Document:

Exhibit 10.4 Supplemental Retirement Plan

    

    

     

    

     

    Exhibit
      10.4

     

    Rev.
      9/13/06

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    MATTHEWS
      INTERNATIONAL CORPORATION

     

    SUPPLEMENTAL
      RETIREMENT PLAN

     

    ORIGINALLY
      EFFECTIVE OCTOBER 1, 1987

     

    AMENDED
      EFFECTIVE SEPTEMBER 13, 2006

     

    

     

    

    
       

       

       

    

    

     

    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 September 13, 2006.

     

    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,
      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)

              	 
	
                Actuarial
                  Equivalent

              	
                4.6

              	 
	
                Board
                  of Directors

              	
                2.1(b)

              	 
	
                Company

              	
                1.1

              	 
	
                Compensation
                  Committee

              	
                2.5(d)

              	 
	
                Continuous
                  Service

              	
                3.5

              	 
	
                Deferred
                  Retirement Benefit

              	
                4.2

              	 
	
                Deferred
                  Retirement Date

              	
                2.7(b)

              	 
	
                Delayed
                  Payment Date

              	
                4.11(a)

              	 
	
                Early
                  Retirement Benefit

              	
                4.3

              	 
	
                Early
                  Retirement Date

              	
                2.7(c)

              	 
	
                Early
                  Retirement Factor

              	
                4.3(a)

              	 
	
                Early
                  Retirement Supplement

              	
                4.3(c)

              	 
	
                Earnings

              	
                3.4

              	 
	
                Employees
                  Retirement Plan

              	
                3.2

              	 
	
                ERISA

              	
                6.1(b)

              	 
	
                Excise
                  Tax

              	
                4.10

              	 
	
                Final
                  Average Monthly Earnings

              	
                3.3

              	 
	
                Former
                  Active Participant

              	
                2.4

              	 
	
                Gross-Up

              	
                4.10

              	 
	
                IRC

              	
                2.7(d)

              	 
	
                Joint
                  and 50% Surviving Spouse Annuity

              	
                4.7

              	 
	
                Joint
                  and 66-2/3% Surviving Spouse Annuity 

              	
                4.8

              	 
	
                Minimum
                  Officer Service Requirement

              	
                2.1

              	 
	
                LTD
                  Benefits

              	
                2.2(c)

              	 
	
                Normal
                  Annuity

              	
                4.5

              	 
	
                Normal
                  Retirement Benefit

              	
                4.1

              	 
	
                Normal
                  Retirement Date

              	
                2.7(a)

              	 
	
                Officer

              	
                2.1

              	 
	
                Parachute
                  Payment

              	
                4.10

              	 
	
                Participant

              	
                Article
                  2, Preamble

              	 
	
                Participant's
                  Termination Date

              	
                7.1(b)

              	 
	
                Plan

              	
                1.1

              	 
	
                Retired
                  Participant

              	
                2.7(a)

              	 
	
                Retirement
                  Date

              	
                2.7(d)

              	 
	
                Section 9
                  Event

              	
                2.2(b)

              	 
	
                Spouse
                  

              	
                4.4(f)

              	 
	
                Social
                  Security Primary Insurance Amount

              	
                3.2

              	 
	
                Social
                  Security Supplement

              	
                4.3(b)

              	 
	
                Supplemental
                  Plan

              	
                1.1

              	 
	
                Surviving
                  Spouse

              	
                4.7,
                  5.1

              	 
	
                Trust

              	
                6.4

              	 
	
                Vested
                  Accrued Benefit

              	
                2.5(a)

              	 
	
                Vested
                  Participant

              	
                6.4(a)

              	 

      

    

    
 

     

     

    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)  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. 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 9
      Event",
      as
      defined in Section 9(A) of the Matthews International Corporation 1992
      Stock Incentive Plan (as amended through April 25, 2006 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 1992 Stock Incentive Plan.

     

    (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 (2.7).

     

    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.

     

    Eligibility
      for Benefits (Vesting, etc.)

    

    2.5  Vesting
      under Circumstances Other than a Section 9 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.

     

    (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 9 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 9 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 9 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 9 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).

     

    (ii)  An
      Active
      Participant who terminated employment following a Section 9 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 9 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 9 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.

     

    (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 who, in either case, retires from active employment with
      the Company on a “Deferred
      Retirement Date”
(being
      the first day of the month following the month in which his or her Normal
      Retirement Date occurred), shall become a Retired Participant, and the Plan
      shall commence distribution of his or her Vested Accrued Normal Retirement
      Benefit.

     

    (d)  An
      Active
      Participant (or Former Active Participant) who retires from active employment
      with the Company prior to his or her 65th birthday, but on or after the first
      day of any month following 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), which first day of any month is an "Early
      Retirement Date",
      shall
      become a Retired Participant, and
      the
      Plan shall commence distribution of his or her Early
      Retirement Benefit.

     

    (e)  An
      Active
      Participant (or Former Active Participant) whose employment terminates, or
      whose
      employment previously terminated, under circumstances described in 2.5(a)
      through 2.5(e), or in 2.6, 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 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 a Participant’s Early, Normal, or Deferred Retirement Benefit commenced
      (or 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.

     

    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.

     

    3.3  "Final
      Average Monthly Earnings"
      means
      an amount equal to the average of the Participant's monthly "Earnings" for
      the
      highest 60 consecutive months during the 120 consecutive 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 9
      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 (both 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 9 Event, each Active Participant
      (including each Officer who becomes an Active Participant, pursuant to 2.2(b)
      upon occurrence of such Section 9 Event) shall be credited with additional
      service equal to the lesser of (i) five years, or (ii) the period of
      years between the Section 9 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.

     

    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 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 post-Normal Retirement Date Continuous
      Service being counted 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:

     

    

      
        	 	
                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,
      becomes 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.

     

    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.

     

    (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 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, (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 benefits 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).

     

    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 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, (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.

     

    (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 9 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 1992 Stock 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. 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.

     

    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 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).

     

    (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.1

     

    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).

     

    (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.

     

    (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.

     

    (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 9 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 9 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.

     

    (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 9 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 9 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 counsel and advice short of or preparatory to litigation (or other
      proceeding), which the Vested Participant undertakes to enforce his or her
      right
      to receive benefits under the Plan following a refusal (in any form) by the
      Company to pay such benefits.

     

    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  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 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.

     

    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 9 Event, the Company shall take the following
      measures: The Company shall establish a trust of the kind and nature
      contemplated under 6.3 (the "Trust").
      The
      trust agreement establishing 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, shall at the time of appointment be one of the
      50 largest banking institutions in the United States. 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 9 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 9 Event, Active Participants (including those who will become or
      became Active Participants on the date of the Section 9 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 9 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 9
      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 9 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.

     

    (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 9/13/06 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.

     

    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.

    _________________________

    

      

      
        1
          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 ParticipantsExhibit 4.5

 

ARTICLES OF AMENDMENT

 

to the

 

ARTICLES OF INCORPORATION

 

of

 

ALABAMA POWER COMPANY

 

 

Pursuant to, and with the effect provided in, Section 10-2B-6.02 of the Code of Alabama, 1975, as amended (the "Code"), the undersigned company adopts the following Articles of Amendment to its Articles of Incorporation:

 

	
            FIRST:  
 	
            The name of the company is "Alabama Power Company" (the "Company").
 

 

SECOND:  The following resolutions amending the Company's Articles of Incorporation, as amended, providing for, among other things, the issuance and sale of not more than 6,000,000 shares of Preference Stock (Stated Capital $25 Per Share), not in excess of an aggregate $150 million, in one or more series and establishing each series of the new stock (as defined below), was duly adopted in the manner provided by the Code by the Company's Board of Directors at a meeting held on October 27, 2006, shareholder approval therefor not being required:

 

RESOLVED, That the relative rights and preferences of 6,000,000 of the authorized but unissued shares of undesignated Preference Stock (Stated Capital $25 Per Share) (the "new stock") in those respects in which the shares thereof may vary from the shares of other series of Preference Stock which may now or hereafter be authorized or created shall be as follows: 

 

(1)          The officers of the Company be and hereby are authorized to determine the dividend rate or rates of the new stock, not to exceed 7.0% of the stated capital per annum, from and after the date issued, but only when declared by the Board of Directors and the dividend payment dates shall be the first days of January, April, July and October in each year commencing on the applicable dividend payment date succeeding the date of issuance of the new stock. If declared, dividends shall be payable to 

 

868938.3

 

 

shareholders of record on a date as may be determined by the Board of Directors.  If any dividend payment date is not a business day, the related dividend, if declared, will be paid on the next succeeding business day with the same force and effect as though paid on the dividend payment date, without any increase to account for the period from such dividend payment date through the date of actual payment.

 

(2)          Dividends payable on the new stock shall be non-cumulative and, accordingly, if the Board of Directors of the Company does not declare a dividend or declares less than a full dividend on the new stock for a dividend period, holders of the new stock will have no right to receive a dividend or the full dividend, as the case may be, for the dividend period and the Company will have no obligation to pay a dividend for that dividend period, whether or not the Company pays dividends in full or has sufficient funds to pay dividends in the future.  Dividends payable on the new stock for the initial dividend period and any period less than a full dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed in such period.

 

(3)          (a)No shares of the new stock shall be redeemed prior to five years from the first dividend payment date and the price at which shares may be redeemed thereafter shall be $25 per share, plus accrued and unpaid dividends (whether or not declared) from the immediately preceding dividend payment date to but excluding the redemption date (without accumulation of unpaid dividends for any prior dividend periods).

 

 (b)        In the event the Company shall determine to redeem any or all of the new stock as aforesaid, the Company will give notice of any such redemption to holders of record of the new stock not more than 60 nor less than 30 days prior to the date fixed by the Board of Directors for such redemption.  Failure to give notice to any holder of record of the new stock shall not affect the validity of the proceedings for the redemption of shares of any other holder of record of the new stock being redeemed.

 

 (c)        Notice having been given as herein provided, from and after the redemption date, dividends on the new stock called for redemption shall cease to accrue and such new stock called for redemption will no longer be deemed outstanding, and all 

 

868938.3

 

 

rights of the holders thereof, other than the right to receive the redemption price as herein provided, will cease.

 

 (d)        Holders of the new stock will have no right to require redemption of any shares of the new stock.

 

 (e)        Any shares of the new stock that are redeemed shall thereafter have the status of authorized but unissued shares of preference stock of the Company undesignated as to series, and may thereafter be reissued by the Board of Directors in the same manner as any other authorized and unissued shares of preference stock.

 

 (f)         If the Company shall deposit on or prior to any date fixed for redemption of the new stock, with any bank or trust company having a capital, surplus and undivided profits aggregating at least fifty million dollars ($50,000,000), as a trust fund, a fund sufficient to redeem the shares called for redemption, with irrevocable instructions and authority to such bank or trust company to pay on and after the date fixed for redemption or such earlier date as the Board of Directors may determine, to the respective holders of such shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for
redemption and such deposit shall be deemed to constitute full payment of said shares to the holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the holders thereof shall cease to be shareholders with respect to such shares, and shall have no rights with respect thereto except only the right to receive from said bank or trust company payment of the redemption price of such shares without interest.

 

 (g)        In case the holder of any such new stock shall not, within six years after said deposit, claim the amount deposited as above stated for the redemption thereof, the bank or trust company shall upon demand pay over to the Company such amounts so deposited and the bank or trust company shall thereupon be relieved from all responsibility to the holder thereof.  No interest on such deposit shall be payable to any such holder.

 

 

868938.3

 

 

 

 (h)        Nothing contained in this paragraph (3) shall limit any legal right of the Company to purchase or otherwise acquire any shares of the new stock.

 

(4)          The amount payable in the event of liquidation shall be $25 per share, plus accrued and unpaid dividends (whether or not declared) for the then current quarterly dividend period, accrued to but excluding the date of such liquidation payment, but without accumulation of unpaid dividends for any prior dividend periods.

 

(5)          The shares of such class shall not be, by their terms, convertible or exchangeable.

 

(6)          The shares of such class shall not be, by their terms, entitled to the benefit of any sinking fund.

 

(7)          Upon the issuance of shares of the new stock, there shall be transferred from the Premium on Capital Stock Account to the Preference Stock Account an amount equal to $24 per share, and thereafter the stated capital of each share of the new stock shall be $25 per share.

 

THIRD:  The undersigned officers of the Company pursuant to the authority granted them by the Company’s Board of Directors at a meeting held on October 27, 2006 hereby establish and designate, on behalf of the Company, a series of Preference Stock comprising 6,000,000 shares of 5.625% Series Preference Stock, Non-Cumulative, Par Value $1 Per Share (Stated Capital $25 Per Share) (the "5.625% Series Preference Stock").  Dividends shall be payable upon the 5.625% Preference Stock at a rate of 5.625% of the stated capital per annum.

 

868938.3

 

 

 

IN WITNESS WHEREOF, the undersigned officers of the Company do hereby set their hand and the seal of the Company on the 12th day of December, 2006. 

 

 

 

	
            /s/Art P. Beattie
 	
             

	
            Art P. Beattie
 	
             

	
            Executive Vice President, Chief Financial
 
	
            Officer and Treasurer
 	
             

	
            Alabama Power Company
 	
             

					

 

 

 

	
            /s/Ceila H. Shorts
 	
             

	
            Ceila H. Shorts
 	
             

	
            Assistant Secretary
 	
             

	
            Alabama Power Company
 
				

 

This Instrument was prepared by:

Monica W. Sargent

Balch & Bingham LLP

1901 Sixth Avenue North, Suite 2600

Birmingham, AL  35203

 

 

868938.3

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