to a Participant under this Plan in any
Plan Year (determined without regard to the special rule applicable to Participants who transferred
from GenCorp Inc. to Aerojet Fine Chemicals LLC after June 1, 2000 and before December 1, 2005),
shall be the lesser of:

36

 

     (a) Two and one-half percent (2-1/2%) multiplied by such Participant’s Credited Service
(determined in the manner applicable to determining the Minimum Benefit) and further
multiplied by his average Annual Earnings during his three (3) consecutive Plan Years which
produces the highest annual average; and

     (b) One hundred twenty percent (120%) of his average Annual Earnings during his three
(3) consecutive Plan Years which produces the highest annual average minus fifty percent
(50%) of the annual primary social security benefit which such Participant is eligible to
receive. In the case of a Participant retiring on or after Normal Retirement Date the
annual primary social security benefit shall be the benefit which such Participant is
eligible to receive upon retirement based upon social security benefit levels in effect at
his Normal Retirement Date. In the case of a Participant terminating employment before
Normal Retirement Date, the annual primary social security benefit shall be the benefit
which such Participant would receive at Normal Retirement Date if he did not earn any
further compensation until that date from any source and based upon social security benefit
levels in effect on the date of his termination of employment.

     The primary social security benefit shall be determined for purposes of this Section
7.6 by the Pension Plan Committee. In making this determination, the Pension Plan Committee
may estimate a Participant’s pre-separation salary history by applying a salary scale,
projected backwards, to the Participant’s compensation as of the date on which his
employment terminated. At the election of the Pension Plan Committee, said salary scale
shall be either (a) the actual change in the average wages from year to year as determined
by the Social Security Administration or (b) a level annual percentage in the amount of six
percent (6%). Notwithstanding the foregoing, if the Pension Plan

37

 

Committee elects to estimate a Participant’s pre-separation salary history, in
determining the primary social security benefit the Pension Plan Committee shall consider
competent evidence supplied by a Participant of such Participant’s prior earnings history
for social security purposes if such evidence is presented by the Participant not later than
twelve (12) months after termination of employment with the Company and all Affiliated
Companies, or the date the Participant is notified of the benefit under the Plan to which he
is entitled.

     In no event, however, shall the total annual amount of Pension Benefits payable to a
Participant exceed the limitation on benefits as provided in Article XXI.

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ARTICLE VIII

DISABILITY PROVISION

     8.1 Disability Provision. A Participant in Employee status who through some
unavoidable cause becomes totally and permanently disabled, as defined in Section 8.2, shall be
eligible to accrue Cumulative and Credited Service in accordance with this Article VIII. Such
accrual of Cumulative and Credited Service shall commence on the date that the Pension Plan
Committee determines the Participant to be totally and permanently disabled, but not sooner than
six (6) months following the cessation of active performance of duties by reason of disability. In
the case of any Disabled Participant, for purposes of determining Pension Benefits with respect to
Credited Service accrued in accordance with this Article VIII, the Annual Earnings of such
Participant shall be deemed to include only the salary (excluding bonuses, commissions and
overtime) of such Participant as in effect at the time of cessation of active performance of duties
by reason of disability. The accrual of Cumulative Service and Credited Service provided herein
shall continue until the earliest of the date (1) such total and permanent disability ceases
(including but not limited to a cessation of such disability by reason of the cessation of Social
Security disability benefits), (2) the Participant reaches Normal Retirement Date, (3) payment of
his Pension Benefit commences, (4) the Participant fails to comply with examination requirements as
provided in Section 8.4, or (5) the Participant engages in any regular occupation or employment
subsequent to his disability as provided in Section 8.4.

     8.2 Determination of Total and Permanent Disability. A Participant shall be deemed to
be totally and permanently disabled when (a) he is entitled to receive Social Security disability
benefits and (b) on the basis of proof satisfactory to the Pension Plan Committee, the Pension Plan
Committee determines that as a result of any physical or mental condition he is

39

 

totally prevented from engaging in any regular occupation or employment for wage or profit
(except such employment as is found by the Pension Plan Committee to be for purposes of
rehabilitation) and the condition will, in the opinion of the physician or physicians, clinic or
hospital who make the examination or examinations provided herein, be permanent, total and
continuous for the remainder of his life. To the extent permitted by law, a Participant shall not
be deemed disabled for the purposes of this section if, on the basis of proof satisfactory to it,
the Pension Plan Committee determines that his disability arose from any intentionally
self-inflicted injury or injury resulting from participation in any criminal undertaking or from
service in the armed forces of any country, or consists of chronic alcoholism or addiction to
narcotics (or injury or disease resulting there from). Application for Disability Benefits must be
received no later than one year after your last date of active employment

     8.3 Early Commencement of Benefits. A Participant who is totally and permanently
disabled and who has accrued Cumulative Service and Credited Service pursuant to Section 8.1, may,
on or after attaining age fifty-five (55) and completing at least five (5) years of Cumulative
Service, elect to have his accrued Pension Benefit commence on the first day of a month designated
by the Participant coinciding with or after his fifty-fifth (55th) birthday and before his Normal
Retirement Date. In such event the Pension Benefit to which he would otherwise be entitled shall
be reduced by reason of the commencement of payments prior to Normal Retirement Date, in accordance
with Section 7.4(a). If the Pension Benefit is paid in a form other than a single life annuity,
the Pension Benefit also will be subject to such further reductions as are provided in Article X.

     8.4 Verification of Disability. A Participant who becomes totally and permanently
disabled shall be required to submit to a medical examination and to such reexamination as the

40

 

Pension Plan Committee shall deem necessary in order to make a determination concerning his
mental or physical condition. An individual who is accruing Cumulative and Credited Service
pursuant to this Article VIII may be required to submit to a medical examination at any time, but
not more often than once every six (6) months, to determine whether he is eligible to continue
accruing such Cumulative and Credited Service. If on the basis of such examination it is
determined by the Pension Plan Committee that such individual prior to attaining age sixty-five
(65), has sufficiently recovered to engage in any regular occupation or employment for wage or
profit, or if it is determined by the Pension Plan Committee that such individual has engaged in
any regular occupation or employment subsequent to his disability (except such employment as is
found by the Pension Plan Committee to be for purposes of rehabilitation), continued accrual of
Cumulative and Credited Service shall cease as of the date determined by the Pension Plan
Committee. In the event that such individual shall fail within thirty (30) days after notice to
submit to medical examination, his accrual of Cumulative and Credited Service shall cease until he
has submitted to such examination after which his continued eligibility to accrue Cumulative and
Credited Service may be determined as provided above. The medical examinations provided herein
shall be made by a competent physician or physicians or clinic or hospital selected by the Pension
Plan Committee at no cost to the Participant.

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ARTICLE IX

VESTING AND VESTED TERMINATION

     9.1 Vesting and Vested Percentage. A Participant shall become fully vested in his
accrued Pension Benefits upon his sixty-fifth (65th) birthday (if he is then employed by the
Company or an Affiliated Company), or upon completion of five (5) years of Cumulative Service,
whichever shall occur first.

     9.2 Early Commencement of Benefits. A Participant whose employment terminates after
completion of five (5) or more years of Cumulative Service but before becoming eligible for and
entitled to retirement on an Early Retirement Date in accordance with Section 6.2 may, upon
attaining age fifty-five (55) elect to receive his Vested Percentage of his Pension Benefit,
commencing on the first day of any month designated by the Participant coinciding with or after his
fifty-fifth (55th) birthday and before his Normal Retirement Date. If the Participant was credited
with an hour of service under Program D before December 1, 1992, the amount actually payable on
such early commencement date shall be a reduced percentage, determined in accordance with Schedule
A attached hereto, of his vested Pension Benefit payable at Normal Retirement Date. If the
Participant was not credited with an hour of service under Program D before December 1, 1992, the
amount actually payable on such early commencement date shall be the Actuarial Equivalent of his
vested Pension Benefit payable at Normal Retirement Date. The percentage reduction specified in
Section 7.4(a) for early retirement shall not apply.

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ARTICLE X

PAYMENT OF BENEFITS

     10.1 Normal Form of Payment.

     (a) The Pension Benefit payable to a Participant who has a Spouse on his Annuity
Starting Date shall be a reduced benefit payable for the lifetime of the Participant, and
upon his death fifty percent (50%) of the amount payable to the Participant will be paid to
the Spouse of the Participant, for the lifetime of such Spouse. The reduced monthly amount
payable to a Participant during his lifetime (as provided in this Section 10.1(a)), shall be
a percentage of the amount otherwise payable in the form described in Section 10.1(b) below,
and such percentage shall be determined in accordance with Schedule B, attached hereto.

     (b) The Pension Benefit payable to any Participant who does not have a Spouse on his
Annuity Starting Date shall be a single life annuity, payable for the lifetime of the
Participant, which is the amount provided in Article VII, VIII or IX, as appropriate.

     10.2 Optional Form of Payment. Subject to the provisions of Section 10.3, below, a
Participant (including a former Employee with a vested interest as provided in Article IX) may make
an election, at any time prior to the date with respect to which his retirement income commences,
to receive the retirement income otherwise payable to him in an optional form described in either
Section 10.2(a), Section 10.2(b) or Section 10.2(c) below:

     (a) A single life annuity, as described in Section 10.1(b), payable to the Participant
for his lifetime.

     (b) A joint and survivor annuity, with reduced monthly payments to the Participant for
his lifetime, with the percentage of such monthly amount continued

43

 

thereafter to the Participant’s designated Joint Annuitant, to be paid monthly for the
lifetime of such Joint Annuitant, ending with the last payment made prior to the death of
such Joint Annuitant. Subject to the provisions of Section 10.6, the applicable Joint
Annuitant’s percentage shall be specified by the Participant at the time of electing the
joint and survivor annuity described in this Section 10.2(b), and shall be either fifty
percent (50%) or one hundred percent (100%). The reduced monthly amount payable to a
Participant during his lifetime (as provided in this Section 10.2(b)), shall be a percentage
of the amount otherwise payable in the form described in Section 10.1(b) above, and such
percentage shall be determined in accordance with Schedule B (where fifty percent (50%) is
payable to the Joint Annuitant) or Schedule C (where one hundred percent (100%) is payable
to the Joint Annuitant).

     (c) A reduced pension, which shall be the Actuarial Equivalent of the amount otherwise
payable in the form described in Section 11.1(b), payable during the Participant’s life, but
for a term certain of 5, 10, 15 or 20 years (as the Participant shall so elect provided the
period specified shall not exceed the maximum period permitted under Section 10.6, with the
payment to his Beneficiary of any pension payments remaining to be paid after the
Participant’s death, or if such Beneficiary shall have predeceased him, with the commuted
value of such remaining pension payments to be paid to his estate in one lump sum, and with
the payment to the estate of the Beneficiary in one lump sum of the commuted value of any
pension payments remaining to be paid at the death of the Beneficiary.

Except in the case of an election of a joint and survivor annuity where (i) the designated Joint
Annuitant is the Participant’s Spouse, and (ii) the Joint Annuitant will receive 100% of the

44

 

monthly pension benefit paid to the Participant during his lifetime, such election must be a
Qualified Election.

     10.3 Election Not to Take Joint and Survivor Annuity. At least thirty (30) and no
more than ninety (90) days before the date with respect to which a Participant’s benefit under this
Plan commences to be paid in the form of a joint and survivor annuity described in Section 10.1(a),
such Participant shall be furnished, in writing, (a) a general description of such joint and
survivor annuity, (b) a general description of the circumstances in which it will be provided, (c)
notice of the Participant’s right, prior to the commencement of benefits, to make an election to
receive his benefits in an optional form described in Section 10.2 (and the right to revoke such
election, together with an explanation of the effect of such revocation), (d) a general description
of the relative financial effect on a Participant’s benefits of an election to receive benefits in
a form other than the joint and survivor annuity provided in Section 10.1(a), and (e) a general
description of the rights of the Participant’s Spouse under applicable provisions of the Internal
Revenue Code pertaining to a Qualified Election. At the same time the Participant also shall be
furnished, or be advised of the availability of, a written explanation of the terms and conditions
of the joint and survivor annuity described in Section 10.1(a) and the financial effect upon the
particular Participant’s annuity of making an election to receive benefits in an optional form.

     Subject to Section 10.8, an election (including a Qualified Election) under this Section 10.3
may be made by a Participant hereunder at any time prior to the commencement of benefits. Except in
the case of an election of a joint and survivor annuity where (i) the designated Joint Annuitant is
the Participant’s Spouse, and (ii) the Joint Annuitant will receive 100% of the monthly pension
benefit paid to the Participant during his lifetime, such election must be a Qualified Election
which is in writing and clearly indicates that the Participant is making a

45

 

Qualified Election to receive benefits in a form other than that of the joint and survivor
annuity provided under Section 10.1(a).

     10.4 Designation of Joint Annuitant. Whenever a Participant may be permitted to
designate a Joint Annuitant pursuant to this Article X, such designation shall be made in the form
of an election (including, where required, a Qualified Election) by the execution and delivery to
the Pension Plan Committee of an instrument in form satisfactory to the Pension Plan Committee. An
election of an optional form of benefit under this Article X may be revoked or a different Joint
Annuitant may be named before payment of the Participant’s retirement income commences, with the
written consent of the Pension Plan Committee in accordance with rules of uniform application for
all Participants similarly situated.

     10.5 Conditions of Qualified Election. Except as provided in Article XII, in the
event that a Participant has made an election (including, where required, a Qualified Election) to
receive an optional form of benefit under this Article X, and either the Participant or the Joint
Annuitant designated to receive such payments dies before payment of the Participant’s Retirement
Income commences, such election of an optional form shall not become effective.

     10.6 Limitations on Distribution of Benefits.

     (a) Required Beginning Date: Distribution of Benefits must commence not later
than a Participant’s Required Beginning Date. The Required Beginning Date for payment of a
pension to a Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2. If the provisions of this
Section require the payment of benefits to a Participant who has not yet terminated
employment, the Participant’s Normal Monthly Pension Benefit earned during each subsequent
accrual period and determined as of the end of such period shall be actuarially

46

 

reduced to reflect distributions made during the period to which the additional Accrued
Benefit relates.

     (b) The provisions of this Section will apply to any distribution of a Participant’s
interest and will take precedence over any inconsistent provisions of this Plan. However,
this Section is not intended to provide an optional form of distribution or commencement
date not otherwise allowed under the Plan unless the timing or amount of payments to be made
under the applicable provisions of the Plan, without regard to this Section, would be later
than the Required Beginning Date or less than the required minimum provided under this
Section.

     (c) All distributions required under this Section shall be determined and made in
accordance with Section 401(a)(9) of the Code and the regulations thereunder, including the
incidental death benefit requirements of Code Section 401(a)(9)(G) and Treas. Reg.
1.401(a)(9)-6, Q & A-2. The Plan shall apply the minimum distribution requirements of Code
Section 401(a)(9) in accordance with the Final Treasury Regulations issued June 15, 2004
thereunder.

     (d) Distribution of benefits, if not made in a single sum, shall be made over one of
the following periods (or a combination thereof): 1) the life of the Participant; 2) the
lives of the Participant and a designated Beneficiary; 3) a period not extending beyond the
life expectancy of the Participant or 4) a period not extending beyond the life expectancy
of the Participant and a designated Beneficiary.

     (e) If the distribution of the Participant’s interest has begun in accordance with the
preceding paragraph and the Participant dies before his entire interest has been

47

 

distributed to him, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution used as of his date of death.

     (f) If the Participant dies before distribution commences, his or her entire interest
will be distributed no later than the date specified below:

     (1) Payments of any portion of such interest to the Participant’s surviving
Spouse shall be made over the life or life expectancy of such surviving Spouse
commencing no later than December 31 of the calendar year in which the Participant
would have attained age seventy and one half (701/2) or, if later, December 31 of
the calendar year containing the first anniversary of the Participant’s death except
to the extent an election is made to receive a distribution of the surviving
Spouse’s entire interest no later than December 31 of the calendar year containing
the fifth anniversary of the Participant’s death.

     (2) Distribution of the entire interest of a Beneficiary other than the
Participant’s surviving Spouse shall be made no later than December 31 of the
calendar year containing the fifth anniversary of the Participant’s death except to
the extent an election is made to receive distributions over the life or life
expectancy of such designated Beneficiary commencing no later than December 31 of
the calendar year containing the first anniversary of the Participant’s death;

     Such election must be made by the Participant (or his designated Beneficiary or
surviving Spouse, if the Participant dies without having made such an election) on
or before the earlier of the date by which distribution must commence absent such
election and the date distribution must commence assuming such election has been
made.

48

 

     If the Spouse dies before payments begin, subsequent distributions are required
under this subsection (except for subsection (f)(2)) as if the surviving Spouse was
the Participant.

     (g) For the purpose of this Section, distribution of a Participant’s interest is
considered to begin on the Participant’s required beginning date (or, if the last sentence
of subsection (f) applies, the date distribution is required to begin to the surviving
Spouse pursuant to subsection (f)). If distribution in the form of an annuity irrevocably
commences to the Participant before the required beginning date, distribution is considered
to commence on the date it actually commences.

     (h) Any amount paid to a child shall be treated as if it had been paid to the surviving
Spouse if such amount will become payable to the surviving Spouse when the child reaches the
age of majority.

     (i) For purposes of this Section, any distribution required under the incidental death
benefit requirements of Section 401(a) of the Code shall be treated as a distribution
required under Section 401(a)(9) of the Code.

     (j) Required Actuarial Increase.

     (i) Except with respect to a Five-Percent Owner, a Participant’s accrued
benefit must be actuarially increased to take into account the period after age 701/2
in which the Participant does not receive any benefits under the Plan. The
actuarial increase begins on the April 1 following the calendar year in which the
Participant attains age 701/2 and ends on the date on which benefits commence after
retirement in an amount sufficient to satisfy Code section 401(a)(9).

49

 

     (ii) The amount of actuarial increase payable as of the end of the period of
actuarial increases must be no less than the actuarial equivalent of the
Participant’s retirement benefits that would have been payable as of the date the
actuarial increase must commence plus the actuarial equivalent of additional
benefits accrued after that date, reduced by the actuarial equivalent of any
distributions made after that date.

     10.7 Direct Rollovers.

     (a) Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee’s election under this section, a Distributee may elect, at the time and
in the manner prescribed by the Pension Plan Committee, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.

     (b) Definitions. For purposes of this Section, the following terms shall have
the meanings set forth in this subsection:

     (1) “Eligible Rollover Distribution” means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: (i) any distribution of less than Two
Hundred Dollars; (ii) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee’s designated Beneficiary, or for a specified
period of ten years or more; (iii) any distribution to the extent such distribution
is required under Code section 401(a)(9); and (iv) the portion of any distribution
that

50

 

is not includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).

     (2) “Eligible Retirement Plan” means an individual retirement account described
in Code section 408(a), an individual retirement annuity described in Code section
408(b), an annuity plan described in Code section 403(a), or a qualified trust
described in Code section 401(a) that accepts the Distributee’s Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity. An Eligible Retirement Plan shall also mean an
annuity contract described in section 403(b) of the Code and an eligible plan under
section 457(b) of the Code which is maintained by a state, political subdivision of
a state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred into such plan
from this Plan. The definition of Eligible Retirement Plan shall also apply in the
case of a distribution to a surviving Spouse, or to a Spouse or former Spouse who is
the alternate payee under a qualified domestic relation order, as defined in section
414(p) of the Code.

     (3) “Distributee” means any Participant who is or was an Employee, and any
Beneficiary who is or was a Participant’s Spouse (including any former Spouse who is
an alternate payee under a qualified domestic relations order, as defined in Code
section 414(p) with regard to any spousal interests recognized or created under the
Plan.

51

 

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

     10.8 Consent to Certain Distribution of Benefits. Notwithstanding any provision of the
Plan to the contrary, if the Actuarial Equivalent present value of a Participant’s vested accrued
benefit exceeds (or at the time of any prior distribution exceeded) $5,000, and the Participant’s
vested accrued benefit is immediately distributable, the Participant and the Participant’s Spouse
(if the Participant elects as Retroactive Annuity Starting Date pursuant to Section 16.1 or a form
of payment other than a Qualified Joint and Survivor Annuity) must consent to any distribution of
such accrued benefit. Except as provided in Section 16.1 with respect to Retroactive Annuity
Starting Date, the consent of the Participant and the Participant’s Spouse (if required) must be
obtained in writing within the 90-day period ending on the Annuity Starting Date. The Pension Plan
Committee will notify the Participant and the Participant’s Spouse of the right to defer any
distribution until the Participant’s Normal Retirement Date. Such notification will include a
general description of the material features and an explanation of the relative value of the
optional forms of benefit available under the Plan in a manner that would satisfy the notice

52

 

requirements of Code Section 417(a)(3), and will be provided no fewer than 30 days nor more
than 90 days prior to the Participant’s Annuity Starting Date.

     If the Participant, after having received the written explanation described above,
affirmatively elects a form of distribution and the spouse consents to that form of distribution
(if necessary), the Annuity Starting Date may be less than thirty (30) days after the written
explanation was provided to the Participant, provided that the following requirements are met:

     (1) The Pension Plan Committee provides information to the Participant clearly
indicating that the Participant has a right to at least thirty (30) days to consider
whether to waive the Qualified Joint and Survivor Annuity and consent to another
form of distribution;

     (2) The Participant is permitted to revoke an affirmative distribution election
until the later of the Annuity Starting Date or the eighth day following the date
the foregoing explanation is provided to the Participant;

     (3) Except as provided in Section 16.1 with respect to Retroactive Annuity
Starting Dates, the Annuity Starting Date is after the date the foregoing
explanation is provided to the Participant; and

     (4) Distribution in accordance with the affirmative election does not commence
before the eighth day after the foregoing explanation is provided to the
Participant.

     Notwithstanding the foregoing, only the Participant is required to consent to the commencement
of a distribution in the form of a qualified joint and survivor annuity described in Section
10.1(a). Neither the consent of the Participant nor the Participant’s Spouse is required to the
extent that a distribution is required to satisfy Code Section 401(a)(9) or 415.

53

 

     An accrued benefit is immediately distributable if any part of the accrued benefit could be
distributed to the Participant or the Participant’s Spouse before the Participant attains (or would
have attained, if the Participant had not died) age sixty-five (65).

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ARTICLE XI

NO PAYMENTS OF BENEFITS DURING EMPLOYMENT

     11.1 No Commencement of Benefits During Employment. Except as provided in Section
10.6, no benefits shall commence to be paid under this Plan to a Participant while he is employed
by a Member Company or an Affiliated Company.

     11.2 Suspension of Benefits. If a Member Company or an Affiliated Company rehires a
Participant who has retired and to whom payment of a Pension Benefit has commenced, or if a
Participant continues to be employed by a Member Company or Affiliated Company after his Normal
Retirement Date, payment of his Pension Benefit shall (i) commence or continue during the
subsequent period of reemployment if he is scheduled to be employed, and is so employed, for no
more than 40 Hours of Service in any month or 173 Hours of Service in a Plan Year, whichever occurs
first, and (ii) cease either upon such re-employment in all other cases or when the Participant’s
Hours of Service exceed 40 Hours of Service in a month or 172 Hours of Service in a Plan Year,
whichever occurs last. If payment of benefits ceases in accordance with the foregoing sentence,
then upon termination of employment thereafter, the Participant shall be entitled to benefits
computed in accordance with Article VII, giving effect to his credited Service before and after
such re-employment and adjusted to reflect the payment of benefits before and after such
re-employment. From time to time, the Pension Plan Committee shall adopt written procedures
regarding the suspension of benefits payable to Participants during a subsequent period of
employment, which comply with the requirements of Section 203(a)(3)(B) of the Employee Retirement
Income Security Act of 1974 and any applicable regulation promulgated thereunder.

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ARTICLE XII

SPOUSAL DEATH BENEFIT

     12.1 Spousal Death Benefit. Subject to the provisions of this Article XII, if a
Participant dies (1) after having completed at least five (5) years of Cumulative Service or after
having attained Normal Retirement Date (whether or not he has actually retired) and (2) before
payment of his Pension Benefit commences, a monthly benefit, based on his accrued benefit under
this Plan to the extent vested, will be payable to the Spouse to whom such Participant is lawfully
married on the date of his death. Such monthly benefit for such Spouse shall commence on the later
of (a) first day of the first month following the Participant’s death or (b) the first day of the
month coinciding with or next following the date on which the Participant would have attained age
55 had his death not occurred. Such monthly benefit shall end upon such Spouse’s death. The
monthly amount of such benefit shall be equal to the monthly amount which would have been payable
to such Spouse after the Participant’s death had the Participant’s employment terminated on the
date of his death, and had payments commenced to be paid to such Participant on the later of (a)
such date or (b) the first day of the month coinciding with or next following the date on which he
would have attained age 55 had his death not occurred, in the form of the joint and survivor
annuity provided in Section 10.1(a). However, if the Participant elected a 100% joint and survivor
annuity with his surviving Spouse as his joint annuitant within 90 days prior to his death and the
Participant dies prior to benefit commencement, the benefit under this Section shall be calculated
by substituting such payment form for the joint and survivor annuity provided in Section 10.1(a).
For purposes of determining the appropriate reduction factor in the case of benefits commencing
prior to the date on which the Participant would have attained age 65, the provisions of Section
7.4(a) shall apply in the case of a Participant whose death occurs on or after

56

 

attainment of age fifty-five (55) and the factors set forth in Schedule A attached hereto
shall apply in all other cases.

     12.2 Marriage Requirement. No benefit shall be payable under this Article XII other
than to the Spouse of a Participant who (a) is lawfully married to the Participant on the date of
the Participant’s death, and (b) in the case of a Participant who as of the date of his death had
not attained age fifty-five (55), had been lawfully married to the Participant throughout the one
(1) year period ending on the date of the Participant’s death.

     12.3 Certain Elections. A Participant whose employment for the Company and all
Affiliated Companies terminates, may make a Qualified Election at any time prior to the date of his
death not to have such coverage apply.

     Within the applicable period, each Participant described in the preceding provisions of this
Section shall be furnished a written explanation with respect to the pre-retirement survivor
annuity described in Section 12.1. Such explanation shall be comparable to the explanation
described in Section 10.3 hereof. If a Participant enters the Plan after the first day of the Plan
Year in which the Participant attains age thirty-five (35) such written explanation shall be
furnished no later than the start of the second Plan Year commencing after the Plan Year in which
such participation begins.

     For purposes of this Section the term “applicable period” means, with respect to a
Participant, whichever of the following periods end last:

     (a) the period beginning with the first day of the Plan Year on which the Participant
attains age thirty-two (32) and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains thirty-five (35),

     (b) a reasonable period after the individual becomes a Participant,

57

 

     (c) a reasonable period ending after the Plan ceases to fully subsidize the cost of
pre-retirement survivor annuities,

     (d) a reasonable period ending after Section 401(a)(11) of the Code applies to a
Participant, and

     (e) a reasonable period after separation from service in case of a Participant who
separated before attaining age thirty-five (35).

     12.4 Cost of Benefit. If spousal death benefit coverage applies to a Participant
during any period of time, prior to the Participant’s death, that the Participant is not employed
by the Company or an Affiliated Company, a charge shall be imposed. Likewise, a charge shall be
imposed for any period of time prior to December 1, 2005 with respect to which Part D as in effect
on November 30, 2005 would have imposed such a charge. Such charge shall be a reduction of any
benefits payable to or with respect to the Participant, and shall be expressed as a percentage of
such benefits for each Plan Year or portion of a Plan Year during which coverage is in effect, as
follows:

	 	 	 
	Youngest Age During	 	Percentage Reduction
	Plan Year of Coverage	 	for such year
	Under 35
	 	No reduction
	 	 	 
	35 through 44
	 	.1% (one tenth of one percent)
	 	 	 
	45 through 54
	 	.3% (three tenths of one percent)
	 	 	 
	55 and over
	 	.6% (six tenths of one percent)

     Such charge shall be imposed when coverage is provided automatically, subject to a right to
make a Qualified Election to waive coverage (as described in Section 12.3).

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ARTICLE XIII

DESIGNATION OF BENEFICIARY

     13.1 Designation of Beneficiary. Whenever a Participant is entitled to designate a
Beneficiary to receive all amounts payable under this Plan in the event of the Participant’s death,
then such designation of a Beneficiary other than the Participant’s Spouse shall be made pursuant
to a Qualified Election.

     13.2 Failure of Designation. Wherever provision is made hereunder for the payment of
any death benefit to the Beneficiary of a Participant and there shall be no properly designated
Beneficiary surviving such Participant, such benefit shall be paid to the Participant’s Spouse, if
any, or if there is no spouse, to the executor or administrator of the estate of such Participant,
or, if no executor or administrator has been duly designated and qualified, then such benefit shall
be paid to the survivors of the Participant in the following order of priority:

     (a) Children;

     (b) Parents;

     (c) Brothers and sisters;

     (d) Heirs at law.

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ARTICLE XIV

TRANSFER OF EMPLOYMENT

     If any Participant transfers (a) to a position with a Member Company, other than as an
Employee as defined in this Plan, or (b) to an Affiliated Company as a salaried employee or an
hourly paid employee of such organization or entity, such Participant for the period of such
service shall continue to accumulate Cumulative Service in accordance with Article XV of this Plan,
but shall not earn Credited Service for the period of such service. Such Participant shall retain
all other rights as provided by this Plan.

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ARTICLE XV

AFFILIATED SERVICE

     15.1 Definitions. For purposes of this Article XV, only the following definition
shall apply:

     (a) “Related Employee” means an employee (including a person deemed to be an employee
pursuant to Section 414(n) of the Internal Revenue Code) of a Member Company or of an
Affiliated Company who is not an Employee as defined in this Plan.

     (b) “Related Plan” means the Ampac Fine Chemicals Pension Plan for Bargaining
Employees, and any employee pension benefit plan (within the meaning of Section 3(2) of the
Employee Retirement Income Security Act of 1974) which is maintained by a Member Company or
an Affiliated Company, other than this Plan.

     15.2 Credited Service. No Employee or former Employee shall accrue Credited Service
for purposes of this Plan for any period during which he is not an Employee, as defined in this
Plan, except as provided in Article VIII.

     15.3 Cumulative Service. In the case of an Employee or former Employee who has
rendered service as a Related Employee to a Member Company or an Affiliated Company, Cumulative
Service, for purposes of this Plan, shall include:

     (a) Full years of service credit for vesting purposes deemed to be earned as a Related
Employee under a Related Plan (but not including any such credit with respect to service as
an Employee, as defined herein, for which credit for vesting purposes is deemed earned under
Section 3.10), and

     (b) For any period of service rendered as a Related Employee during which such Employee
or former Employee is not covered by a Related Plan, any Plan Year

61

 

during which the Related Employee completes at least one hour for which he is paid or
indirectly paid or entitled to payment for the performance of duties as a Related Employee,
provided, however, that no such Plan Year shall be taken into account if service rendered
during such Plan Year is included in service credit described in Section 15.3(a), above.

     For purposes of applying the rules of this Plan respecting Breaks in Service, a Related
Employee who sustains a Break in Service under a Related Plan shall be deemed to have sustained a
Break in Service for purposes of this Plan.

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ARTICLE XVI

APPLICATION FOR BENEFITS

     16.1 Application for Benefits.

     (a) Any person claiming benefits under this Plan (hereinafter referred to as
“Claimant”) shall submit an application therefor to the Pension Plan Committee,
together with such documents and information as the Pension Plan Committee may
require. Except as provided below, a Participant’s Annuity Starting Date shall not
precede the later of the date the notice described in Section 10.3 is provided to
the Participant and the date an application for benefits based on such notice is
filed with the Pension Plan Committee.

     (b) If (i) circumstances exist under which the Participant’s Annuity Starting
Date is permitted under subsection (c) to precede the distribution notice required
by Code section 417(a)(3); (ii) the desired Annuity Starting Date is permissible
under the terms of the Plan; (iii) the Participant and his or her Spouse consent in
writing on forms provided by the Pension Plan Committee; and (iv) the Participant
properly completes his or her benefit election forms and returns them to the Pension
Plan Committee on a timely basis in accordance with rules established by the Pension
Plan Committee, the Participant’s benefits will commence in the form elected by the
Participant as of the first day of the month affirmatively elected by the
Participant in accordance with the terms of the Plan and the Plan’s Administrative
rules, provided that the requirements of subsection (d) are satisfied. Such first
day of the month shall be his or her Retroactive Annuity Starting Date.

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     (c) A Retroactive Annuity Starting Date is permitted in the following circumstances:

     (1) Through no fault of the Participant, the Pension Plan Committee delays
providing the distribution notice until after the date designated as the
Participant’s desired Annuity Starting Date; or

     (2) The distribution notice is not provided prior to the Normal Retirement Date
because the Participant’s whereabouts are unknown and the Participant later comes
forward and requests a benefit commencing at the Normal Retirement Date.

     (d) The benefit payable as of such Retroactive Annuity Starting Date is subject to the
following:

     (1) Amount of Payment: The amount payable as of the date the Participant’s
benefit begins shall be the Participant’s Accrued Benefit, determined as of the
Retroactive Annuity Starting Date, plus a catch-up payment increased by interest
accrued at a reasonable rate for the period commencing as of the Retroactive Annuity
Starting Date or the due date of any periodic payment owed under the relevant
annuity option and ending on the on the date benefits begin to be paid.

     (2) Consent: A Participant’s spouse shall be required to consent to the
designation of a Retroactive Annuity Starting Date hereunder; provided, however,
that the Participant’s spouse shall not be required to consent if the survivor
annuity payments under the form of benefit payable hereunder equal or exceed the
survivor annuity payments payable under a Qualified Joint and Survivor Annuity

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calculated as of the date benefit payments to the Participant actually commence
and not as of the Retroactive Annuity Starting Date.

     (3) Other Limitations. In no event shall any amount paid hereunder exceed the
limitations imposed under Section IX hereof, determined as of the date the
Participant’s benefits begin to be paid.

     (4) Form of Payment. The Participant receives his benefit in an annuity form
of payment.

     16.2 Action on Application. The Pension Plan Committee shall respond within a
reasonable period of time but not later than ninety (90) days (45 days in the case of a claim for a
Disability Retirement Benefit) of receipt of the claim. However, upon written notification to the
Claimant, the response period may be extended, for an additional ninety (90) days (two additional
30 day periods in the case of a claim for a Disability Retirement Benefit). The extension notice
shall indicate the special circumstances requiring an extension of time and the date by which the
Plan expects to render the determination. In the case of a claim for a Disability Retirement
Benefit, the notice of an extension shall specifically explain the standards on which entitlement
to a benefit is based, the unresolved issues that prevent a decision on the claim, and the
additional information needed to resolve those issues, and the claimant shall be afforded at least
45 days within which to provide the specified information. If the claim is denied in whole or in
part, the Claimant shall be provided with a written opinion using nontechnical language calculated
to be understood by the Participant setting forth:

     (1) The specific reason or reasons for denial;

     (2) The specific references to pertinent Plan provisions on which the denial is
based;

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     (3) A description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such material or such
information is necessary;

     (4) Appropriate information as to the steps to be taken if the Claimant wishes
to submit the claim for review;

     (5) The time limits for requesting a review; and

     (6) A statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a) following the adverse benefit determination on review.

     16.3 Claim Review Procedure. A claimant who does not agree with the decision rendered
with respect to his application, may appeal such decision to the Pension Plan Committee. Such
appeal shall be made in accordance with the following procedures:

     (a) Within sixty (60) days (180 days in the case of a claim for a Disability Retirement
Benefit) after the receipt by the Claimant of the written opinion described above, the
Claimant may request in writing that the Pension Plan Committee review the determination.

     The Claimant or his duly authorized representative may review the pertinent documents
and submit written comments, documents, records, and other information for consideration by
the Pension Plan Committee. The Claimant shall be provided, upon request and free of
charge, reasonable access to and copies of, all documents, records, and other information
relevant to the Claimant’s claim for benefits. If the Claimant does not request a review of
the Pension Plan Committee’s determination within such sixty- (60) day period (180 days in
the case of a claim for a Disability Retirement Benefit), he shall be barred and stopped
from challenging the Pension Plan Committee’s determination.

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     The Pension Plan Committee shall review the determination within sixty (60) days (45
days in the case of a claim for a Disability Retirement Benefit) after receipt of a
Claimant’s request for review; provided, however, that for reasonable cause such period may
be extended due to special circumstances for an additional sixty (60) days (45 days in the
case of a Claim for a Disability Retirement Benefit). In the case of a claim for a
Disability Retirement Benefit, the notice of an extension shall specifically explain the
standards on which entitlement to a benefit is based, the unresolved issues that prevent a
decision on the claim, and the additional information needed to resolve those issues, and
the claimant shall be afforded at least 45 days within which to provide the specified
information. In the case of a committee that meets at least on a regular quarterly basis,
the committee shall make a benefit determination no later than the meeting date that
immediately follows the Plan’s receipt of the request for a review, unless the request for
review is filed within 30 days before the meeting date. In such case, the benefit
determination may be made no later than the date of the second meeting following the Plan’s
receipt of the request for review. If, after considering all materials and information
presented by the Claimant (whether or not such materials or information were submitted or
considered in the initial benefit determination), the claim is denied in whole or in part,
the Claimant shall be provided with a written opinion using nontechnical language setting
forth:

     (1) The specific reason or reasons for denial;

     (2) The specific references to pertinent Plan provisions on which the denial is
based;

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     (3) A statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits;

     (4) A statement describing any voluntary appeal procedures offered by the Plan
and the Claimant’s right to obtain the information about such procedures; and

     (5) A statement of the Claimant’s right to bring an action under ERISA Section
502(a).

     (b) Procedures (General). The following procedures shall apply to any claim
filed or reviewed pursuant to this Section:

     (1) Any Claimant may be represented by an authorized representative; however,
the Pension Plan Committee may determine reasonable procedures to determine whether
any individual is authorized to act on behalf of another individual.

     (2) The Pension Plan Committee or any other person or persons acting as a named
fiduciary for this purpose shall determine administrative safeguards designed to
ensure and verify that all determinations are made in accordance with governing Plan
documents and that all Plan provisions are applied consistently with respect to
similarly situated Claimants.

     (3) The response periods described in subsections 16.2 and 16.3(a) shall be
tolled for periods during which the Claimant is responding to a request for
additional information that the Pension Plan Committee or other named fiduciary has
determined is necessary to process the Claimant’s claim. The Claimant shall

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have not less than 45 days to provide the requested information. The response
periods described in subsections 16.2 and 16.3(a) shall recommence when the Claimant
provides the requested information.

     (c) Procedures (Disability). In the case of a claim that relates to a
Disability Retirement pension, the following additional procedures shall apply.

     (1) An individual or committee designated by the Board of Directors, but not
the person or persons responsible for the initial review under Section 16.2, shall
be the named fiduciary responsible for determining the appeal. Such individual or
committee may not make such determination if the individual or committee (or a
subordinate thereof) was consulted in connection with the initial claim for
benefits.

     (2) The review shall not afford deference to the initial adverse benefit
determination.

     (3) When the appeal is based on a medical judgment, the named fiduciary shall
consult with a health care professional who has appropriate experience and training
in the field involved in determining the Claimant’s disability and shall identify
all medical and vocational experts whose advice was obtained in connection with the
appeal. A health care professional may not be consulted under this subsection if
the health care professional (or a subordinate of such individual) was consulted in
connection with the initial claim for benefits.

     (4) If the named fiduciary makes an adverse benefit determination on review,
the named fiduciary shall provide the Claimant with a statement that the Claimant is
entitled to receive or request reasonable access to, and copies of, all

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information relevant to the claim for benefits, including internal rules,
guidelines, and protocols (to the extent relied upon) and a statement regarding
voluntary alternative dispute resolution options.

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ARTICLE XVII

ADMINISTRATION

     17.1 The Pension Plan Committee. Authority to control and manage the operation and
administration of Plan shall, except as hereafter provided, be vested in the Pension Plan Committee
of the Board of Directors of American Pacific Corporation. The members of the Pension Plan
Committee will be the persons appointed by the Board of Directors. Each member of the Pension
Plan Committee shall constitute a “Named Fiduciary” within the meaning of Section 402(a)(2) of the
Employee Retirement Income Security Act of 1974. Members of the Pension Plan Committee shall be
bonded within the limits provided by the Employee Retirement Income Security Act of 1974, and shall
serve without compensation for their services as members.

     17.2 Pension Plan Committee Procedure. The Pension Plan Committee shall elect a
Chairman and one of its members as Secretary (provided, however, that the Pension Plan Committee
may appoint a Secretary who need not be a member of the Pension Plan Committee) and such other
officers as the Pension Plan Committee deems appropriate. The Pension Plan Committee shall hold
meetings upon such notice, at such place, and at such time as it may from time to time determine.
A majority of the members of the Pension Plan Committee shall constitute a quorum for the
transaction of business. Any action taken by the Pension Plan Committee shall be by vote of a
majority of the members present at a meeting, or in writing and signed by all the members without a
meeting.

     17.3 Pension Plan Committee Powers. The Pension Plan Committee shall have full
authority to control and manage the operation and administration of the Plan (other than authority
with respect to management and direction of Plan investments unless the Board of Directors shall

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otherwise determine) and to construe and apply all of its provisions. Any action taken in
good faith by the Pension Plan Committee in the exercise of authority conferred upon it by this
instrument shall be conclusive and binding upon the Participants and their beneficiaries. The
authority of the Pension Plan Committee shall include, but not by way of limitation, the following:

     (a) Authority to decide all questions relating to the eligibility of employees to
become Participants, the amount of service of any Employee or Participant, and the amount of
benefits to which any Participant may be entitled;

     (b) Authority to compile and maintain all records it determines to be necessary,
appropriate or convenient in connection with the Plan;

     (c) Authority to approve the payment of all benefits as they become payable under the
Plan, which payments shall be made by the Trustee upon written instructions from the Pension
Plan Committee.

     (d) Authority to engage such legal, actuarial, accounting and other professional
service as it may deem proper, including authority to employ one or more persons to render
advice with regard to any responsibility any Named Fiduciary or persons designated under
Section 17.4 may have under the Plan;

     (e) Authority to order valuations and appraisals of the assets held in the Trust Fund,
to retain an actuary to determine the liabilities of the Plan, and to maintain or cause to
be maintained any or all appropriate records pertaining to the Plan, including but not
limited to an accounting of the value of certain assets identified by the Pension Plan
Committee (and gains or losses with respect thereto) which shall be known as the Variable
Benefit Fund;

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     (f) Authority to fix the rates of interest to be credited to Participant contributions
(subject to requirements of Section 411 of the Internal Revenue Code and regulations
thereunder);

     (g) Authority to perform or cause to be performed such further acts as it may deem to
be necessary, appropriate or convenient in the efficient administration of the Plan.

     17.4 Allocation and Delegation of Duties. The Pension Plan Committee may allocate its
fiduciary responsibilities among its members and may designate other persons to carry out fiduciary
and other responsibilities under the Plan. Pursuant to the authority conferred by this Section
17.4, the Pension Plan Committee may designate one or more Pension Benefits Representatives to
perform such functions as the Pension Plan Committee may prescribe.

     17.5 Expenses. All expenses of the Plan, including those incurred by the Pension Plan
Committee, shall be borne by the Plan, and paid out of the Trust Fund, unless the Company, Member
Company, or Sponsor pays such expenses.

     17.6 Accounts. The Pension Plan Committee shall keep records of each Participant’s
accounts under the Plan and shall notify each Participant annually of the then current amount of
such Participant’s accounts. The Pension Plan Committee, in its discretion, may delegate to
another person or persons, including the Trustee, the duty to keep such records and so notify such
Participants subject to the control and supervision of the Pension Plan Committee.

     17.7 Periodic Review. At periodic intervals, not less frequently than annually, the
Pension Plan Committee shall establish and review a funding policy and method consistent with the
objectives of the Plan and the requirements of the Employee Retirement Income Security Act of 1974,
and shall formulate guidelines for the carrying out of such funding policy and method.

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     17.8 Investment Administration.

     (a) Pension Plan Committee. The Pension Plan Committee will have general
responsibility for maintaining relationships with the Trustee and Investment Managers;
selection and removal of the Trustee and Investment Managers; establishing and reviewing
general investment guidelines and policies; monitoring and evaluating the performance of the
Trustee and Investment Managers; establishing and implementing policies and methods for
funding the Plan consistent with the objectives of the Plan and the requirements of law; and
informing the Trustee about projected short-term and long-term financial requirements and
need for cash to make distributions.

     (b) Investment Managers. All contributions to the Trust Fund and earnings
thereon will be invested (a) by the Trustee alone or (b) pursuant to the instructions of an
Investment Manager. The Sponsor may enter into, or direct the Trustee to enter into, a
written agreement with one or more Investment Managers designated by the Pension Plan
Committee to manage the investments of specified portions of the Trust Fund. The Pension
Plan Committee may remove any such Investment Manager or any successor Investment Manager,
or direct the Trustee to do so, and any such Investment Manager may resign, upon giving
appropriate written notice thereof. Upon removal or resignation of an Investment Manager,
the Pension Plan Committee may appoint a successor Investment Manager.

     17.9 Compensation and Expenses of Fiduciaries. A fiduciary will be entitled to
receive any reasonable compensation for services rendered or for the reimbursement of expenses
properly and actually incurred in the performance of his or her duties under the Plan. However, a
fiduciary who already receives full-time pay from the Company or an Affiliated Company will
receive no compensation from the Plan, except for reimbursement of expenses properly and
actually incurred.

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ARTICLE XVIII

AMENDMENT

     The Plan or any portion of the Plan may be amended at any time by action of the Board of
Directors. However, no amendment shall be made at any time, the effect of which would be:

     (a) To cause any assets of the Trust Fund, at any time prior to the satisfaction of all
liabilities with respect to participants and their beneficiaries in the Plan, to be used for
or diverted to purposes other than for the exclusive benefit of such participants and their
beneficiaries;

     (b) To increase the duties and liabilities of the Trustee without its written consent.

     (c) No amendment to the Plan shall have the effect of decreasing a Participant’s
accrued benefit (within the meaning of Section 411(d)(6) of the Code) with respect to
service performed prior to the effective date of the amendment.

     (d) No amendment to the Plan shall have the effect of eliminating or reducing an early
retirement benefit or a subsidy that continues after retirement, or eliminating an optional
form of benefit.

Notwithstanding anything herein to the contrary, the Plan or any portion thereof may be
amended at any time, if necessary, to conform to the provisions of the Employee Retirement Income
Security Act of 1974 and the Internal Revenue Code or any amendment thereto or regulations issued
pursuant thereto. The Board of Directors may delegate its authority to amend
the Plan, as set forth herein, to any person, committee or other entity, subject to such terms or
limitations which the Board, in its complete discretion, may impose.

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     If the Plan’s vesting schedule is amended or the Plan is amended in any way that directly or
indirectly affects the computation of a Participant’s nonforfeitable benefit, each Participant with
at least three (3) years of Cumulative Service with the Company may elect, within a reasonable
period after the adoption of the amendment or change, to have his nonforfeitable benefit computed
under the Plan without regard to such amendment or change. The period during which the election
may be made shall commence at the date the amendment is adopted or deemed to be made, and shall end
on the latest of:

     (A) sixty (60) days after the amendment is adopted,

     (B) sixty (60) days after the amendment becomes effective, or

     (C) sixty (60) days after the Participant is issued written notice of
amendment by the Company.

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ARTICLE XIX

RIGHT TO DISCONTINUE OR TERMINATE;

ALLOCATION OF ASSETS UPON TERMINATION

     19.1 No Contractual Obligation. It is the expectation of the Member Companies that
they will continue the Plan indefinitely, but the continuance thereof is not assumed as a
contractual obligation by any Member Company or any Affiliated Company. The Plan or any portion
thereof may be discontinued or terminated at any time by action of the Board of Directors of the
Sponsor, and any Member Company may discontinue or terminate its participation in the Plan.
Discontinuance or termination of the Plan or any portion thereof shall not have the effect of
revesting in any Member Company any part of the funds of the Trust Fund, except as provided in
Section 19.4.

     19.2 Vesting Upon Termination of Plan. In the event of a termination of the Plan
within the meaning of Section 411 of the Internal Revenue Code, the rights of all Plan participants
to benefits accrued, to the extent then funded (but subject to allocation and reallocation in
accordance with the provisions of Title IV of the Employee Retirement Income Security Act of 1974),
shall become fully vested. In the event of a partial termination of the Plan within the meaning of
Section 411 of the Internal Revenue Code, the rights of all affected Participants to benefits
accrued, to the extent then funded (but subject to allocation and reallocation, if required,
pursuant to the provisions of Title IV of the Employee Retirement Income Security Act of 1974)
shall become fully vested.

     19.3 Allocation of Assets Upon Plan Termination. Upon termination of the Plan, the
assets of the Plan, to the extent that they are sufficient after the payment of and reasonable
reserves for expenses of administration or liquidation of the Trust, shall be allocated for the

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purpose of paying benefits to participants and their beneficiaries of the Plan in an order of
precedence consistent with the provisions of Section 4044 of the Employee Retirement Income
Security Act of 1974.

     19.4 Distribution of Residual Assets. Following termination, any residual assets of
the Plan shall be distributed to the Member Companies after all liabilities of the Plan to
participants and their beneficiaries of the Plan have been satisfied.

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ARTICLE XX

GENERAL MATTERS

     20.1 No Enlargement of Employee Rights. This Plan shall not be deemed to constitute a
contract between any Member Company and any Employee, or to be consideration for, or an inducement
to, or a condition of, the employment of any Employee. Nothing contained in this instrument or
otherwise in the Plan shall be deemed to give any Employee the right to be retained in the employ
of any Member Company or to interfere with the right of any Member Company to discharge or retire
any Employee at any time. No Employee, prior to his retirement under conditions of eligibility for
pension income benefits or prior to his acquiring vested rights in benefits as provided in this
Plan shall have any right to or interest in any portion of any fund, other than as herein
specifically provided. No person shall have any right to pension income benefits, except to the
extent provided herein.

     20.2 Benefits From Trust Fund. Any benefits payable under this Plan shall be paid or
provided for solely from the Trust Fund and the Member Companies assume no liability or
responsibility therefor. The Member Companies’ obligations hereunder are limited solely to the
making of contributions to the Trust Fund as provided for in this Plan. Member Companies may
suspend or discontinue contributions at any time whether or not benefits for service to the date of
suspension or discontinuance have been fully funded.

     20.3 No Alienation. None of the benefits, payments, proceeds, claims or rights of any
Participant, Joint Annuitant or Beneficiary hereunder shall be subject to any claims of any
creditor of any Participant, Joint Annuitant or Beneficiary and in particular the same shall not be
subject to attachment or garnishment or other legal process by any creditor of any Participant,
Joint Annuitant or Beneficiary nor shall any such Participant, Joint Annuitant or Beneficiary have

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any right to alienate, anticipate, commute, pledge, encumber, or assign any claim or right
hereunder or any of the benefits or payments or proceeds which he may expect to receive, contingent
or otherwise, under the provisions hereof. The foregoing shall not apply to judgments, orders and
decrees, and settlement agreements to the extent permitted by Code Section 401(a)(13)(C) and (D).
In the event any person attempts to take any action contrary to this Section such action shall be
null and void and of no effect, and the Company, the Sponsor, the Pension Plan Committee, the
Trustee and all Participants, Joint Annuitants and Beneficiaries shall disregard such action and
are not in any manner bound thereby, and they, and each of them, shall suffer no liability for any
such disregard thereof, and shall be reimbursed on demand out of the Trust Fund for the amount of
any loss, cost or expense incurred as a result of disregarding or of acting in disregard of such
action. Neither the provisions of this Section nor any other provision of this Plan (including but
not limited to provisions conferring rights on a Spouse) shall prohibit observance of a qualified
domestic relations order (as defined in Section 206(d) of the Employee Retirement Income Security
Act of 1974).

     20.4 Facility of Payment. If any payee under the Plan is a minor, or if the Pension
Plan Committee believes that any payee is legally incapable of giving a valid receipt or discharge
for any payment due him, the Pension Plan Committee may have such payment or any part thereof made
to the person (or persons or institution) whom it reasonably believes is caring for or supporting
such payee, unless it has received due notice of claim therefor from a duly appointed guardian or
committee of such payee. Any such payment shall be a payment for the account of such payee and
shall, to the extent thereof, be a complete discharge of any liability under the Plan of such
payee.

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     20.5 Location of Payee. Benefits shall not be paid under this Plan until the
Participant or other person entitled to benefits hereunder shall have made application for such
benefits as provided in this instrument. If any such person, having so applied for benefits, shall
fail thereafter to give the Pension Plan Committee evidence satisfactory to the Pension Plan
Committee of his continued life and address, payment of benefits shall cease as of the last
payment, if any, known to have been received by the payee, and benefits shall not again commence to
be paid until application for benefits is again made in accordance with the provisions of this Plan
as then in effect. In no event shall a Participant or other person be entitled to receive any
amount with respect to any period prior to application for benefits in accordance with this Plan,
or with respect to any period between cessation of benefits and reapplication therefor, as provided
herein.

     20.6 Payment of Small Benefits.

     (a) Notwithstanding any provision in this instrument for the payment of monthly
benefits, if the monthly benefit which would be paid to any person under this Plan is less
than forty dollars ($40.00) and the present value of such benefit is not in excess of five
thousand dollars ($5,000), the Pension Plan Committee will pay one lump sum no later than
the close of the Plan Year following the Plan Year in which the termination or retirement
occurs, in lieu of monthly payments. No other benefits shall be payable to such person.

     (b) Notwithstanding subsection (a), if, at the distribution date, the present value of
the Accrued Benefit of a Participant (or a spouse or former spouse who is an alternate payee
under a qualified domestic relations order) exceeds $1,000 but does not

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exceed $5,000, such present value shall not be distributed prior to the Participant
reaching age 65 without the consent of the distributee.

          The Participant or Beneficiary shall be given a notice of his or her right to receive
the present value of the vested benefit in a lump sum. The Participant or Beneficiary may
choose to have such distribution paid directly to an Eligible Retirement Plan (as defined in
Section 10.7) specified by the Participant or Beneficiary, no later than the close of the
Plan Year following the Plan Year in which the termination or retirement occurs. The
Participant or Beneficiary shall have at least thirty (30) but not more than ninety (90)
days from the date of such notice to elect to receive his benefit in a lump sum or a direct
rollover, and if so elected and paid, no other benefits shall be payable to such former
Participant or to his or her Beneficiaries.

          In the event that the distribute does not make an affirmative election to receive his
or her benefit in a lump sum or to have the benefit paid in a direct rollover pursuant to
Section 10.7:

     (1) If the Participant has not yet reached Normal Retirement Age, the
Participant’s benefit will remain in the Plan until the Participant makes an
affirmative election in accordance with the terms of the Plan or reaches Normal
Retirement Age or dies.

     (2) If the Beneficiary is the surviving spouse or a former spouse who is an
alternate payee under a qualified domestic relations order, the alternate payee’s
benefit will remain in the Plan until the alternate payee makes an affirmative
election in accordance with the terms of the Plan or the date the Participant
reaches Normal Retirement Age or dies.

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     (3) If the Participant has reached Normal Retirement Age, the Plan the benefit
will remain in accordance with subsection (a).

     (4) If the Participant dies prior to receiving or commencing distribution of
his or her benefits, benefits will be paid as otherwise provided in this Plan,
subsection (a), and to the extent benefits are payable to a spouse or former spouse
who is an alternate payee under a qualified domestic relations order, subsection
(b).

     (c) For purposes of this Section, the present value of a benefit and the amount of a
lump sum payment shall be determined in accordance with Section 3.1(b).

     20.7 The Trust Agreement. All assets of the Plan shall be held in a Trust Fund or
Trust Funds by a Trustee or Trustees appointed by the Pension Plan Committee and/or Sponsor
pursuant to a Trust Agreement or Trust Agreements creating such Trust Fund or Trust Funds entered
into between the Pension Plan Committee and/or Sponsor and the Trustee or Trustees.

     20.8 Application of Forfeitures. Any forfeiture of benefits arising from termination
of employment, death, or otherwise prior to the termination of the Plan or the complete
discontinuance of contributions will be used to reduce Member Company contributions otherwise
payable under the Plan, and will not be used to increase Participants’ benefits.

     20.9 Irrevocability. The Member Companies shall have no right or title to, nor
interest in the contributions made to the Trust hereunder, nor shall any part of any funds held in
trust revert to the Member Companies except as follows:

     (a) If an amount is contributed under the Plan by the Member Companies pursuant to a
mistake of fact, the amount so contributed (subject to any depreciation or

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loss in the Trust Fund attributable to such contribution) may be returned to the Member
Companies within one year of the date of such contribution, or

     (b) If any contribution which the Member Companies make under the Plan is conditioned
on initial qualification of the Plan under Code Section 401(a) and if initial qualification
of the Plan is denied, such contribution (subject to any depreciation or loss in the Trust
Fund attributable to such contribution) may be returned to the Member Companies within one
year after the date of denial of the Plan’s initial qualification provided the application
for qualification is made by the time prescribed by law for filing the Member Companies’ tax
return for the taxable year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe, or

     (c) Any contribution which the Member Companies make under the Plan is conditioned upon
the deductibility of such contribution under Section 404 of the Code and, to the extent a
deduction therefor is disallowed, such contribution (subject to any depreciation or loss in
the Trust Fund attributable to such contribution) may be returned to the Member Companies
within one year after such disallowance, or

     (d) In the case of any residual assets remaining after satisfaction of all liabilities
of the Plan, a distribution may be made of such residual assets in accordance with the
provisions of Section 18.4.

     20.10 Merger Restriction. This Plan shall not in whole or in part merge or
consolidate with, or transfer its assets or liabilities to any other plan unless each affected
Participant in this Plan would (if the plan then terminated) be entitled to receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been

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entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had
then terminated).

     20.11 Article Headings. Article headings are for convenient reference only and shall
not be deemed to be a part of the substance of this instrument or in any way to enlarge or limit
the contents of any Article.

     20.12 Gender. Masculine gender shall include the feminine and the singular shall
include the plural unless the context clearly indicates otherwise.

     20.13 Amendments. All amendments to the Plan are effective only on the date on which
such amendments are adopted, unless a different effective date is expressly provided by resolution
of the Board of Directors of the Sponsor, or unless any such amendment shall by its own express
terms become effective at another date. Further, unless and to the extent expressly provided to
the contrary in the terms of any amendment, such amendment shall not be construed to enlarge the
rights of any Participant or other person with respect to a Participant whose employment terminated
prior to the effective date of such amendment.

     20.14 Applicable Law. All legal questions pertaining to the Plan shall be determined
in accordance with applicable federal law and the laws of the State of Nevada, to the extent not
preempted by federal law.

     20.15 Veterans’ Reemployment Rights. Notwithstanding any other provision in the Plan
to the contrary, contributions, benefits, and service credit with respect to qualified military
service shall be provided in accordance with Code section 414(u). The Sponsor shall notify the
Trustee of any Participant with respect to whom additional contributions are made because of
qualified military service.

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ARTICLE XXI

LIMITATIONS ON BENEFITS

     21.1 Basic Limitation. Subject to the adjustments hereinafter set forth, the maximum
annual amount of retirement income payable to a Participant under this Plan shall not exceed the
lesser of:

     (a) One hundred sixty thousand dollars ($160,000); or

     (b) One hundred percent (100%) of the Participant’s average compensation for the three
consecutive calendar years during which he was a Participant and had the greatest aggregate
compensation.

     Except as provided below, a benefit payable in a form other than a straight life annuity must
be adjusted to an actuarial equivalent straight life annuity before applying the limitations of
this Article. The actuarial factors used to determine actuarial equivalence will be either the
factors specified in Section 3.1 or the Applicable Mortality Table (as defined in Section
3.1(b)(A)) and 5%, whichever produces the higher benefit. The Applicable Interest Rate (as defined
in Section 3.1(b)(B)) is substituted for 5% for forms of benefit subject to Code Section 417(e).
Notwithstanding the foregoing, for the short Plan Year beginning December 1, 2005, for purposes of
adjusting any benefit under this paragraph for any form of benefit subject to Code Section
417(e)(3), the interest rate assumption shall be 5.5% or the rate specified by the Plan in Section
3.1(b), whichever produces the higher benefit. The annual benefit does not include any benefits
attributable to employee contributions or rollover contributions, or the assets transferred from a
qualified plan that was not maintained by the Company or an Affiliated Company. No actuarial
adjustment to the benefit is required for (i) the value of a qualified joint and survivor annuity,
(ii) the value of benefits that are not directly related to retirement benefits, and (iii) the

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value of post-retirement cost-of-living increases made in accordance with Code Section 415(d)
and Treasury Regulation 1.415-3(c)(2)(iii).

For purposes of this Section, the limitation year shall be the same as the Plan Year.

     21.2 Membership in Other Defined Benefit Plans. The limitations of this Article XXI with respect to any
Participant who at any time has been a participant in any other defined benefit plan (as defined in
Section 414(j) of the Internal Revenue Code) maintained by the Company or an Affiliated Company
shall apply as if the total benefits payable under all such defined benefit plans in which the
Participant has been a participant were payable from one plan.

     21.3 Payment Prior to Age Sixty-Two or After Age Sixty-Five.
If the annual benefit of a Participant commences prior to age sixty-two (62), the reduced age
dollar limit is the lesser of the actuarial equivalent amount computed using the plan rate and plan
mortality table used for actuarial equivalence of early retirement benefits and the actuarial
equivalent of the amount at age 62 computed using a 5% interest rate and the applicable mortality
table. Any decrease in the defined benefit dollar limitation determined in accordance with this
provision shall not reflect the mortality decrement to the extent that benefits will not be
forfeited upon the death of the Participant.

If the annual benefit of a Participant commences after age 65, the limitation referred to in
subsection (a) of Section 21.1, if necessary, will be adjusted so that it is the actuarial
equivalent of an annual benefit of such dollar limitation beginning at age 65. To determine
actuarial equivalence, the dollar limitation shall be the lesser of the limitation determined using
the Plan rate and Plan mortality table used for late retirement benefits or 5% interest and the
Applicable Mortality Table. For these purposes mortality between age 65 and the age at which
benefits commence shall be ignored.

     21.4 Exception. The provisions of this Article XXI shall not apply to any Participant
who has not at any time participated in any defined benefit plan (as defined in Section 415(k) of

87

 

the Internal Revenue Code) maintained by the Company or any Affiliated Company if his total annual
benefit computed in accordance with this Article XXI in any year is not in excess of ten thousand
dollars ($10,000).

     21.5 Adjustment of Limitation. The maximum annual retirement benefit payable under
this Article XXI to any Participant who has completed less than ten (10) years of service with the
Company and all Affiliated Companies shall be the amount otherwise permitted to be paid under this
Article XXI or, as the case may be, multiplied by a fraction, the numerator of which is the number
of the Participant’s years of service and the denominator of which is ten (10). Application of this
provision to the dollar limit of Section 21.1(a) shall be based upon years of Plan participation
rather than years of service. Application of this provision to the percentage of compensation
limit of Section 21.1(b) shall be based upon years of service.

     21.6 Adjustment. The dollar limitation on the maximum amount of annual retirement
benefit prescribed by Section 21.1 shall be deemed to be adjusted annually, without the necessity
of formal amendment of this Plan, for increases in the cost of living, in accordance with
Regulations issued by the Secretary of the Treasury pursuant to the provisions of Section 415(d) of
the Internal Revenue Code.

     21.7 Special Affiliation Rule. For purposes of this Article XXI, the determination of
whether a company is an Affiliated Company shall be made after applying the modifications required
by Internal Revenue Code Section 415(h) to the percentage tests of Internal Revenue Code Sections
414(b) and (c).

     21.8 Compensation. For the limited purpose of applying the provisions of Article XXI
and Article XXIII, “compensation” means all wages, salaries, and fees for professional services
actually rendered in the course of employment with the Company or an Affiliated Company

88

 

(including,
but not limited to commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the
following:

     (a) Contributions to a plan of deferred compensation which are not includable in the
Employee’s gross income for the taxable year in which contributed, or contributions under a
simplified employee pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;

     (b) Amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by the Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture;

     (c) Amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and
Compensation shall include elective deferrals during the Limitation Year under Code sections 125,
132(f)(4), 401(k), 403(b) and 457.

89

 

ARTICLE XXII

SPECIAL QUALIFICATION PROVISION

     (a) In the event of termination of this Plan, the benefit of any highly compensated
employee (as defined under Code Section 414(q)) and of any highly compensated former
employee is limited to a benefit that is nondiscriminatory under Code Section 401(a)(4).

     (b) In order to comply with this Section, the annual payments to a Participant
described in paragraph (c) below will be restricted to an amount equal in each year to—

     (i) The accrued benefit and other benefits to which the Participant is entitled
under the Plan (other than a social security supplement), and

     (ii) The amount of the payments that the Participant is entitled to receive
under a social security supplement.

     The restrictions in this paragraph (b) do not apply, however, if any one of the
following requirements is satisfied—

     (iii) After payment to a Participant described in subsection (c) hereof of all
benefits payable to the Participant under the Plan, the value of Plan assets equals
or exceeds 110 percent of the value of current liabilities, as defined in Code
Section 412(1)(7)),

     (iv) The value of the benefits payable to the Participant under the Plan for a
Participant described in subsection (c) hereof is less than one percent (1%) of the
value of current liabilities before distribution, or

90

 

     (v) The value of the benefits payable to the Participant under the Plan for a
Participant described in subsection (c) hereof does not exceed the amount described
in Code Section 411(a)(11)(A).

     (c) The Participants whose benefits are restricted on distribution under this
subsection include all highly compensated employees and highly compensated former employees;
provided, however, that in any one (1) year, the total number of Participants whose benefits
are subject to restrictions under this subsection is limited to the twenty-five (25) highly
compensated employees and highly compensated former employees with the greatest compensation
in the current or any prior Plan Year.

     (d) For purposes of this subsection, the term “benefit” includes, among other benefits,
any periodic income and any death benefits not provided by insurance on the Participant’s
life.

     (e) If it is determined that the provisions of this subsection are no longer necessary
to qualify this Plan under the Code, this Section shall automatically become inoperative and
of no effect.

91

 

ARTICLE XXIII

TOP-HEAVY PLAN RULES

     23.1 Applicability. Notwithstanding any provision in this Plan to the contrary, the
provisions of this Article XXIII shall apply in the case of any Plan Year in which the Plan is
determined to be a Top-Heavy Plan under the rules of Section 23.3.

     23.2 Definitions.

     (a) For purposes of this Article XXIII, the term “Key Employee” shall mean any
employee, or former employee, who, at any time during the Plan Year, is or was —

     (i) An officer of the Company or an Affiliated Company having an annual
compensation greater than one hundred thirty thousand dollars ($130,000) as adjusted
under Section 416(i)(1) of the Code. However, no more than fifty (50) employees
(or, if lesser, the greater of three (3) or ten percent (10%) of the employees)
shall be treated as officers;

     (ii) A Five Percent Owner of the Company or an Affiliated Company; or

     (iii) A One Percent Owner of the Company or an Affiliated Company having an
annual compensation from the Company or an Affiliated Company of more than One
Hundred Fifty Thousand Dollars ($150,000).

     (b) For purposes of this Section 23.2, the term “Five Percent Owner” means any person
who owns (or is considered as owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Company or an Affiliated Company or stock
possessing more than five percent (5%) of the total combined voting power of all stock of
the Company or an Affiliated Company. The rules

92

 

of subsections (b), (c), and (m) of Section 414 shall not apply for purposes of
applying these ownership rules. Thus, this ownership test shall be applied separately with
respect to every Affiliated Company.

     (c) For purposes of this Section 23.2, the term “One Percent Owner” means any person
who would be described in Paragraph (b) if “one percent (1%)” were substituted for “five
percent (5%)” each place where it appears therein.

     (d) For purposes of this Section 23.2, the rules of Code Section 318(a)(2)(C) shall be
applied by substituting “five percent (5%)” for “fifty percent (50%).”

     (e) For purposes of this Article XXIII, the term “Non-Key Employee” shall mean any
employee who is not a Key Employee.

     (f) For purposes of this Article XXIII, the terms “Key Employee” and “Non-Key Employee”
include their Beneficiaries.

     23.3 Top-Heavy Status.

     (a) The term “Top-Heavy Plan” means, with respect to any Plan Year —

     (i) Any defined benefit plan if, as of the Determination Date, the present
value of the cumulative accrued benefits under the Plan for Key Employees exceeds
sixty percent (60%) of the present value (determined on the basis of the 1983 Group
Annuity Mortality Table (5%) and including non-proportional subsidies, but excluding
proportional subsidies) of the cumulative accrued benefits under the plan for all
employees, and

     (ii) Any defined contribution plan if, as of the Determination Date, the
aggregate of the account balances of Key Employees under the Plan exceeds sixty

93

 

percent (60%) of the present value of the aggregate of the account balances of
all employees under the plan.

     For purposes of this Paragraph (a), the term “Determination Date” means, with respect
to any plan year, the last day of the preceding plan year. In the case of the first plan
year of any plan, the term “Determination Date” shall mean the last day of that plan year.
The present value of account balances under a defined contribution plan shall be determined
as of the most recent valuation date that falls within or ends with the 12-month period
ending on the Determination Date. The present value of cumulative accrued benefits under a
defined benefit plan shall be determined as of the same valuation date used for computing
plan costs for minimum funding.

     (b) Each plan maintained by the Company or an Affiliated Company required to be
included in an Aggregation Group shall be treated as a Top-Heavy Plan if the Aggregation
Group is a Top-Heavy Group. If a Plan maintained by the Company or an Affiliated Company is
part of an Aggregation Group which is not a Top-Heavy Group, then notwithstanding anything
to the contrary in this paragraph (b), no plan of the Company or an Affiliated Company shall
be treated as a Top-Heavy Plan.

     (i) The term “Aggregation Group” means —

     (A) Each plan of the Company or an Affiliated Company in which a Key
Employee is a Participant or participated at any time during the five-year
period preceding the Determination Date (regardless of whether the plan has
terminated), and

94

 

     (B) Each other plan of the Company or an Affiliated Company which
enables any plan described in Subdivision (A) to meet the requirements of
Code Sections 401(a)(4) or 410.

     Also, any Plan not required to be included in an Aggregation Group under the preceding
rules may be treated as being part of such group if the group would continue to meet the
requirements of Code Sections 401(a)(4) and 410 with the plan being taken into account.

     (ii) The term “Top-Heavy Group” means any Aggregation Group if the sum (as of
the Determination Date) of —

     (A) The present value of the cumulative accrued benefits for Key
Employees under all defined benefit plans included in the group, and

     (B) The aggregate of the account balances of Key Employees under all
defined contribution plans included in the group exceeds sixty percent (60%)
of a similar sum determined for all employees.

     (iii) For purposes of determining —

     (A) The present value of the cumulative accrued benefit of any employee,
or

     (B) The amount of the account balance of any employee, such present
value or amount shall be increased by the aggregate distributions made with
respect to the employee under the plan during the one (1) year period ending
on the Determination Date. The preceding rule shall also apply to
distributions under a terminated plan that, if it had not been terminated,
would have been required to be included in an Aggregation

95

 

Group. In the case of a distribution made for a reason other than
separation from service, death, or disability, this provision shall be
applied by substituting “five (5) year period” for “one (1) year period”.
Also, any rollover contribution or similar transfer initiated by the employee
to a plan shall not be taken into account with respect to the transferee plan
for purposes of determining whether such plan is a Top-Heavy Plan (or whether
any Aggregation Group which includes such plan is a Top-Heavy Group).

     (c) If any individual is a Non-Key Employee with respect to any plan for any plan year,
but the individual was a Key Employee with respect to the plan for any prior plan year, any
accrued benefit for the individual (and the account balance of the individual) shall not be
taken into account for purposes of this Section 23.3.

     (d) If any individual has not received any compensation from the Company or an
Affiliated Company (other than benefits under the Plan) at any time during the one (1) year
period ending on the Determination Date, any accrued benefit for such individual (and the
account balance of the individual) shall not be taken into account for purposes of this
Section 23.3.

     (e) For purposes of establishing the present value of a Participant’s accrued benefit
in any defined benefit plan maintained or ever maintained by the Company or an Affiliated
Company being tested for top-heavy status under Code Section 416, the actuarial assumptions
will be identical and will be based on the interest rate and mortality assumptions described
in Section 23.3(a)(i).

     23.4 Minimum Benefits.

96

 

     (a) The Plan shall provide a minimum benefit for each Plan Year in which this Plan is a
top Heavy Plan for each Participant who is not classified as a “Key Employee”. This minimum
benefit, when expressed as an annual retirement benefit payable in the form of a single life
annuity beginning at the Participant’s Normal Retirement Age, shall not be less than the
Participant’s average annual compensation during the testing period (which shall consist of
the five (5) consecutive Plan Years in which the Participant completed at least 1,000 Hours
of Service and had the highest compensation) multiplied by the lesser of:

     (i) Two percent (2%) multiplied by the number of his Years of Service; or

     (ii) Twenty percent (20%).

     (b) For purposes of this Section 23.4, Years of Service shall be determined under
subsections (4), (5), and (6) of Code Section 411(a), but excluding:

     (i) Any year of Credited Service if the Plan was not a Top-Heavy Plan for the
Plan Year ending during such Year of Service;

     (ii) Any Year of Service which was completed in a Plan Year beginning before
January 1, 1984;

     (iii) Any Year of Service occurring during a Plan Year in which the Plan
benefits no Key Employee or former Key Employee.

     (c) The Participant’s minimum benefit determined under this Section 23.4 shall be
calculated without regard to any Social Security benefits payable to the Participant.

97

 

     (d) In the event a Participant is covered by both a defined contribution and a defined
benefit plan maintained by the Company or an Affiliated Company, both of which are
determined to be top-heavy, the defined benefit minimum will be provided under the defined
benefit plan, offset by benefits provided under the defined contribution plan, in accordance
with regulations issued under Code Section 416(f).

     (e) In no instance may the Plan take into account an employee’s compensation in excess
of the first two hundred thousand dollars ($200,000) (or such greater amount as may be
permitted pursuant to Section 416(d)(2) of the Code). For purposes of this Section 23.4, an
employee’s compensation shall be determined in accordance with the rules of Code Section
415, as set forth in Section 21.8.

     23.5 Vesting Rules. In the event that the Plan is determined to be Top-Heavy in
accordance with the rules of Section 21.3, then the vesting schedule set forth below shall apply
automatically to all benefits accrued before the Plan became a Top-Heavy Plan and all benefits
which accrue during any Plan Year in which the Plan is a Top-Heavy Plan:

	 	 	 
	Years of Service	 	Nonforfeitable Percentage
	2
	 	20%
	 
	3
	 	40%
	 
	4
	 	60%
	 
	5
	 	80%
	 
	6 or more
	 	100%

     If a Participant’s nonforfeitable percentage under the terms of the Plan determined without
regard to this Section at any time exceeds the percentage determined above, such Participant shall
be entitled to the greater percentage.

98

 

     23.6 Non-Eligible Employees. The rules of this Article XXIII shall not apply to any
employee included in a unit of employees covered by an agreement which the Secretary of Labor finds
to be a collective bargaining agreement between employee representatives and one or more employers
if there is evidence that retirement benefits were the subject of good faith bargaining between
such employee representatives and the employer or employers.

     EXECUTED pursuant to the                      adopting resolution of the Sponsor’s Board of
Directors.

	 	 	 	 	 
	 	 	American Pacific Corporation
	 
	 	 	 	 
	 

	 	By	 	 
	 	 	 	 	 
	Date
	 	 	 	 

99

 

SCHEDULE A

     Except as otherwise expressly provided in this Plan, if a Participant’s Pension Benefit
commences prior to Normal Retirement Date the amount of Pension Benefit otherwise payable shall be
reduced in accordance with this Schedule A, taking into account the number of years and full
calendar months by which the date of commencement of benefits precedes the Participant’s Normal
Retirement Date. The percentages shown in the table below represent the reduced percentage of the
monthly amount which would have been payable commencing at Normal Retirement Date. If a
Participants Pension Benefit is to be paid in a form other than the form of a single life annuity,
the reduced percentage of pension income determined from this Schedule A shall be subject to
further reduction as provided in this Plan.

A-1

 

SCHEDULE A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yr.	 	Mo.	 	%	 	Yr.	 	Mo.	 	%	 	Yr.	 	Mo.	 	%	 	Yr.	 	Mo.	 	%
	 
	0
	 	 	1	 	 	 	99.4	 	 	 	 	 	 	 	7	 	 	 	82.6	 	 	 	5	 	 	 	1	 	 	 	69.3	 	 	 	 	 	 	 	7	 	 	 	58.9	 
	 
	 	 	2	 	 	 	98.8	 	 	 	 	 	 	 	8	 	 	 	82.1	 	 	 	 	 	 	 	2	 	 	 	69.0	 	 	 	 	 	 	 	8	 	 	 	58.6	 
	 
	 	 	3	 	 	 	98.2	 	 	 	 	 	 	 	9	 	 	 	81.6	 	 	 	 	 	 	 	3	 	 	 	68.6	 	 	 	 	 	 	 	9	 	 	 	58.2	 
	 
	 	 	4	 	 	 	97.6	 	 	 	 	 	 	 	10	 	 	 	81.1	 	 	 	 	 	 	 	4	 	 	 	68.2	 	 	 	 	 	 	 	10	 	 	 	57.9	 
	 
	 	 	5	 	 	 	97.0	 	 	 	 	 	 	 	11	 	 	 	80.6	 	 	 	 	 	 	 	5	 	 	 	67.8	 	 	 	 	 	 	 	11	 	 	 	57.6	 
	 
	 	 	6	 	 	 	96.3	 	 	 	 	 	 	 	12	 	 	 	80.1	 	 	 	 	 	 	 	6	 	 	 	67.4	 	 	 	 	 	 	 	12	 	 	 	57.3	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	7	 	 	 	95.7	 	 	 	3	 	 	 	1	 	 	 	79.6	 	 	 	 	 	 	 	7	 	 	 	67.1	 	 	 	8	 	 	 	1	 	 	 	57.0	 
	 
	 	 	8	 	 	 	95.1	 	 	 	 	 	 	 	2	 	 	 	79.2	 	 	 	 	 	 	 	8	 	 	 	66.7	 	 	 	 	 	 	 	2	 	 	 	56.7	 
	 
	 	 	9	 	 	 	94.5	 	 	 	 	 	 	 	3	 	 	 	78.7	 	 	 	 	 	 	 	9	 	 	 	66.3	 	 	 	 	 	 	 	3	 	 	 	56.4	 
	 
	 	 	10	 	 	 	93.9	 	 	 	 	 	 	 	4	 	 	 	78.3	 	 	 	 	 	 	 	10	 	 	 	66.0	 	 	 	 	 	 	 	4	 	 	 	56.1	 
	 
	 	 	11	 	 	 	93.3	 	 	 	 	 	 	 	5	 	 	 	77.8	 	 	 	 	 	 	 	11	 	 	 	65.6	 	 	 	 	 	 	 	5	 	 	 	55.8	 
	 
	 	 	12	 	 	 	92.7	 	 	 	 	 	 	 	6	 	 	 	77.3	 	 	 	 	 	 	 	12	 	 	 	65.2	 	 	 	 	 	 	 	6	 	 	 	55.5	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1
	 	 	1	 	 	 	92.2	 	 	 	 	 	 	 	7	 	 	 	76.9	 	 	 	6	 	 	 	1	 	 	 	64.9	 	 	 	 	 	 	 	7	 	 	 	55.3	 
	 
	 	 	2	 	 	 	91.6	 	 	 	 	 	 	 	8	 	 	 	76.4	 	 	 	 	 	 	 	2	 	 	 	64.5	 	 	 	 	 	 	 	8	 	 	 	55.0	 
	 
	 	 	3	 	 	 	91.0	 	 	 	 	 	 	 	9	 	 	 	76.0	 	 	 	 	 	 	 	3	 	 	 	64.2	 	 	 	 	 	 	 	9	 	 	 	54.7	 
	 
	 	 	4	 	 	 	90.5	 	 	 	 	 	 	 	10	 	 	 	75.5	 	 	 	 	 	 	 	4	 	 	 	63.8	 	 	 	 	 	 	 	10	 	 	 	54.4	 
	 
	 	 	5	 	 	 	90.0	 	 	 	 	 	 	 	11	 	 	 	75.1	 	 	 	 	 	 	 	5	 	 	 	63.5	 	 	 	 	 	 	 	11	 	 	 	54.1	 
	 
	 	 	6	 	 	 	89.4	 	 	 	 	 	 	 	12	 	 	 	74.6	 	 	 	 	 	 	 	6	 	 	 	63.1	 	 	 	 	 	 	 	12	 	 	 	53.8	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	7	 	 	 	88.8	 	 	 	4	 	 	 	1	 	 	 	74.2	 	 	 	 	 	 	 	7	 	 	 	62.8	 	 	 	9	 	 	 	1	 	 	 	53.5	 
	 
	 	 	8	 	 	 	88.3	 	 	 	 	 	 	 	2	 	 	 	73.8	 	 	 	 	 	 	 	8	 	 	 	62.5	 	 	 	 	 	 	 	2	 	 	 	53.3	 
	 
	 	 	9	 	 	 	87.8	 	 	 	 	 	 	 	3	 	 	 	73.4	 	 	 	 	 	 	 	9	 	 	 	62.1	 	 	 	 	 	 	 	3	 	 	 	53.0	 
	 
	 	 	10	 	 	 	87.2	 	 	 	 	 	 	 	4	 	 	 	73.0	 	 	 	 	 	 	 	10	 	 	 	61.8	 	 	 	 	 	 	 	4	 	 	 	52.7	 
	 
	 	 	11	 	 	 	86.6	 	 	 	 	 	 	 	5	 	 	 	72.6	 	 	 	 	 	 	 	11	 	 	 	61.4	 	 	 	 	 	 	 	5	 	 	 	52.5	 
	 
	 	 	12	 	 	 	86.1	 	 	 	 	 	 	 	6	 	 	 	72.1	 	 	 	 	 	 	 	12	 	 	 	61.1	 	 	 	 	 	 	 	6	 	 	 	52.2	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2
	 	 	1	 	 	 	85.6	 	 	 	 	 	 	 	7	 	 	 	71.7	 	 	 	7	 	 	 	1	 	 	 	60.8	 	 	 	 	 	 	 	7	 	 	 	51.9	 
	 
	 	 	2	 	 	 	85.1	 	 	 	 	 	 	 	8	 	 	 	71.3	 	 	 	 	 	 	 	2	 	 	 	60.5	 	 	 	 	 	 	 	8	 	 	 	51.7	 
	 
	 	 	3	 	 	 	84.6	 	 	 	 	 	 	 	9	 	 	 	70.9	 	 	 	 	 	 	 	3	 	 	 	60.1	 	 	 	 	 	 	 	9	 	 	 	51.4	 
	 
	 	 	4	 	 	 	84.1	 	 	 	 	 	 	 	10	 	 	 	70.5	 	 	 	 	 	 	 	4	 	 	 	59.8	 	 	 	 	 	 	 	10	 	 	 	51.1	 
	 
	 	 	5	 	 	 	83.6	 	 	 	 	 	 	 	11	 	 	 	70.1	 	 	 	 	 	 	 	5	 	 	 	59.5	 	 	 	 	 	 	 	11	 	 	 	50.9	 
	 
	 	 	6	 	 	 	83.1	 	 	 	 	 	 	 	12	 	 	 	69.7	 	 	 	 	 	 	 	6	 	 	 	59.2	 	 	 	 	 	 	 	12	 	 	 	50.6	 

A-2

 

SCHEDULE B

     If a Participant’s benefit is payable in the form of a joint and survivor annuity providing
for a “reduced” monthly benefit to the Participant for his lifetime, with fifty percent (50%) of
such amount to continue to be paid to another person after his death for such other person’s
lifetime, the “reduced” monthly amount shall be determined from the table below, taking into
account (a) the age of the Participant upon commencement of benefits, and (b) the age of the spouse
or other contingent annuitant when benefits commence for the Participant. The percentages shown in
the table below represent the percentage of the monthly amount which would have been payable in
single life annuity form (after any reduction required by this Plan to reflect the commencement of
benefits prior to Normal Retirement Date).

B-1

 

SCHEDULE B

Age of Participant

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Spouse	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	or C.A.	 	55	 	56	 	57	 	58	 	59	 	60	 	61	 	62	 	63	 	64	 	65	 	66	 	67	 	68	 	69	 	70
	40
	 	 	90.7	 	 	 	90.0	 	 	 	89.3	 	 	 	88.6	 	 	 	87.9	 	 	 	87.1	 	 	 	86.2	 	 	 	85.3	 	 	 	84.4	 	 	 	83.4	 	 	 	82.4	 	 	 	81.3	 	 	 	80.2	 	 	 	79.1	 	 	 	77.9	 	 	 	76.7	 
	41
	 	 	91.0	 	 	 	90.4	 	 	 	89.6	 	 	 	89.0	 	 	 	88.2	 	 	 	87.5	 	 	 	86.6	 	 	 	85.7	 	 	 	84.8	 	 	 	83.9	 	 	 	82.8	 	 	 	81.8	 	 	 	80.7	 	 	 	79.6	 	 	 	78.4	 	 	 	77.2	 
	42
	 	 	91.3	 	 	 	90.7	 	 	 	90.1	 	 	 	89.3	 	 	 	88.6	 	 	 	87.8	 	 	 	87.0	 	 	 	86.2	 	 	 	85.2	 	 	 	84.3	 	 	 	83.3	 	 	 	82.2	 	 	 	81.2	 	 	 	80.1	 	 	 	78.9	 	 	 	77.7	 
	43
	 	 	91.6	 	 	 	91.1	 	 	 	90.4	 	 	 	89.8	 	 	 	89.0	 	 	 	88.2	 	 	 	87.4	 	 	 	86.6	 	 	 	85.7	 	 	 	84.7	 	 	 	83.7	 	 	 	82.7	 	 	 	81.6	 	 	 	80.6	 	 	 	79.4	 	 	 	78.2	 
	44
	 	 	92.0	 	 	 	91.4	 	 	 	90.8	 	 	 	90.1	 	 	 	89.4	 	 	 	88.6	 	 	 	87.9	 	 	 	87.0	 	 	 	86.2	 	 	 	85.2	 	 	 	84.2	 	 	 	83.2	 	 	 	82.2	 	 	 	81.0	 	 	 	79.9	 	 	 	78.8	 
	45
	 	 	92.4	 	 	 	91.8	 	 	 	91.1	 	 	 	90.5	 	 	 	89.8	 	 	 	89.1	 	 	 	88.3	 	 	 	87.5	 	 	 	86.6	 	 	 	85.7	 	 	 	84.8	 	 	 	83.7	 	 	 	82.6	 	 	 	81.6	 	 	 	80.4	 	 	 	79.3	 
	46
	 	 	92.7	 	 	 	92.1	 	 	 	91.6	 	 	 	90.9	 	 	 	90.3	 	 	 	89.5	 	 	 	88.8	 	 	 	87.9	 	 	 	87.1	 	 	 	86.1	 	 	 	85.3	 	 	 	84.3	 	 	 	83.1	 	 	 	82.1	 	 	 	81.0	 	 	 	79.8	 
	47
	 	 	93.1	 	 	 	92.5	 	 	 	91.9	 	 	 	91.3	 	 	 	90.6	 	 	 	90.0	 	 	 	89.2	 	 	 	88.4	 	 	 	87.5	 	 	 	86.6	 	 	 	85.7	 	 	 	84.8	 	 	 	83.7	 	 	 	82.6	 	 	 	81.5	 	 	 	80.4	 
	48
	 	 	93.5	 	 	 	92.9	 	 	 	92.3	 	 	 	91.7	 	 	 	91.1	 	 	 	90.3	 	 	 	89.7	 	 	 	88.9	 	 	 	88.1	 	 	 	87.1	 	 	 	86.2	 	 	 	85.2	 	 	 	84.3	 	 	 	83.2	 	 	 	82.1	 	 	 	81.0	 
	49
	 	 	93.8	 	 	 	93.3	 	 	 	92.7	 	 	 	92.1	 	 	 	91.5	 	 	 	90.8	 	 	 	90.0	 	 	 	89.3	 	 	 	88.5	 	 	 	87.7	 	 	 	86.7	 	 	 	85.8	 	 	 	84.7	 	 	 	83.8	 	 	 	82.7	 	 	 	81.5	 
	50
	 	 	94.1	 	 	 	93.6	 	 	 	93.1	 	 	 	92.5	 	 	 	91.9	 	 	 	91.2	 	 	 	90.5	 	 	 	89.7	 	 	 	89.0	 	 	 	88.2	 	 	 	87.3	 	 	 	86.3	 	 	 	85.3	 	 	 	84.3	 	 	 	83.3	 	 	 	82.2	 
	51
	 	 	94.4	 	 	 	93.9	 	 	 	93.4	 	 	 	92.9	 	 	 	92.3	 	 	 	91.6	 	 	 	90.9	 	 	 	90.2	 	 	 	89.4	 	 	 	88.6	 	 	 	87.8	 	 	 	86.9	 	 	 	85.8	 	 	 	84.9	 	 	 	83.8	 	 	 	82.9	 
	52
	 	 	94.8	 	 	 	94.3	 	 	 	93.8	 	 	 	93.2	 	 	 	92.7	 	 	 	92.0	 	 	 	91.4	 	 	 	90.7	 	 	 	89.9	 	 	 	89.1	 	 	 	88.3	 	 	 	87.4	 	 	 	86.5	 	 	 	85.4	 	 	 	84.4	 	 	 	83.4	 
	53
	 	 	95.0	 	 	 	94.6	 	 	 	94.1	 	 	 	93.6	 	 	 	93.0	 	 	 	92.5	 	 	 	91.8	 	 	 	91.1	 	 	 	90.4	 	 	 	89.6	 	 	 	88.7	 	 	 	87.9	 	 	 	87.0	 	 	 	86.1	 	 	 	85.0	 	 	 	84.0	 
	54
	 	 	95.3	 	 	 	94.9	 	 	 	94.5	 	 	 	94.0	 	 	 	93.4	 	 	 	92.8	 	 	 	92.3	 	 	 	91.5	 	 	 	90.8	 	 	 	90.1	 	 	 	89.3	 	 	 	88.4	 	 	 	87.6	 	 	 	86.6	 	 	 	85.7	 	 	 	84.6	 
	55
	 	 	95.6	 	 	 	95.2	 	 	 	94.8	 	 	 	94.3	 	 	 	93.8	 	 	 	93.2	 	 	 	92.6	 	 	 	92.0	 	 	 	91.3	 	 	 	90.5	 	 	 	89.8	 	 	 	89.0	 	 	 	88.0	 	 	 	87.2	 	 	 	86.3	 	 	 	85.3	 
	56
	 	 	95.9	 	 	 	95.5	 	 	 	95.1	 	 	 	94.6	 	 	 	94.2	 	 	 	93.6	 	 	 	93.0	 	 	 	92.4	 	 	 	91.8	 	 	 	91.0	 	 	 	90.3	 	 	 	89.5	 	 	 	88.7	 	 	 	87.7	 	 	 	86.9	 	 	 	86.0	 
	57
	 	 	96.1	 	 	 	95.8	 	 	 	95.4	 	 	 	94.9	 	 	 	94.5	 	 	 	94.0	 	 	 	93.4	 	 	 	92.8	 	 	 	92.2	 	 	 	91.5	 	 	 	90.8	 	 	 	90.0	 	 	 	89.2	 	 	 	88.4	 	 	 	87.4	 	 	 	86.6	 
	58
	 	 	96.4	 	 	 	96.0	 	 	 	95.7	 	 	 	95.2	 	 	 	94.8	 	 	 	94.3	 	 	 	93.8	 	 	 	93.2	 	 	 	92.6	 	 	 	92.0	 	 	 	91.3	 	 	 	90.5	 	 	 	89.7	 	 	 	88.9	 	 	 	88.1	 	 	 	87.2	 
	59
	 	 	96.6	 	 	 	96.3	 	 	 	95.9	 	 	 	95.6	 	 	 	95.1	 	 	 	94.6	 	 	 	94.2	 	 	 	93.7	 	 	 	93.0	 	 	 	92.4	 	 	 	91.8	 	 	 	91.1	 	 	 	90.3	 	 	 	89.5	 	 	 	88.7	 	 	 	87.9	 
	60
	 	 	96.9	 	 	 	96.6	 	 	 	96.2	 	 	 	95.8	 	 	 	95.5	 	 	 	95.0	 	 	 	94.5	 	 	 	94.0	 	 	 	93.5	 	 	 	92.9	 	 	 	92.3	 	 	 	91.6	 	 	 	90.9	 	 	 	90.1	 	 	 	89.3	 	 	 	88.5	 
	61
	 	 	97.0	 	 	 	96.8	 	 	 	96.5	 	 	 	96.2	 	 	 	95.7	 	 	 	95.4	 	 	 	94.9	 	 	 	94.4	 	 	 	93.9	 	 	 	93.4	 	 	 	92.7	 	 	 	92.1	 	 	 	91.4	 	 	 	90.8	 	 	 	90.0	 	 	 	89.2	 
	62
	 	 	97.3	 	 	 	97.0	 	 	 	96.8	 	 	 	96.4	 	 	 	96.1	 	 	 	95.6	 	 	 	95.3	 	 	 	94.8	 	 	 	94.3	 	 	 	93.8	 	 	 	93.3	 	 	 	92.6	 	 	 	92.0	 	 	 	91.3	 	 	 	90.7	 	 	 	89.9	 
	63
	 	 	97.5	 	 	 	97.3	 	 	 	96.9	 	 	 	96.7	 	 	 	96.4	 	 	 	96.0	 	 	 	95.6	 	 	 	95.2	 	 	 	94.7	 	 	 	94.3	 	 	 	93.7	 	 	 	93.2	 	 	 	92.6	 	 	 	91.9	 	 	 	91.3	 	 	 	90.6	 
	64
	 	 	97.8	 	 	 	97.5	 	 	 	97.2	 	 	 	96.9	 	 	 	96.7	 	 	 	96.4	 	 	 	96.0	 	 	 	95.6	 	 	 	95.2	 	 	 	94.7	 	 	 	94.2	 	 	 	93.7	 	 	 	93.2	 	 	 	92.5	 	 	 	91.9	 	 	 	91.2	 
	65
	 	 	98.0	 	 	 	97.8	 	 	 	97.5	 	 	 	97.3	 	 	 	96.9	 	 	 	96.7	 	 	 	96.4	 	 	 	96.0	 	 	 	95.6	 	 	 	95.2	 	 	 	94.7	 	 	 	94.2	 	 	 	93.7	 	 	 	93.2	 	 	 	92.5	 	 	 	91.9	 
	66
	 	 	98.1	 	 	 	98.0	 	 	 	97.8	 	 	 	97.5	 	 	 	97.3	 	 	 	97.0	 	 	 	96.8	 	 	 	96.4	 	 	 	96.1	 	 	 	95.6	 	 	 	95.2	 	 	 	94.7	 	 	 	94.2	 	 	 	93.7	 	 	 	93.2	 	 	 	92.5	 
	67
	 	 	98.3	 	 	 	98.1	 	 	 	98.1	 	 	 	97.9	 	 	 	97.5	 	 	 	97.3	 	 	 	97.0	 	 	 	96.8	 	 	 	96.4	 	 	 	96.1	 	 	 	95.8	 	 	 	95.2	 	 	 	94.7	 	 	 	94.3	 	 	 	93.7	 	 	 	93.3	 
	68
	 	 	98.6	 	 	 	98.3	 	 	 	98.2	 	 	 	98.1	 	 	 	97.9	 	 	 	97.6	 	 	 	97.3	 	 	 	97.0	 	 	 	96.8	 	 	 	96.5	 	 	 	96.1	 	 	 	95.6	 	 	 	95.3	 	 	 	94.8	 	 	 	94.3	 	 	 	93.8	 
	69
	 	 	98.7	 	 	 	98.6	 	 	 	98.4	 	 	 	98.2	 	 	 	98.1	 	 	 	97.9	 	 	 	97.6	 	 	 	97.4	 	 	 	97.1	 	 	 	96.8	 	 	 	96.5	 	 	 	96.1	 	 	 	95.7	 	 	 	95.3	 	 	 	94.9	 	 	 	94.4	 
	70
	 	 	98.9	 	 	 	98.7	 	 	 	98.6	 	 	 	98.4	 	 	 	98.2	 	 	 	98.2	 	 	 	98.0	 	 	 	97.6	 	 	 	97.4	 	 	 	97.1	 	 	 	96.9	 	 	 	96.5	 	 	 	96.2	 	 	 	95.8	 	 	 	95.4	 	 	 	95.0	 

B-2

 

SCHEDULE C

     If a Participant’s benefit is payable in the form of a joint and survivor annuity providing
for a “reduced” monthly benefit to the Participant for his lifetime, with one hundred percent
(100%) of such amount to continue to be paid to another person after his death for such other
person’s lifetime, the “reduced” monthly amount shall be determined from the table below, taking
into account (a) the age of the Participant upon commencement of benefits, and (b) the age of the
spouse or other contingent annuitant when benefits commence for the Participant. The percentages
shown in the table below represent the percentage of the monthly amount which would have been
payable in single life annuity form (after any reduction required by this Plan to reflect the
commencement of benefits prior to Normal Retirement Date).

C-1

 

SCHEDULE C

Age of Participant

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Spouse	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	or C.A.	 	55	 	 	56	 	 	57	 	 	58	 	 	59	 	 	60	 	 	61	 	 	62	 	 	63	 	 	64	 	 	65	 	 	66	 	 	67	 	 	68	 	 	69	 	 	70	 
	40
	 	 	82.8	 	 	 	81.4	 	 	 	80.3	 	 	 	79.0	 	 	 	77.9	 	 	 	76.6	 	 	 	75.1	 	 	 	73.8	 	 	 	72.4	 	 	 	70.9	 	 	 	69.4	 	 	 	67.8	 	 	 	66.2	 	 	 	64.6	 	 	 	63.0	 	 	 	61.3	 
	41
	 	 	83.2	 	 	 	82.1	 	 	 	80.8	 	 	 	79.7	 	 	 	78.4	 	 	 	77.2	 	 	 	75.9	 	 	 	74.4	 	 	 	73.0	 	 	 	71.5	 	 	 	70.0	 	 	 	68.5	 	 	 	66.9	 	 	 	65.2	 	 	 	63.6	 	 	 	61.9	 
	42
	 	 	83.7	 	 	 	82.6	 	 	 	81.5	 	 	 	80.2	 	 	 	79.0	 	 	 	77.7	 	 	 	76.5	 	 	 	75.1	 	 	 	73.6	 	 	 	72.1	 	 	 	70.7	 	 	 	69.0	 	 	 	67.5	 	 	 	65.9	 	 	 	64.2	 	 	 	62.5	 
	43
	 	 	84.2	 	 	 	83.2	 	 	 	82.1	 	 	 	81.0	 	 	 	79.6	 	 	 	78.4	 	 	 	77.1	 	 	 	75.8	 	 	 	74.4	 	 	 	72.8	 	 	 	71.3	 	 	 	69.8	 	 	 	68.1	 	 	 	66.6	 	 	 	64.9	 	 	 	63.2	 
	44
	 	 	84.9	 	 	 	83.8	 	 	 	82.7	 	 	 	81.6	 	 	 	80.4	 	 	 	79.0	 	 	 	77.8	 	 	 	76.4	 	 	 	75.1	 	 	 	73.6	 	 	 	72.0	 	 	 	70.4	 	 	 	68.9	 	 	 	67.2	 	 	 	65.6	 	 	 	63.9	 
	45
	 	 	85.5	 	 	 	84.5	 	 	 	83.3	 	 	 	82.2	 	 	 	81.0	 	 	 	79.8	 	 	 	78.4	 	 	 	77.1	 	 	 	75.7	 	 	 	74.3	 	 	 	72.8	 	 	 	71.1	 	 	 	69.5	 	 	 	68.0	 	 	 	66.3	 	 	 	64.7	 
	46
	 	 	86.1	 	 	 	85.0	 	 	 	84.0	 	 	 	82.8	 	 	 	81.7	 	 	 	80.5	 	 	 	79.2	 	 	 	77.8	 	 	 	76.4	 	 	 	74.9	 	 	 	73.5	 	 	 	72.0	 	 	 	70.3	 	 	 	68.6	 	 	 	67.1	 	 	 	65.3	 
	47
	 	 	86.7	 	 	 	85.7	 	 	 	84.6	 	 	 	83.6	 	 	 	82.3	 	 	 	81.2	 	 	 	79.9	 	 	 	78.6	 	 	 	77.1	 	 	 	75.7	 	 	 	74.2	 	 	 	72.7	 	 	 	71.1	 	 	 	69.4	 	 	 	67.8	 	 	 	66.2	 
	48
	 	 	87.4	 	 	 	86.3	 	 	 	85.3	 	 	 	84.2	 	 	 	83.1	 	 	 	81.8	 	 	 	80.8	 	 	 	79.3	 	 	 	78.0	 	 	 	76.4	 	 	 	75.0	 	 	 	73.4	 	 	 	71.9	 	 	 	70.3	 	 	 	68.5	 	 	 	66.9	 
	49
	 	 	87.9	 	 	 	87.0	 	 	 	85.9	 	 	 	84.8	 	 	 	83.7	 	 	 	82.6	 	 	 	81.3	 	 	 	80.1	 	 	 	78.7	 	 	 	77.3	 	 	 	75.7	 	 	 	74.2	 	 	 	72.6	 	 	 	71.1	 	 	 	69.5	 	 	 	67.7	 
	50
	 	 	88.5	 	 	 	87.5	 	 	 	86.6	 	 	 	85.5	 	 	 	84.4	 	 	 	83.2	 	 	 	82.1	 	 	 	80.7	 	 	 	79.4	 	 	 	78.0	 	 	 	76.6	 	 	 	75.0	 	 	 	73.4	 	 	 	71.8	 	 	 	70.3	 	 	 	68.6	 
	51
	 	 	89.0	 	 	 	88.1	 	 	 	87.2	 	 	 	86.2	 	 	 	85.1	 	 	 	83.9	 	 	 	82.7	 	 	 	81.5	 	 	 	80.1	 	 	 	78.8	 	 	 	77.4	 	 	 	75.9	 	 	 	74.2	 	 	 	72.7	 	 	 	71.0	 	 	 	69.5	 
	52
	 	 	89.7	 	 	 	88.7	 	 	 	87.8	 	 	 	86.8	 	 	 	85.8	 	 	 	84.6	 	 	 	83.5	 	 	 	82.2	 	 	 	80.9	 	 	 	79.5	 	 	 	78.2	 	 	 	76.7	 	 	 	75.2	 	 	 	73.5	 	 	 	71.9	 	 	 	70.2	 
	53
	 	 	90.1	 	 	 	89.4	 	 	 	88.4	 	 	 	87.4	 	 	 	86.4	 	 	 	85.4	 	 	 	84.2	 	 	 	82.9	 	 	 	81.7	 	 	 	80.4	 	 	 	78.9	 	 	 	77.5	 	 	 	76.0	 	 	 	74.4	 	 	 	72.7	 	 	 	71.2	 
	54
	 	 	90.6	 	 	 	89.8	 	 	 	89.1	 	 	 	88.1	 	 	 	87.1	 	 	 	86.0	 	 	 	85.0	 	 	 	83.7	 	 	 	82.4	 	 	 	81.1	 	 	 	79.7	 	 	 	78.2	 	 	 	76.8	 	 	 	75.3	 	 	 	73.7	 	 	 	72.0	 
	55
	 	 	91.1	 	 	 	90.4	 	 	 	89.5	 	 	 	88.7	 	 	 	87.7	 	 	 	86.7	 	 	 	85.6	 	 	 	84.5	 	 	 	83.2	 	 	 	81.9	 	 	 	80.5	 	 	 	79.1	 	 	 	77.6	 	 	 	76.2	 	 	 	74.6	 	 	 	73.1	 
	56
	 	 	91.7	 	 	 	90.9	 	 	 	90.1	 	 	 	89.2	 	 	 	88.4	 	 	 	87.3	 	 	 	86.2	 	 	 	85.1	 	 	 	84.0	 	 	 	82.6	 	 	 	81.3	 	 	 	79.9	 	 	 	78.5	 	 	 	77.0	 	 	 	75.5	 	 	 	74.0	 
	57
	 	 	92.1	 	 	 	91.4	 	 	 	90.6	 	 	 	89.8	 	 	 	88.9	 	 	 	88.0	 	 	 	86.9	 	 	 	85.8	 	 	 	84.7	 	 	 	83.5	 	 	 	82.1	 	 	 	80.8	 	 	 	79.4	 	 	 	78.0	 	 	 	76.4	 	 	 	74.9	 
	58
	 	 	92.6	 	 	 	91.8	 	 	 	91.2	 	 	 	90.3	 	 	 	89.5	 	 	 	88.6	 	 	 	87.7	 	 	 	86.5	 	 	 	85.4	 	 	 	84.2	 	 	 	83.0	 	 	 	81.6	 	 	 	80.2	 	 	 	78.8	 	 	 	77.4	 	 	 	75.8	 
	59
	 	 	93.1	 	 	 	92.4	 	 	 	91.6	 	 	 	90.9	 	 	 	90.0	 	 	 	89.2	 	 	 	88.2	 	 	 	87.3	 	 	 	86.1	 	 	 	85.0	 	 	 	83.8	 	 	 	82.6	 	 	 	81.1	 	 	 	79.8	 	 	 	78.3	 	 	 	76.9	 
	60
	 	 	93.5	 	 	 	92.9	 	 	 	92.2	 	 	 	91.4	 	 	 	90.7	 	 	 	89.8	 	 	 	88.9	 	 	 	87.9	 	 	 	87.0	 	 	 	85.8	 	 	 	84.6	 	 	 	83.4	 	 	 	82.2	 	 	 	80.7	 	 	 	79.3	 	 	 	77.9	 
	61
	 	 	93.8	 	 	 	93.4	 	 	 	92.7	 	 	 	92.0	 	 	 	91.1	 	 	 	90.4	 	 	 	89.5	 	 	 	88.6	 	 	 	87.6	 	 	 	86.7	 	 	 	85.4	 	 	 	84.3	 	 	 	83.0	 	 	 	81.8	 	 	 	80.3	 	 	 	78.9	 
	62
	 	 	94.3	 	 	 	93.7	 	 	 	93.2	 	 	 	92.5	 	 	 	91.8	 	 	 	91.0	 	 	 	90.2	 	 	 	89.3	 	 	 	88.3	 	 	 	87.3	 	 	 	86.4	 	 	 	85.2	 	 	 	84.0	 	 	 	82.7	 	 	 	81.5	 	 	 	80.0	 
	63
	 	 	94.6	 	 	 	94.2	 	 	 	93.5	 	 	 	93.1	 	 	 	92.4	 	 	 	91.7	 	 	 	90.8	 	 	 	90.0	 	 	 	89.1	 	 	 	88.1	 	 	 	87.1	 	 	 	86.2	 	 	 	84.9	 	 	 	83.7	 	 	 	82.4	 	 	 	81.2	 
	64
	 	 	95.2	 	 	 	94.6	 	 	 	94.1	 	 	 	93.5	 	 	 	93.0	 	 	 	92.3	 	 	 	91.6	 	 	 	90.7	 	 	 	89.9	 	 	 	89.0	 	 	 	88.0	 	 	 	86.9	 	 	 	86.0	 	 	 	84.7	 	 	 	83.5	 	 	 	82.2	 
	65
	 	 	95.6	 	 	 	95.2	 	 	 	94.5	 	 	 	94.0	 	 	 	93.4	 	 	 	92.9	 	 	 	92.2	 	 	 	91.5	 	 	 	90.6	 	 	 	89.8	 	 	 	88.8	 	 	 	87.8	 	 	 	86.8	 	 	 	85.8	 	 	 	84.5	 	 	 	83.3	 
	66
	 	 	95.8	 	 	 	95.6	 	 	 	95.2	 	 	 	94.5	 	 	 	94.0	 	 	 	93.4	 	 	 	92.9	 	 	 	92.2	 	 	 	91.4	 	 	 	90.5	 	 	 	89.7	 	 	 	88.7	 	 	 	87.7	 	 	 	86.6	 	 	 	85.7	 	 	 	84.4	 
	67
	 	 	96.2	 	 	 	95.8	 	 	 	95.6	 	 	 	95.2	 	 	 	94.5	 	 	 	94.0	 	 	 	93.4	 	 	 	92.9	 	 	 	92.1	 	 	 	91.4	 	 	 	90.4	 	 	 	89.6	 	 	 	88.6	 	 	 	87.6	 	 	 	86.5	 	 	 	85.6	 
	68
	 	 	96.7	 	 	 	96.2	 	 	 	95.8	 	 	 	95.6	 	 	 	95.2	 	 	 	94.5	 	 	 	94.0	 	 	 	93.3	 	 	 	92.8	 	 	 	92.1	 	 	 	91.3	 	 	 	90.4	 	 	 	89.6	 	 	 	88.5	 	 	 	87.5	 	 	 	86.5	 
	69
	 	 	96.9	 	 	 	96.7	 	 	 	96.2	 	 	 	95.8	 	 	 	95.6	 	 	 	95.2	 	 	 	94.5	 	 	 	93.9	 	 	 	93.3	 	 	 	92.8	 	 	 	92.0	 	 	 	91.2	 	 	 	90.3	 	 	 	89.5	 	 	 	88.5	 	 	 	87.5	 
	70
	 	 	97.3	 	 	 	96.9	 	 	 	96.7	 	 	 	96.2	 	 	 	95.8	 	 	 	95.6	 	 	 	95.1	 	 	 	94.4	 	 	 	93.9	 	 	 	93.3	 	 	 	92.8	 	 	 	92.0	 	 	 	91.2	 	 	 	90.3	 	 	 	89.5	 	 	 	88.5	 

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Exhibit 10.1    
    

 
 

INDEMNITY AGREEMENT    
    

        This Indemnity Agreement, dated as of                        ,
2007, is made by and between                        , a Delaware corporation (the
"Company"), and                        (the "Indemnitee"). 

RECITALS  

        A.    The
Company is aware that competent and experienced persons are increasingly reluctant to serve as directors, officers or agents of corporations unless they are protected
by comprehensive liability insurance or indemnification, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such directors, officers and other agents. 

        B.    The
statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting, and therefore fail to provide
such directors, officers and agents with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take. 

        C.    Plaintiffs
often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or
settlement of such litigation is often beyond the personal resources of directors, officers and other agents. 

        D.    The
Company believes that it is unfair for its directors, officers and agents and the directors, officers and agents of its subsidiaries to assume the risk of huge
judgments and other expenses which may occur in cases in which the director, officer or agent received no personal profit and in cases where the director, officer or agent was not culpable. 

        E.    The
Company recognizes that the issues in controversy in litigation against a director, officer or agent of a corporation such as the Company or its subsidiaries are
often related to the knowledge, motives and intent of such director, officer or agent, that he is usually the only witness with knowledge of the essential facts and exculpating circumstances regarding
such matters, and that the long period of time which usually elapses before the trial or other disposition of such litigation often extends beyond the time that the director, officer or agent can
reasonably recall such matters and may extend beyond the normal time for retirement for such director, officer or agent with the result that he, after retirement or in the event of his death, his
spouse, heirs, executors or administrators, may be faced with limited ability and undue hardship in maintaining an adequate defense, which may discourage such a director, officer or agent from serving
in that position. 

        F.     Based
upon their experience as business managers, the Board of Directors of the Company (the "Board") has concluded that,
to retain and attract talented and experienced individuals to serve as directors, officers and agents of the Company and its subsidiaries and to encourage such individuals to take the business risks
necessary for the success of the Company and its subsidiaries, it is necessary for the Company to contractually indemnify its directors, officers and agents and the directors, officers and agents of
its subsidiaries, and to assume for itself maximum liability for expenses and damages in connection with claims against such directors, officers and agents in connection with their service to the
Company and its subsidiaries, and has further concluded that the failure to provide such contractual indemnification could result in great harm to the Company and its subsidiaries and the Company's
stockholders. 

        G.    Section 145
of the General Corporation Law of Delaware, under which the Company is organized
("Section 145"), empowers the Company to indemnify its directors, officers, employees and agents by agreement and to indemnify persons who serve,
at the request of the Company, as the 

1

 

directors,
officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by Section 145 is not exclusive. 

        H.    The
Company desires and has requested the Indemnitee to serve or continue to serve as a director, officer or agent of the Company and/or one or more subsidiaries of the
Company free from undue concern for claims for damages arising out of or related to such services to the Company and/or one or more subsidiaries of the Company. 

        I.     Indemnitee
is willing to serve, or to continue to serve, the Company and/or one or more subsidiaries of the Company, provided that he is furnished the indemnity provided
for herein. 

AGREEMENT  

        NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: 

        1.    Definitions.    

        (a)    Agent.    For the purposes of this Agreement, "agent" of the Company means any person who is or was a director,
officer, employee or other agent of the Company or a subsidiary of the Company; or is or was serving at the request of, for the convenience of, or to represent the interests of the Company or a
subsidiary of the Company as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise; or was a director, officer,
employee or agent of a foreign or domestic corporation which was a predecessor corporation of the Company or a subsidiary of the Company, or was a director, officer, employee or agent of another
enterprise at the request of, for the convenience of, or to represent the interests of such predecessor corporation. 

        (b)    Expenses.    For purposes of this Agreement, "expenses" include all out-of-pocket costs
of any type or nature whatsoever (including, without limitation, all attorneys' fees and related disbursements), actually and reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement or Section 145 or otherwise; provided, however, that "expenses"
shall not include any judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding. 

        (c)    Proceeding.    For the purposes of this Agreement, "proceeding" means any threatened, pending, or completed
action, suit or other proceeding, whether civil, criminal, administrative, or investigative. 

        (d)    Subsidiary.    For purposes of this Agreement, "subsidiary" means any corporation of which more than 50% of the
outstanding voting securities is owned directly or indirectly by the Company, by the Company and one or more other subsidiaries, or by one or more other subsidiaries. 

        2.    Agreement to Serve.    The Indemnitee agrees to serve and/or continue to serve as agent of the Company, at its
will (or under separate agreement, if such agreement exists), in the capacity Indemnitee currently serves as an agent of the Company, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any subsidiary of the
Company or until such time as he tenders his resignation in writing; provided, however, that nothing contained in this Agreement is intended to create any right to continued employment by Indemnitee. 

        3.    Liability Insurance.    

        (a)    Maintenance of D&O Insurance.    The Company hereby covenants and agrees that, so long as the Indemnitee shall
continue to serve as an agent of the Company and thereafter so long 

2

 

as
the Indemnitee shall be subject to any possible proceeding by reason of the fact that the Indemnitee was an agent of the Company, the Company, subject to Section 3(c), shall promptly obtain
and maintain in full force and effect directors' and officers' liability insurance ("D&O Insurance") in reasonable amounts from established and
reputable insurers. 

        (b)    Rights and Benefits.    In all policies of D&O Insurance, the Indemnitee shall be named as an insured in such a
manner as to provide the Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's directors, if the Indemnitee is a director; or of the Company's
officers, if the Indemnitee is not a director of the Company but is an officer; or of the Company's key employees, if the Indemnitee is not a director or officer but is a key employee. 

        (c)    Limitation on Required Maintenance of D&O Insurance.    Notwithstanding the foregoing, the Company shall have
no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are disproportionate to
the amount of coverage provided, the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or the Indemnitee is covered by similar insurance maintained
by a subsidiary of the Company. 

        4.    Mandatory Indemnification.    Subject to Section 9 below, the Company shall indemnify the Indemnitee as
follows: 

        (a)    Third Party Actions.    If the Indemnitee is a person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the Company) by reason of the fact that he is or was an agent of the Company, or by reason of anything done or not done by him in any such
capacity, the Company shall indemnify the Indemnitee against any and all expenses and liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) actually and reasonably incurred by him in connection with the investigation, defense, settlement or appeal of such proceeding, provided the Indemnitee acted
in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company and its stockholders, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. 

        (b)    Derivative Actions.    If the Indemnitee is a person who was or is a party or is threatened to be made a party
to any proceeding by or in the right of the Company by reason of the fact that he is or was an agent of the Company, or by reason of anything done or not done by him in any such capacity, the Company
shall indemnify the Indemnitee against all expenses actually and reasonably incurred by him in connection with the investigation, defense, settlement, or appeal of such proceeding, provided the
Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and its stockholders; except that no indemnification under this
subsection 4(b) shall be made in respect to any claim, issue or matter as to which such person shall have been finally adjudged to be liable to the Company by a court of competent jurisdiction
unless and only to the extent that the court in which such proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such amounts which the court shall deem proper. 

        (c)    Actions where Indemnitee is Deceased.    If the Indemnitee is a person who was or is a party or is threatened
to be made a party to any proceeding by reason of the fact that he is or was an agent of the Company, or by reason of anything done or not done by him in any such capacity, and if prior to, during the
pendency of after completion of such proceeding Indemnitee becomes deceased, the Company shall indemnify the Indemnitee's heirs, executors and administrators against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, 

3

 

judgments,
fines, ERISA excise taxes and penalties, and amounts paid in settlement) actually and reasonably incurred to the extent Indemnitee would have been entitled to indemnification pursuant to
Sections 4(a) or 4(b) above were Indemnitee still alive. 

        (d)    Limitations.    Notwithstanding the foregoing, the Company shall not be obligated to indemnify the Indemnitee
for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) for which payment is actually
made to or on behalf of Indemnitee under a valid and collectible insurance policy of D&O Insurance, or under a valid and enforceable indemnity clause, by-law or agreement. 

        5.    Partial Indemnification.    If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and
amounts paid in settlement) incurred by him in the investigation, defense, settlement or appeal of a proceeding, but not entitled, however, to indemnification for all of the total amount hereof, the
Company shall nevertheless indemnify the Indemnitee for such total amount except as to the portion hereof to which the Indemnitee is not entitled. 

        6.    Mandatory Advancement of Expenses.    Subject to Section 9(a) below, the Company shall advance all
expenses incurred by the Indemnitee in connection with the investigation, defense, settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened to be made a party by
reason of the fact that the Indemnitee is or was an agent of the Company. Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall be determined ultimately
that the Indemnitee is not entitled to be indemnified by the Company as authorized hereby. The advances to be made hereunder shall be paid by the Company to the Indemnitee within twenty
(20) days following delivery of a written request therefor by the Indemnitee to the Company. In the event that the Company fails to pay expenses as incurred by the Indemnitee as required by
this paragraph, Indemnitee may seek mandatory injunctive relief from any court having jurisdiction to require the Company to pay expenses as set forth in this paragraph. If Indemnitee seeks mandatory
injunctive relief pursuant to this paragraph, it shall not be a defense to enforcement of the Company's obligations set forth in this paragraph that Indemnitee has an adequate remedy at law for
damages. 

        7.    Notice and Other Indemnification Procedures.    

        (a)    Notice by Indemnitee.    Promptly after receipt by the Indemnitee of notice of the commencement of or the
threat of commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under this Agreement, notify the
Company of the commencement or threat of commencement thereof. 

        (b)    Notice by Company.    If, at the time of the receipt of a notice of the commencement of a proceeding pursuant
to Section 7(a) hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures
set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies. 

        (c)    Defense.    In the event the Company shall be obligated to pay the expenses of any proceeding against the
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, with counsel approved by the Indemnitee, upon the delivery to the Indemnitee of written notice of
its election so to do. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company 

4

 

will
not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same proceeding, provided that (i) the Indemnitee
shall have the right to employ his counsel in any such proceeding at the Indemnitee's expense; and (ii) if (A) the employment of counsel by the Indemnitee has been previously authorized
by the Company, (B) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of any such defense, or
(C) the Company shall not, in fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of Indemnitee's counsel shall be at the expense of the Company. 

        8.    Determination of Right to Indemnification.    

        (a)    Successful Defense.    To the extent the Indemnitee has been successful on the merits or otherwise in defense
of any proceeding (including, without limitation, an action by or in the right of the Company) to which the Indemnitee was a party by reason of the fact that he is or was an agent of the Company at
any time, the Company shall indemnify the Indemnitee against all expenses of any type whatsoever actually and reasonably incurred by him in connection with the investigation, defense or appeal of such
proceeding. 

        (b)    Other Situations.    In the event that Section 8(a) is inapplicable, the Company shall also indemnify
the Indemnitee unless, and except to the extent that, the Company shall prove by clear and convincing evidence in a forum listed in Section 8(c) below that the Indemnitee has not met the
applicable standard of conduct required to entitle the Indemnitee to such indemnification. 

        (c)    Selection of Forum.    The Indemnitee shall be entitled to select the forum in which the validity of the
Company's claim under Section 8(b) hereof that the Indemnitee is not entitled to indemnification will be heard from among the following: 

          (i)  A
quorum of the Board consisting of directors who are not parties to the proceeding for which indemnification is being sought; 

         (ii)  The
stockholders of the Company; 

        (iii)  Legal
counsel selected by the Indemnitee, and reasonably approved by the Board, which counsel shall make such determination in a written opinion; or 

        (iv)  A
panel of three arbitrators, one of whom is selected by the Company, another of whom is selected by the Indemnitee and the last of whom is selected by the first two
arbitrators so selected. 

        (d)    Submission to Forum.    As soon as practicable, and in no event later than thirty (30) days after
written notice of the Indemnitee's choice of forum pursuant to Section 8(c) above, the Company shall, at its own expense, submit to the selected forum in such manner as the Indemnitee or the
Indemnitee's counsel may reasonably request, its claim that the Indemnitee is not entitled to indemnification; and the Company shall act in the utmost good faith to assure the Indemnitee a complete
opportunity to defend against such claim. 

        (e)    Application to Court of Chancery.    Notwithstanding a determination by any forum listed in Section 8(c)
hereof that Indemnitee is not entitled to indemnification with respect to a specific proceeding, the Indemnitee shall have the right to apply to the Court of Chancery of Delaware, the court in which
that proceeding is or was pending or any other court of competent jurisdiction, for the purpose of enforcing the Indemnitee's right to indemnification pursuant to this Agreement. 

        (f)    Expenses Related to this Agreement.    Notwithstanding any other provision in this Agreement to the contrary,
the Company shall indemnify the Indemnitee against all expenses incurred by the Indemnitee in connection with any hearing or proceeding under this Section 8 involving the Indemnitee and against
all expenses incurred by the Indemnitee in connection with 

5

 

any
other proceeding between the Company and the Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this Agreement unless a court of competent jurisdiction
finds that each of the claims and/or defenses of the Indemnitee in any such proceeding was frivolous or made in bad faith. 

        9.    Exceptions.    Any other provision herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement: 

        (a)    Claims Initiated by Indemnitee.    To indemnify or advance expenses to the Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way of defense, unless (i) such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the General Corporation
Law of Delaware or
(iv) the proceeding is brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145; 

        (b)    Lack of Good Faith.    To indemnify the Indemnitee for any expenses incurred by the Indemnitee with respect to
any proceeding instituted by the Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous; or 

        (c)    Unauthorized Settlements.    To indemnify the Indemnitee under this Agreement for any amounts paid in
settlement of a proceeding unless the Company consents to such settlement, which consent shall not be unreasonably withheld. 

        10.    Non-exclusivity.    The provisions for indemnification and advancement of expenses set forth in
this Agreement shall not be deemed exclusive of any other rights which the Indemnitee may have under any provision of law, the Company's Certificate of Incorporation or Bylaws, the vote of the
Company's stockholders or disinterested directors, other agreements, or otherwise, both as to action in his official capacity and to action in another capacity while occupying his position as an agent
of the Company, and the Indemnitee's rights hereunder shall continue after the Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors and
administrators of the Indemnitee. 

        11.    Enforcement.    Any right to indemnification or advances granted by this Agreement to Indemnitee shall be
enforceable by or on behalf of Indemnitee in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition
of such claim is made within ninety (90) days of request therefor. Indemnitee, in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim. It shall be a defense to any action for which a claim for indemnification is made under this Agreement (other than an action brought to enforce a claim for expenses pursuant to
Section 6 hereof, provided that the required undertaking has been tendered to the Company) that Indemnitee is not entitled to indemnification because of the limitations set forth in
Sections 4 and 9 hereof. Neither the failure of the Company (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement
action that indemnification of Indemnitee is proper in the circumstances, nor an actual determination by the Company (including its Board of Directors or its stockholders) that such indemnification is
improper, shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise. 

        12.    Subrogation.    In the event the Company is obligated to make a payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery under an insurance policy or any other indemnity agreement covering the Indemnitee, who 

6

 

shall
execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. 

        13.    Survival of Rights.    

        (a)   All
agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an agent of the Company and shall continue thereafter so
long as Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by
reason of the fact that Indemnitee was serving in the capacity referred to herein. 

        (b)   The
Company shall require any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession
had taken place. 

        14.    Interpretation of Agreement.    It is understood that the parties hereto intend this Agreement to be
interpreted and enforced so as to provide indemnification to the Indemnitee to the fullest extent permitted by law including those circumstances in which indemnification would otherwise be
discretionary. 

        15.    Severability.    If any provision or provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including without limitation, all portions of any paragraphs
of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable and to give effect to Section 14 hereof. 

        16.    Modification and Waiver.    No supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 

        17.    Notice.    All notices, requests, demands and other communications under this Agreement shall be in writing and
shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on the third business
day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice. 

        18.    Governing Law.    This Agreement shall be governed exclusively by and construed according to the laws of the
State of Delaware as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware. 

7

 

        The
parties hereto have entered into this Indemnity Agreement effective as of the date first above written. 

	 	 	THE COMPANY:
	

 	
 	

GSI TECHNOLOGY, INC.
	

 	
 	

By	
 	

    

	

 	
 	

Title	
 	

    

	

 	
 	

Address	
 	

    

	 	 	 	 	    

	

 	
 	

INDEMNITEE:
	

 	
 	

    
[Name]
	

 	
 	

Address	
 	

    

	 	 	 	 	    

	 	 	 	 	    

8

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Exhibit 10.1

INDEMNITY AGREEMENT

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