Document:

freshstart8k111810ex10.htm

INTELLECTUAL PROPERTY LICENSE

AND

ASSET PURCHASE AGREEMENT

This Intellectual Property License and Asset Purchase Agreement (the “Agreement”) is made and entered into as of the 22nd day of November 2010 (the “Effective Date”), by and among Fresh Start Private, Inc., a Nevada corporation (“Fresh Start Private”), Neil Muller (“Muller”), and Fresh Start Private Management Inc. (“Licensee”).  For the purposes of this Agreement, Fresh Start Private and Muller shall collectively be referred to as (“Licensor”).

WHEREAS, Fresh Start Private has licensed from Muller the exclusive right to use the trademark and service mark “Fresh Start Private” in connection with the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation business and industry (the “Trademark”) in the United States of America and its territories;

WHEREAS, for the purposes of this Agreement, “Intellectual Property” shall mean, with reference to any person, any and all technology, Muller’s entire written grogram regarding alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation, technical information, and rights therein owned or licensed from a third party by such person, including, without limitation, technical data, inventions, concepts, processes, formulae, algorithms, know-how, system, apparatuses, software, designs, design elements, product features, product specifications, works of authorship, drawings, and any other technical subject matter related thereto, including all Patent Rights (as defined in the following recital), copyrights, trade secrets, masks and mask works, industrial designs, domain names, secure socket layers and other intellectual property rights therein protected under the laws of any country or the world (whether or not the rights therein are currently perfected), as it relates to the business operated under (i) the Trademark and (ii) the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation treatment and program conceived and/or business operated by Muller and/or Fresh Start Private.

WHEREAS, for the purposes of this Agreement, “Patent Rights” shall mean (a) all patent applications heretofore or hereafter filed or having legal force, in any country; (b) all patents that have issued or in the future issue therefrom, including utility, model and design patents and certificates of invention; and (c) all divisions, continuations, continuations-in-part, reissuances, renewals, extensions or additions to any such patent applications and patents; all to the extent and only to the extent that the person holding such patent applications, patents, divisions, continuations, continuations-in-part, resissuances, renewals, extensions or additions now has or hereafter will have the right to grant licenses, immunities or other rights thereunder, as the foregoing relates to the business operated under (i) the Trademark and (ii) the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation treatment and program conceived and/or business operated by Muller and/or Fresh Start Private.

 

WHEREAS, Fresh Start Private owns and operates alcohol treatment and rehabilitation centers and related businesses in the US which use and otherwise have a license to the Trademark and Intellectual Property (the “Alcohol Treatment and Rehabilitation Centers”); and

 

WHEREAS, Licensor desires to grant Licensee, and Licensee desires to obtain, subject to the terms and conditions below, a license to use the Trademark and Intellectual Property in connection with the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation business and industry, on an exclusive basis within United States of America and its territories (the “Territory”).

 

  

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 NOW, THEREFORE, in consideration of the premises, Licensor and Licensee hereby agree as follows:

 

1. License.

 

1.1 Grant of License.  Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee accepts, for the Term (as defined in Section 2.1 below), an exclusive right to use the Trademark and the Intellectual Property in the Territory for (i) the operation of the Alcohol Treatment and Rehabilitation Centers and (ii) otherwise for the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation business and industry.  Licensee shall not use the Trademark and Intellectual Property, except as expressly stated in this Agreement.  All rights in and to the Trademark and the Intellectual Property not specifically granted to Licensee by this Agreement are reserved to Licensor for Licensor’s own use and benefit.  Licensee shall utilize the Trademark and Intellectual Property solely with respect to (i) the operation of the Alcohol Treatment and Rehabilitation Centers and (ii) otherwise for the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation business and industry.  The Trademark and the Intellectual Property include the use the same for other products related to (i) the operation of the Alcohol Treatment and Rehabilitation Centers and (ii) the alcohol addiction, alcohol withdrawal, alcohol abuse treatment and alcohol detox rehabilitation business and industry.  This Agreement does not convey any ownership rights in the Trademark to the Licensee.  Any license hereunder by Fresh Start Private necessarily include any sub-license to Licensee, to the extent one is required.

 

1.2 Sublicenses.  Licensee shall have the right to license and sublicense any of the Trademark, Intellectual Property or all or any part of this Agreement or all or any of its rights or obligations under this Agreement.

 

1.3 Limitation of Territory.  Licensee understands and acknowledges that the license granted under this Agreement is limited to the Territory.

 

1.4 No Rights After Term.  Licensee understands and acknowledges that no rights whatsoever shall extend to Licensee beyond the expiration of the term of this Agreement, as exten­ded, and that Licensee shall not be entitled to any payment of any nature on the expiration or termination of this Agreement for whatever reason.

 

 

1.5 No Limitations on Licensor.  Except as expressly stated in Section 1 hereof, nothing contained in this Agreement shall in any way restrict, impair, limit, or affect Licensor’s rights to use, or license third parties to use, the Trademark, outside the Territory, whether on or in connection with the Trademark or otherwise.

 

  

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2. Term and Option to Extend.

 

2.1 Term.  The term of this Agreement (the “Term”), and the license granted hereby, shall commence on the Effective Date and shall expire on the ninety-ninth (99th) anniversary of the Effective Date, subject to extension as described below.

 

2.2 Automatic Extension.  Upon the expiration of the Term or any Extended Term (as hereafter defined), this Agreement shall automatically extend for additional terms of five (5) years each (each, an “Extended Term”) unless Licensor gives written notice to Licensor at least ninety (90) days prior to the expiration date thereof of its intention to terminate this Agreement upon the expiration of the then-current Term.  The term “Term” shall collectively mean the Term and the Extended Term, unless the context otherwise specifies.

 

3. Intellectual Property Ownership Rights.

 

3.1 Ownership of the Trademark and the Intellectual Property.  Licensee acknowledges, understands and agrees that each of Fresh Start Private and/or Muller, as the case may be, have sole and exclusive ownership of all right, title, and interest in and to the Trademark and the Intellectual Property and any copyrights related to the Trademark and the Intellectual Property, and all registrations and applications therefor.  Licensee further acknowledges, represents, and warrants that it has not acquired, and shall not acquire, whether by operation of law, this Agreement, or otherwise, any right, title, interest, or other ownership in or to the Trademark or the Intellectual Property.  Should any such right, title, interest, or other ownership become vested in Licensee by operation of law, this Agreement, or otherwise, Licensee agrees to assign, and hereby assigns, all such right, title, interest, and other ownership to Fresh Start Private and/or Muller, as the case may appropriately be, free of additional consideration.  Licensee shall provide and execute all documents necessary to effectuate and record such assignments to Fresh Start Private’s and/or Muller’s, expense, as the case may appropriately be.  Licensee recognizes the value of the goodwill associated with the Trademark and acknowledges that all rights therein belong exclusively to Licensor and further acknowledges that the Trademark and the Intellectual Property has acquired secondary meaning in the mind of the public.  Except as provided herein, all use of the Trademark and all goodwill and benefit arising from such use shall inure to the sole and exclusive benefit of Fresh Start Private and/or Muller, as the case may appropriately be.  All rights in and to the Trademark other than those specifically granted in this Agreement are reserved by Fresh Start Private and/or Muller, as the case may appropriately be, for each of their own use and benefit.

 

Neither Licensor nor Licensee shall, during the Term or thereafter, do anything which would in any way damage, injure, or impair the validity and subsistence of the Trademark or the Intellectual Property, (nor shall Licensor or Licensee attack, dispute, or challenge, nor aid others to do so) Licensor’s or Licensor’s right, title, and interest in and to the Trademark and the Intellectual Property, or the validity of this Agreement.

 

3.2 Registrations and Licensing Formalities.  Licensee shall promptly cooperate with Licensor if Licensor requests the execution, filing and prosecution of any Trademark or copyright applications that Licensor may desire to file, and for that purpose Licensee shall supply to Licensor from time to time, at Licensor’s expense, such samples, packaging, containers, labels, tags, and similar materials as may be reasonably required.

 

  

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3.3 No Use After Expiration or Termination.  Upon expiration of this Agreement, Licensee shall immediately cease all use of the Trademark and Intellectual Property owned by Licensor, and shall at Licensor’s request take all steps and actions as may be necessary to reflect or confirm the expiration, termination, and/or surrender of Licensee’s rights to use same.

 

3.4 Infringements.  Licensee shall inform Licensor forthwith if Licensee learns of any goods or activities which infringe the Licensed Products, or learns of any other infringement of the Trademark or the Intellectual Property or of other intellectual property rights now or hereafter owned by Licensor.  Licensee shall provide information, cooperation, and assistance to Licensor concerning such infringements, including without limitation, in any further investigation and/or legal action.  Upon learning of such infringements, Licensor shall have the right, but not the obligation, at its sole discretion and expense, to take such action as Licensor considers necessary or appropriate to enforce Licensor’s rights, including without limitation legal action to suppress or eliminate the infringements, and/or to settle any such dispute and/or action.  Upon Licensor’s request, Licensee shall join and participate in any proceeding against counterfeiters and/or infringers in the Territory; provided that Licensor shall have the right to terminate this Agreement and not so to join or participate.  If Licensor joins in such proceeding or is named as a defendant in a legal proceeding involving the Trademark or the Intellectual Property, Licensor shall have the right to interplead all royalties due hereunder pending the resolution of such proceedings.  Licensor shall bear all reasonable costs and expenses (including reasonable attorneys’ fees) of Licensee’s participation in such proceedings.  Licensor shall also be entitled to seek and recover all costs, expenses, and damages resulting from such infringements, including without limitation sums which might otherwise be due Licensee by operation of law or otherwise, and Licensor and Licensee shall share equitably in any amounts recovered by Licensor.  Licensee shall have no authority to enforce the rights of Licensor, but Licensee shall have the reasonable right to demand or control action by Licensor to enforce such rights.

 

4. Consideration for License.  As consideration for the license granted hereunder, Licensee shall issue to Fresh Start Private sixteen million (16,000,000) shares (the “Stock”) of common stock of Licensee.

 

5. Representations and Warranties.

 

5.1 Licensor.  Licensor represents and warrants that:

 

5.1.1 Licensor holds good title to and is able to license all of Licensor’s rights to the Trademark and the Intellectual Property in the Territory for purposes of this Agreement.

 

5.1.2 Licensor’s entering into and performing this Agreement will not conflict with or violate any agreements or obligations Licensor may have with any other person or entity.

 

5.1.3 The use of the Trademark and the Intellectual Property pursuant to this Agreement, shall not infringe the patents, industrial design rights, copyrights, Trademark rights, or other intellectual property rights of others.

 

  

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5.1.4 Licensor owns the Alcohol Treatment and Rehabilitation Centers and is engaged in an active trade or business.

 

5.1.5  Each of the Trademark and the Intellectual Property are not subject to any security interest, lien, mortgage or any other kind of encumbrance.

 

5.2 Licensee. Licensee represents and warrants that:

 

5.2.1 Licensee’s entering into and performing this Agreement will not conflict with or violate any agreements or obligations Licensee may have with any other person or entity.

 

5.3 Licensor Covenants. During the Term of this Agreement, Licensor shall own and operate the Alcohol Treatment and Rehabilitation Centers and maintain the Alcohol Treatment and Rehabilitation Centers as it is currently operated and maintained by Licensor.

 

6. Indemnity.

 

           Licensor shall indemnify and hold Licensee harmless from and against any claim, suit, loss, damage, or expense (including without limitation reasonable attorneys’ fees) arising out of or relating to any breach of Licensor’s representations and warranties.    Licensee shall indemnify and hold Licensor harmless from and against any claim, suit, loss, damage, or expense (including without limitation reasonable attorneys’ fees) arising out of or relating to any breach of Licensee’s representations and warranties.  Either Licensor or Licensee, as the case may be, shall provide the other party notice of any claim or suit for which the other party may be liable in indemnity within ten (10) business days after learning of same.  The indemnifying party, at its expense, shall have the right to enter and defend against any such claim or suit using counsel of the indemnifying party’s choice.  The indemnified party shall have the right, at its own expense, to participate in such claim or suit using the indemnified party’s own counsel.

 

7. Asset Purchase.

 

7.1 Definition. For the purposes of this Agreement, “Assets” shall mean those assets that are related to the Trademark and the Intellectual Property that are or were used or created by Licensor in its conduct of business, including all assets, rights, interests, and properties of Licensor of whatever nature, tangible or intangible, real or personal, fixed or contingent, except for the Trademark and the Intellectual Property.  Assets shall include, but shall not be limited to, the following types of assets:

 

(a) equipment (including transportation equipment), tools, vehicles, machinery, furniture, furnishings, other tangible personal property, signage, leasehold improvements, and fixtures;

 

(b) inventory of any kind, character, nature or description, wherever located and in transit, including all supplies, goods in process, finished goods, packaging materials and merchandise;

 

  

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(c) accounts receivable, retainage receivables, rights to collect for unbilled services, employee receivables, notes, instruments, other accounts, and similar items;

 

(d) rights and interests of Licensor in, to, and under any contract;

 

(e) rights to and under leases, subleases and assignments relating to equipment;

 

(f) cash, cash deposits, bank accounts, certificates of deposit, savings and other similar cash or cash equivalents of every kind, character, nature and description;

 

(g) prepaid items and deposits and rights to rebates;

 

(h) rights under any governmental authorization;

 

(i) customer lists and advertising and promotional materials;

 

(j) rights, claims, causes of action, choses in action, rights of recovery, rights of set-off, counterclaims and rights of recoupment, including all rights under express or implied warranties relating to the Assets;

 

(k) files, records, data, and plans including customer and supplier lists, and employee and financial records;

 

(l) books, records and other documents, including fixed asset records, sales and advertising materials (including price lists), sales and purchase correspondence, technical and research data, books of account and records, ledgers, files, correspondence, creative materials, studies, reports and other items;

 

(m) property subject to capital leases; and

 

(n) Except as they relate to the Trademark and the Intellectual Property, all rights, claims, contracts, agreements, causes of action and properties, as of the Effective Date, of every kind, character, nature and description, whether tangible or intangible, choate or inchoate, corporeal or incorporeal, matured or not matured, known or unknown, contingent or fixed wherever located.

 

7.2 Purchase and Sale.  Upon the terms and subject to the conditions set forth in this Agreement, at the Licensor hereby sells, transfers, and assigns to Licensee all of Licensor’s right, title, and interest in and to the Assets free and clear of any security interest, lien, mortgage or any other kind of encumbrance, and Licensee hereby purchases and acquires the Assets from Fresh Start Private.

 

7.3 Purchase Price.   The purchase price for the Assets shall be Ten Dollars ($10.00), which $10.00 Licensor acknowledges as having received.

 

7.4 No Assumption of Liabilities.  Licensee does not and will not by acceptance hereof assume any liabilities or obligations whatsoever of Licensor.

  

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8. Investment.

 

8.1  Knowledge of Investment and its Risks.  Fresh Start Private has knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of Fresh Start Private’s investment in the Stock.  Fresh Start Private understands that an investment in Licensee represents a high degree of risk and there is no assurance that Licensee’s business or operations will be successful.  Fresh Start Private has considered carefully the risks attendant to an investment in Licensee, and that, as a consequence of such risks, Fresh Start Private could lose Fresh Start Private’s entire investment in Licensee.

 

8.2  Investment Intent.  Fresh Start Private hereby represents and warrants that (i) it is acquiring the Stock for investment for Fresh Start Private’s own account, and not as a nominee or agent and not with a view to the resale or distribution of all or any part of the Stock, and Fresh Start Private has no present intention of selling, granting any participation in or otherwise distributing any of the Stock within the meaning of the Securities Act and (ii) Fresh Start Private does not have any contracts, understandings, agreements or arrangements with any person and/or entity to sell, transfer or grant participations to such person and/or entity, with respect to any of the Stock.

 

8.3 Accredited Investor.  Fresh Start Private is an “Accredited Investor” as that term is defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

 

8.3.1 Disclosure.  Fresh Start Private has reviewed information provided by Licensee in connection with the decision to purchase the Stock, including Licensee’s publicly-available filings with the Securities and Exchange Commission.  Licensee has provided Fresh Start Private with all the information that Fresh Start Private has requested in connection with the decision to purchase the Stock.  Fresh Start Private further represents that Fresh Start Private has had an opportunity to ask questions and receive answers from Licensee regarding the business, properties, prospects and financial condition of Licensee.  All such questions have been answered to the full satisfaction of Fresh Start Private.

 

8.4 No Registration.  Fresh Start Private understands that it must bear the economic risk of its investment in Licensee for an indefinite period of time.  Fresh Start Private further understands that (i) neither the offering nor the sale of the Stock has been registered under the Securities Act or any applicable State Acts or securities laws of other applicable jurisdictions in reliance upon exemptions from the registration requirements of such laws, (ii) the Stock must be held by Fresh Start Private indefinitely unless the sale or transfer thereof is subsequently registered under the Securities Act and any applicable State Acts, or an exemption from such registration requirements is available, (iii) Licensee is not hereby under an obligation to register any of the Stock on Fresh Start Private’s behalf or to assist Fresh Start Private in complying with any exemption from registration, and (iv) Licensee will rely upon the representations and warranties made by Fresh Start Private in this Agreement in order to establish such exemptions from the registration requirements of the Securities Act and any applicable State Acts or securities laws of other applicable jurisdictions.

 

  

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8.5 Transfer Restrictions.  Fresh Start Private will not transfer any of the Stock unless such transfer is exempt from registration under the Securities Act and such State Acts and securities laws of other applicable jurisdictions, and, if requested by Licensee, Fresh Start Private has furnished an opinion of counsel satisfactory to Licensee that such transfer is so exempt.  Fresh Start Private understands and agrees that (i) the certificates evidencing the Stock will bear appropriate legends indicating such transfer restrictions placed upon the Stock, (ii) Licensee shall have no obligation to honor transfers of any of the Stock in violation of such transfer restrictions, and (iii) Licensee shall be entitled to instruct any transfer agent or agents for the securities of Licensee to refuse to honor such transfers.

 

9. General.

 

9.1 Entire Agreement.  This Agreement constitutes the entire agreement and contains a complete statement of all the arrangements between the parties with respect to its subject matter and supersedes all prior agreements, understandings, commitments, negotiations, and discussions, whether oral or written.

 

9.2 Amendment.  This Agreement may not be amended, altered, modified, or otherwise changed in any respect or particular whatsoever except in writing signed by both parties.

 

9.3 Waiver.  The failure of a party to insist upon strict adherence to any provision of this Agreement on any occasion shall not be considered a waiver or deprive or limit that party’s right thereafter to insist upon strict adherence to that provision in the particular instance or that provision or any other provision of this Agreement in any instance.  Any waiver shall be in writing signed by the party against whom the waiver is sought to be enforced.

 

9.4 No Assignment Without Consent.  This Agreement is personal to Licensee, and Licensee shall not assign or transfer any of its rights or delegate any of its obligations under this Agreement without Licensor’s consent, which shall not be unreasonably withheld.  Any attempted assignment, transfer, or delegation in violation of this provision or by virtue of the operation of law shall be void.   This Agreement is personal to Licensor, and Licensor shall not assign or transfer any of its rights or delegate any of his obligations under this Agreement without Licensee’s con­sent, which shall not be unreasonably withheld.  Any attempted assignment, transfer, or delegation in violation of this provision or by virtue of the operation of law shall be void.

 

9.5 Independent Contractors.  Licensor and Licensee have entered this Agreement as independent contractors only.  Nothing contained in this Agreement places or shall be construed to place the parties in the relationship of partners, joint ventures, agent/principal, or legal repre­sen­ta­tion, and Licensee shall have no authority or power to obligate or bind Licensor in any manner.

 

9.6 Severability.  The provisions of this Agreement are severable.  If a court of com­pe­tent jurisdiction should declare any provision of this Agreement void or otherwise unen­force­able, the other provisions shall remain unchanged and in full force and effect.

 

  

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9.7 Governing Law and Jurisdiction.  This Agreement shall be construed in accordance with and governed by the laws of the State of Washington without regard to choice of law principles. The parties hereto each consent to the exclusive jurisdiction of the courts of the state of Washington, county of King and to the federal courts located in the county of King, State of Washington.

 

9.8 Notices.  Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally by messenger or courier, by facsimile, or if mailed by certified or overnight express mail, postage prepaid, return receipt requested (such mailed notice to be effective on the first date of attempted delivery), as follows:

 

	
Fresh Start Private:

	
Fresh Start Private, Inc.,

	  	
712 Miller Ave.

	  	
Las Vegas, Nevada 89030

	  	  
	
Muller:

	
Neil Muller

	  	
712 Miller Ave.

	  	
Las Vegas, Nevada 89030

	  	  
	
Licensee:

	
Fresh Start Private Management Inc.

	  	
375 N. Stephanie St., Ste. 1411

	  	
Henderson, Nevada 89014

9.9 Authorization and Ability to Execute.  The undersigned represent that they are authorized to sign this Agreement on behalf of the parties hereto.  Each party has relied upon said representations in entering into this Agreement.

 

9.10 Multiple Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.  The execution and delivery of counterparts of this Agreement, by facsimile, scanned e-mail attachment or by original manual signature, regardless of the means or any such variation in pagination or appearance shall be binding upon the parties executing this Agreement.

 

[signature page follows]

 

  

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                   IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the Effective Date.

 

FRESH START PRIVATE, INC.:

	
By:

	
____________________________________

	  	
Name:

	
Jorge Andrade

	  	
Title:

	
President

 NEIL MULLER

	
By:

	
____________________________________

	  	
Name:

	
Neil Muller

FRESH START PRIVATE MANAGEMENT, INC.:

	
By:

	
____________________________________

	  	
Name:

	
Michael Cetrone

	  	
Title:

	
President

10exhibit10-5suppretiremt.htm

Exhibit No. 10.5

 

 

 

Rev. 04/23/09

 

 

 

 

 

 

 

 

MATTHEWS INTERNATIONAL CORPORATION

 

SUPPLEMENTAL RETIREMENT PLAN

 

ORIGINALLY EFFECTIVE OCTOBER 1, 1987

 

AMENDED EFFECTIVE APRIL 23, 2009*

 

 

 

 

 

 

 

 

*NOTE:                      This Plan applies only to employees who were elected Officers of

 

Matthews International Corporation prior to January 1, 2009.

 

 

  

  

  

ARTICLE 1

 

 

GENERAL PROVISIONS

 

1.1 Matthews International Corporation ("the Company") originally adopted this Supplemental Retirement Plan ("Supplemental Plan" or "Plan") effective October 1, 1987.  This instrument amends and restates the Plan in its entirety, effective as of April 23, 2009.

 

1.2 As amended from time to time, this Supplemental Plan shall be deemed to be a contract between the Company and each Participant.  However, nothing contained in this  Plan shall be deemed to give any Participant the right to be retained in service or to interfere with the right of the Company to discharge any Participant at any time without regard to the effect which such discharge shall have on such Participant's rights, if any, under this Plan.

 

1.3 No Participant shall have the right to assign, transfer, hypothecate, encumber, commute or anticipate the right to any payments under this Supplemental Plan or the Trust, and such payments shall not in any way be subject to any legal processes to levy on or attach the same for payment of any claim against any Participant.

 

1.4 Defined Terms:  The terms listed below, when used in this Supplemental Plan with (an) initial capital letter(s), are defined either explicitly or in context in the provisions identified below:

 

	
Accrued Benefit

	
Article 3

	
Active Participant

	
2.1(a), 2.1(b)

	
Actuarial Equivalent

	
4.6

	
Board of Directors

	
2.1(c)

	
Company

	
1.1

	
Compensation Committee

	
2.5(d)

	
Continuous Service

	
3.5

	
Deferred Retirement Benefit

	
4.2

	
Deferred Retirement Date

	
2.8(c)

	
Delayed Payment Date

	
4.11(a)

	
Early Retirement Benefit

	
4.3(a)

	
Early Retirement Date

	
2.8(d)

	
Early Retirement Factor

	
4.3(a)

	
Early Retirement Supplement

	
4.3(c)

	
Earnings

	
3.4

	
Employees Retirement Plan

	
3.2

	
ERISA

	
6.1(b)

 

  

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Excise Tax

	
4.10

	
Final Average Monthly Earnings

	
3.3

	
Former Active Participant

	
2.4

	
Gross-Up

	
4.10

	
IRC

	
2.9

	
Joint and 50% Surviving Spouse Annuity

	
4.7

	
Joint and 66-2/3% Surviving Spouse Annuity

	
4.8

	
Minimum Officer Service Requirement

	
2.1(a)1

	
Legal Expenses

	
6.1(c)(vii)

	
LTD Benefits

	
2.2(c)

	
Normal Annuity

	
4.5

	
Normal Retirement Benefit

	
4.1

	
Normal Retirement Date

	
2.8(a)

	
Officer

	
2.1(c)

	
Parachute Payment

	
4.10

	
Participant

	
Article 2, Preamble

	
Participant's Termination Date

	
7.1(b)

	
Plan

	
1.1

	
Retired Participant

	
2.8(a)

	
Retirement Date

	
2.8(e)

	
Retirement Restoration Plan

	
2.3(e)

	
Section 11 Event

	
2.2(b)

	
Spouse

	
4.4(f)

	
Social Security Primary Insurance Amount

	
3.2(b)

	
Social Security Supplement

	
4.3(b)

	
Supplemental Plan

	
1.1

	
Surviving Spouse

	
4.7, 5.1

	
Trust

	
6.3(a)

	
Trustee

	
6.3(b)

	Vested Accrued Benefit	 2.5(a)
	Vested Participant	 6.4(a)

  
 

 

1 See also 2.1(b).

  

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ARTICLE 2

 

 

PARTICIPATION AND ELIGIBILITY FOR BENEFITS

 

In this Supplemental Plan, the term “Participant” is sometimes used to refer to any one, or more, or all, of the following, as the context requires: Active Participant (2.1), Former Active Participant (2.4), Retired Participant (2.7), and/or Vested Participant (6.4(a)).

 

Eligibility for Participation

2.1 

(a) Except as otherwise provided in 2.2, each Officer of the Company shall become an Active Participant in this Supplemental Plan as of the first day of the month next following the date on which he or she completes five years of active service as an Officer of the Company (the "Minimum Officer Service Requirement").

 

(b) Effective April 23, 2009, active participation in this Supplemental Plan shall be restricted to those individuals who have been elected Officers of the Company prior to January 1, 2009.

 

(c) For purposes of this Plan, "Officer" shall include only those employees whom the Company's Board of Directors, acting pursuant to the Company's Bylaws, have elected as executive officers of Matthews International Corporation prior to January 1, 2009.  As such, "Officer" includes, but is not limited to:  Chairman (if also a salaried employee of the Company), Vice Chairman (if also such an employee), Chief Executive Officer, President, Chief Financial Officer, Vice President, Secretary, Treasurer and Controller.  However, assistant officers of the Company, officers of subsidiary companies, or managers of unincorporated business divisions or business units who hold titles such as "President" or "Vice President" of such a division or business unit, shall not, solely by virtue of holding such office or division officer designation, be deemed to be Officers of the Company for purposes of this Plan.

 

2.2 Notwithstanding 2.1:

 

(a) In its sole and absolute discretion and with no obligation to apply its discretion in a uniform manner, the Board of Directors may expressly waive the Minimum Officer Service Requirement with respect to any individual Officer and designate such Officer an Active Participant in the Plan effective at the time determined by the Board.

 

(b) An Officer who has not satisfied the Minimum Officer Service Requirement of 2.1 or who has not been specially designated as an Active Participant pursuant to 2.2(a), shall nevertheless become an Active Participant upon the occurrence of a "Section 11 Event", as defined in Section 11.1(4) of the Matthews International Corporation 2007 Equity Incentive Plan (as amended through September 26, 2008 and as it may be amended hereafter), or similar change-of-control provisions in any successor plan adopted by the Company in place of the 2007 Equity Incentive Plan.2

 

  

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(c) An Officer who has not satisfied the Minimum Officer Service Requirement of 2.1(a) or the special designation requirements of 2.2(a), and who has both attained age 55 and become eligible to receive long-term disability benefits under the Company's long-term disability insurance plan ("LTD Benefits"), will become an Active Participant upon the last to occur of his or her (i) becoming eligible to receive LTD Benefits, or (ii) attainment of age 55 while receiving LTD Benefits.

 

2.3 Following qualification as an Active Participant, an individual shall continue in such capacity until the earliest to occur of the following events:

 

(a) The Participant dies.

 

(b) The Participant's employment with the Company terminates, or, in the case of a Participant who is receiving LTD Benefits (2.2(c)), the Participant ceases to be eligible to continue to receive LTD Benefits, whichever occurs later.

 

(c) The Participant becomes a Former Active Participant (2.4) upon termination of his or her status as an Officer of the Company.

 

(d) The Participant becomes a Retired Participant (2.8).

 

Notwithstanding the foregoing:

 

(e) In the case of an Officer who, as of April 23, 2009, has not yet satisfied the Minimum Officer Service Requirement of 2.1(a) or the special designation requirements of 2.2(a), such individual may make the irrevocable election described in 2.3(g) to forego eligibility to become an Active Participant in this Supplement Plan but instead to be deemed eligible to become an Active Participant in the Matthews International Corporation Officers Retirement Restoration Plan ("Retirement Restoration Plan") with respect to all of his or her prior and future service with the Company, subject to his or her satisfying the Minimum Officer Service Requirement or the special designation requirements of the Retirement Restoration Plan.

 

(f) In the case of an Active Participant who, as of April 23, 2009, has a vested percentage of 0% (under 2.5 or 2.7), such individual may make the irrevocable election described in 2.3(g) to become an Active Participant in the Retirement Restoration Plan effective as of April 23, 2009 with respect to all of his or her prior and future service with the Company.

 

(g) An Officer described in 2.3(e) or an Active Participant described in 2.3(f), may make the irrevocable election referred to in 2.3(e) or 2.3(f) no later than September 30, 2009 by filing a written election with the Secretary of the Committee in such form as the Secretary shall prescribe.  Upon making such election, such individual shall, as the case may be, cease to be eligible to become an Active Participant, or shall cease to be an Active Participant, in this Supplemental Retirement Plan and shall receive no benefits whatsoever from this Plan.

 

  

4

  

2.4 In the event that an Active Participant ceases to be an Officer of the Company, but continues to be an active employee of the Company in a non-Officer capacity, his or her benefits hereunder shall cease to accrue as of the date such Participant ceases to be an Officer of the Company.  An individual who meets the criteria of this paragraph shall be a Former Active Participant.  (An individual who elects, pursuant to 2.3(f) and 2.3(g), to cease participation in this Supplemental Retirement Plan, shall not be a "Former Active Participant".)

 

Eligibility for Benefits (Vesting, etc.)

2.5 Vesting under Circumstances Other than a Section 11 Event

 

(a) Except as provided in 2.5(f), 2.6 or 2.7, an Active Participant or Former Active Participant (1) who voluntarily terminates employment or (2) whose employment with the Company is terminated involuntarily or by mutual agreement, shall have vested rights in his or her Accrued Benefit (Article 3) according to the following schedule:

	
Participant's Completed Years

of Continuous Service (3.5(b))

	
Vested Percentage

	
                     Less than 10

	
                                    0%

	
                     10 but less than 15

	
                                  50%

	
                     15 or more

	
                                100%

 

A positive amount determined hereunder shall be such Participant's Vested Accrued Benefit.

 

(b) Except as provided in 2.5(d), a Participant with a vested percentage of 0% whose employment terminates, shall forfeit all rights under the Plan and no benefits of any kind shall be due or payable under the Plan to, or with respect to, such Participant, such Participant's Surviving Spouse, or such Participant's estate.

 

(c) Except as provided in 2.5(d), a Participant with a vested percentage of 50% whose employment terminates shall forfeit the remaining 50% of his or her Accrued Benefit.  Such Participant shall be eligible to receive, and the Plan shall commence payment of, such Participant’s 50% Vested Accrued Benefit as provided in 2.8.

 

(d) In the case of any particular Participant described in 2.5(b) or 2.5(c), the Compensation Committee of the Company's Board of Directors, in the Committee’s sole and absolute discretion and with no obligation to apply its discretion in a uniform manner, shall have full authority to waive such Participant's satisfaction of the requirement of performing future Continuous Service with the Company in order to achieve either a 50% Vested Accrued Benefit or a 100% Vested Accrued Benefit, and, in any such case, the Participant shall be deemed to be described in 2.5(c) or 2.5(e), as applicable under the action taken by the Committee.  Solely for purposes of determining his or her eligibility to retire on an Early Retirement Date, a Participant who achieves a 100% Vested Accrued Benefit because of the Committee's action hereunder shall be deemed to have 15 years of Continuous Service.

 

(e) A Participant whose employment terminates with a vested percentage of 100%, shall be eligible to receive, and the Plan shall commence payment of, his or her 100% Vested Accrued Benefit on the first applicable Retirement Date under 2.8 to occur following the Participant's termination of employment.  For example, such a Participant who has attained the actual age of 55 or higher shall be eligible to receive, and the Plan shall commence payment of, his or her 100% Vested Accrued Benefit, on the first day of the month following his or her termination of employment.

 

  

5

  

(f) Notwithstanding 2.5(a) through (e), if

 

(i) an involuntary or mutually-agreed-upon termination of employment occurred by reason of the Participant engaging in (1) a felonious act involving the Company or another employee of the Company, or (2) competition with, or conduct detrimental to, the Company as described in 4.9, or

 

(ii) at any time following a voluntary termination of employment it comes to the attention of the Compensation Committee that the Participant had engaged in such felonious act, competition or detrimental conduct prior to his or her voluntary termination of employment,

 

then, in any such case, such Participant shall forfeit all rights under the Plan and no benefit (or further benefit) of any kind shall be due or payable under the Plan to, or with respect to, such Participant, such Participant's Surviving Spouse, or such Participant's estate.

 

2.6 Vesting Upon a Section 11 Event

 

(a) An Active Participant or Former Active Participant who terminates employment with the Company, whether voluntarily, involuntarily, or by mutual agreement, at any time following the occurrence of a Section 11 Event, shall have a 100% Vested Accrued Benefit and become a Retired Participant (2.8), and the Plan shall commence distribution of such Participant's benefits, effective on the first applicable Retirement Date occurring under 2.8 after such termination of employment.  Further, and solely for purposes of such benefits commencing at an Early Retirement Date, such Participant shall be deemed to have had 15 years of Continuous Service at the date of such termination.  Moreover, if such Participant was an Active Participant at the time of such Section 11 Event, he or she shall thereafter be deemed to be five years older than his or her actual age, solely for purposes of

 

(i) determining his or her eligibility to commence receipt of benefits at an Early Retirement Date and the applicable Early Retirement Factor under 4.3(a), or

 

(ii)  determining his or her eligibility to commence receipt of benefits or at his or her Normal Retirement Date or a Deferred Retirement Date (without application of an Early Retirement Factor).

 

(b) The following examples illustrate the effect, pursuant to 2.6(a), of attributing to an Active Participant additional five years of age:

 

(i) An Active Participant who terminated employment following a Section 11 Event and who, exactly coincident with such date of termination, attained the actual age of 60 years, would be deemed to have attained Normal Retirement Age and, therefore, would be eligible to commence to receive benefits, and the Plan would commence distribution of such Participant's Normal Retirement Benefit, on the first day of the month immediately following such Participant's termination of employment (such date being deemed to be the Participant’s Normal Retirement Date).

 

  

6

  

(ii) An Active Participant who terminated employment following a Section 11 Event and who, at the date of such termination, had attained the actual age of 62 years, would be deemed to have attained Normal Retirement Age and, therefore, would be eligible to commence to receive benefits, and the Plan would commence distribution of such Participant's Normal Retirement Benefit, on the first day of the month immediately following such Participant's termination of employment (such date being deemed to be a Deferred Retirement Date).

 

(iii) An Active Participant who terminated employment following a Section 11 Event and who, exactly coincident with the date of such termination, attained the actual age of 50 years old would be deemed to have attained Early Retirement Age and, therefore, would be eligible to commence to receive benefits, and the Plan would commence distribution of such Participant's Early Retirement Benefit, on the first day of the month immediately following such date of termination (such date being deemed to be an Early Retirement Date), with an Early Retirement Factor of 70% under 4.3(a).

 

(iv) An Active Participant who terminated employment following a Section 11 Event, but who, at such date of termination, had not yet attained age 50 years, would be eligible to commence to receive benefits, and the Plan would commence distribution of such Participant's Early Retirement Benefit, on the first day of the month immediately following the date of the Participant’s 50th birthday (at which time he or she with be deemed to have attained Early Retirement Age), with an Early Retirement Factor of 70% under 4.3(a).

 

However, any such Participant who is deemed to be five years older than such Participant’s actual age for purposes of eligibility for commencement of benefits (and, if applicable, determination of the appropriate Early Retirement Factor), shall not be deemed to be five years older for any other purpose relevant to the Plan (such as, e.g., the period during which a Social Security Supplement would be payable to such Participant under 4.3(b)), except as expressly provided in this instrument.

2.7 Vesting Upon Eligibility for LTD Benefits

 

Notwithstanding 2.5, an Officer who becomes an Active Participant pursuant to 2.2(c), or an Active Participant or Former Active Participant who becomes disabled and eligible to receive LTD Benefits under the Company's long-term disability insurance plan, shall have a 100% Vested Accrued Benefit.

2.8 Retirement and Commencement of Benefits

 

(a) An Active Participant (or Former Active Participant) who has attained a Vested Accrued Benefit on or prior to the date of his or her 65th birthday may retire from active employment with the Company on the first day of the month following his or her 65th birthday (which is such Participant's "Normal Retirement Date"), shall become a Retired Participant, and the Plan shall commence distribution of his or her Vested Accrued Normal Retirement Benefit.

 

(b) If an Active Participant (or Former Active Participant) shall not have attained a  50% or 100% Vested Accrued Benefit on or prior to the date of his or her 65th birthday, he or she may become a Retired Participant pursuant to 2.8(c) at any time after he or she has accumulated sufficient additional Continuous Service (see 3.5(b)) to attain a 50% or 100% Vested Accrued Benefit.

 

  

7

  

(c) An Active Participant (or Former Active Participant) (1) who has attained a Vested Accrued Benefit on or prior to the date of his or her 65th birthday, or (2) who (pursuant to 2.8(b)) attains a Vested Accrued Benefit after his or her Normal Retirement Date; and, in either case, whose active employment with the Company terminates on a date following his or her Normal Retirement Date, shall become a Retired Participant on the first day of the month following such termination of employment (which shall be the Participant's “Deferred Retirement Date”), and the Plan shall commence distribution of his or her Vested Accrued Normal Retirement Benefit.

 

(d) An Active Participant (or Former Active Participant) whose active employment with the Company terminates on a date that both (a) precedes his or her 65th birthday, and (b) follows the occurrence of both (1) the Participant's 55th birthday, and (2) his or her completion of at least 15 years of Continuous Service (or his or her being expressly deemed in this Plan to have completed 15 years of Continuous Service solely for purposes of eligibility for Early Retirement), shall become a Retired Participant on the first day of the month following such termination of employment (which shall be the Participant's "Early Retirement Date"), and the Plan shall commence distribution of his or her Early Retirement Benefit.

 

(e) In the case of (i) a Participant (including a Former Active Participant) who terminated employment prior to a Retirement Date under circumstances described in 2.5(a) through 2.5(e), or (ii) a Former Active Participant whose employment terminates under circumstances described in 2.6; then, in either such case, the Plan shall commence distribution of such Participant's Vested Accrued Benefit, and such Participant shall become a Retired Participant, effective at the Participant’s Early, Normal, or Deferred, Retirement Date, whichever first applies under 2.5 or 2.6, and 2.8, to such Participant.  (Hereinafter in this Plan, the term “Retirement Date” is sometimes used to refer to the Early, Normal, or Deferred, Retirement Date on which payment of a Participant’s Early, Normal, or Deferred Retirement Benefit commenced (or on which payment would have commenced).)

 

(f) A Participant who is receiving LTD Benefits (2.7) shall become a Retired Participant, and the Plan shall commence distribution of his or her Vested Accrued Benefit, effective at the Participant’s Early, Normal, or Deferred, Retirement Date, whichever shall first occur following the later to occur of (a) the Participant's termination of employment, or (b) the cessation of the Participant's eligibility to continue to receive LTD Benefits.  Solely for purposes of the Participant's eligibility to commence to receive benefits at an Early Retirement Date, such Participant shall be deemed to have 15 years of Continuous Service upon the later to occur of (a) the Participant's termination of employment, or (b) the cessation of the Participant's eligibility to continue to receive LTD Benefits.

 

2.9 Notwithstanding any provision in this Article II regarding the date on which the Plan shall commence to pay a Participant’s Retirement or Vested Accrued Benefit, the commencement of payment of any benefit under the Plan is subject to the provisions of 4.11 regarding the requirement of Internal Revenue Code (“IRC”) § 409A(a)(2)(B)(i) that payment of benefits be delayed for six months under specified circumstances.

 

  

8

  

ARTICLE 3

 

 

BENEFIT ACCRUAL

 

In this Supplemental Plan, the term “Accrued Benefit” means the benefit determined pursuant to the application of the provisions of 3.1 through 3.5.

 

3.1 Gross Accrued Benefit.  Each Active Participant shall accrue a gross monthly benefit (subject to reduction as provided in 3.2 below), stated as a Normal Annuity beginning on his or her Normal Retirement Date, equal to the product of (a) multiplied by (b):

 

(a) 1.85% of his or her Final Average Monthly Earnings;

 

(b) his or her years of Continuous Service, subject to a maximum of 35 years.

 

The gross monthly Accrued Benefit thus determined shall be reduced as provided in 3.2 to determine the net monthly benefit payable under this Supplemental Plan to the Participant who retires on or after his or her Normal Retirement Date.

 

Notwithstanding the foregoing, in the case of a Former Active Participant described in 2.4, the gross monthly Accrued Benefit shall be calculated based on Final Average Monthly Earnings and Continuous Service as of the date such Participant ceased to be an Active Participant.

 

The gross monthly Accrued Benefit determined above shall be subject to recalculation in the event the Participant's Final Average Earnings are recalculated as described in 3.3.

 

3.2 Offsets to the Accrued Benefit.  The gross Accrued Benefit determined in 3.1 shall be reduced by the sum of (a) plus (b):

 

(a) The Participant's "Accrued Benefit" under the Matthews International Corporation Employees Retirement Plan ("Employees Retirement Plan") payable in the Normal Annuity form (under Section 7.5 of the Employees Retirement Plan) commencing at his or her actual Early or Normal Retirement Date under this Supplemental Plan (or, if applicable, commencing as soon after the Participant's Early Retirement Date under this Supplemental Plan as such benefit can commence under the early retirement rules of the Employees Retirement Plan).  If a portion of a Participant's Continuous Service under 3.5 relates to service with a wholly-owned subsidiary when such subsidiary did not participate as an employer in the Employees Retirement Plan, the Participant's Employees Retirement Plan "Accrued Benefit" shall nevertheless be calculated, solely for purposes of this 3.2(a), as if such service with the subsidiary were counted as Continuous Service for calculating benefits under the Employees Retirement Plan.  (That is, the offset amount under this 3.2(a) will include an imputed Employees Retirement Plan benefit attributable to such service with the wholly-owned subsidiary.)

 

(b) The maximum anticipated Social Security Primary Insurance Amount that would be payable to the Participant beginning the month after his or her actual 65th birthday on the assumption that his or her earnings for FICA purposes had always been in excess of the FICA wage base in any particular year up to and including the year in which his or her actual 65th birthday occurs.  However, where a Participant's benefits commence under this Supplemental Plan at an Early Retirement Date, it will be assumed, in calculating such Social Security Primary Insurance Amount, that the Participant has no FICA wages after such Early Retirement Date.

 

  

9

  

3.3 "Final Average Monthly Earnings" means an amount equal to the average of the Participant's monthly "Earnings" for the highest 60 consecutive complete calendar months during the 120 consecutive complete calendar months immediately preceding the earliest to occur of the events described in 2.3 or the Participant's Normal Retirement Date.  However, if a Participant's Earnings are recalculated under 3.4 to reflect a reduction in deferred Management Incentive Plan credits actually paid to such Participant, his or her Final Average Monthly Earnings shall be recalculated at the same time.  Nevertheless, no such recalculation shall be performed in any case following the occurrence of a Section 11 Event.

 

3.4 "Earnings":  Except as provided in the second and third sentences of this 3.4, Earnings means regular basic salary and incentive compensation at the time it is earned and paid in the ordinary course, or, if payment of any earned amount is deferred, at the time such salary or incentive compensation would have been paid in the ordinary course had payment of such amount not been deferred.  As such, Earnings includes the principal amount of any deferred credits assigned to the Participant under the Company's Management Incentive Program as of the date on which such principal amount of deferred credits is assigned.  However, if the said principal amount assigned to the Participant is reduced pursuant to the provisions for negative adjustments under the Management Incentive Program, then the Participant's Earnings shall be reduced, for purposes of this Supplemental Plan, to reflect the reduction of said principal amount of such deferred credits as of the date on which the reduction under the Management Incentive Plan is made.  "Earnings" shall not include severance payments or allowances, profit-sharing distributions, expense allowances, directors' fees, stock-related rights (restricted stock, stock options and stock appreciation rights) or any other form of additional compensation.

 

3.5 "Continuous Service" means

 

(a) For purposes of calculating the Accrued Benefit pursuant to 3.1(b), the sum (in full years and months, with partial months rounded up) of all periods of an Employee's service with the Company from his or her employment date (including periods during which an Employee is receiving LTD Benefits) to the earliest to occur of the events described in 2.3 or his or her Normal Retirement Date.  However, upon the occurrence of a Section 11 Event, each Active Participant (including each Officer who becomes an Active Participant, pursuant to 2.2(b) upon occurrence of such Section 11 Event) shall be credited with additional service equal to the lesser of (i) five years, or (ii) the period of years between the Section 11 Event and such Active Participant's Normal Retirement Date.  An Employee's service with a wholly-owned subsidiary of the Company shall be counted as Continuous Service for purposes of the Plan effective with the later of (a) the Employee's employment date, or (b) the date the Company acquired 100% ownership of such subsidiary.  (Nevertheless, not more than 35 years of Continuous Service shall be counted under 3.1(b).)

 

(b) Solely for purposes of determining the Participant's vested percentage under 2.5(a), an Employee's service with the Company (as otherwise described in 3.5(a)) after his or her Normal Retirement Date shall be counted in the computation of his or her completed years of Continuous Service.

 

  

10

  

3.6 Application of Vested Percentage.  If applicable, a Participant’s Vested Accrued Benefit shall be determined pursuant to 2.5, and the Accrued Benefit determined pursuant to 3.1 and 3.2 shall be reduced to the Vested Accrued Benefit as 2.5 may provide.

 

ARTICLE 4

 

 

AMOUNT AND PAYMENT OF BENEFITS

 

4.1 Amount of Normal Retirement Benefit.

 

(a) The Normal Retirement Benefit payable to a Retired Participant whose monthly benefits commence on his or her Normal Retirement Date shall initially be the monthly amount equal to such Participant's Accrued Benefit as initially determined under 3.1 less the reductions determined under 3.2, and multiplied by the Participant's vested percentage under 3.6.

 

(b) Notwithstanding 4.1(a), should a Retired Participant's Vested Accrued Normal Retirement Benefit be recalculated pursuant to 3.1 and 3.3, and the result of such recalculation is a reduction of more than $100 in the monthly benefit, the Vested Accrued Normal Retirement Benefit payable to the Retired Participant shall be accordingly reduced prospectively.

 

(c) A Participant's Accrued Normal Retirement Benefit shall not increase by reason of additional Continuous Service or Earnings after his or her Normal Retirement Date.  (See 3.5(b), however, regarding the counting of post-Normal Retirement Date Continuous Service for purposes of determining a Participant's vested percentage in his or her Accrued Normal Retirement Benefit.)

 

4.2 Amount of Deferred Retirement Benefit.  The Deferred Retirement Benefit payable to a Retired Participant who retires any time after his or her Normal Retirement Date shall be equal to the monthly amount of such Participant's Accrued Normal Retirement Benefit determined pursuant to 4.1 at his or her Normal Retirement Date, but multiplied by his or her vested percentage at his or her Deferred Retirement Date.  Deferred Retirement Benefits shall not be actuarially increased to account for the fact that the Participant continued in active service beyond his or her Normal Retirement Date and did not retire until a later date.

 

4.3 Amount of Early Retirement Benefit.

 

(a) The Early Retirement Benefit payable to a Retired Participant who is entitled to receive benefits commencing at an Early Retirement Date shall be the monthly amount equal to: his or her Accrued Benefit determined under 3.1 less the reductions determined under 3.2, the result multiplied by the appropriate percentage in accordance with the following schedule:

 

  

11

  

 

	
Schedule of Early Retirement Factors

	
Number of Whole Years Between Early Retirement Date and Normal Retirement Date

	
 

Percentage

	
0

	
 100%

	
1

	
97

	
2

	
94

	
3

	
91

	
4

	
88

	
5

	
85

	
6

	
82

	
7

	
79

	
8

	
76

	
9

	
73

	
10

	
70

Straight-line interpolation of these percentages will be employed for fractional years.  In the case of an Active Participant who, pursuant to 2.6, is presumed to be five years older than his or her actual age for purposes of eligibility to commence receipt of benefits, the foregoing schedule shall be applied based on such Participant's attributed age.  (Thus, for example, an Active Participant who, pursuant to 2.6, became eligible to receive benefits commencing on the first day of the month following his or her actual 57th birthday, would be presumed to have attained age 62, and to have commenced benefits, three whole years prior to his or her Normal Retirement Date, with an applicable Early Retirement Factor of 91%.).

 

(b) In addition to the Early Retirement Benefit paid to a Retired Participant under 4.3(a), such Retired Participant (other than one who retired from the status of Former Active Participant) shall also receive, until (but including) the month in which his or her actual 65th birthday occurs (or earlier death), a Social Security Supplement equal to the maximum anticipated Social Security Primary Insurance Amount that would be payable to the Participant beginning the month following the month of his or her actual 65th birthday, as the same is calculated pursuant to 3.2.  Thus, for example, an Active Participant who retired immediately following his or her 55th birthday would receive an Early Retirement Benefit of 70% of the amount calculated pursuant to 3.1 and 3.2, plus a Social Security Supplement equal to 100% of the reduction for the maximum anticipated Social Security Primary Insurance Amount calculated pursuant to 3.2.

 

(c) Where, pursuant to 2.6, an Active Participant's benefits commence under this Supplemental Plan at an Early Retirement Date but prior to the Participant's actual attainment of age 55, so that the Participant is not then eligible to commence to receive an immediate early retirement pension under Section 4.3 or 4.4 of the Employees Retirement Plan, then, in addition to the Early Retirement Benefit under 4.3(a) and the Social Security Supplement under 4.3(b), the Participant shall also receive an Early Retirement Supplement equal to the early retirement benefit that would have been payable to such Participant under the Employees Retirement Plan (based on the Participant’s accrued benefit under the Employees Retirement Plan as of the actual date of termination of employment) if the Participant had attained the actual age of 55.  Such Early Retirement Supplement shall be payable until the earliest month for which the corresponding early retirement benefit is actually payable under the Employees Retirement Plan (or would be payable upon timely application therefor).  Thus, for example, a Participant, entitled under 2.6, who commenced to receive an Early Retirement Benefit under this Plan commencing immediately following his or her 50th birthday (but assumed age 55) would initially receive: (i) an Early Retirement Benefit of 70% of the amount calculated pursuant to 3.1 and 3.2 (including, in the 3.2 reduction, the amount of the Employees Retirement Plan early retirement benefit), plus (ii) a Social Security Supplement equal to 100% of the reduction for the maximum anticipated Social Security Primary Insurance Amount calculated pursuant to 3.2, plus (iii) an Early Retirement Supplement equal to 100% of the early retirement benefit that would be payable, commencing at the Participant's actual age 55, under the Employees Retirement Plan.

 

  

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4.4 Election of Form of Payment.  In advance of initially satisfying the requirements of 2.1 or 2.2 to become an Active Participant in this Supplemental Plan, an Officer may, but is not required to, irrevocably elect the form of payment that will apply to him or her at Retirement.

 

(a) 

(i) A Participant who is married at the time he or she makes an election of the form of payment, may elect the Normal Annuity Form, provided that his or her Spouse, at the time such election is made, shall have filed with the Compensation Committee, accompanying the Participant's election, the Spouse's irrevocable written consent to such election, which irrevocable written consent such Spouse shall have acknowledged under oath before a notary public or other person officially empowered to administer oaths and attest to the same.

 

(ii) If such Participant has so elected the Normal Annuity Form, and at his or her Retirement Date is married to the Spouse who so consented to such Participant's election of the Normal Annuity Form, then benefits will be paid to such Participant in the Normal Annuity form.  Benefits will also be paid to such Participant in the Normal Annuity form if such Participant is unmarried on his or her Retirement Date.  If, on his or her Retirement Date, such Participant is married to a Spouse other than the individual who consented to the election of the Normal Annuity form, then benefits will be paid to such Participant in the Joint and 50% Surviving Spouse Annuity Form.

 

(b) If a Participant has elected the Joint and 66-2/3 Surviving Spouse Annuity Form, such Participant will receive benefits in the Joint and 66-2/3 Surviving Spouse Annuity Form if married at the Retirement Date.  If such Participant is unmarried on his or her retirement Date, benefits will be paid in the Normal Annuity Form.

 

(c) Any Participant's election or consent of the Participant's Spouse to an election made hereunder shall be made on such forms or otherwise as the Compensation Committee shall prescribe.

 

(d) Pursuant to IRS Notice 2005-1, Q&A 19(c) and the Preamble to Proposed Treasury Regulation § 1.409A-1 et seq., XI.C. (70 Fed. Reg. 57957, col. 3), an individual who is an Active or Former Active Participant as of September 13, 2006, may irrevocably elect, on a form prescribed by and filed with the Compensation Committee, another form of payment with respect to his or her retirement benefit under the Plan, irrespective of whether or not the Participant shall have earlier filed, pursuant to 4.4(a) or (b), such an election prior to the effective date of his participation in the Plan.  However, to make an election pursuant to this 4.4(d), the Participant must file the election form with the Committee no later than December 31, 2006.

 

  

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(e) An Officer who does not make an election, pursuant to 4.4 (a), (b) or (d), of the form of payment, shall receive benefits under the Normal Annuity Form or the Joint and 50% Surviving Spouse Annuity Form, whichever applies under 4.5 or 4.6 at his or her Retirement Date.

 

(f) For purposes of the Plan, the term "Spouse" means the individual to whom a Participant is lawfully married at the time such Participant elects the form of payment pursuant to 4.4(a), (b) or (d), or the individual to whom such Participant is lawfully married at his or her Retirement Date, whichever the context so requires.  Thus, for example, where a Participant who is married on his or her Retirement Date receives benefits in the Joint and 50% Surviving Spouse Annuity Form, and the Participant later dies while either unmarried or married to an individual who was not his or her Spouse on the Participant's Retirement Date, but is survived by the individual who was his or her Spouse on the Participant's Retirement Date, then the 50% Surviving Spouse Annuity would be payable to such individual (who was his or her Spouse on the Participant's Retirement Date) after the death of such Participant (whether or not the Participant and such individual were still married at the time of the Participant's death).

 

4.5 Normal Annuity Form.  If a Participant is unmarried on his or her Retirement Date, such Retired Participant's Vested Accrued Benefit shall be paid on the Normal Annuity Form (irrespective of any prior election by the Participant).  The Normal Annuity Form shall be a life annuity which provides for monthly payments to the Participant beginning on his or her Normal, Early or Deferred Retirement Date or, as provided in 4.11, beginning six months after such Retirement Date, and continuing to the first day of the month in which his or her death occurs.  The monthly payments to the Retired Participant shall be level in amount except for (i) any month for which the additional temporary Social Security Supplement under 4.3(b) is payable to the Participant, (ii) any month for which the additional temporary Early Retirement Supplement under 4.3(c) is payable to the Participant, (iii) any month in which an Excise Tax Gross-Up payment is made under 4.10, (iv) prospective reduction in the level monthly payment pursuant to 4.1(b), or (v) if 4.11 applies to delay commencement of payment for six months, the first month's payment pursuant to the provisions of 4.11(a).

 

4.6 Actuarial Equivalent.  Where, pursuant to 4.7 or 4.8, benefits are paid in the Joint and 50% Surviving Spouse Annuity Form or the Joint and 66-2/3% Surviving Spouse Annuity Form, the amount of benefit payable under either such Form shall be the Actuarial Equivalent of the Normal Annuity Form.  For purposes of this Supplemental Plan, Actuarial Equivalent means an annuity benefit of equal value to another benefit on the basis of eight percent (8%) interest per annum and mortality under the 1984 Unisex Pension Mortality Table.

 

4.7 Joint and 50% Surviving Spouse Annuity Form.  If a Participant is married on his or her Retirement Date, and shall not have elected a different form of payment pursuant to 4.4, such Retired Participant's Vested Accrued Benefit shall be paid on the Joint and 50% Surviving Spouse Annuity Form, which shall be the Actuarial Equivalent of the Normal Form.  Such form provides for monthly payments to the Participant beginning on his or her Normal, Early or Deferred Retirement Date or, as provided in 4.11, beginning six months after such Retirement Date and continuing to the first day of the month in which occurs the death of the survivor of the Participant and his or her Spouse.  The monthly payments shall be payable during the lifetime of the Participant and upon his or her death, 50% of such monthly payment shall be payable to his Spouse, if then living (the “Surviving Spouse”), for the Spouse's lifetime.  The monthly payments to the Retired Participant and/or Surviving Spouse shall be level in amount except for (i) any months for which the additional temporary Social Security Supplement under 4.3(b) is payable to the Participant, (ii) any month for which the additional temporary Early Retirement Supplement under 4.3(c) is payable to the Participant or Surviving Spouse, (iii) any month in which an Excise Tax Gross-Up payment is made under 4.10, (iv) prospective reduction in the level monthly payment pursuant to 4.1(b), or (v) if 4.11 applies to delay commencement of payment for six months, the first month's payment pursuant to the provisions of 4.11(a).

 

  

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4.8 Joint and 66-2/3% Surviving Spouse Annuity Form.  If a Participant is married on his or her Retirement Date, and shall have so elected pursuant to 4.4, such Retired Participant's Vested Accrued Benefit shall be paid on the Joint and 66-2/3% Surviving Spouse Annuity Form, which shall be the Actuarial Equivalent of the Normal Form.  Such form provides for monthly payments to the Participant beginning on his or her Normal, Early or Deferred Retirement Date or, as provided in 4.11, beginning six months after such Retirement Date and continuing to the first day of the month in which occurs the death of the survivor of the Participant and his or her Spouse.  The monthly payments shall be payable during the lifetime of the Participant and upon his or her death, 66-2/3% of such monthly payment shall be payable to his Spouse, if then living, for the Spouse's lifetime.  The monthly payments to the Retired Participant and/or Spouse shall be level in amount except for (i) any month for which the additional temporary Social Security Supplement under 4.3(b) is payable to the Participant, (ii) any month for which the additional temporary Early Retirement Supplement under 4.3(c) is payable to the Participant, (iii) any month in which an Excise Tax Gross-Up payment is made under 4.10, (iv) prospective reduction in the level monthly payment pursuant to 4.1(b), or (v) if 4.11 applies to delay commencement of payment for six months, the first month's payment pursuant to the provisions of 4.11(a).

 

4.9 Termination of Benefits for Competition or Detrimental Conduct.  Notwithstanding 4.4 or otherwise, except as provided below in this 4.9, a Retired Participant's benefit payments hereunder shall permanently cease and be forfeited if the Compensation Committee determines:

 

(a) that such Retired Participant:

 

	
  

	
1.

	
has entered into competition with the Company or any of its subsidiaries, including, without limiting the generality of the foregoing, acts of direct competition, soliciting customers or employees, or working as an employee, agent or consultant for a competitor or customer; or

 

	
  

	
2.

	
has engaged in other conduct detrimental to the Company, including, but not limited to, disclosing the Company's specific operating practices, product formulas, customer information, pricing formulas and/or technical know-how developed by the Company;

 

and

 

(b) that such competition or other detrimental conduct occurred within five years after the Retired Participant's Retirement Date.

 

  

15

  

(c) However, the foregoing provisions shall not apply in the case of any Participant whose employment terminates, whether voluntarily, involuntary, or by mutual agreement, at any time following the occurrence of a Section 11 Event.

 

4.10 Excise Tax Gross-Up.  In the event that any payment made to a Participant by or for the Company under this Supplemental Plan, or under any other plan or compensation program maintained by the Company (including, for example but without limitation, the Management Incentive Program, the 2007 Equity Incentive Plan, or any successor plan or program), is subject to the excise tax imposed by IRC § 4999 (the "Excise Tax") (any such payment, or part thereof, subject to Excise Tax being a "Parachute Payment"), then the Company or the Trust shall pay such Participant an additional amount (the "Gross-Up") to compensate the Participant for the economic cost of (i) the Excise Tax on the Parachute Payment, (ii) the U.S., state and local income tax (as applicable) on the Gross-Up, and (iii) the Excise Tax on the Gross-Up.  The calculation shall insure that the Participant, after receipt of the Parachute Payment and the Gross-Up and the payment of taxes thereon, will be in approximately the same economic position after all taxes as if the Parachute Payment had been subject only to income tax at the marginal rate.  For purposes of determining the amount of the Gross-Up, the Participant shall be deemed to pay U.S., state and local income taxes at the highest marginal rate of taxation in the calendar year in which the Parachute Payment is to be made.  State and local taxes shall be determined based upon the state and locality of the Participant's domicile on the date of the Participant's termination of service with the Company.  The determination of whether such Excise Tax is payable and the amount thereof shall be based upon the opinion of tax counsel selected by the Company and acceptable to the Participant, and the Company shall make payment to the Participant within one calendar month of the receipt by the Company and the Participant of such opinion of tax counsel, but in no event later than the end of the Participant's taxable year following the taxable year in which the additional tax is remitted to the taxing authority.  If such opinion is not accepted by the Internal Revenue Service upon audit, then appropriate adjustments shall be computed (without interest but with Gross-Up, if applicable) by such tax counsel based on the final amount of the Excise Tax so determined, and the Company shall make payment to the Participant within one calendar month of the receipt by the Company and the Participant of such determination of tax counsel, but in no event latter than the end of the calendar year following the calendar year in which the additional tax is remitted to the taxing authority.

 

4.11 Six Month Delay in Commencement of Payment of Benefits.

 

(a) Except as provided in 4.11(c) or (d), the Plan may in no event commence payment of benefits to, or with respect to, a Participant earlier than the first day of seventh (7th) calendar month following the date on which the Participant's termination of employment occurs (such first day of the seventh month being the "Delayed Payment Date").  If, under the circumstances of a Participant's termination of employment, the Participant's benefits would otherwise have commenced prior to the Delayed Payment Date, the first payment of benefits made by the Plan shall include all payments that would, but for this 4.11, otherwise already have been made prior to the Delayed Payment Date.  For example, a Participant retires effective June 30, having attained age 65 on June 18.  Her Normal Retirement Date is July 1, when monthly benefit payments would normally commence.  However, under this 4.11, her Delayed Payment Date is the following January 1.  The monthly payment made on January 1 would equal the sum of seven monthly payments (the January payment and the delayed payments from July through December, inclusive).

 

  

16

  

(b) If a Participant to whom 4.11(a) applies dies after his or her Retirement Date but before the Delayed Payment Date, any payments that, but for 4.11(a), would have been made to the Participant prior to his or her death, shall be disposed of as follows:

 

(i) If the Participant's benefits were to be paid in either of the Joint and Surviving Spouse Annuity Forms, the delayed payments due the Participant, as well as any delayed payments due to the surviving Spouse, will be paid to the Surviving Spouse as part of the first monthly benefit payment made to the Spouse in the month of the Delayed Payment Date.

 

(ii) If the Participant's benefits were to be paid in the Normal Annuity Form, the payments due the Participant will be paid to the personal representative of the Participant's estate.

 

(c) Notwithstanding 4.11(a), payment of benefits shall not be delayed for six months where the Participant's termination of employment was by reason of his or her death.

 

(d) Also notwithstanding 4.11(a), payment of benefits shall not be delayed if, at the time of termination of employment, the Participant is not classified as a "specified employee" within the meaning IRC § 409A(2)(B)(i) and the regulations issued thereunder.3

 

ARTICLE 5

 

 

PRERETIREMENT SURVIVING SPOUSE BENEFITS

 

5.1 

(a) If an Active Participant or Former Active Participant shall terminate employment because of death after he or she shall have attained at least ten (10) Years of Continuous Service, or any other Participant who, pursuant to 2.5 2.6 or 2.7, has terminated employment but is entitled to receive a Vested Accrued Benefit under the Plan, shall die prior to the date on which such benefits would have commenced; and, in any case, such Participant is survived by a Spouse (also a “Surviving Spouse”), then such Surviving Spouse shall be entitled to receive a Surviving Spouse Benefit.  Such Surviving Spouse Benefit shall commence to be paid beginning on the earliest Retirement Date (i.e., an Early, Normal, or Deferred, Retirement Date, as the case may be) on which the Participant's benefits would have commenced had the Participant terminated employment on the date of his or her death survived until such Retirement Date, provided the Surviving Spouse is living on such Retirement Date.

 

(b) The following examples illustrate the application of 5.1(a):

 

(i) An Active Participant dies at age 57 with 15 years of Continuous Service, and leaves a Surviving Spouse.  A Surviving Spouse Benefit shall be paid to such Surviving Spouse beginning on the first day of the month following the Participant's death (such date, had the Participant terminated employment on the date of his or her death, being the Participant's Early Retirement Date).

 

  

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(ii) An Active Participant dies at age 52 with 15 years of Continuous Service, and leaves a Surviving Spouse.  A Surviving Spouse Benefit shall be paid to such Surviving Spouse beginning on the first day of the month following the date the Participant would have attained age 55 had he or she survived to that date (such date being the Participant's Early Retirement Date), provided that such Surviving Spouse is alive on such benefit commencement date.

 

(iii) An Active Participant dies at age 57 with 10 years of Continuous Service, and leaves a Surviving Spouse.  A Surviving Spouse Benefit shall be paid to such Surviving Spouse beginning on the Participant's Normal Retirement Date, provided that such Surviving Spouse is alive on such benefit commencement date.  Having died prior to his or her Normal Retirement Date with less than 15 years of Continuous Service, the Participant would not have been eligible to have benefits commence at an Early Retirement Date.  Likewise, the Surviving Spouse Benefit would be calculated based the on Participant's 50% Vested Accrued Benefit because the Participant was not 100% vested at the time of his or her death.

 

(iv) An Active Participant dies on his or her 65th birthday with six (6) years of Continuous Service and leaves a Surviving Spouse.  Inasmuch as the Participant had less than ten (10) years of Continuous Service at the time of his death and, therefore, had no Vested Accrued Benefit, no Surviving Spouse Benefit is payable to the Surviving Spouse.

 

5.2 If the Participant described in 5.1(a) had elected, pursuant to 4.4, the Joint and 66-2/3% Surviving Spouse Annuity Form, then the Plan shall pay the 66-2/3% Surviving Spouse Annuity to the Participant's Surviving Spouse.

 

5.3 In any other such case, the Plan shall pay the 50% Surviving Spouse Annuity to the Participant's Surviving Spouse.

 

ARTICLE 6

 

 

ADMINISTRATION

 

FINANCING OF BENEFITS

 

6.1 

(a) This Supplemental Plan shall be administered by the Compensation Committee, which shall have responsibility and authority to manage and control the operation and administration of the Plan.  The Committee shall have complete and absolute discretion to interpret and apply the terms and provisions of the Plan, provided that the Company intends that the Plan shall be interpreted and administered consistent with the requirements of IRC §  409A, particularly as interpreted in final Treas. Regs. §§ 409A-0 through 409A-6 (as published at 72 Fed. Reg. pp. 19234 et seq., April 7, 2007) so as not to subject Participants to taxation, penalties or interest arising under IRC § 409A.

 

(b) The Company intends this Supplemental Plan to be an unfunded, nonqualified plan primarily for the purpose of providing benefits for a select group of highly compensated management employees of the Company, and is intended to qualify as a “top hat” plan under Employee Retirement Income Security Act of 1974, as amended (“ERISA”), §§  201(2), 301(a)(3) and 401(a)(1).  As such, the Plan is not required to, and is not intended to be subject to, or be interpreted and administered according to, inter alia, the provisions of ERISA, Title I, Parts 2, 3 and 4, nor the rules applicable to tax-qualified retirement plans set forth at IRC §§ 401 et seq.

 

  

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(c) The following procedures shall govern the administration of claims under the Plan.

 

(i) The Compensation Committee shall determine the rights of any Participant to any benefits hereunder.  Any Participant who believes that he or she has not received the benefits to which he is entitled under the Plan may file a claim in writing with the Committee.  The Committee shall, no later than 90 days after the receipt of a claim (plus an additional period of 90 days if required for processing, provided that notice of the extension of time is given to the claimant within the first 90-day period), either allow or deny the claim in writing.  If a claimant does not receive written notice of the Committee’s decision on his claim within the above-mentioned period, the claim shall be deemed to have been denied in full.

 

(ii) A denial of a claim by the Committee, wholly or partially, shall be written in a manner calculated to be understood by the claimant and shall include:

 

	
(A)  

	
the specific reasons for the denial;

 

	
(B)  

	
specific reference to pertinent Plan provisions on which the denial is based;

 

	
(C)  

	
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

 

	
(D)  

	
an explanation of the claim review procedure and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under ERISA § 502(a).

 

(iii) A claimant whose claim is denied (or his duly authorized representative) may within 60 days after receipt of denial of a claim file with the Committee a written request for a review of such claim.  Prior to the occurrence of a Section 11 Event, if the claimant does not file a request for review of his claim within such 60-day period, the claimant shall be deemed to have acquiesced in the original decision of the Committee on his claim, the decision shall become final and the claimant will not be entitled to bring a civil action under ERISA §  502(a), provided that after the occurrence of a Section 11 Event, the claimant shall not be deemed to have acquiesced in the original decision of the Committee, nor shall the claimant be in any way limited in bringing a civil action under ERISA § 502(a).

 

(iv) If such an appeal is so filed within such 60-day period, the Committee (or its delegate) shall conduct a full and fair review of such claim.  During such review, the claimant (or the claimant's authorized representative) shall be given the opportunity to review all documents that are pertinent to his claim and to submit issues and comments in writing.

 

  

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(v) The Committee (or its delegate) shall mail or deliver to the claimant a written decision on the matter based on the facts and the pertinent provisions of the Plan within 60 days after the receipt of the request for review (unless special circumstances require an extension of up to 60 additional days, in which case written notice of such extension shall be given to the claimant prior to the commencement of such extension).  Such decision shall be written in a manner calculated to be understood by the claimant, shall state the specific reasons for the decision and the specific Plan provisions on which the decision was based and shall, to the extent permitted by law, be final and binding on all interested persons.  If the decision on review is not furnished to the claimant within the above-mentioned time period, the claim shall be deemed to have been denied on review.

 

(vi) If a Participant's claim for benefits is denied in whole or in part prior to the occurrence of a Section 11 Event, such Participant may file suit only in a state court located in Allegheny County, Pennsylvania or federal court located in Allegheny County, Pennsylvania. Notwithstanding, before such Participant may file suit in a state or federal court, Participant must exhaust the Plan's administrative claims procedure.  If any such judicial or administrative proceeding is undertaken, the evidence presented will be strictly limited to the evidence timely presented to the Committee.  In addition, any such judicial or administrative proceeding must be filed within six months after the Committee's final decision.

 

(vii) If the claim for benefits of a Vested Participant(6.4(a)) is denied in whole or in part after the occurrence of a Section 11 Event, such Participant shall not be in any way restricted by the provisions of 6.1(c)(vi) in taking any steps to enforce his or her rights under the Plan.  Further, the Company shall be liable to reimburse any Vested Participant (6.4(a)) for attorneys fees and other costs related to any litigation (or other proceeding) or legal counsel and advice short of or preparatory to litigation (or other proceeding) (such fees and expenses hereinafter referred to as "Legal Expenses"), which the Vested Participant undertakes or incurs for the purpose of enforcing his or her right to receive benefits under the Plan following a refusal (in any form) by the Company to pay such benefits.  The Participant shall present written evidence to the Company of having incurred Legal Expenses no later than the end of each calendar year during which the Participant incurs or receives invoices for such Legal Expenses, and the Company shall reimburse the Participant for any such Legal Expenses so presented to the Company within one calendar month of the Company's receipt of such written evidence of the Participant's Legal Expenses, but in no event later than two-and-one half months after the end of each such calendar year in which the Company receives such written evidence that the Participant has incurred Legal Expenses.  Should the Company fail to remit reimbursement to the Participant for Legal Expenses within the time prescribed in this 6.1(c)(vii), the Company shall also be liable to reimburse the Participant, on demand, for (a) any penalties, taxes and interest imposed on the Participant pursuant to IRC § 409A arising from the Company's failure timely to remit such reimbursement for Legal Expenses, and (b) any U.S. state and local income tax (as applicable) on the reimbursement, and additional IRC § 409A penalties, taxes and interest attributable to such reimbursement, calculated in a manner comparable to, and according to the principles described in, 4.10 (Excise Tax Gross-Up).

 

  

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6.2 The Company shall bear the entire cost of benefits under this Supplemental Plan as well as the entire cost of administering the Plan.

 

6.3 

(a) This Supplemental Plan will not be funded.  The benefits under this Plan shall be paid from the general assets of the Company as due.  Nevertheless, in the event the Company creates an executive benefit security trust, "rabbi" trust, or similar entity (the "Trust") through which to set aside assets to provide for the payment of benefits under this Supplemental Plan (or other benefits), whether pursuant to 6.4 or otherwise, each monthly benefit payment made to a Retired Participant or Surviving Spouse from such trust with respect to any benefit payable to such Participant or Surviving Spouse under this Plan, shall reduce and discharge, dollar for dollar, the Company's obligation hereunder to make such monthly benefit payment to such Participant or Surviving Spouse.  Similarly, any Gross-Up payment made to a Retired Participant or Surviving Spouse from such trust shall reduce and discharge, dollar for dollar, the Company's obligation hereunder to make such Gross-Up payment.

 

(b) The trust agreement establishing any such Trust shall provide that, prior to the payment of all benefit liabilities under this Supplemental Plan, the Trust shall be irrevocable except upon the bankruptcy or insolvency of the Company.  Such trust agreement shall also provide that initial trustee of the Trust, and any successor trustee (the "Trustee"), shall at the time of appointment be one of the 50 largest banking institutions in the United States.

 

6.4 

(a) Notwithstanding 6.3 but subject to the restriction in 6.4(b), prior to or immediately upon the occurrence of a Section 11 Event, the Company shall take the following measures: The Company shall establish a Trust of the kind and nature contemplated under 6.3 or shall contribute to a Trust already established pursuant to 6.3.  The Company shall transfer to the Trust liquid assets equal to the present value of all benefits accrued under the Plan to the end of the calendar month in which the Section 11 Event occurred or is expected to occur (whether or not such benefits are otherwise then subject to future forfeiture under the terms of the Plan), with respect to all persons who are or were, on the date of the Section 11 Event, Active Participants (including those who will become or became Active Participants on the date of the Section 11 Event pursuant to 2.2(b), Former Active Participants, Retired Participants; and Surviving Spouses who are receiving Surviving Spouse benefits, plus the additional present value of benefits that could accrue to Active Participants, and be payable earlier, from the attribution of five additional years of service, described in 3.5, and five additional years of age, described in 2.6 and 4.3; plus the present value of the accrued benefits that would have accrued by any person who, by reason of then-current disabled status and operation of 2.2(c) could in the future qualify as a Participant pursuant to 2.2(c), determined as such person had already qualified for such benefit.  (Such disabled persons and such persons who are or were, on the date of the Section 11 Event, Active Participants, Former Active Participants, Retired Participants, and Surviving Spouses who are receiving Surviving Spouse benefits, are hereinafter referred to collectively as "Vested Participants").  The present value of the benefits described above shall be calculated by assuming that retirement shall occur either immediately or at actual (or attributed) age 55 (whichever occurs, or shall have occurred, first), no mortality or turnover prior to retirement, post-retirement mortality based on the "applicable mortality table" determined under IRC § 417(e)(3)(A)(ii)(I), and interest at the "applicable interest rate" determined under IRC § 417(e)(3)(A)(ii)(II) for the month in which the Section 11 Event occurs.  The Company shall also transfer to the Trust liquid assets equal to the present value of any Gross-Up payments it reasonably estimates shall or may become due by reason of the occurrence of the Section 11 Event, as well as present value of the estimated costs of administering the Trust (including Trustee fees and expenses) and of administering the Plan through engagement of an independent administrator if deemed appropriate by the Trustee.  The Company shall also provide the Trustee with accurate and complete data regarding all matters necessary to identify Vested Participants, calculate their accrued benefits, and pay them, including (without limiting the generality of the foregoing) data regarding the name, birthdate, current address, Social Security number, employment date with the Company, and compensation in the current and prior years of each such Vested Participant, as well as any information necessary to enable the Trustee to calculate or verify any Gross-Up payments that may be due pursuant to 4.10.

 

  

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(b) Notwithstanding 6.4(a), no amount shall be transferred to a trust or otherwise set aside for the purposes of providing benefits during any "restricted period" (as defined in IRC § 409A(B(3)) with respect to the Employees Retirement Plan or any other single-employer defined benefit plan sponsored by the Company or any member of a controlled group (within the meaning of IRC § 414(b) or (c)) that includes the Company.

 

ARTICLE 7

 

 

AMENDMENT OR TERMINATION OF THE PLAN

 

7.1 Amendment of the Plan.

 

(a) The Company reserves the right to modify or amend this Supplemental Plan from time to time and to any extent that it may deem advisable.  Any amendment shall be made pursuant to a resolution duly adopted by the Compensation Committee.  No amendment shall in any manner (i) reduce the right to the present or future receipt of an Accrued Benefit, Vested Accrued Benefit, or other benefit under the Plan of any Participant to the extent that such right had accrued prior to the date the Compensation Committee approved such amendment, (ii) alter the amount or payment of benefits under the Plan to any Participant who had become a Retired Participant prior to the date the Compensation Committee approved such amendment, or (iii) otherwise apply to former Officers whose employment with the Company had terminated without entitlement to a Plan benefit prior to the date the Compensation Committee approved such amendment.  Otherwise, all Participants claiming any interest under this Plan shall be bound by any amendments.

 

(b) The rights and benefits of each Participant or of any Surviving Spouse claiming through such Participant, shall be determined in accordance with the provisions of this Supplemental Plan in effect on the date (1) the Participant's employment terminates, or (2) in the case of a Participant who is receiving LTD Benefits, the Participant ceases to be eligible to continue to receive LTD Benefits, whichever of (1) or (2) occurs later (such date being the "Participant's Termination Date").  Except as otherwise specifically provided, any amendment to the Plan shall have no effect on, or application to, a Participant (or Surviving Spouse) where such Participant's Termination Date occurred prior to the effective date of such amendment (including the 4/23/09 amendment date of this amended and restated Supplemental Plan).  Thus, any benefit being paid to a Retired Participant or Surviving Spouse, and any Vested Accrued Benefit or Surviving Spouse Benefit due to be paid hereafter, pursuant to the terms of this Supplemental Plan, shall continue to be paid, or shall be commenced, in accordance with all applicable terms and provisions (including the amount, date of commencement and form of payment thereof) of this Supplemental Plan as such plan was in effect on the date of the Participant's Termination Date.

 

  

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7.2 Termination of the Plan.  This Supplemental Plan may be terminated by the Company at any time.  Such termination shall be effected pursuant to a resolution duly adopted by the Board of Directors.  No such termination may impair the benefits of Participants.  In particular, no such termination shall in any manner (i) reduce the right to the present or future receipt of an Accrued Benefit or other benefit under the Plan of any Participant to the extent that such right had accrued prior to the date the Board of Directors approved such termination, or (ii) alter the amount or payment of benefits under the Plan to any Participant who had become a Vested Participant or Retired Participant prior to the date the Board of Directors approved such termination.  Benefits shall cease to accrue under the Plan effective on the termination, but the Plan shall otherwise remain in force for the purpose of administering the benefits accrued prior to the termination according to the provisions of the Plan in force immediately prior to the termination.

_________________________

  
2 The 2007 Equity Incentive Plan, as amended from time to time, or any successor plan adopted by the Company in place of the 2007 Equity Incentive Plan, is, and must by law be, on file with, and publicly available from, the U.S. Securities and Exchange Commission.

  
3 In the Company's case, it is almost certain that current Active Participants (Officers) would be "specified employees" subject to delay in commencement of payment.  Non-specified employees would likely include only Former Active Participants.

  

23

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