Document:

Unassociated Document

    

    Exhibit
10.1

    

    2005

    

    

    

    Executive
Deferred Compensation Plan

     

    Effective
January 1, 2005

    Amended
and Restated effective November 18, 2008

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    Table
of Contents

     

    
      
        	
                Preamble

              	 
      	
                1

              
	 
      	 
      	 
      
	
                Section I –
      Definitions

              	 
      	
                1

              
	 
      	 
      	 
      
	
                Section II –
      Eligibility and Participation

              	 
      	
                6

              
	 
      	 
      	 
      
	
                Section III –
      Contributions and Deferral Elections

              	 
      	
                7

              
	 
      	 
      	 
      
	
                Section IV -
      Accounts

              	 
      	
                10

              
	 
      	 
      	 
      
	
                Section V –
      Vesting

              	 
      	
                12

              
	 
      	 
      	 
      
	
                Section VI –
      Distribution of Benefits

              	 
      	
                13

              
	 
      	 
      	 
      
	
                Section VII –
      Funding

              	 
      	
                16

              
	 
      	 
      	 
      
	
                Section VIII – Plan
      Administration

              	 
      	
                17

              
	 
      	 
      	 
      
	
                Section IX -
      Amendment and Discontinuance

              	 
      	
                20

              
	 
      	 
      	 
      
	
                Section X – General
      Provisions

              	
                  

              	
                20

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2005
La-Z-Boy Incorporated

    Executive
Deferred Compensation Plan

    
       

      Preamble 

        
          

        

      

    

     

    WHEREAS,
La-Z-Boy Incorporated (“Company”) previously established and maintained the
La-Z-Boy Incorporated Executive Deferred Compensation Plan, a nonqualified
deferred compensation plan, last amended and restated effective August 1, 2002
(and herein called the “Prior Plan”);

     

    WHEREAS,
the Prior Plan was “frozen” effective December 31, 2004;

     

    WHEREAS,
the Company desires to continue providing competitive total compensation to its
Eligible Employees so the Company can attract and retain the executive talent
necessary to drive the success of the Company;

     

    WHEREAS,
the Company and its subsidiaries have established qualified retirement plans
which include nondiscrimination and coverage limitations as imposed under
§401(k), §401(m) and §410(b) of the Internal Revenue Code as well as maximum
benefit limitations imposed by §402(g), §415 and §401(a)(17) of the Internal
Revenue Code which may limit the maximum contributions and benefits which may be
made to the tax qualified plans on behalf of some Eligible Employees of the
Company; and

     

    WHEREAS,
the Company desires to provide a tax-deferred capital accumulation opportunity
to a select group of management or highly compensated Employees through the
deferral of compensation in order to encourage the Employees to maintain a
long-term relationship with the Company and provide flexibility to the Employee
in his financial planning.

     

    THEREFORE,
the Company hereby establishes the 2005 La-Z-Boy Incorporated Executive Deferred
Compensation Plan (“Plan”) effective January 1, 2005.

     

    
      Section I - Definitions 

        
          

        

      

       

    

    As used
in this Plan, the following terms shall have the meanings hereinafter set
forth.  The masculine pronoun shall be deemed to include the feminine,
and the singular number shall be deemed to include the plural, and vice versa,
unless a different meaning is plainly required by the context.

     

    
      	
              1.1

            	
              "Account" means an
      account established on the books of the Company for a Participant credited
      with an allocation hereunder.

            

    

     

    
      	
              1.2

            	
              “Annual Election Period”
      means the period specified by the Committee which ends no later than (a)
      the last day of the calendar year prior to the Plan Year during which
      Compensation to be deferred is expected to be earned and/or (b) six months
      prior to the end of the performance period with respect to which Incentive
      Compensation may be awarded.

            

    

    
      
        
          	  
      
	
                  Page
      1

                

        

      

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              1.3

            	
              "Base Compensation" means
      the Participant’s annual base salary, excluding bonus, commissions,
      incentive and all other remunerations for services rendered to the Company
      and prior to reduction for any salary contributions to a plan established
      pursuant to §125 of the Code or qualified pursuant to §401(k) of the
      Code.

            

    

     

    
      	
              1.4

            	
              "Beneficiary" means any
      person(s) designated in writing (on the form approved by the Committee) by
      a Participant to receive payment under this Plan in the event of the
      Participant's death.  In the event the Participant has
      designated no beneficiary (or if the designated beneficiary has
      predeceased the Participant), Beneficiary shall mean the Participant's
      estate.

            

    

     

    
      	
              1.5

            	
              "Board" means the Board
      of Directors of La-Z-Boy
Incorporated.

            

    

     

    
      	
              1.6

            	
              “Change in Control”
      means a change in the ownership or effective control of the Company or in
      the ownership of a substantial portion of the assets of the Company, as
      more fully described in attached Exhibit A, which shall be interpreted in
      accordance with Code §409A(a)(2)(A)(v) and regulations and other guidance
      thereunder.

            

    

     

    
      	
              1.7

            	
              “Code" means the Internal
      Revenue Code of 1986, as amended.

            

    

     

    
      	
              1.8

            	
              “Committee” means the
      group charged with administration of the Plan and having the powers
      provided in Section VIII and shall consist of the Compensation Committee
      of the Board of Directors.

            

    

     

    
      	
              1.9

            	
              “Company” means La-Z-Boy
      Incorporated, a Michigan Corporation, and its successors and
      assigns.

            

    

     

    
      	
              1.10

            	
              “Company Contribution
      Account” means the bookkeeping account maintained by the Company
      for each Participant that is credited with an amount equal to the Company
      Discretionary Contribution, the Company Matching Contribution and earnings
      and losses on such amounts pursuant to Section
  4.2.

            

    

     

    
      	
              1.11

            	
              “Company Discretionary
      Contribution” means such discretionary amount, contributed by the
      Company to a Participant’s Company Contribution Account for a Plan
      Year.  Such amount shall generally represent, but may not
      necessarily be, the amount of profit sharing or discretionary
      contribution, which cannot be contributed to a qualified retirement plan
      and may differ from Participant to Participant both in amount, (including
      no contribution) and as a percentage of
  Compensation.

            

    

     

    
      	
              1.12

            	
              “Company Matching
      Contribution” means any addition made by the Company to a
      Participant’s Company Contribution Account for a Plan Year, attributable
      to a compensation deferral election made by such Participant under the
      Qualified 401(k) Plan.

            

    

     

    
      	
              1.13

            	
              “Compensation” means the
      Participant’s remuneration as defined in the Qualified 401(k) Plan, but
      without the Code §401(a)(17)
limitation.

            

    

    
      
        
          
            	  
      
	
                    Page
      2

                  

          

        

      

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              1.14

            	
              “Deferral Account” means
      the bookkeeping account maintained by the Company for each Participant’s
      Salary Deferrals, if any, and earnings and losses on such amounts pursuant
      to Section 4.1.

            

    

     

    
      	
              1.15

            	
              “Disabled” means the date
      when a Participant (i) is unable to engage in any substantial gainful
      activity by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or can be expected to
      last for a continuous period of not less than 12 months, or (ii) is by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months, receiving income replacement
      benefits for a period of not less than 3 months under an accident and
      health plan covering Employees of the Company, provided that this
      definition shall be interpreted in accordance with Code §409A(a)(2)(A)(v)
      and regulations and other guidance thereunder. 

            

    

     

    
      	
              1.16

            	
              “Distributable Amount”
      means the vested balance in the Participant’s Deferral Account and/or in
      his Company Contribution Account.

            

    

     

    
      	
              1.17

            	
              “Distributable Event”
      means the event that triggers a distribution under the Plan including a
      Separation From Service, death, becoming Disabled or a Scheduled
      Withdrawal Date.

            

    

     

    
      	
              1.18

            	
              “Effective Date” means
      January 1, 2005

            

    

     

    
      	
              1.19

            	
              "Eligible Employee” means
      any Employee who meets the eligibility requirements of Section II of the
      Plan.

            

    

     

    
      	
              1.20

            	
              "Employee" means any
      individual employed by the Company or any of its
    subsidiaries.

            

    

     

    
      	
              1.21

            	
              "ERISA" means the
      Employee Retirement Income Security Act of 1974, as
    amended.

            

    

     

    
      	
              1.22

            	
              “Fund” or “Funds” means one or more
      of the investment funds selected by the Committee pursuant to Sections
      3.8(b) and 8.3(1).

            

    

     

    
      	
              1.23

            	
              “Incentive Compensation”
      means that portion of an executive’s bonus compensation received under the
      La-Z-Boy Incorporated Bonus Program that is based on Company performance
      (and does not include any portion of such bonus that is based on
      individual performance criteria and/or actual individual performance) and
      provided further (and to the extent) such bonus compensation is
      “performance-based” within the meaning of Section 409A(a)(4)(B)(iii) of
      the Code.  For purposes of this definition, “performance-based”
      refers to compensation for which the amount of, or entitlement to, the
      compensation is contingent on the satisfaction of preestablished Company
      or business unit performance criteria relating to a period of at least 12
      consecutive months and shall not include any amount that will be paid
      regardless of performance, or based on a level of performance that is
      substantially certain to be met at the time the criteria are
      established.  Performance criteria shall be established in
      writing, and communicated to employees, no later than 90 days after the
      commencement of the performance
period.

            

    

    
      	 
	
              Page
      3

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              1.24

            	
              “Initial Election Period”
      means

            

    

     

    
      	
               
      

            	
              a)

            	
              for
      an Eligible Employee who is eligible on the Effective Date, a period
      beginning December 1, 2004 and ending March 15, 2005;
  or

            

    

     

    
      	
               
      

            	
              b)

            	
              for
      an Eligible Employee who becomes newly eligible after the Effective Date,
      a 30-day period commencing on the first day he becomes an Eligible
      Employee; provided that (i) only elective deferrals of Base Compensation
      may be made, and only with respect to compensation earned subsequent to
      the initial election; and (ii) such Initial Election Period shall not be
      available to a former Participant unless such former Participant has
      received all balances under the Plan and on and before the date of the
      last payment was not eligible to continue participation in the Plan; and
      (iii) such Initial Election Period shall also not be available to a former
      Participant that ceased being eligible to participate in the Plan,
      regardless of whether all balances under the Plan have been distributed,
      unless he has not been eligible to participate in the Plan (other than the
      accrual of earnings) at any time during the 24-month period ending on the
      date he becomes eligible to participate in the Plan.  For
      purposes of this Section 1.24, the term Plan includes all other elective
      account balance plans of the Company that must be aggregated for purposes
      of Treasury Regulation Section
1.409A-1(c)(2).

            

    

     

    
      	
              1.25

            	
              “Interest Rate” means,
      for each Fund, an amount equal to the net gain or loss on the assets of
      such Fund.

            

    

     

    
      	
              1.26

            	
              "Participant" means any
      individual who has elected to defer Compensation, has been allocated a
      Company Contribution and/or who otherwise maintains a balance under the
      Plan.

            

    

     

    
      	
              1.27

            	
              “Payment Date” means the
      first March 31st
      after a Distributable Event occurs, unless a Distributable Event occurs
      between March 1st
      and March 30th,
      in which case the Payment Date is the second March 31st
      after a Distributable Event occurs.

            

    

     

    
      	
              1.28

            	
              “Plan” means the 2005
      La-Z-Boy Incorporated Executive Deferred Compensation
  Plan.

            

    

     

    
      	
              1.29

            	
              "Plan Year" means the
      twelve-month period coinciding with the calendar
  year.

            

    

     

    
      	
              1.30

            	
              “Pre-2005 Participant”
      means an Employee (including a Participant in this Plan) or former
      Employee of the Company or one of its Subsidiaries who has a Company
      Contribution Account balance in the Prior Plan which had not become vested
      as of the Effective Date of this Plan and the balance is held in a Prior
      Account.

            

    

    
      	 
	
              Page
      4

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              1.31

            	
              “Prior Account” means the
      non-vested balance of the bookkeeping account maintained under the Prior
      Plan for each Pre-2005 Participant as of the Effective Date of this
      Plan.

            

    

     

    
      	
              1.32

            	
              “Prior Plan” means the
      La-Z-Boy Incorporated Executive Deferred Compensation Plan, last amended
      and restated effective August 1,
2002.

            

    

     

    
      	
              1.33

            	
              “Qualified 401(k) Plan”
      means the La-Z-Boy Incorporated Retirement Savings Plan or the qualified
      plan of the Company or Subsidiary having §401(k) and or §401(m) features
      applicable to the Participant.

            

    

     

    
      	
              1.34

            	
              “Qualified Profit Sharing
      Plan” means the La-Z-Boy Incorporated Retirement Contribution and
      Profit Sharing Plan (formerly known as the “La-Z-Boy Incorporated
      Employees’ Amended Profit Sharing Plan”) or the qualified plan of the
      Company or Subsidiary having employer profit sharing allocations
      applicable to the Participant.

            

    

     

    
      	
              1.35

            	
              “Rabbi Trust” or “Trust” means the 2005
      La-Z-Boy Incorporated Executive Deferred Compensation Plan Trust, a
      grantor trust established by the Company to hold funds equal to the
      liability of the Plan, in accordance with Section
  VII.

            

    

     

    
      	
              1.36

            	
              “Salary Deferral” means
      the amount deferred by the Participant from his Base and/or Incentive
      Compensation pursuant to Section
3.4.

            

    

     

    
      	
              1.37

            	
              “Scheduled Withdrawal
      Date” means the distribution date selected by the Participant for a
      withdrawal of amounts from a Participant’s Deferral Account, including
      earnings and losses attributable thereto, pursuant to Section
      3.6(b).

            

    

     

    
      	
              1.38

            	
              “Separation From
      Service” means the date upon which a Participant is no longer an
      Employee of the Company, determined under the rules and procedures
      described in attached Exhibit B.

            

    

     

    
      	
              1.39

            	
              “Subsidiary” means a
      corporation, domestic or foreign, the majority of whose voting stock is
      owned directly or indirectly by the
Company.

            

    

     

    
      	
              1.40

            	
              “Trustee” means Wachovia
      Bank, NA, and its successors and
assigns.

            

    

     

    
      	
              1.41

            	
              “Unforeseeable
      Emergency” means a severe financial hardship to the Participant
      resulting from an illness or accident of the Participant, the
      Participant's spouse, or a dependent (as defined in Treasury Regulation
      Section 1.409A-3(i)(3)(i)) of the Participant, loss of the Participant's
      property due to casualty (including the need to rebuild a home following
      damage to a home not otherwise covered by insurance, for example, not as a
      result of a natural disaster), or other similar extraordinary and
      unforeseeable circumstances arising as a result of events beyond the
      control of the Participant.  Some examples may include the
      imminent foreclosure of or eviction from the Participant’s primary
      residence, the need to pay for medical expenses, including nonrefundable
      deductibles, as well as for the costs of prescription drug medication and
      finally, the need to pay for the funeral expenses of a spouse, a
      beneficiary or a dependent (as defined in Treasury Regulation Section
      1.409A-3(i)(3)(i)).  Except as otherwise provided in this
      Section 1.41, the purchase of a home and the payment of college tuition
      are not unforeseeable emergencies.  The foregoing requirements
      shall be met only if, as determined under regulations of the U.S.
      Secretary of the Treasury, the amounts distributed with respect to such an
      emergency do not exceed the amounts necessary to satisfy such emergency
      plus amounts necessary to pay taxes reasonably anticipated as a result of
      the distribution, after taking into account the extent to which such
      emergency is or may be relieved through reimbursement or compensation by
      insurance or otherwise or by liquidation of the Participant's assets (to
      the extent the liquidation of such assets would not itself cause severe
      financial hardship).

            

    

    
      	 
	
              Page
      5

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              1.42

            	
              "Vested" means the
      nonforfeitable portion of a Participant’s
  Account.

            

    

     

    
      	
              1.43

            	
              "Year of Service" means
      the period that is measured on an elapsed time basis from a Participant’s
      initial date of employment with the Company until the date his employment
      with the Company terminates.  A Participant will be credited
      with a full Year of Service for each completed Year of
      Service.  No fractional Years of Service will be
      credited.  In the event of a break in service, a Participant’s
      rehire date will be treated as an initial date of employment with the
      Company.

            

    

     

    Section II – Eligibility and Participation 

      
        

      

    

     

    
      	
              2.1

            	
              Eligibility

            

    

     

    An
Employee will first become eligible to participate in the Plan when he is
selected by the Committee from the Company's management while earning
annual total compensation sufficient to be classified as a
highly-compensated employee under Code Section 414(q).  Once
an Employee becomes eligible to participate in the Plan, he will remain eligible
to make Salary Deferrals and to receive contributions from the Company as
described in Section III, until the earliest of: (i) Separation From Service;
(ii) becoming Disabled; (iii) death; or (iv) upon removal of the Participant
from participation by the Committee (e.g., because he no longer holds a
management position) and subject to completion of deferrals under previous
irrevocable elections; provided, however, that no such event shall impair the
Participant’s right to become vested in and to receive (upon a permitted
distribution event described in Section VI) benefits accrued under this Plan
prior to loss of eligibility (recognizing, however, that the
amount of such benefits may increase or decrease over time, depending on
investment results and other factors).

     

    
      	
              2.2

            	
              Participation

            

    

     

    Once an
Employee is notified of his eligibility as determined in Section 2.1 above, an
Eligible Employee shall become a Participant and begin accruing benefits upon
completion of enrollment (including the completion of any required insurance
application) during the Initial Election Period or any Annual Election Period
thereafter.  Beginning January 1, 2006, eligibility shall not become
effective, until the Corporate Benefits Department receives notice of the newly
Eligible Employee.

    
      	 
	
              Page
      6

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
       

      Section III – CONTRIBUTIONS AND DEFERRAL ELECTIONS 

        
          

        

      

    

     

    
      	
              3.1

            	
              In
    General

            

    

     

    The
Committee, in its sole discretion, shall determine upon each Participant’s
initial participation in the Plan (and prior to each Annual Election Period
thereafter with respect to allocations to the Company Contribution Account)
which Participant shall be eligible to defer Compensation (including Incentive
Compensation) pursuant to Section 3.4 and/or to receive allocations under
Sections 3.2 and 3.3.

     

    
      	
              3.2

            	
              Company Discretionary
      Contribution

            

    

     

    To the
extent allocations to a Participant under the Company Qualified Profit Sharing
Plan are precluded or limited, the Company may credit a corresponding amount to
such Participant’s Account under this Plan.  The Company shall
determine the amount of any other Company Discretionary Contribution to be
credited to the Account of a Participant.  Any such amounts may vary
by Participant and each allocation may be subject to a different vesting
schedule.

     

    
      	
              3.3

            	
              Company Matching
      Contribution

            

    

     

    A
Participant in this Plan who participates during a Plan Year in the Qualified
401(k) Plan and who elects to make sufficient 401(k) deferrals to be entitled to
the maximum employer matching contribution under the Qualified 401(k) Plan for
that Plan Year, may also be eligible to receive a Company Matching Contribution
under this Plan.  If so eligible, the Company shall credit the Company
Contribution Account of the Participant with a matching contribution amount,
within 90 days after the end of the Plan Year.  To receive a matching
contribution amount, a Participant must be employed on the date that accounts
are credited. The
matching contribution amount shall be equal to the excess, if any, of A over B,
where:

     

    “A” is
the amount of matching contribution that would have been contributed to the
applicable Qualified 401(k) Plan for the Plan Year determined without the
limitations imposed by §401(k), §401(m), §401(a)(17), §412(g) or §415 of the
Code; and

     

    “B” is
the actual matching contribution made on behalf of the Participant to the
Qualified §401(k) Plan.

     

    
      	
              3.4

            	
              Salary Deferrals and Incentive
      Compensation

            

    

     

    Each Plan
Year, an Employee may irrevocably elect pursuant to election procedures
established by the Committee, to have a percentage reduction of his Base
Compensation for the Plan Year and/or Incentive Compensation for the performance
measurement period, and in lieu thereof, have such elective deferral percentage
credited to a Deferral Account.  Effective January 1, 2005, all of the
following conditions must be met for such compensation reduction to become
effective:

    
      	 
	
              Page
      7

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              a)

            	
              An
      Employee must elect during the Annual Election Period (or an Initial
      Election Period, if applicable) to have Base Compensation
      deferred;

            

    

     

    
      	
               
      

            	
              b)

            	
              An
      Employee must elect during the Annual Election Period (and under no
      circumstances during an Initial Election Period), provided such period
      ends no later than six months prior to the end of a 12-month performance
      measurement period, and in no event after such Incentive Compensation has
      become both substantially certain to be paid and readily ascertainable in
      amount, and shall only be valid if the Participant performs services
      continuously from the date the performance criteria are established
      through the date the election to defer Incentive Compensation is made
      pursuant to Section 3.6; and

            

    

     

    
      	
               
      

            	
              c)

            	
              A
      deferral election must be expressed as a percentage which shall not exceed
      100% of the Employee’s Base Compensation and/or Incentive Compensation (as
      applicable), provided that the total amount deferred by a Participant
      shall be limited in any calendar year, if necessary, to satisfy Social
      Security Tax (including Medicare), income tax and employee benefit plan
      withholding requirements.  The minimum elective deferral which
      may be made in any Plan Year by a Participant shall not be less than 5% of
      such Participant’s Base Compensation, and/or 5% of such Participant’s
      Incentive Compensation.

            

    

     

    Each
Eligible Employee who had been participating in the Prior Plan on December 31,
2004 shall continue as a Participant in this Plan until his participation ceases
pursuant to Section 2.1.  Continuing participation during 2005 shall
be contingent upon timely enrollment during the applicable Initial Election
Period.

     

    
      	
              3.5

            	
              Deferral Elections for Company
      Contribution Accounts

            

    

     

    Vested
balances in Company Contribution Accounts will be distributed in a single lump
sum payment upon Separation From Service in accordance with Section 6.1(a)
unless an alternative time and/or form of benefit is elected pursuant to
election procedures as established by the Committee.  This one-time
election, which will apply to all future Company Contributions, if any, will be
made during the Initial Election Period or the Annual Election Period (but only
to the extent the Annual Election Period coincides with the Initial Election
Period), assuming a contribution is made at all.  Elections will be
made according to one of the following three options:

     

    
      	
               
      

            	
              a.

            	
              Substantially
      equal annual installments over a period of time not to exceed fifteen (15)
      years, commencing on the Participant's Payment
  Date;

            

    

     

    
      	
               
      

            	
              b.

            	
              Substantially
      equal annual installments over a period of time not to exceed fifteen (15)
      years, commencing on an anniversary of the Participant’s Payment Date, but
      in no event shall be an anniversary date that is more than five (5) years
      after the Participant’s Separation From Service;
  OR

            

    

     

    
      	
               
      

            	
              c.

            	
              A
      lump sum payment on an anniversary of the Participant’s Payment Date, but
      in no event an anniversary date that is more than five (5) years after the
      Participant’s Separation From
Service.

            

    

    
      	 
	
              Page
      8

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    If a
Participant decides to make a change with regard to the distribution of his
Company Contribution Accounts, he may do so in accordance with the Plan’s rules
on Election Changes as described in Section 3.7.

     

    For
purposes of this Plan, installment elections will be subject to Section
6.1(e).  Further, all installments payments shall be treated as a
right to a series of separate payments.

     

    The
Participant's remaining Account balance shall continue to be credited with
earnings pursuant to Section 4.2 of the Plan until all amounts credited to his
Account under the Plan have been distributed.

     

    
      	
              3.6

            	
              Deferral Elections for Deferral
      Accounts

            

    

     

    A
Participant may initially elect the time and form of payment for Base
Compensation, during the Initial Election Period or the applicable Annual
Election Period, whichever corresponds with the first deferral of Base
Compensation, and must elect the time and form of payment for Salary Deferrals
each year thereafter (i.e., including Incentive Compensation), during each
Annual Election Period, from among the following two methods:

     

    
      	
               
      

            	
              a.

            	
              Upon Separation of
      Service.  A Participant may elect to have the applicable
      annual deferrals in his Deferral Account paid upon Separation From Service
      according to one of the three options listed in 3.5(a), (b) and (c)
      above.

            

    

     

    
      	
               
      

            	
              b.

            	
              Scheduled Withdrawal
      Date Distributions.  A Participant may elect to have the
      applicable annual deferrals in his Deferral Account distributed
      in:

            

    

     

    
      	
               
      

            	
              i.

            	
              a
      lump sum commencing on a Scheduled Withdrawal Date;
  or

            

    

     

    
      	
               
      

            	
              ii.

            	
              two
      (2) to fifteen (15) substantially equal annual installments commencing on
      a Scheduled Withdrawal Date, subject to Section
  6.1(e).

            

    

     

    
      	
              3.7

            	
              Election
      Changes

            

    

     

    A
Participant may elect to change the time and form of a distribution from the
Plan, provided that all of the following conditions are met:

     

    
      	
               
      

            	
              i.

            	
              an
      election change will not take effect until at least 12 months after the
      date on which the election is filed pursuant to procedures established by
      the Committee (i.e., the election change will be void if a Participant
      dies or has a Separation From Service within 12 months of the election
      change);

            

    

     

    
      	
               
      

            	
              ii.

            	
              the
      payment (or first installment) with respect to which such election is made
      must be postponed for a period of at least 5 years from the date such
      payment (or first installment) would otherwise have been made, and, in the
      case of installments, payment of each installment after the first
      installment shall also be deferred for a period of at least 5 years
      (except in the case of death or Unforeseeable Emergency);
    and

            

    

    
      	 
	
              Page
      9

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              iii.

            	
              With
      respect to payments upon a Scheduled Withdrawal Date, an election change
      must be filed pursuant to procedures established by the Committee at least
      12 months prior to the applicable Payment
Date.

            

    

     

    Notwithstanding
(i) through (iii) above, the Committee may provide Participants with one or more
opportunities to make new payment elections in accordance with transition relief
available under IRS Notice 2006-79, as extended, with respect to both the time
and form of distribution, provided that no such election may apply to amounts
that would otherwise be payable in the year of the election nor cause an amount
to be paid in the year of election that would not otherwise be payable in that
year. The Committee may provide such additional conditions and limitations with
respect to any such new payment elections as the Committee in its discretion
shall determine.

     

    
      	
              3.8

            	
              Investment
      Elections

            

    

     

    
      	
               
      

            	
              a)

            	
              At
      the time of initial participation in the Plan under Section II and upon
      making annual deferral elections described in Sections 3.4 and 3.6, the
      Participant shall designate, pursuant to procedures established by the
      Committee, the types of investment funds in which the Participant’s
      Account will be deemed to be invested for purposes of determining the
      amount of earnings to be credited to that Account.  In making
      the designation pursuant to this Section 3.8(a), the Participant may
      specify that all or any multiple of his Account be deemed to be invested,
      in whole percentage increments, in one or more of the types of investment
      funds provided under the Plan as communicated from time to time by the
      Committee.  Effective as of the end of any business day, a
      Participant may change the designation made under this Section 3.8(a)
      pursuant to procedures established by the Committee.  If a
      Participant fails to elect a type of fund under this Section 3.8(a), he
      shall be deemed to have elected the Money Market type of investment
      fund.

            

    

     

    
      	
               
      

            	
              b)

            	
              Although
      the Participant may designate the type of investments as described in
      Section 3.8(a) above, the Committee shall not be bound by such
      designation.  The Committee shall select from time to time, in
      its sole and absolute discretion, commercially available investments for
      each of the types of Funds communicated by the Committee to the
      Participant pursuant to Section 3.8(a) above to be the
      Funds.  The Interest Rate of each such commercially available
      investment fund shall be used to determine the amount of earnings or
      losses to be credited to the Participant’s Account under Section
      IV.

            

    

    
       

      SECTION IV - ACCOUNTS 

        
          

        

      

    

     

    
      	
              4.1

            	
              Deferral
      Accounts

            

    

     

    The
Committee shall establish and maintain a Deferral Account for each Participant
under the Plan.  Each Participant's Deferral Account shall be further
divided into separate sub accounts ("investment fund sub accounts"), each of
which corresponds to an investment fund elected by the Participant pursuant to
Section 3.8(a).  A Participant's Deferral Account shall be credited as
follows:

    
      	 
	
              Page
      10

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              a)

            	
              On
      the third business day after amounts are deferred, and withheld from a
      Participant's Compensation, the Committee shall credit the investment fund
      sub accounts of the Participant's Deferral Account with an amount equal to
      Compensation deferred by the Participant in accordance with the
      Participant's election under Section 3.8(a); that is, the portion of the
      Participant's deferred Compensation that the Participant has elected to be
      deemed to be invested in a certain type of investment fund shall be
      credited to the investment fund sub account corresponding to that
      investment fund.  Effective May 1, 2008, amounts will be
      credited in the manner described above, on the same day that amounts are
      deferred and withheld from a Participant’s Compensation (as opposed to the
      third business day).

            

    

     

    
      	
               
      

            	
              b)

            	
              Each
      business day, each investment fund sub account of a Participant's Deferral
      Account shall be credited with earnings or losses in an amount equal to
      that determined by multiplying the balance credited to such investment
      fund sub account as of the prior day plus contributions credited that day
      to the investment fund sub account by the Interest Rate for the
      corresponding fund selected by the Company pursuant to Section
      3.8(b).

            

    

     

    
      	
               
      

            	
              c)

            	
              In
      the event that a Participant elects for a given Plan Year's deferral of
      Compensation to have a Scheduled Withdrawal Date pursuant to Section
      3.6(b), all amounts attributed to the deferral of Compensation for such
      Plan Year shall be accounted for in a manner which allows separate
      accounting for the deferral of Compensation and investment gains and
      losses associated with such Plan Year's deferral of
      Compensation.

            

    

     

    
      	
              4.2

            	
              Company Contribution
      Account

            

    

     

    
      	
               
      

            	
              a)

            	
              The
      Committee shall establish and maintain a Company Contribution Account for
      each Participant under the Plan.  Each Participant's Company
      Contribution Account shall be further divided into separate investment
      fund sub accounts corresponding to the investment fund(s) elected by the
      Participant pursuant to Section 3.8(a).  Effective the third
      business day after a Company Discretionary Contribution amount and/or
      Company Matching Contribution amount is calculated and approved, the
      Committee shall credit the investment fund sub accounts of the
      Participant's Company Contribution Account with an amount equal to the
      Company Discretionary Contribution amount, if any, applicable to that
      Participant, that is, the proportion of the Company Discretionary
      Contribution amount, if any, and/or Company Matching Contribution amount,
      if any, which the Participant elected to be deemed to be invested in a
      certain type of investment fund shall be credited to the corresponding
      investment fund sub account.  Effective May 1, 2008, amounts
      will be credited in the manner described above, on the same day that
      amounts are calculated and approved (as opposed to the third business
      day).

            

    

     

    Participant's
Company Contribution Account shall be credited as follows:

    
      	 
	
              Page
      11

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              b)

            	
              Each
      business day, each investment fund sub account of a Participant's Company
      Contribution Account shall be credited with earnings or losses in an
      amount equal to that determined by multiplying the balance credited to
      such investment fund sub account as of the prior day plus contributions
      credited that day to the investment fund sub account by the Interest Rate
      for the corresponding Fund selected by the Company pursuant to Section
      3.8(b).

            

    

     

    
      	
              4.3

            	
              Prior
      Account

            

    

     

    The
Committee shall maintain a Prior Account for each Pre-2005 Participant under the
Prior Plan.  Each Pre-2005 Participant's Prior Account shall be
further divided into separate investment fund sub accounts corresponding to the
investment fund(s) elected by the Pre-2005 Participant pursuant to Section
3.8(a).  Each business day, each investment fund sub account of a
Pre-2005 Participant's Prior Account shall be credited with earnings or losses
in an amount determined by multiplying the balance credited to such investment
fund sub account as of the prior day plus contributions credited that day to the
investment fund sub account by the Interest Rate for the corresponding Fund
selected by the Company pursuant to Section 3.8(b).

    
       

      SECTION V – VESTING 

        
          

        

      

    

     

    
      	
              5.1

            	
              Vesting In
      General

            

    

     

    Subject
to Sections 5.2, 5.3 and 5.4 below, a Participant shall have a nonforfeitable
interest in benefits payable from his Account as follows:

     

    
      	
               
      

            	
              a)

            	
              Deferral
      Account - A Participant shall have a 100% nonforfeitable interest
      in benefits payable from his Deferral
Account.

            

    

     

    
      	
               
      

            	
              b)

            	
              Company Contribution
      Account - A Participant shall have a nonforfeitable percentage
      interest in his Company Matching Contribution and the profit sharing
      portion of the Company Discretionary Contribution at a rate of 25% vesting
      for each Year of Service.  All of a Participant’s Years of
      Service, including service accrued under the Prior Plan, shall be counted
      toward vesting under this Plan.  The Company shall determine the
      vesting schedule of any other Company Discretionary Contributions (i.e.,
      not profit sharing related) credited to the Participant’s Company
      Contribution Account.

            

    

     

    
      	
               
      

            	
              c)

            	
              Prior Account -
      A Pre-2005 Participant shall vest at a rate of 25% per Year of Service in
      benefits payable under the Plan from his Prior Account which are
      attributable to prior contributions made by the Company and any interest
      thereon.  Service accrued under the Prior Plan shall be counted
      toward vesting under this Plan.

            

    

     

    
      	
              5.2

            	
              Vesting upon Plan Termination
      or Change in Control

            

    

     

    Notwithstanding
anything contrary in the above, in the event the Plan is terminated by the
Board, or there is a Change in Control, all Participants who are actively
employed on the date the Plan is terminated or the Change in Control occurs
shall be immediately vested in their benefits under the Plan.

    
      	 
	
              Page
      12

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              5.3

            	
              Vesting upon Sale of
      Company-Owned Retail Store

            

    

     

    Notwithstanding
anything contrary in the above, in the event the Company sells one of its retail
stores, and as a result the employment of the manager of such retail store is
terminated by the Company, then such manager shall be immediately vested in his
benefit under the Plan, provided that a Separation From Service
occurs.

     

    
      	
              5.4

            	
              Vesting upon Death or
      Disability of a Participant

            

    

     

    Notwithstanding
anything contrary in the above, in the event a Participant dies or becomes
Disabled, his benefits shall be immediately vested under the Plan and
distributed in accordance with Section 6.1(f) or 6.1(h), as
applicable.

     

    SECTION VI – DISTRIBUTION OF BENEFITS 

      
        

      

    

     

    
      	
              6.1

            	
              Distribution
      Rules

            

    

     

    
      	
               
      

            	
              a)

            	
              Company Contribution
      Accounts.  Subject to 6.1(d), (e) and (f) below, vested
      balances in a Participant’s Company Contribution Account shall be paid to
      him in a lump sum on the Participant's Payment Date following the
      Participant’s Separation From Service; provided, however, that if a
      Participant elected to receive payment at an alternative time or in
      installments, pursuant to Section 3.5(a), (b) or (c), payment shall be
      made in accordance with such
election.

            

    

     

    
      	
               
      

            	
              b)

            	
              Deferral Account
      Distributions Upon Separation From Service.  Subject to
      6.1(d), (e) and (f) below, all balances in a Participant’s Deferral
      Account for which a Participant elected to receive upon Separation From
      Service pursuant to Section 3.6(a) shall be paid to the Participant in
      accordance with each such election he has on
  file.

            

    

     

    
      	
               
      

            	
              c)

            	
              Deferral Account
      Distributions Upon Scheduled Withdrawal Date.  All
      balances in a Participant’s Deferral Account which a Participant elected
      to receive upon a Scheduled Withdrawal Date pursuant to Section 3.6(b)
      shall be paid to the Participant upon such Scheduled Withdrawal Dates,
      notwithstanding whether the Participant Separates From Service, either
      prior or subsequent to such dates.

            

    

     

    
      	
               
      

            	
              d)

            	
              Distributions Upon
      Separation From Service.  Notwithstanding the foregoing
      provisions of this Section 6.1, to the extent a distribution (or
      commencement of annual installments) from any and all Accounts is to be
      made upon Separation From Service, and the applicable Payment Date is less
      than six months after the Separation from Service, then payment shall be
      delayed until the first date of the seventh month following the date of
      Separation From Service (or until death, if earlier).  In the
      case of installments, the second installment shall be paid on the next
      Payment Date, and each subsequent installment shall be paid on each
      Payment Date thereafter.  Payments made pursuant to a Scheduled
      Withdrawal Date as described in Section 6.1(c) are not subject to the
      delay described herein.

            

    

    
      	 
	
              Page
      13

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              e)

            	
              Cash-out.  Notwithstanding
      previous installment elections under Sections 3.5 and/or 3.6, in the case
      of a Participant who, at the time of his Separation From Service, has a
      balance of $25,000 or less in any of his Accounts (i.e., his
      Company Contribution Account or his Deferral Account, or both), the
      Distributable Amount for such Account(s) shall be paid to the Participant
      (or after his death to his Beneficiary) in a lump sum distribution on the
      Participant's Payment Date, subject to any delay required by Section
      6.1(d).

            

    

     

    
      	
               
      

            	
              f)

            	
              Distribution upon
      Separation From Service due to Death.  In the event a
      Participant dies while in the employ of the Company, any unvested portion
      of the Participant’s Company Contribution Account shall become immediately
      vested pursuant to Section 5.4, and the Company shall distribute the
      Participant’s undistributed Account to the Participant’s Beneficiary in a
      lump sum payment within 90 days of the Participant’s death, or by the end
      of the calendar year, whichever is
later.

            

    

     

    
      	
               
      

            	
              g)

            	
              Death Benefit after
      Separation From Service.  In the event a Participant dies
      after his Separation From Service and still has a vested balance in his
      Account, the vested balance of such Account shall be paid to the
      Participant’s Beneficiary in a lump sum payment within 90 days of the
      Participant’s death, or by the end of the calendar year, whichever is
      later.

            

    

     

    
      	
               
      

            	
              h)

            	
              Distribution upon
      becoming Disabled.  In the event a Participant becomes
      Disabled while in the employ of the Company, any unvested portion of the
      Participant’s Company Contribution Account shall become immediately vested
      pursuant to Section 5.4, and distributions shall commence pursuant to
      Sections 6.1(a), 6.1(b) and/or 6.1(c)
above.

            

    

     

    
      	
              6.2

            	
              Unforeseeable Emergency
      Distribution

            

    

     

    
      	
               
      

            	
              a)

            	
              General
      Rule.  A Participant may request a distribution from his
      Deferral Account, prior to a scheduled Payment Date, in the event of an
      Unforeseeable Emergency.  The request to take a distribution
      shall be made by completing a form provided by and filed with the
      Committee.  The Committee will first require that the
      Participant cancel all outstanding elective deferrals, deferred pursuant
      to Section 3.6.  If the Committee determines that the requested
      distribution is for the purpose of meeting an Unforeseeable Emergency in
      accordance with Section 1.41 of the Plan, and that the requested
      distribution is necessary to relieve the Unforeseeable Emergency even
      after the cancellation of outstanding deferral election(s), then the
      amount determined by the Committee, sufficient to meet the Unforeseeable
      Emergency in accordance with Section 1.41 of the Plan, shall be paid in a
      single cash lump sum as soon as
practicable.

            

    

    
      	 
	
              Page
      14

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              b)

            	
              New Deferral
      Election.  Once a Participant’s deferral election(s) is
      cancelled pursuant to Section 6.2(a), notwithstanding that a distribution
      might be granted, a Participant may not elect to again defer, pursuant to
      Section 3.6 of the Plan for at least 12 months from the date that the
      distribution under this Section is
requested.

            

    

     

    
      	
              6.3

            	
              Tax
      Withholding

            

    

     

    With
respect to any benefit payments under the Plan, the Company shall make and remit
all appropriate income tax withholdings; however, the Participant will be solely
liable for any and all income taxes applicable on such benefit
payments.

     

    The
benefits, which accrue and vest under the Plan, are subject to FICA taxes (which
include the Old-Age, Survivors and Disability Insurance tax and/or Medicare tax
as the case may be) which may become due before the benefits are actually paid
as provided under Code §3121(v)(2) and related IRS regulations.  To
ensure proper compliance with these regulations, the Company will calculate the
amount of FICA tax when it becomes due and notify the Participant of the amount
of his share of such tax.  The Company will remit the entire tax to
the IRS and arrange for the collection of the Participant’s share of the tax
from the Participant.  The Company may provide the Participant with
additional compensation to offset his share of such tax, however, the
Participant will be solely liable for his share of FICA taxes on benefits
accrued and vested under the Plan.

     

    
      	
              6.4

            	
              Other

            

    

     

    Notwithstanding
any other provisions of the Plan, if any amounts held in trust are found, due to
the creation or operation of the Trust, in a final decision by a court of
competent jurisdiction, or under a “determination” by the Internal Revenue
Service in a closing agreement or a final refund disposition (within the meaning
of §1313(a) of Internal Revenue Code of 1986, as amended), to have been
includable in the gross income of a Participant or Beneficiary prior to payment
of such amounts from the Trust, the Trustee shall, as soon as practicable, pay
to such Participant or Beneficiary an amount equal to the amount determined to
have been includable in gross income in such determination, and shall
accordingly reduce the Participant’s or Beneficiary’s Account.  The
Trustee shall not make any distribution to a Participant or Beneficiary pursuant
to this Section 6.4 unless it has received a copy of the written determination
described above together with any legal opinion which it may request as to the
applicability thereof.

     

    
      	
              6.5

            	
              Inability to Locate
      Participant

            

    

     

    In the
event that the Committee is unable to locate a Participant or Beneficiary within
two (2) years following the required Payment Date, the amount allocated to the
Participant's Account shall be forfeited.  If, after such forfeiture,
the Participant or Beneficiary later claims such benefit, such benefit shall be
reinstated without interest or earnings.

    
      	 
	
              Page
      15

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
       

      Section VII - Funding 

        
          

        

      

    

     

    
      	
              7.1

            	
              Unfunded
      Plan

            

    

     

    Benefits
under this Plan shall be paid from the general assets of the Company or
Subsidiary.  The Plan shall be administered as an unfunded plan which
is maintained primarily for the purpose of providing supplemental retirement
compensation "for a select group of management or highly compensated employees"
as set forth in Sections 201(2), 301(3), and 401(a)(1) of ERISA, and is not
intended to meet the qualification requirements of §401 of the
Code.  Any use of the words “contributions” or “contribute,” or any
similar phrase, shall not require actual contributions or funding of this Plan
and is only used for convenience when describing the deferral and supplemental
retirement benefit activities of this Plan.

     

    
      	
              7.2

            	
              Rabbi
    Trust

            

    

     

    The
Company shall establish a Rabbi Trust and, subject to the rules of this section
and consistent (in form and in operation) with the requirements of Code
§409A(b), may, but is not required to, make contributions to it for the purpose
of providing a source of funds to meet the liabilities of the
Plan.  It is generally intended that contributions to the Rabbi Trust
will be made by the Company at least annually in an amount equal to the Salary
Deferral Contributions and any Company Matching Contributions or other Company
Discretionary Contributions related to the Plan for the year as calculated and
approved pursuant to Section III.  However, no contribution shall be
expected if the fair value of the assets in the Rabbi Trust exceeds the value of
all benefits under the Plan.

     

    In the
event of a Change in Control, to the extent consistent (in form and operation)
with the requirements of Code §409A(b), the Company shall be required to make
additional contributions to the Rabbi Trust within 30 days of the date of the
Change in Control and annually thereafter within 90 days after the end of each
Plan Year, such that the fair value of the assets in the Rabbi Trust are
sufficient to pay the value of all benefits of the Plan accrued at the date of
Change in Control and thereafter at the end of the Plan Year.

     

    Any
assets set aside in the Rabbi Trust shall not be deemed to be the property of
the Participant and shall be subject to claims of the Company’s unsecured
general creditors.  No Participant or Beneficiary shall have any claim
against, right to, or security or other interest in, any fund, account or asset
of the Company from which any payment under the Plan may be made.

     

    Notwithstanding
the above provisions, no Rabbi Trust assets shall be located or transferred
outside of the United States and no property shall be transferred to the Rabbi
Trust in connection with an adverse change in the Company’s financial
health.

    
      	 
	
              Page
      16

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
       

      SECTION VIII – PLAN ADMINISTRATION 

        
          

        

      

    

     

    
      	
              8.1

            	
              General
    Duty

            

    

     

    The Plan
shall be administered by the Committee.  Members of the Committee
shall serve in such capacity until resignation or removal by the
Board.  It shall be the principal duty of the Committee to determine
that the provisions of the Plan are carried out in accordance with its terms,
for the exclusive benefit of persons entitled to participate in the
Plan.

     

    
      	
              8.2

            	
              Committee
      Action

            

    

     

    The
Committee shall act at meetings by affirmative vote of a majority of the members
of the Committee.  Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee.  A member
of the Committee shall not vote or act upon any matter which relates solely to
himself as a Participant.  The Chair or any other member or members of
the Committee designated by the Chair may execute any certificate or other
written direction on behalf of the Committee.

     

    
      	
              8.3

            	
              General Powers, Rights and
      Duties of the Committee

            

    

     

    The
Committee shall have full power to administer the Plan in all of its details,
subject to the applicable requirements of the law, on behalf of the Participants
and their Beneficiaries, shall enforce the Plan in accordance with its terms,
shall be charged with the general administration of the Plan, and shall have all
powers necessary to accomplish its purposes, including, but not by way of
limitation, the following:

     

    
      	
               
      

            	
              (1)

            	
              To
      select the Funds in accordance with Section 3.8(b)
  hereof;

            

    

     

    
      	
               
      

            	
              (2)

            	
              To
      construe and interpret the terms and provisions of this Plan, and make
      findings of fact in connection
therewith;

            

    

     

    
      	
               
      

            	
              (3)

            	
              To
      compute and certify to the amount and kind of benefits payable to
      Participants and their
Beneficiaries;

            

    

     

    
      	
               
      

            	
              (4)

            	
              To
      maintain all records that may be necessary for the administration of the
      Plan;

            

    

     

    
      	
               
      

            	
              (5)

            	
              To
      provide for the disclosure of all information and the filing or provision
      of all reports and statements to Participants, Beneficiaries or
      governmental agencies as shall be required by
  law;

            

    

    
      	 
	
              Page
      17

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (6)

            	
              To
      make and publish such rules for the regulation of the Plan and procedures
      for the administration of the Plan as are not inconsistent with the terms
      hereof;

            

    

     

    
      	
               
      

            	
              (7)

            	
              To
      appoint a Plan administrator or any other agent, and to delegate to them
      such powers and duties in connection with the administration of the Plan
      as the Committee may from time to time prescribe;
  and

            

    

     

    
      	
               
      

            	
              (8)

            	
              To
      take all actions necessary for the administration of the Plan, including
      determining whether to hold or discontinue its
  policies.

            

    

     

    
      	
              8.4

            	
              Construction and
      Interpretation

            

    

     

    The
Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, and make findings of fact in connection therewith,
which interpretations, construction or findings, shall be final and binding on
all parties, including but not limited to the Company and any Participant or
Beneficiary.  The Committee shall administer such terms and provisions
in a uniform and nondiscriminatory manner and in full accordance with any and
all laws applicable to the Plan.  The Plan is intended to comply with
Code §409A, and will therefore be interpreted and administered to maintain
intended income tax deferral in accordance with Code §409A and regulations and
other guidance issued thereunder.

     

    
      	
              8.5

            	
              Information

            

    

     

    To enable
the Committee to perform its functions, the Company shall supply full and timely
information to the Committee on all matters relating to the Compensation of all
Participants, their death or other events which cause termination of their
participation in this Plan, and such other pertinent facts as the Committee may
require.

     

    
      	
              8.6

            	
              Compensation, Expenses and
      Indemnity

            

    

     

    
      	
               
      

            	
              a)

            	
              The
      members of the Committee shall serve without compensation for their
      services hereunder.

            

    

     

    
      	
               
      

            	
              b)

            	
              The
      Committee is authorized at the expense of the Company to employ such legal
      counsel as it may deem advisable to assist in the performance of its
      duties hereunder.  Expenses and fees in connection with the
      administration of the Plan shall be paid by the
  Company.

            

    

     

    
      	
               
      

            	
              c)

            	
              To
      the extent permitted by applicable state law, the Company shall indemnify
      and hold harmless the Committee and each member thereof, the Board of
      Directors and any delegate of the Committee who is an employee of the
      Company against any and all expenses, liabilities and claims, including
      legal fees to defend against such liabilities and claims arising out of
      their discharge in good faith of responsibilities under or incident to the
      Plan, other than expenses and liabilities arising out of willful
      misconduct.  This indemnity shall not preclude such further
      indemnities as may be available under insurance purchased by the Company
      or provided by the Company under any bylaw, agreement or otherwise, as
      such indemnities are permitted under state
law.

            

    

    
      	 
	
              Page
      18

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              8.7

            	
              Claims and Review
      Procedures

            

    

     

    
      	
               
      

            	
              a)

            	
              Claim - A
      person who believes that he is being denied a benefit to which he is
      entitled under this Plan (hereinafter referred to as "Claimant") must file
      a written request for such benefit with the Company, setting forth his
      claim.  The request must be addressed to the President of the
      Company at its then principal place of
business.

            

    

     

    
      	
               
      

            	
              b)

            	
              Claim Decision
      - Upon receipt of a claim, the Company shall advise the Claimant that a
      reply will be forthcoming within ninety (90) days, and shall, in fact,
      deliver such reply within such period.  The Company may,
      however, extend the reply period for an additional ninety (90) days for
      special circumstances.

            

    

     

    If the
claim is denied in whole or in part, the Company shall inform the Claimant in
writing, using language calculated to be understood by the Claimant, setting
forth:  (A) the specified reason or reasons for such denial; (B) the
specific reference to pertinent provisions of this Plan on which such denial is
based; (C) a description of any additional material or information necessary for
the Claimant to perfect his claim and an explanation of why such material or
such information is necessary; (D) appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review; and (E) the time
limits for requesting a review under subsection (c).

     

    
      	
               
      

            	
              c)

            	
              Request For
      Review - Within sixty (60) days after the receipt by the Claimant
      of the written opinion described above, the Claimant may request in
      writing that the Committee review the determination of the
      Company.  Such request must be addressed to the President of the
      Company, at its then principal place of business.  The Claimant
      or his duly authorized representative may, but need not, review the
      pertinent documents and submit issues and comments in writing for
      consideration by the Committee.  If the Claimant does not
      request a review within the applicable period, he shall be barred and
      estopped from challenging the Company's
  determination.

            

    

     

    
      	
               
      

            	
              d)

            	
              Review of
      Decision - Within sixty (60) days after the Committee's receipt of
      a request for review, after considering all materials presented by the
      Claimant, the Committee will inform the Participant in writing, in a
      manner calculated to be understood by the Claimant, the decision setting
      forth the specific reasons for the decision containing specific references
      to the pertinent provisions of this  Plan on which the decision
      is based.  If special circumstances require that the applicable
      time period be extended, the Committee will so notify the Claimant and
      will render the decision as soon as possible, but no later than one
      hundred twenty (120) days after receipt of the request for
      review.

            

    

    
      	 
	
              Page
      19

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              8.8

            	
              Furnishing Information or
      Providing Other Reports

            

    

     

    The
Committee shall provide Participant under procedures established by the
Committee (i) a statement with respect to such Participant’s Accounts on at
least a quarterly basis, (ii) a description of the Plan, and (iii) such other
information or notices as required by ERISA or other applicable
law.  After payment by the Participant of a reasonable charge, which
charge may be waived by the Committee, the Committee shall provide the
Participant with a copy of the Plan upon written request by the
Participant.  The Committee shall also file with government
authorities any reports or returns required.

     

    
      Section IX - Amendment and Discontinuance 

        
          

        

      

    

     

    
      	
              9.1

            	
              In
    General

            

    

     

    The
Company hereby reserves the right and power, by action of the Board or the
Committee, to amend, suspend or terminate the Plan in whole or in part, at any
time.  Included in the Company’s right to amend, suspend
or terminate is the Company’s right at any time to no longer permit any
additional participants under the Plan, to cease making benefit allocations, and
to distribute all Account balances upon Plan termination, to the extent
permitted under Code §409A.  The Committee may promulgate rules and
procedures from time to time to carry out the provisions of this Section
IX.  However, in no event shall the Company or Committee have the
right to eliminate or reduce any benefit which has been vested or become
nonforfeitable under the Plan pursuant to Section V.  No adopting
company other than the Company shall have the right to amend or terminate the
Plan, but a company shall have the right to cease or suspend participation in
the Plan.

     

    
      SECTION X – GENERAL PROVISIONS 

        
          

        

      

    

     

    
      	
              10.1

            	
              Unsecured General
      Creditor

            

    

     

    Participants
and their Beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, claims, or interest in any specific property or assets of the
Company, any Subsidiary, and of the Rabbi Trust.  No assets of the
Company shall be held in any way as collateral security for the fulfilling of
the obligations of the Company under this Plan.  The Company’s or
Subsidiary's obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Company or Subsidiary to pay money in the future, and
the rights of the Participants and Beneficiaries shall be no greater than those
of unsecured general creditors.  It is the intention of the Company
that this Plan be unfunded for purposes of the Code and for purposes of Title 1
of ERISA.

    
      	 
	
              Page
      20

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              10.2

            	
              Restriction Against
      Assignment

            

    

     

    The
Company shall pay all amounts payable hereunder only to the person or persons
designated by the Plan and not to any other person or corporation.  No
part of a Participant's Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his Beneficiary, or successors in interest, nor
shall a Participant's Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner
whatsoever.  If any Participant, Beneficiary or successor in interest
is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.

     

    Notwithstanding
the preceding paragraph,

     

    a.        To
the extent required under final judgment, decree or order (including approval of
a property settlement agreement) made pursuant to a state domestic relations
law, any portion of a Participant’s Plan benefits may be paid or set aside for
payment to a spouse, former spouse, or child of the Participant.  Any
benefit so set aside for a spouse, former spouse, or child shall be paid out as
and when benefits are paid to the Participant, unless the Committee agrees to a
different time and/or form of payment to such recipient(s).  Any
payment made to a person other than the Participant pursuant to this Section
shall be reduced by tax withholding, if required by law; the fact that payment
is made to a person other than the Participant may not prevent such payment from
being includible in the gross income of the Participant for withholding and
income tax reporting purposes.

     

    b.        The
Company’s liability to pay benefits to a Participant shall be reduced to the
extent that amounts have been paid or set aside for payment to a spouse, former
spouse, or child pursuant to subparagraph (a) of this Section.  No
such transfer shall be effectuated unless the Company or Committee has been
provided with satisfactory evidence that the Company and the Committee are
released from any further claim with respect to such amounts, in any case in
which (i) the Company or Committee has been served with legal process or
otherwise joined in a proceeding relating to such transfer, (ii) the Participant
has been notified of the pendency of such proceeding in the manner prescribed by
law of the jurisdiction in which the proceeding is pending for service of
process in such action or by mail from the Employer or Committee to the
Participant’s last known mailing address, and (iii) the Participant fails to
obtain an order of the court in the proceeding relieving the Company or
Committee from the obligation to comply with the judgment, decree, or
order.

     

    c.        The
Company and Committee shall not be obligated to defend against or set aside any
judgment, decree, or order described in subparagraph (a), or any legal order
relating to the garnishment of a Participant’s benefits, unless the full expense
of such legal action is borne by the Participant.  In the event that
the Participant’s action (or inaction) nonetheless causes the Company or
Committee to incur such expense, the amount of the expense may be charged
against the Participant’s Plan benefits and thereby reduce the Company’s
obligation to pay benefits to the Participant.  In the course of any
proceeding relating to divorce, separation, or child support, the Company and
Committee shall be authorized to disclose information relating to the
Participant’s benefits to the Participant’s spouse, former spouse, or child
(including the legal representatives of the spouse, former spouse, or child), or
to a court.

    
      	 
	
              Page
      21

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              10.3

            	
              Receipt or
      Release

            

    

     

    Any
payment to a Participant or the Participant's Beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in full satisfaction of
all claims against the Committee and the Company.  The Committee may
require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect.

     

    
      	
              10.4

            	
              Payments on Behalf of Persons
      Under Incapacity

            

    

     

    In the
event that any amount becomes payable under the Plan to a person who, in the
sole judgment of the Committee, is considered by reason of physical or mental
condition to be unable to give a valid receipt therefore, the Committee may
direct that such payment be made to any person found by the Committee, in its
sole judgment, to have assumed the care of such person.  Any payment
made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Company.

     

    
      	
              10.5

            	
              Limitation of Rights and
      Employment Relationship

            

    

     

    Neither
the establishment of the Plan and/or Rabbi Trust nor any modification thereof,
nor the creating of any fund or account, nor the payment of any benefits shall
be construed as giving to any Participant, or Beneficiary or other person any
legal or equitable right against the Company or the trustee of the Rabbi Trust
except as provided in the Plan and Trust; and in no event shall the terms of
employment of any Employee or Participant be modified or in any way be affected
by the provisions of the Plan and/or Trust.

     

    
      	
              10.6

            	
              Governing
      Law

            

    

     

    This Plan
shall be construed, governed and administered in accordance with the laws of the
State of Michigan, except to the extent pre-empted by federal law.  It
is the intention of the Company that the Plan meets all requirements of the Code
so that the benefits provided are non-taxable during the period of deferral and
until actual distribution is made.  Accordingly, the Plan will at all
times, be interpreted and administered to maintain intended income tax deferral
in accordance with Code §409A and regulations and other guidance issued
thereunder.

     

    
      	
              10.7

            	
              Statutory
      References

            

    

     

    All
references to the Code and ERISA include reference to any comparable or
succeeding provisions of any legislation which amends, supplements or replaces
such section or subsection.

    
      	 
	
              Page
      22

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	
              10.8

            	
              Severability

            

    

     

    In case
any provisions of the Plan shall be held illegal or invalid for any reason, such
illegality or invalidity shall not affect the remaining provisions of the Plan,
and the Plan shall be construed and enforced as if such illegal and invalid
provisions had never been set forth in the Plan.

     

    
      	
              10.9

            	
              Headings

            

    

     

    Headings
and subheadings in this Plan are inserted for convenience of reference only and
are not to be considered in the construction of the provisions
hereof.  In the event of a conflict between a heading and the content
of a section, the content of the section shall control.

     

    
      	
              10.10

            	
              Action by the
      Company

            

    

     

    Any
action to be performed by the Company under the Plan shall be by resolution of
its Board, by a duly authorized committee of its Board, or by a person or
persons authorized by resolution of its Board or by resolution of such
committee, or by the Committee.

     

    Executed
this _______ day of____________, 2008.

     

    
      
        
          
            	
                    LA-Z-BOY
      INCORPORATED

                  
	 	 
	
                    By:

                  	 
      
	
                    President
      and Chief Executive
Officer

                  

          

        

      

    

    
      	 
	
              Page
      23

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    Exhibit
A

     

    Change
in Control

     

    “Change
in Control” means any change required to be reported in Item 6(e) of Schedule
14A of Regulation 14A issued under the Securities Exchange Act of 1934 (the
“Exchange Act”) that qualifies as a change in control event pursuant to Code
§409A.  A “change in control event” pursuant to Code §409A includes
the occurrence of a change in the ownership of the Company (as defined in Reg.
§1.409A-3 (i)(5)(v)), a change in effective control of the Company (as defined
in Reg. §1.409A-3(i)(5)(vi)), or a change in the ownership of a substantial
portion of the assets of the Company (as defined in Reg. §1.409A-3(i)(5)(vii),
and, in particular, any one or more of the following events:

     

    
      	
              a.

            	
              A
      change in ownership of the Company in which any one person, or more than
      one person acting as a group acquires beneficial ownership of stock of the
      Company that, together with stock held by such person or group,
      constitutes more than 50 percent of the total fair market value or total
      voting power of the stock of the Company; provided, however, that for
      purposes of this subsection (a), the following acquisitions shall not
      constitute a Change in Control: (i) any acquisition by the Company, or
      (ii) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or by any corporation controlled by
      the Company.

            

    

     

    
      	
              b.

            	
              A
      change in the effective control of the Company, pursuant to which
      either:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Any
      one person, or more than one person acting as a group acquires (or has
      acquired during the 12-month period ending on the date of the most recent
      acquisition by such person or persons) beneficial ownership of stock of
      the Company possessing 30 percent or more of the total voting power of the
      stock of the Company.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              A
      majority of members of the Company’s board of directors is replaced during
      any 12-month period by directors whose appointment or election is not
      endorsed by a majority of the members of the Company’s board of directors
      before the date of the appointment or
election.

            

    

     

    
      	
              c.

            	
              A
      change in the ownership of a substantial portion of the Company’s assets
      pursuant to which any one person, or more than one person acting as a
      group acquires (or has acquired during the 12-month period ending on the
      date of the most recent acquisition by such person or persons) assets from
      the Company that have a total gross fair market value equal to or more
      than 40 percent of the total gross fair market value of all of the assets
      of the Company immediately before such acquisition or
      acquisitions.  As used herein, gross fair market value means the
      value of the assets of the Company, or the value of the assets being
      disposed of, determined without regard to any liabilities associated with
      such assets.  However, there is no change in control event under
      this paragraph  when there is a transfer to a related person as
      described in Reg.
§1.409A-3(i)(5)(vii)(B)

            

    

    
      	 
	
              Page
      24

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    However a
Change in Control shall not include a merger of the Company with another entity,
a consolidation involving the Company, or the sale of all or substantially all
of the assets or equity interests of the Company to another entity if, in any
such case, (a) the holders of equity securities of the Company immediately prior
to such event beneficially own immediately after such event equity securities of
the resulting entity entitled to more than fifty percent of the votes then
eligible to be cast in the election of directors (or comparable governing body)
of the resulting entity in substantially the same proportions that they owned
the equity securities of the Company immediately prior to such event or (b) the
persons who were members of the Board immediately prior to such event constitute
at least a majority of the board of directors of the resulting entity
immediately after such event.

     

    For
purposes of this definition:

     

    (A)           “Beneficial
owner” (or “beneficial ownership”) includes ownership by attribution as provided
in Reg. §1.409A.

     

    (B)           Where
applicable, “person” means a person as defined in Section 3(a)(9) of Securities
Exchange Act of 1934, as amended (the “Exchange Act”);

     

    (C)           “Acting
as a group” means so acting within the meaning of Reg. §1.409A-3(i)(5)(B, D or
C), whichever pertains.  Persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.  If a person, including an entity, owns stock in
both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders only with respect to the ownership
in that corporation before the transaction giving rise to the change and not
with respect to the ownership interest in the other
corporation.  Where applicable, “group” means a group as described in
Rule 13d-5 promulgated under the Exchange Act or any successor
regulation.

    
      	 
	
              Page
      25

            

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    Exhibit
B

     

    Separation
From Service

     

    A
Separation From Service occurs on the date upon which a Participant is no longer
an Employee of the Company, as determined in accordance with Code Section 409A
and Treasury Regulation Section 1.409A-1(h).

     

    For
purposes of this Plan, an Employee Separates From Service with the Company if
the Employee dies, retires or otherwise has a termination of employment with the
Company.  However, the employment relationship is treated as
continuing intact while the Employee is on military leave, sick leave, or other
bona fide leave of absence if the period of such leave does not exceed six
months, or if longer, so long as the Employee’s right to reemployment with the
Company is provided either by statute or by contract.  A leave of
absence constitutes a bona fide leave of absence only if there is a reasonable
expectation that the Employee will return to perform services for the
Company.  In general, if the period of leave exceeds six months and
the Employee’s right to reemployment is not provided either by statute or by
contract, the employment relationship is deemed to terminate on the first date
immediately following such six-month period.

     

    Whether a
termination of employment has occurred is determined based on whether the facts
and circumstances indicate that the Company and Employee reasonably anticipated
that no further services would be performed after a certain date.  An
Employee is presumed to have Separated From Service where the level of bona fide
services performed decreases to a level equal to 20 percent or less of the
average level of services performed by the Employee during the immediately
preceding 36-month period (or the full period of services to the Company if the
Employee has been providing services to the Company less than 36
months).  Facts and circumstances to be considered in making this
determination include, but are not limited to, whether the Employee continues to
be treated as an Employee for other purposes (such as continuation of salary and
participation in Employee benefit programs), whether similarly situated
Employees have been treated consistently, and whether the Employee is permitted,
and realistically available, to perform services for other Companies in the same
line of business.  An Employee will be presumed not to have separated
from service where the level of bona fide services performed continues at a
level that is 50 percent or more of the average level of service performed by
the Employee during the immediately preceding 36-month period.  No
presumption applies to a decrease in the level of bona fide services performed
to a level that is more than 20 percent and less than 50 percent of the average
level of bona fide services performed during the immediately preceding 36-month
period.  The presumption is rebuttable by demonstrating that the
Company and the Employee reasonably anticipated that as of a certain date the
level of bona fide services would be reduced permanently to a level less than or
equal to 20 percent of the average level of bona fide services provided during
the immediately preceding 36-month period or full period of services provided to
the Company if the Employee has been providing services to the Company for a
period of less than 36 months (or that the level of bona fide services would not
be so reduced).

    
      	 
	
              Page
      26Unit Note
No. ____     

    

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE, AND ARE ISSUED IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (ii) IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS.  NOTWITHSTANDING THE FOREGOING,
THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

     

    
      	
              $100,000.00

            	
              As
      of November__, 2009

            

    

     

    SECURED
PROMISSORY NOTE

     

    FOR VALUE
RECEIVED, the undersigned, Millennium Biotechnologies Group, Inc., (“Debtor”) hereby promises to
pay to the order of ________________ (“Holder”), at
_______________________________________________ (or such other place as Holder
may direct from time to time), in lawful money of the United States of America
and in immediately available funds, the principal amount of One Hundred Thousand
Dollars ($100,000.00) and all accrued interest thereon on ____________ (30
months from the date hereof or on the date of a Declaration of Default) (the
“Maturity
Date”).  The Debtor may not prepay any portion of this Note
without the prior consent of the Holder.

     

    This Note
is one of a series of similar notes (the “Unit Notes”) issued pursuant
to a private placement of the Debtor’s securities offered pursuant to a
Subscription Agreement and Investment Letter dated October 2, 2009, as amended
on October 21, 2009 (“Subscription Agreement”), all
of which Notes are secured by a first lien and security interest in all of the
assets of the Debtor and Millennium Biotechnologies, Inc. (the “Guarantor”), pursuant to the
terms of a security agreement between the Debtor, the Guarantor and the
Collateral Agent on behalf of the Unit Note Holders (“Security
Agreement”).  The Holder of this Note, by acceptance of this
Note, and the holders of the other Unit Notes, by their acceptance of such Unit
Notes, have designated Ken Sadowsky, Leon Frenkel and Seahorse Enterprises LLC
(i) as the Unit Note representative (the “Unit Note Representative”),
for purposes of declaring a default (and enforcement of all rights) under this
Note and the other Unit Notes; and (ii) as Collateral Agent under the terms of
the Security Agreement.

     

    Interest.  Interest
shall be computed on the unpaid principal amount at the per annum rate of twelve
percent (12%); provided, in the event of the Declaration of Default as defined
hereunder, the principal balance shall bear interest from the date of such
Declaration until the date of actual payment at the per annum rate of seventeen
percent (17%).  All interest payable hereunder shall be computed on
the basis of actual days elapsed and a year of 360 days.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.           Amortization.  No
payments shall be due hereunder (unless payment is accelerated in the event of a
Declaration of Default) until ______________ (the first business day of the
calendar quarter following 18 months from the date hereof referred to herein as
the “First Quarterly Payment
Date”).  Fixed quarterly installment payments (“Quarterly Installment
Payments”) in the amount of $25,372 each shall commence on the First
Quarterly Payment Date and shall be due on the first business day of each
calendar quarter thereafter until the Maturity Date, on which all remaining
principal and accrued interest shall be due and payable in
full.  Quarterly Installment Payments shall be applied first against
accrued interest and then against the outstanding principal
balance.

     

    2.           Guaranty.  Payment
in full of this Note in accordance with its terms is guaranteed by the
Guarantor.

     

    3.           Representations and
Warranties.

     

    (a)           Organization;
Authority.  Debtor is duly organized and validly existing under
the laws of the jurisdiction of its organization and has all the requisite power
and authority to execute, deliver and perform the transactions contemplated by
this Note.  This Note constitutes the legal, valid and binding
obligations of the Debtor and is enforceable against it in accordance with the
terms hereof.

     

    (b)           Consents;
Conflicts.  The execution and delivery of this Note by the
Debtor as contemplated hereby will not (i) require any consent authorization or
approval of or filing with any governmental entity or third party  or
(ii) result in any violation of, be in conflict with or constitute a default
under, the charter or by-laws of any of the Debtor, or any law, statute,
regulation, ordinance, judgment, decree or order, or any material contract,
agreement, instrument to which any of the Debtor is a party or by which it is
bound.

     

    4.           Default.

     

    (a)           Events of
Default.  The occurrence or existence of any one or more of the
following events are referred to herein individually as an “Event of Default”,
and collectively as “Events of Default”:

    

       (i)       
 the Debtor fails to pay any Quarterly Installment Payment or other payment
required hereunder within five (5) business days following the due date
thereof;

    

      (ii)       
any representation, warranty or statement of fact made by the Debtor in this
Note shall when made or deemed made be false or misleading in any material
respect;

     

     (iii)       
Debtor or Guarantor dissolves or suspends or discontinues doing business or
becomes unable, or admits in writing its inability, to pay its debts as they
mature;

     

     (iv)       
Debtor or Guarantor makes an assignment for the benefit of creditors, makes or
sends notice of a bulk transfer or calls a meeting of its creditors or principal
creditors in connection with a moratorium or adjustment of the indebtedness due
to them;

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (v)           a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at law or in equity) is filed
against a Debtor or Guarantor or all or any part of their properties and such
petition or application is not dismissed within thirty (30) days after the date
of its filing or Debtor or Guarantor shall file any answer admitting or not
contesting such petition or application or indicates its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;

     

    (vi)          a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at a law or equity) is filed by
Debtor or Guarantor or for all or any part of their property; or

     

    (vii)         the
Debtor shall within six months from the Final Closing Date (as that term is
defined in the Subscription Agreement) fail to amend its certificate of
incorporation to either increase the number of shares of common stock it is
authorized to issue, or reverse split the number of shares of common stock
currently outstanding in order that it will have reserved a sufficient number of
shares of common stock for issuance upon conversion of the Debtor’s Series E and
Series F Preferred Stock.

    

    (b)           Declaration of
Default.  Following the occurrence of an Event of Default,
the  Unit Note Representative, upon a vote or written instruction of
holders of Unit Notes representing the majority in dollar amount of the
outstanding principal balance of all Unit Notes, shall declare the Unit Notes to
be in default by serving on the Debtor a Declaration of Default in which event
the entire principal balance, together with accrued interest, shall be
immediately due and payable.  The Unit Note Representative is
designated on behalf of the Holder and on behalf of all other Unit Note Holders
to pursue such action or enforcement procedures as it shall deem appropriate to
enforce the rights of the Unit Note Holders under the Unit Notes and the
Security Agreement.

    

    5.           Miscellaneous.

     

    (a)           Amendments,
Etc.  No amendment, modification, termination or waiver of any
provision of this Note, and no consent to any departure by the Debtor here from,
shall in any event be effective unless the same shall be in writing and signed
by Holder, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

     

    (b)           Other
Rights.  No failure to exercise, and no delay in exercising on
the part of Holder of, any right, power or privilege under this Note shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights and remedies of Holder herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.

     

    (c)           Binding Effect; Successors
and Assigns.  This Note and the terms, covenants and conditions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Debtor shall not have
the right to assign or transfer this Note or its rights or obligations hereunder
or any interest herein without the prior written consent of
Holder.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (d)           Governing
Law.  This Note shall be a contract made under and governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to conflict of laws principles.  All obligations of the Debtor
and rights of Holder expressed herein shall be in addition to and not in
limitation of those provided by applicable law.

     

    (e)           Maximum Interest
Rate.  This Note is subject to the express condition that at no
time shall the Debtor be obligated or required to pay interest on the principal
balance at a rate which would subject Holder to either civil or criminal
liability as a result of being in excess of the maximum rate which the Debtor
are permitted by law to contract or agree to pay.  If by the terms of
this Note the Debtor is at any time required or obligated to pay interest on the
principal balance at a rate in excess of such maximum rate, the rate of interest
under this Note shall be deemed to be immediately reduced to such maximum rate
and interest payable hereunder shall be computed at such maximum rate and the
portion of all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance.

     

    (f)           Notices.  All
notices and other communications provided to any party hereto under this Note
shall be in writing (including telex or facsimile) and addressed or delivered to
such party at its address set forth herein:

     

    
      
        	
                If
      to Holder:

              	
                _____________________

              
	 
      	
                _____________________

              
	 
      	
                _____________________

              
	 
      	
                _____________________

              
	 
      	 
      
	
                If
      to the Debtor and/or

              	
                Millennium
      Biotechnologies Group, Inc.

              
	
                Guarantor:

              	
                665
      Martinsville Road, Suite 219

              
	 
      	
                Basking
      Ridge, NJ 07920

              
	 
      	
                Attn:  President

              
	 
      	 
      
	 
      	
                Millennium
      Biotechnologies, Inc.

              
	 
      	
                665
      Martinsville Road, Suite 219

              
	 
      	
                Basking
      Ridge, NJ 07920

              
	 
      	
                Attn:  President

              
	 
      	 
      
	
                with
      a copy to:

              	
                Silverman
      Sclar Shin & Byrne PLLC

              
	 
      	
                381
      Park Avenue South, 16th
      Floor

              
	 
      	
                New
      York, NY 10016

              
	 
      	
                Attn:  Peter
      R. Silverman

              

      

    

    

    or at
such other address as may be designated by such party from time to time in a
notice complying with the terms of this section.  Any notice shall be
deemed given upon receipt.

    

    (g)          Severability.  Wherever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law.  Any provision of this
Note that is prohibited by, unenforceable or invalid in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition,
unenforceability or invalidity, without invalidating the remainder of such
provisions of this Note or affecting the validity or enforceability of such
provision in any other jurisdiction.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (h)          Captions.  Section
captions used in this Note are for convenience of reference only and shall not
affect the construction of this Note.

     

    (i)           Counterparts.  This
Note may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute but one
and the same Note.

     

    (j)           WAIVER OF JURY
TRIAL.  THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS NOTE, AND AGREE THAT ANY SUCH
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ENTERING INTO
THIS NOTE.

     

     [signature
page follows]

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the Company has
caused this Note to be duly executed as of the date first written
above.

    

    
      
        
          
            	
                    Millennium
      Biotechnologies Group, Inc.

                  
	 
	
                    By: 

                  	
                      

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    

    Guaranty

    

    The undersigned hereby guarantees
payment in full of the foregoing Note in accordance with its terms.

    

    
      
        
          	 
      	
                  Millennium
      Biotechnologies, Inc.

                
	 
      	 
      
	 
      	
                  By: 

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]