Document:

exv10w7

 

Exhibit 10.7

FOURTH AMENDED AND RESTATED

CHAMPION LABORATORIES

PENSION PLAN

As Amended and Restated

Effective as of January 1, 1997

(Except as otherwise set forth herein)

 

 

FOURTH AMENDED AND RESTATED

CHAMPION LABORATORIES

PENSION PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE I PURPOSE
	 	 	1	 
	ARTICLE II DEFINITIONS
	 	 	3	 
	 	2.1 Accrued Benefit
	 	 	3	 
	 	2.2 Actuarial (or Actuarially) Equivalent
	 	 	3	 
	 	2.3 Anniversary Date
	 	 	3	 
	 	2.4 Beneficiary
	 	 	3	 
	 	2.5 Benefit Commencement Date
	 	 	3	 
	 	2.6 Board
	 	 	3	 
	 	2.7 Break in Service
	 	 	3	 
	 	2.8 Childbirth Leave Hours
	 	 	4	 
	 	2.9 Code
	 	 	4	 
	 	2.10 Committee
	 	 	4	 
	 	2.11 Company
	 	 	4	 
	 	2.12 Compensation
	 	 	5	 
	 	2.13 Continuous Employment
	 	 	5	 
	 	2.14 Disability
	 	 	5	 
	 	2.15 Effective Date
	 	 	5	 
	 	2.16 Employee
	 	 	5	 
	 	2.17 Employer
	 	 	6	 
	 	2.18 Entry Date
	 	 	6	 

 

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	2.19 ERISA
	 	 	6	 
	 	2.20 Highly Compensated Employee
	 	 	7	 
	 	2.21 Hour of Service
	 	 	8	 
	 	2.22 Key Employee
	 	 	9	 
	 	2.23 Key Employee Test Period
	 	 	11	 
	 	2.24 Leave of Absence
	 	 	11	 
	 	2.25 Non-Key Employee
	 	 	11	 
	 	2.26 Normal Retirement Age
	 	 	11	 
	 	2.27 Normal Retirement Date
	 	 	11	 
	 	2.28 Participant
	 	 	11	 
	 	2.29 Pension
	 	 	11	 
	 	2.30 Plan Year
	 	 	11	 
	 	2.31 Qualified Domestic Relations Order
	 	 	11	 
	 	2.32 Qualified Military Service
	 	 	12	 
	 	2.33 Related Company
	 	 	12	 
	 	2.34 Retirement
	 	 	12	 
	 	2.35 Top-Heavy Determination Date
	 	 	12	 
	 	2.36 Top-Heavy Year
	 	 	13	 
	 	2.37 Transfer
	 	 	14	 
	 	2.38 Trust Fund
	 	 	14	 
	 	2.39 Trustee
	 	 	14	 
	 	2.40 Year of Service
	 	 	15	 
	ARTICLE III PARTICIPATION
	 	 	16	 
	 	3.1 Eligibility to Participate
	 	 	16	 
	 	3.2 Duration of Participation
	 	 	16	 

iii

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	3.3 Participation Upon Re-Employment
	 	 	16	 
	ARTICLE IV CONTINUOUS EMPLOYMENT
	 	 	18	 
	 	4.1 Determination of Continuous Employment
	 	 	18	 
	 	4.2 Break in Service
	 	 	18	 
	 	4.3 Transfers
	 	 	18	 
	 	4.4 Benefits Related to Military Service
	 	 	19	 
	ARTICLE V REQUIREMENTS FOR PENSIONS
	 	 	20	 
	 	5.1 Normal Retirement
	 	 	20	 
	 	5.2 Early Retirement
	 	 	20	 
	 	5.3 Disability Retirement
	 	 	20	 
	 	5.4 Deferred Vested Pension
	 	 	20	 
	 	5.5 Deferred Vested Pension in Top-Heavy Years
	 	 	21	 
	 	5.6 Vesting Following Plan Amendment
	 	 	21	 
	ARTICLE VI AMOUNT OF PENSIONS
	 	 	22	 
	 	6.1 Benefits Generally
	 	 	22	 
	 	6.2 Normal Retirement Pension
	 	 	22	 
	 	6.3 Early Retirement Pension
	 	 	23	 
	 	6.4 Disability Retirement Pension
	 	 	23	 
	 	6.5 Deferred Vested Pension
	 	 	23	 
	 	6.6 Benefits for Former Participants
	 	 	23	 
	 	6.7 Maximum Pensions
	 	 	23	 
	 	6.8 Combined Plan Limitation
	 	 	26	 
	 	6.9 Additional Restrictions
	 	 	27	 
	 	6.10 Conditions Affecting Pensions
	 	 	28	 
	 	6.11 Minimum Benefits in Top-Heavy Years
	 	 	28	 

iv

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE VII FORM AND PAYMENT OF PENSIONS
	 	 	30	 
	 	7.1 Payment of Pensions
	 	 	30	 
	 	7.2 Survivorship Benefits
	 	 	31	 
	 	7.3 Optional Forms of Benefits
	 	 	32	 
	 	7.4 Election Procedures
	 	 	33	 
	 	7.5 Small Pensions
	 	 	35	 
	 	7.6 Designation of Beneficiaries
	 	 	36	 
	 	7.7 Benefit Commencement Date
	 	 	36	 
	 	7.8 Employment After Normal Retirement Age
	 	 	36	 
	ARTICLE VIII APPLICATION FOR BENEFITS, CLAIMS PROCEDURE AND
GENERAL PROVISIONS
	 	 	38	 
	 	8.1 Advance Written Applications Required
	 	 	38	 
	 	8.2 Information Required
	 	 	38	 
	 	8.3 Denial of Benefits
	 	 	38	 
	 	8.4 Review Procedure
	 	 	39	 
	 	8.5 Responsibility for Correctness of Address
	 	 	40	 
	 	8.6 Payments for Incompetents
	 	 	40	 
	 	8.7 Non-Alienation of Benefits
	 	 	40	 
	ARTICLE IX ADMINISTRATIVE COMMITTEE AND PLAN ADMINISTRATOR
	 	 	41	 
	 	9.1 Appointment of Committee
	 	 	41	 
	 	9.2 Committee Actions
	 	 	41	 
	 	9.3 Resignation or Removal of Committee Member
	 	 	41	 
	 	9.4 Powers and Duties of Committee
	 	 	42	 
	 	9.5 Discharge of Fiduciary Responsibilities
	 	 	43	 
	 	9.6 Records Required
	 	 	43	 

v

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	9.7 Indemnification
	 	 	43	 
	 	9.8 Liability of Committee
	 	 	43	 
	 	9.9 Plan Administrator
	 	 	44	 
	ARTICLE X CONTRIBUTIONS AND FUNDING
	 	 	45	 
	 	10.1 General
	 	 	45	 
	 	10.2 Amount of Contributions
	 	 	45	 
	 	10.3 Payment of Contributions
	 	 	45	 
	 	10.4 Time for Payment
	 	 	45	 
	 	10.5 Forfeitures
	 	 	45	 
	 	10.6 Payment of Benefits and Expenses
	 	 	45	 
	 	10.7 Participant Contributions
	 	 	45	 
	ARTICLE XI EMPLOYEE RIGHTS
	 	 	46	 
	 	11.1 Benefits of Participants and Beneficiaries
	 	 	46	 
	 	11.2 Protection from Reprisal
	 	 	46	 
	 	11.3 Non-Guarantee of Employment
	 	 	46	 
	 	11.4 Nonforfeitability of Benefits
	 	 	46	 
	 	11.5 No Decrease in Benefits
	 	 	46	 
	ARTICLE XII AMENDMENT AND TERMINATION
	 	 	47	 
	 	12.1 Permanency
	 	 	47	 
	 	12.2 Amendments
	 	 	47	 
	 	12.3 Permanent Discontinuance of Contributions
	 	 	47	 
	 	12.4 Termination
	 	 	47	 
	 	12.5 Partial Termination
	 	 	48	 
	 	12.6 Liquidation of Trust Fund
	 	 	48	 
	 	12.7 Allocation Procedures
	 	 	49	 

vi

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	12.8 Distribution Procedures
	 	 	50	 
	 	12.9 Residual Amounts
	 	 	51	 
	 	12.10 Merger, Consolidation or Transfer of Assets or Liabilities
	 	 	51	 
	 	12.11 Withdrawal
	 	 	51	 
	ARTICLE XIII NO REVERSION TO EMPLOYER
	 	 	52	 
	 	13.1 Trust Fund Recovery
	 	 	52	 
	ARTICLE XIV MULTIPLE EMPLOYERS
	 	 	53	 
	ARTICLE XV MISCELLANEOUS
	 	 	54	 
	 	15.1 Limitation of Liability
	 	 	54	 
	 	15.2 Reference to Other Documents
	 	 	54	 
	 	15.3 Governing Law
	 	 	54	 
	 	15.4 Severability
	 	 	54	 
	 	15.5 Litigation
	 	 	54	 
	 	15.6 Conformance with Code and ERISA
	 	 	54	 
	 	15.7 Adequacy of Evidence
	 	 	55	 
	 	15.8 Waiver of Notice
	 	 	55	 
	 	15.9 Successors
	 	 	55	 
	 	15.10 Validity of Actions
	 	 	55	 
	 	EXHIBIT
	 	 	 	 

vii

 

ARTICLE I

Purpose

          Effective as of January 1, 1972, Pyroil Company, a Delaware corporation,
adopted the Pyroil-Champion Pension Plan (the “Champ Plan”), a defined benefit
pension plan, for the exclusive benefit of its eligible employees. On July 31,
1974, Pyroil Company merged with Champion Laboratories, Incorporated, a
Connecticut corporation to form Champion Laboratories, Inc., a Delaware
Corporation. On June 20, 1975, Chalab, Inc., a Delaware corporation (the
“Employer”), acquired certain of the assets of Champion Laboratories, Inc. and,
in connection therewith, agreed to establish the Chalab Pension Plan (the
“Chalab Plan”), a defined benefit pension plan, for the exclusive benefit of
the participants in the Champ Plan as of June 19, 1975, and its eligible
employees.

          Effective as of January 1, 1976, the Chalab Plan was amended and restated
in its entirety by the Employer as the Amended and Restated Champion
Laboratories Pension Plan (the “Amended Plan”) for the purpose of incorporating
into a single document all pre-1976 amendments to the Chalab Plan and new
amendments required in order to comply with the provisions of the Employee
Retirement Income Security Act of 1974 (“ERISA”) without adversely affecting
the benefits paid to or accrued on behalf of any Participant.

          Effective January 1, 1985, the Employer and Luber-Finer, Incorporated, a
Delaware corporation (“Luber-Finer”), amended and restated the Amended Plan in
its entirety as the Second Amended and Restated Champion Laboratories and
Luber-Finer Pension Plan (the “1985 Plan”) for the purpose of incorporating
into a single document both all prior amendments to the Amended Plan and those
additional amendments required in order for the 1985 Plan to assume the
pensions previously provided under the Amended and Restated Luber-Finer,
Incorporated Pension Plan (the “Luber-Finer Plan”) and to comply with the
applicable provisions of the Tax Equity and Fiscal Responsibility Act of 1982,
the Deficit Reduction Act of 1984 and the Retirement Equity Act of 1984, all
without adversely affecting the benefits paid to or accrued on behalf of any
Participant.

          Effective January 1, 1993, Luber-Finer, Inc. was merged into Champion
Laboratories, Inc.

          The 1985 Plan was amended and restated in its entirety as the Third
Amended and Restated Champion Laboratories Pension Plan (the “1989 Plan”) for
the purpose of incorporating into a single document both all amendments to the
1985 Plan which had previously been made and new amendments required in order
to comply with the applicable provisions of the Tax Reform Act of 1986 and
subsequent legislation without adversely affecting the benefits paid to or
accrued on behalf of any Participant.

          The 1989 Plan is hereby amended and restated in its entirety as the Fourth
Amended and Restated Champion Laboratories Pension Plan (the “Plan”) effective
as of January 1, 1997; and such other dates as are provided herein, in order to
comply with changes in law. This amendment and restatement also includes
amendments adopted through December 31, 2001,

 

 

including amendments intended to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001.

          The provisions of the Plan shall apply only to a Participant who retires
or otherwise terminates his employment on or after January 1, 1997 (the
“Effective Date”). Except as otherwise specifically provided herein, a former
Participant’s eligibility for benefits and the amount of benefits, if any,
payable to or on behalf of a former Participant shall be determined in
accordance with the provisions of either the Champ Plan, the Chalab Plan, the
Amended Plan, the Luber-Finer Plan, the 1985 Plan or the 1989 Plan, as the case
may be, as was in effect on the date that his employment terminated.
Notwithstanding the foregoing, any provision of the Plan that is required to
have an earlier effective date in order to continue the Plan’s qualified status
under Section 401(a) of the Code shall be effective as of such earlier date.

2

 

ARTICLE II

Definitions

          When used herein, the following words and terms shall have the respective
meanings hereinafter set forth, unless a different meaning is clearly required
by the context. Whenever appropriate, words used in the singular shall be
deemed to include the plural, and vice versa, and the masculine gender shall be
deemed to include the feminine gender, and vice versa, unless a different
meaning is clearly required by the context.

          2.1 Accrued Benefit. The monthly amount payable to a Participant at his
Normal Retirement Age as determined in accordance with the provisions of
Section 6.2, considering the Participant’s years of Continuous Employment and
his Compensation at the date of determination.

          2.2 Actuarial (or Actuarially) Equivalent. Equality in present value in
the aggregate amounts expected to be received under different forms of payment,
based on actuarial assumptions selected, from time to time, by an actuary. The
actuarial assumptions used in the Plan are set forth in Exhibit A attached
hereto and made a part hereof. In the event that the actuarial assumptions set
forth in Exhibit A shall be changed, the Actuarial Equivalent of a
Participant’s Accrued Benefit on or after the date of such amendment shall be
equal to the greater of (a) the Actuarial Equivalent of his Accrued Benefit as
of such date computed on the basis of the prior actuarial assumptions or (b)
the Actuarial Equivalent of his Accrued Benefit as of the date of the
Participant’s Retirement computed on the basis of the new actuarial
assumptions.

          2.3 Anniversary Date. The last day of each Plan Year.

          2.4 Beneficiary. Any person (natural or otherwise) entitled to receive
any benefits which may become payable upon or after a Participant’s death.

          2.5 Benefit Commencement Date. The date on which the payment of a
Participant’s benefit commences, as determined in accordance with the
provisions of Section 7.7.

          2.6 Board. The Board of Directors of Champion Laboratories, Inc.

          2.7 Break in Service.

          (a) Except as otherwise provided under paragraphs (b) and (c), a period of
one or more consecutive Plan Years during which an Employee has not completed
more than five hundred (500) Hours of Service with the Employer, the Company
and all Related Companies. An Employee shall not incur a Break in Service
solely because he fails to complete more than five hundred (500) Hours of
Service with the Company and all Related Companies during the twelve (12) month
computation period beginning on his employment commencement date.

          (b) Notwithstanding the provisions of paragraph (a), a Plan Year shall not
be included in a Break in Service if the sum of the Employee’s Hours of Service
completed during

3

 

such Plan Year plus the Employee’s Childbirth Leave Hours (as hereinafter defined) attributable to such Plan Year exceeds five hundred (500).

          (c) Notwithstanding the provisions of paragraph (a), a Plan Year shall not
be included in a Break in Service if the Employee would have completed at least
five hundred (500) Hours of Service but for a Leave of Absence as the result of
Qualified Military Service, or a Leave of Absence to which the Employee is
entitled under the Family and Medical Leave Act of 1993, provided that such
Employee returns to the Company within the period of time required for his
re-employment rights to be protected by applicable law.

          2.8 Childbirth Leave Hours.

          (a) An Employee’s Childbirth Leave Hours shall be the number of Hours of
Service (but not in excess of five hundred one (501) for any one continuous
period of absence) which the Employee would have completed but for the fact
that the Employee is absent from the employment of the Employer, the Company,
and all Related Companies: (i) by reason of the pregnancy of the Employee, (ii)
by reason of the birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the adoption of such
child by the Employee, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement; provided,
however, that in the case of any Employee with respect to whom it is not
possible to determine the number of Hours of Service which such Employee would
have completed but for such absence, such Employee shall be credited with eight
(8) Childbirth Leave Hours for each work day of such absence; and further
provided that an hour which is considered an Hour of Service under Section
2.21(a)(2) shall not also be considered a Childbirth Leave Hour.

          (b) All Childbirth Leave Hours for any period of absence shall be
attributed to the Plan Year during which such period off absence begins if the
result of such attribution is to prevent such Plan Year from being considered a
Break in Service; otherwise, all Childbirth Leave Hours shall be attributed to
the immediately following Plan Year.

          (c) The Committee shall adopt regulations under which an Employee may be
required to furnish reasonable information on a timely basis establishing the
number of Childbirth Leave Hours to which such Employee is entitled with
respect to any period of absence from
employment, and any Employee who fails to furnish such information with
respect to any period of absence shall not be credited with any Childbirth
Leave Hours for such period of absence.

          2.9 Code. The Internal Revenue Code of 1986, as now in effect or as
hereafter amended, and any regulation issued pursuant thereto by the Internal
Revenue Service.

          2.10 Committee. The Administrative Committee appointed by the Board
pursuant to the provisions of Article IX to administer the Plan.

          2.11 Company. UIS, Inc. (formerly known as United Industrial Syndicate,
Inc.), a New York corporation, or any predecessor or successor to it. Anything
to the contrary notwithstanding, a mere change in the identity, form or
organization of the Company shall not

4

 

affect its status under the Plan in any
manner and, if the corporate name of the Company is hereafter changed, all
references herein to the Company shall be deemed to refer to the Company as it is then known.

          2.12 Compensation.

          (a) Except as otherwise provided in paragraph (b), all amounts paid or
accrued during the Plan Year by the Employer, the Company and all Related
Companies to or for the benefit of an Employee as remuneration for personal
services rendered, but excluding expense allowances and contributions to any
employee benefit plan (other than contributions made by the Employer, Company
or Related Company to an employee benefit plan for the benefit of the Employee
pursuant to a cash or deferred arrangement described in Code Section 401(k), a
cafeteria plan described in Code Section 125 or, effective January 1, 1998, any
elective amounts excludable from gross income under Code Section 132(f)(4)).

          (b) For purposes of determining a Participant’s Accrued Benefit, the
Compensation which shall be taken into consideration in any Plan Year
(including Plan Years prior to the Effective Date) shall not exceed One Hundred
Sixty Thousand Dollars ($160,000), or, effective January 1, 2002, Two Hundred
Thousand Dollars ($200,000), as adjusted pursuant to Section 401(a)(17) of the
Code.

          (c) For purposes of both Sections 2.12(a) and 2.12(b), a Participant who
is reemployed following Qualified Military Service shall be deemed to receive
Compensation during such Qualified Military Service based on the rate of pay
the Participant would have received during such Qualified Military Service, or
if such rate is not reasonably certain, based on his average Compensation
during the twelve month period (or, if shorter, the total period of employment)
immediately preceding the Qualified Military Service.

          2.13 Continuous Employment. The period of a Participant’s employment which is considered in the
determination of both his eligibility for benefits under the Plan and the
amount of benefits payable to or on his behalf under the Plan, as determined
pursuant to the provisions of Article IV.

          2.14 Disability. A physical or mental condition which totally and
presumably permanently prevents a Participant from engaging in any
substantially gainful occupation or employment for wage or profit as a result
of bodily injury or disease, either occupational or non-occupational in cause.
Disability shall be presumed to be present if the Participant receives
disability benefits under the Social Security Act. A determination of
Disability pursuant to the provisions of the Plan shall not be construed to be
an admission of disability by the Employer in regard to any other claim of
disability brought by the Employee against the Employer.

          2.15 Effective Date. January 1, 1997 (except as otherwise set forth
herein).

          2.16 Employee. Any person employed by and receiving Compensation for
services rendered to the Employer, the Company or any Related Company. The
term “Employee” shall also include any person (a “Leased Employee”) who
performs services for the Employer, the

5

 

Company or any Related Company under
the primary direction or control of the Employer, the Company or any Related
Company on a substantially full-time basis pursuant to an agreement between the
Employer, the Company or such Related Company and any third person (the
“Leasing Organization”), unless:

          (a) the Leased Employee is covered by a money purchase pension plan
maintained by the Leasing Organization and providing for contributions equal to
at least ten percent (10%) of the Leased Employee’s compensation (without
regard to integration with Social Security) providing for full and immediate
vesting of all such contributions and, providing that each employee of the
Leasing Organization (other than employees who perform substantially all of
their services for the Leasing Organization) immediately participate in such
plan (other than employees whose compensation from the Leasing Organization for
each of the plan years in the four plan year period ending with the plan year
under determination is less than One Thousand Dollars ($1,000)); and

          (b) persons who would be Leased Employees but for this sentence do not
comprise more than twenty percent (20%) of the number of Employees (excluding
Leased Employees) who have performed services for the Employer, the Company or
a Related Company on a substantially full-time basis for at least one year and
persons who would be Leased Employees but for this sentence, excluding in each
case any Highly Compensated Employee.

          For purposes of Article III, a Leased Employee shall not be considered to
be an Employee until he has provided such services to the Employer, the Company
or a Related Company for at least one year, but thereafter the Leased Employee’s Years of
Service and years of Continuous Employment shall be determined on the basis of
the entire period that the Leased Employee has performed services for any such
persons. Solely for purposes of the definition of Leased Employee, the term
“Related Company” should also include any person related to the Employer, the
Company or a Related Company within the meaning of Section 144(a)(3) of the
Code.

          2.17 Employer. Champion Laboratories, Inc. (formerly known as Chalab,
Inc.) a Delaware corporation which is a subsidiary of the Company, or any
predecessor or successor to it. The term “Employer” shall also include (i)
Luber-Finer, Incorporated, a Delaware corporation (“Luber-Finer”), which is
also a subsidiary of the Company, and any predecessor or successor to
Luber-Finer and any other corporation that adopts the Plan for the exclusive
benefit of its eligible employees. Anything to the contrary notwithstanding, a
mere change in the identity, form or organization of the Employer shall not
affect its status under the Plan in any manner and, if the corporate name of
the Employer is hereafter changed, all references herein to the Employer shall
be deemed to refer to the Employer as it is then known.

          2.18 Entry Date. The first day of each calendar month during the Plan
Year.

          2.19 ERISA. The Employee Retirement Income Security Act of 1974, as now
in effect or as hereafter amended, and any regulation issued pursuant thereto
by the Internal Revenue Service, the Department of Labor or the Pension Benefit
Guaranty Corporation.

6

 

          2.20 Highly Compensated Employee.

          (a) Except as otherwise provided in this Section 2.20, any Employee who
either:

		
	 	          (i) at any time during the Plan Year or the immediately preceding
Plan Year owned more than five percent, by voting power or value, of the
outstanding stock of an Employer or a Related Company that is a
corporation, or owned more than five percent of the capital or profits
interest in an Employer or a Related Company that is not a corporation;
or
	 
	 	          (ii) in the immediately preceding Plan Year received Compensation in
excess of $80,000 (as adjusted pursuant to Section 414(q)(1) of the Code
for the preceding Plan Year) and, if the Administrator so elects, was a
member for such preceding Plan Year of the Top Paid Group (as defined in
paragraph (b)).

          (b) For any Plan Year, the Top Paid Group shall consist of the group
consisting of the top twenty percent (20%) of Employees when ranked on the
basis of Compensation paid during such Plan Year. For purposes of this
paragraph (b), there shall be excluded: Employees who have not completed six
(6) months of service, Employees who normally work less than seventeen and
one-half (17 1/2) Hours of Service per week; Employees who normally work during
not more than six (6) months during any Plan Year; and Employees who have not
attained the age of twenty-one (21).

          (c) A former Employee shall be treated as a Highly Compensated Employee if
he was a Highly Compensated Employee either when his employment was terminated
or at any time after attaining age fifty-five (55).

          (d) A nonresident alien who receives no earned income (within the meaning
of Section 91l(d)(2) of the Code) which constitutes income form sources within
the United States (within the meaning of Section 861(a)(3) of the Code) from
the Employer, the Company or any Related Company during any Plan Year shall not
be considered an Employee for such Plan Year for any purpose of this Section
2.20.

          (e) The purpose of this Section 2.20 is to conform to the definition of
“highly compensated employee” set forth in Section 414(q) of the Code, which is
incorporated herein by reference, and to the extent that this Section 2.20
shall be inconsistent with Section 414(q) of the Code, either by excluding
Employees who would be classified as “highly compensated employees” thereunder
or by including Employees who would not be so classified, the provisions of
Section 414(q) of the Code shall govern and control. This definition
incorporates an election to use the “calendar year method” of determining
highly compensated employees as provided by Treasury Regulations Section
1.414(q)-1T, Q&A 14(b). The Committee may revoke such elective and may make
any other elective adjustment to the definition of Highly Compensated Employee
permitted by Section 414(q) of the Code, including specifically use of the
simplified method provided in Revenue Procedure 93-42 (with or without snapshot
day testing) and, and the elections referred to

7

 

in the last sentence of Section
414(q)(8) and in Section 414(q)(12), in accordance with Treasury Regulations or other administrative procedures issued thereunder.

          2.21 Hour of Service.

          (a) Each Employee shall be credited with an Hour of Service for:

		
	 	          (1) Each hour for which he is directly or indirectly paid or
entitled to payment by the Employer, the Company or any Related Company
for the performance of duties. These hours shall be credited to the
Employee for the computation period (or periods) during which the duties
are performed. An Employee for whom the Company does not maintain
records which would permit it to determine accurately the actual number
of Hours of Service performed by such Employee shall be credited with the
following number of Hours of Service for each payroll period during which
he completes at least one Hour of Service:
	 
	 	          (i) Forty-five (45) Hours of Service for each weekly payroll period;
	 
	 	          (ii) Ninety (90) Hours of Service for each biweekly payroll period;
	 
	 	          (iii) Ninety-five (95) Hours of Service for each semi-monthly
payroll period; and
	 
	 	          (iv) One hundred ninety (190) Hours of Service for each monthly
payroll period.
	 
	 	Hours of Service credited to a payroll period which includes an
Anniversary Date shall be credited entirely to the Plan Year commencing
on the date following such Anniversary Date. An Employee who is not
compensated on the basis of a regular payroll period shall be credited
with ten (10) Hours of Service for each day on which he completes at
least one hour of Service.
	 
	 	          (2) Each hour (up to a maximum of five hundred one (501) hours in
any one continuous period) for which he is directly or indirectly paid or
entitled to payment by the Employer, the Company or any Related Company
on account of a period during which no duties are performed, such as
vacation or sickness. These hours shall be credited to the Employee for
the computation period (or periods) during which payment is made or
amounts payable to the Employee become due. For purposes of this
paragraph (a)(2), payment made to an Employee under an insurance policy
or trust fund to which an employer contributes shall be deemed to have
been paid by such employer, but no Hours of Service shall be credited for
periods during which an Employee receives payments under a plan
maintained solely for the purpose of complying with an applicable
worker’s compensation, unemployment compensation or disability insurance
law, or payments which solely reimburse the Employee for medical or
medically related expenses.

8

 

		
	 	          (3) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer, the
Company or any Related Company. These hours shall be credited to the
Employee for the computation period (or periods) during which the award,
agreement or payment pertains rather than the computation period (or
periods) during which the award, agreement or payment was made.

          (b) Anything in this Section 2.21 to the contrary notwithstanding, an
Employee shall be credited with Hours of Service during any Leave of Absence,
other than a Leave of Absence occurring as the result of Qualified Military
Service, for a maximum of one year. An Employee who is given a Leave of
Absence by reason of Qualified Military Service shall be credited with Hours of
Service throughout such Leave of Absence.

          (c) An Hour of Service may be credited under either paragraph (a) or
paragraph (b) above, whichever results in the greater credit, but may not be
credited more than once.

          2.22 Key Employee.

          (a) Each Employee who, at any time during the Key Employee Test Period, is
or was:

		
	 	          (i) An officer of the Employer, the Company or any Related Company
whose Top-Heavy Compensation (as defined in paragraph (g)) exceeds fifty
percent (50%) of the annual defined benefit dollar limitation set forth
in Section 415(b)(1)(A) of the Code; or
	 
	 	          (ii) A shareholder of the Employer who owns at least one-half
percent (.5%) of the stock of the Employer and whose Top-Heavy
Compensation exceeds the annual defined contribution dollar limitation
set forth in Section 415(c)(1)(A) of the Code, unless at least ten (10)
other Employees whose Top-Heavy Compensation exceeds the annual defined
contribution dollar limitation set forth in Section 415(c)(1)(A) of the
Code own or owned during any Year in the Key Employee Test Period a
percentage share of the stock of the Employer which is greater than such
shareholder’s percentage share; or
	 
	 	          (iii) A shareholder who owns more than five percent (5%) of the
stock of the Employer; or
	 
	 	          (iv) A shareholder who owns more than one percent (1%) of the stock
of the Employer and whose Top-Heavy Compensation for any Year in which he
owns such percentage exceeds One Hundred Fifty Thousand Dollars
($150,000).

Commencing January 1, 2002, the term Key Employee shall mean an Employee who is
described in subparagraph (a)(i), (a)(iii), or (a)(iv) in the Plan Year
(without regard to whether he was so described in the four prior Plan Years),
and subparagraph (a)(ii) shall no longer apply. Moreover, an officer shall be
described in paragraph (a)(i) if and only if his Top-Heavy Compensation for the
Plan Year is at least $130,000, as adjusted for cost of living increases.

9

 

          (b) For purposes of subparagraph (a)(i), the number of Employees
classified as Key Employees solely because they are officers shall not exceed
the greater of (i) three (3) or (ii) ten percent (10%) of the largest number of
Employees during any of the Plan Years in the Key Employee Test Period;
provided, however, that in no event shall such number exceed fifty (50). If
more than such number of Employees would otherwise be classified as Key
Employees by reason of being officers, the Employees classified as Key
Employees by reason of being officers shall be those officers who had the
highest Top-Heavy Compensation during any of the Plan Years in the Key Employee
Test Period during which they were officers.

          (c) For purposes of subparagraph (a)(ii), in the event that two or more
Employees own the same percentage share of the stock of the Employer, the
Employee who had the highest Top-Heavy Compensation of such Employees for the
Year during the Key Employee Test Period in which his Top-Heavy Compensation
was the highest and in which he owned such interest in the Employer for part of
the Plan Year shall be treated as owning the largest percentage share of the
stock of the Employer. If an Employee’s percentage interest in the stock of
the Employer changes during a Plan Year, his interest for such Plan Year shall
be the highest percentage he held at any time during such Plan Year.

          (d) For purposes of this Section, an Employee who owns a percentage of the
stock of the Company or a Related Company shall be deemed to own the same
percentage of the stock of the Employer. An Employee shall be considered to
own any stock of a corporation which would be attributed to him under Section
318 of the Code (as modified by substituting “five percent” for “50 percent” in
Section 318(a)(2) of the Code). In the case of a corporation which has issued
more than one class of stock, the applicable test shall be satisfied if the
Employee’s stock ownership meets the test on the basis of either the value or
the voting power of the stock. In the case of a Related Company which is not a
corporation, such tests shall be applied in accordance with regulations
promulgated under Section 4l6(i)(1)(B)(iii)(II) of the Code.

          (e) Any Employee who meets any of the tests set forth in paragraph (a) as
of any Top-Heavy Determination Date shall continue to be a Key Employee for the
remainder of the Key Employee Test Period, commencing with the Plan Year which
includes such Top-Heavy Determination Date, whether or not he remains an
Employee, and, if such Employee dies during such Key Employee Test Period, his
Beneficiaries shall be classified as Key Employees for the balance of such Key
Employee Test Period, unless such Employee is a Key Employee solely by reason
of paragraph (a)(i) and is subsequently excluded from the group of officers
having the highest Top-Heavy Compensation by reason of the limitation set forth
in paragraph (b) in subsequent Years or solely by reason of paragraph (a)(ii)
and is subsequently excluded from the group of the ten (10) Employees owning
the largest percentage shares of the stock of the Employer in subsequent Plan
Years.

          (f) The purpose of this Section 2.22 is to conform to the definition of
“key employee” set forth in Section 416(i)(1) of the Code, which is
incorporated herein by reference, and to the extent that this Section 2.22
shall be inconsistent with Section 416(i)(1) of the Code either by excluding
Employees who would be classified as “key employees” thereunder or by including
Employees who would not be so classified, the provisions of Section 416(i)(1)
of the Code shall govern and control.

10

 

          (g) An Employee’s Top-Heavy Compensation for any Year shall be the amount
of taxable wages reported on Form W-2 as paid to such Employee by the Employer
and all Related Companies for the calendar year which ends in or with such
Year, increased by any elective contributions to a cafeteria plan or 401(k)
plan that are excluded from the Employee’s income under Section 125 or
402(e)(3) of the Code and, effective January 1, 1998, by any elective amounts
not included in the Participant’s gross income pursuant to Section 132(f)(4) of
the Code.

          2.23 Key Employee Test Period. For any Plan Year prior to 2002, the
period consisting of five (5) Plan Years (or, if fewer, the total number of
Plan Years during which the Plan and all other employee plans qualified under
Section 401 (a) of the Code maintained by the Employer, the Company or any
Related Company have been in effect) ending with the Plan Year which includes
the Top-Heavy Determination Date for such Plan Year. Effective January 1,
2002, the Key Employee Test Period shall be the Plan Year.

          2.24 Leave of Absence. Authorized leave of absence, sick or disability
leave, Qualified Military Service or any absence with the advance approval of
the Employer, the Company or any Related Company; provided, however, that the
Employee retires or returns to work for the
Employer, the Company or any Related Company within the time specified in
his Leave of Absence (or, in the case of Qualified Military Service, within the
period provided by law). In granting such leaves, the Employer, the Company
and any Related Company shall treat all Employees under similar circumstances
alike under rules uniformly and consistently applied.

          2.25 Non-Key Employee. Any Employee who has not been a Key Employee
during the Key Employee Test Period.

          2.26 Normal Retirement Age. The sixty-fifth (65th) birthday of a
Participant.

          2.27 Normal Retirement Date. The first day of the month coincident with
or immediately following the Participant’s Normal Retirement Age.

          2.28 Participant. An Employee who participates in the Plan as provided in
Article III.

          2.29 Pension. A series of monthly amounts which are payable to a person
who is entitled to receive benefits under the Plan.

          2.30 Plan Year. The twelve (12) month period commencing on January 1 and
ending on December 31, on the basis of which the records of the Plan are kept.
The limitation year for purposes of Section 415 of the Code shall be the Plan
Year.

          2.31 Qualified Domestic Relations Order.

          (a) Except as provided in paragraph (b), any order (including a judgment, a decree or an approval of a property
settlement agreement entered by any court) which the Committee determines (i)
is made pursuant to any state domestic relations law (including a community
property law), (ii) relates to the provision of child support, alimony payments
or marital

11

 

property rights of a spouse, former spouse, child or other dependent
of a Participant (an “Alternate Payee”), (iii) creates or recognizes the
existence of an Alternate Payee’s right to, or assigns to an Alternate Payee
the right to, receive all or a portion of the benefits payable to a Participant
under the Plan, and (iv) clearly specifies (A) the name and last known mailing
address of the Participant and the name and last known mailing address of each
Alternate Payee covered by the order, (B) the amount or percentage of the
Participant’s benefits to be paid by the Plan to each Alternate Payee, or the
manner in which such amount or percentage is to be determined, (C) the number
of payments or period to which such order applies, and (D) the employee benefit
plan to which such order applies.

          (b) An order shall in no event be considered a Qualified Domestic
Relations Order if the Committee determines that such order (i) requires the
Plan to provide benefits to Alternate Payees, the actuarial present value of
which in the aggregate is greater than the benefits which would otherwise have
been provided to the Participant, (ii) requires the Plan to pay benefits to an
Alternate Payee, which benefits are required to be paid to a different
Alternate Payee under another order previously determined to be a Qualified
Domestic Relations Order, or (iii) requires the Plan to provide any type or
form of benefit, or any option, not otherwise provided under the Plan, except
that a Qualified Domestic Relations Order may require the Trustee to distribute
a portion of the Participant’s vested Accrued Benefit prior to the time the
Participant has terminated
his employment if the Participant is eligible to retire and begin
receiving a Pension under any of the provisions of Article V.

          2.32 Qualified Military Service. Service by a Participant or Employee in
the armed forces of the United States of a character that entitles the
Participant or Employee to reemployment under the Uniformed Services Employment
and Reemployment Rights Act of 1994, but only if the Participant or Employee is
re-employed during the period following such service in which his right of
re-employment is protected by such Act.

          2.33 Related Company. Any trade or business (whether or not incorporated)
that is, along with the Company, a member of a controlled group of related
entities (as defined in Sections 414(b) and (c) of the Code, as modified for
purposes of Sections 6.7 and 6.8 by Section 415(h) of the Code) or a member of
an affiliated service group (as defined in Section 414(m) of the Code), or that
is otherwise required to be aggregated with the Company by Treasury Regulations
issued under Section 414(o) of the Code. Anything to the contrary
notwithstanding, a mere change in the identity, form or organization of a
Related Company shall not affect its status under the Plan in any manner and,
if the corporate name of a Related Company is hereafter changed, all references
herein to such Related Company shall be deemed to refer to such Related Company
as it is then known.

          2.34 Retirement. Termination of employment for a reason other than death
after a Participant has satisfied the requirements for a Pension set forth in
Article V. Retirement shall be considered as commencing on the day immediately
following a Participant’s last day of employment (or the last day of a Leave of
Absence, if later).

          2.35 Top-Heavy Determination Date. The Anniversary Date of the
immediately preceding Plan Year.

12

 

          2.36 Top-Heavy Year.

          (a) Except as otherwise provided below, a Top-Heavy Year shall be any Plan
Year if, as of the Top-Heavy Determination Date for such Plan Year, the present
value of the cumulative Accrued Benefits of all Key Employees under the Plan
exceeds sixty percent (60%) of the present value of the cumulative Accrued
Benefits of all Participants under the Plan.

          (b) Notwithstanding paragraph (a), if as of any Top-Heavy Determination
Date the Employer, the Company or any Related Company has adopted any other
employee plan qualified under Section 401 (a) of the Code and either (i) a Key
Employee participates in the Plan and such other plan or (ii) the Plan or such
other plan has satisfied the requirements of either Section 401(a)(4) or
Section 410 of the Code only by treating the Plan and such other plan as a
single plan, then the Plan Year shall be considered a Top-Heavy Year if and
only if the present value of the cumulative Accrued Benefits of all Key
Employees under the Plan and the present value of the cumulative benefits
accrued by all Key Employees under all such other plans exceeds sixty percent
(60%) of the present value of the cumulative benefits accrued by all
Participants under the Plan and all such other plans.

          (c) Notwithstanding paragraphs (a) and (b), if as of any Top-Heavy
Determination Date the Employer, the Company or any Related Company has adopted
any other employee plan qualified under Section 401 (a) of the Code which is
not a plan described in paragraph (b), but which plan may be considered as a
single plan with the Plan and all plans described in paragraph (b) without
causing any of such plans to violate the requirements of either Section
401(a)(4) or Section 410 of the Code, the Plan Year shall not be considered a
Top-Heavy Year if the present value of the cumulative Accrued Benefits of all
Key Employees under the Plan and the present value of the cumulative benefits
accrued by all Key Employees under all plans described in paragraph (b) and all
plans described in this paragraph (c) does not exceed sixty percent (60%) of
the present value of the cumulative benefits accrued by all Participants under
all such plans.

          (d) If any of the plans described in either paragraph (b) or (c) are
defined contribution plans (as defined in Section 414(i) of the Code), then the
tests set forth in said paragraphs shall be applied by substituting the
aggregate account balances under such plans for the present value of the
cumulative benefits accrued under such plans. If any of such plans have a
determination date (as defined in Section 416(g)(4)(C) of the Code) for
purposes of determining top-heavy status which is different from the Top-Heavy
Determination Date, the present value of the cumulative benefits accrued (or
the aggregate account balances, in the case of a defined contribution plan) in
such plan shall be determined as of the determination date for such plan which
occurs in the same Plan Year as the Top-Heavy Determination Date.

          (e) For purposes of this Section 2.36, the present value of a
Participant’s Accrued Benefit shall be determined as of the Top-Heavy
Determination Date, on the assumption that the Participant terminated his
employment as of such date, utilizing the 1971 Group Annuity Table for Males at
five percent (5%) interest. Such assumptions shall be used for all plans being
aggregated for Top-Heavy determinations. The present value of a Participant’s
Accrued Benefit

13

 

shall also include the actuarial present value as of the Top-Heavy Determination Date of all distributions made to such Participant (or his Beneficiary) during the Key Employee Test Period.

          (f) For purposes of this Section 2.36, account balances shall include (i)
all contributions which the Employer the Company or any Related Company has
paid or is legally obligated to pay to any employee plan as of the Top-Heavy
Determination Date (including contributions made thereafter if they are
allocated as of the Top-Heavy Determination Date) and all forfeitures allocated
as of the Top-Heavy Determination Date, and (ii) all distributions made to a
Participant or his Beneficiary during the five year period ending on the
Top-Heavy Determination Date (or, in the case of a defined benefit plan, the
actuarial present value as of the Top-Heavy Determination Date of such
distributions). Effective January 1, 2002, distributions made more than twelve
months prior to the Top-Heavy Determination Date shall be included only if made
for a reason other than death, retirement, or termination of employment. For
purposes of this Section 2.36, account balances shall also include amounts
which are attributable to contributions made by the Participants (other than
deductible voluntary contributions under Section 219 of the Code) but shall not
include any rollover (as defined in Section 402(a)(5) of the Code) or a direct
transfer from the trust of any employee plan qualified under Section 401(a) of
the Code if such plan is not maintained by the Employer, the Company or any
Related Company and such rollover or transfer is made at the request of the
Participant.

          (g) Anything to the contrary notwithstanding, if a Participant or former
Participant has not been an Employee at any time during the Key Employee Test
Period, his accrued benefit (in the case of a defined benefit plan) or his
account balance (in the case of a defined contribution plan) shall not be taken
into consideration in the determination of whether the Plan Year is a Top-Heavy
Year.

          (h) The purpose of this Section 2.36 is to conform to the definition of
“top-heavy plan” set forth in Section 416(g) of the Code, which is incorporated
herein by reference, and to the extent that this Section 2.36 shall be
inconsistent with Section 416(g) of the Code, either by causing any Plan Year
during which the Plan would be classified as a “top-heavy plan” not to be a
Top-Heavy Year or by causing any Plan Year during which it would not be
classified as a “top-heavy plan” to be a Top-Heavy Year, the provisions of
Section 416(g) of the Code shall govern and control.

          2.37 Transfer. An Employee’s transfer of employment between the Employer,
the Company and any Related Company, or an Employee’s transfer between an
employment position covered by the Plan and an employment position not covered
by the Plan, without a termination of the Employee’s period of Continuous
Employment.

          2.38 Trust Fund. All assets of the Plan held by the Trustee from time to
time in accordance with the provisions of the Champion Laboratories and
Luber-Finer Pension Trust, as amended from time to time.

          2.39 Trustee. The corporation which shall from time to time be appointed
by the Employer to administer the Trust Fund. As of the Effective Date, the
Trustee is the First Pennsylvania Bank, N.A.

14

 

          2.40 Year of Service. Any twelve (12) month computation period (as
defined below) during which an Employee has completed an aggregate of at least one thousand (1,000) Hours of Service with the Employer, the Company or any Related Company. The initial twelve (12) month computation period shall begin on the Employee’s employment or re-employment commencement date. If the Employee fails to complete an aggregate of at least one thousand (1,000) Hours of Service with the Employer, the Company or any Related Company during the initial twelve (12) month computation period, the second twelve (12) month computation period shall consist of the Plan Year which includes the first anniversary of the Employee’s employment or re-employment commencement date, and succeeding twelve (12) month computation periods shall also be based on the Plan Year.

15

 

ARTICLE III

Participation

          3.1  Eligibility to Participate.

          (a) Except as provided below, each Employee (other than Leased Employees)
shall be eligible to participate in the Plan, provided that he (i) is employed
by the Employer, (ii) has completed at least one Year of Service (iii) has
attained at least the age of twenty-one (21) years, (iv) is not covered under
any other defined benefit pension plan to which the Employer makes
contributions, and (v) is not a member of a collective bargaining unit in which
retirement benefits were the subject of good faith bargaining between the
Employer and one or more employee representatives.

          (b) Each Employee who participated in the 1989 Plan in accordance with the
provisions thereof in effect prior to the Effective Date shall continue as a
Participant in the Plan. Each other Employee who satisfies the eligibility
requirements of paragraph (a) shall become a Participant on the later of the
Effective Date or the Entry Date coincident with or immediately following the
date on which he satisfies such eligibility requirements, provided that he is
still employed by the Employer on such date.

          (c) A person who is retained to provide services to the Employer as an
independent contractor, or as the employee of an unaffiliated third party
(whether or not a Leased Employee), and who is consistently so treated by the
Employer, shall not be eligible to participate herein even if he is
subsequently determined to be a common law employee of the Employer for tax or
any other legal purpose, but if such person is subsequently hired as an
Employee eligible to participate in the Plan, the period of time during which
he is determined to have been a common law employee shall be included in his
service to same extent as for any other Employee.

          3.2  Duration of Participation.

          An Employee shall remain a Participant until such time as he incurs a
Break in Service consisting of one Plan Year, at which time his participation
in the Plan shall cease, unless he has met the requirements for a Pension as
set forth in Article V at such time.

          3.3  Participation Upon Re-Employment.

          (a) Each Participant who terminates his employment and is re-employed
after incurring a Break in Service consisting of one Plan Year shall again
become a Participant on the Entry Date coincident with or immediately following
the date on which he completes one Year of Service following such
re-employment; provided, however, that if either (i) such Participant was
entitled to a Deferred Vested Pension under either Section 5.4 or Section 5.5
when he terminated his employment, or (ii) the number of Plan Years in such
Break in Service is fewer than the greater of either (A) the number of years of
Continuous Employment completed by the Participant prior to such Break in
Service, or (B) five (5), then his participation in the Plan shall be
retroactive to his date of re-employment.

16

 

          (b) Each Employee or each Participant who terminates his employment and is
re-employed prior to incurring a Break in Service shall be treated, for
purposes of eligibility to participate in the Plan, as though he never
terminated his employment.

17

 

ARTICLE IV

Continuous Employment

          4.1  Determination of Continuous Employment.

          (a) A Participant’s eligibility for benefits and the amount of benefits
payable to or on his behalf shall be determined by his period of Continuous
Employment.

          (b) Subject to the provisions of Sections 4.2 and 4.3, a Participant shall
receive credit under the Plan for one year of Continuous Employment for each
Plan Year during which he has completed an aggregate of at least one thousand
(1,000) Hours of Service with the Employer, the Company or any Related Company;
provided however;

		
	 	     (i) that, a Participant’s period of Continuous Employment prior to
January 1, 1976 shall not be less than his continuous service as
determined in accordance with the provisions of the Chalab Plan; and
	 
	 	     (ii) that a Participant’s period of employment with the Company
prior to January 1, 1976 which would have been disregarded in accordance
with the break in employment provisions of the Chalab Plan shall not be
considered to be Continuous Employment under the Plan.

          (c) A Participant shall also receive credit, to the extent determined by
the Board, for years of Continuous Employment for any period of employment with
a predecessor employer’s business prior to its acquisition (or prior to the
acquisition of certain assets of such business) by the Employer if the
operations thereof become a part of the Employer.

          4.2  Break in Service. A Participant’s entire period of Continuous
Employment (as determined under Section 4.1) shall be taken into consideration
under the Plan, except that:

          (a) If a Participant incurs a Break in Service, his period of Continuous
Employment before such Break shall be disregarded until he has completed one
year of Continuous Employment following his re-employment by the Employer, the
Company or any Related Company, at which time his pre-break period of
Continuous Employment shall be credited under the Plan, retroactive to his date
of re-employment.

          (b) If a Participant who is not entitled to a Deferred Vested Pension
under either Section 5.4 or Section 5.5 incurs a Break in Service, his period
of Continuous Employment before such Break shall be disregarded if the number
of the Plan Years in such Break in Service after December 31, 1975 equals or
exceeds five (5) years.

          4.3  Transfers.

          (a) A Transfer shall not affect the continuity of a Participant’s period
of Continuous Employment for purposes of his eligibility for benefits under the
Plan.

18

 

          (b) In the event of a Transfer, the amount of the benefit payable to a
Participant under the Plan shall be computed as follows:

		
	 	     (i) If a Participant is transferred to an employment position which
would not make him eligible for benefits under the Plan, he shall have
his Accrued Benefit under the Plan based solely on his years of
Continuous Employment and his Compensation prior to the date of Transfer;
and
	 
	 	     (ii) If an Employee is transferred to an employment position which
would make him eligible to participate in the Plan, he shall have his
Accrued Benefit under the Plan be based solely on his years of Continuous
Employment and Compensation from and after the date of Transfer.

          4.4 Benefits Related to Military Service. Effective December 12, 1994,
notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to Qualified Military Service will be
provided in accordance with Section 414(u) of the Code.

19

 

ARTICLE V

Requirements for Pensions

          5.1  Normal Retirement. A Participant shall be eligible for a Normal
Retirement Pension if his employment is terminated on or after his Normal
Retirement Age. Payment of a Normal Retirement Pension shall commence as of
the first day of the month coincident with or immediately following the
Participant’s Retirement. A Participant’s right to his Normal Retirement
Pension shall be non-forfeitable on attainment of his Normal Retirement Age.

          5.2  Early Retirement. A Participant shall be eligible for an Early
Retirement Pension if his employment is terminated on or after his fifty-fifth
(55th) birthday. Payment of an Early Retirement Pension shall commence as of
the Participant’s Normal Retirement Date. However, if a Participant requests
the Committee to authorize the commencement of his Early Retirement Pension as
of the first day of the month coincident with or immediately following his
Retirement, or as of the first day of any subsequent month which precedes his
Normal Retirement Date his Pension shall commence as of the first day of the
month so requested, but the amount thereof shall be reduced as provided in
Section 6.3.

          5.3  Disability Retirement.

          (a) A Participant shall be eligible for a Disability Retirement Pension if
his employment is terminated by reason of Disability. Payment of a Disability
Retirement Pension shall commence as of the first day of the first month
coincident with or immediately following the first to occur of (i) the
expiration of a period of twenty-six (26) consecutive weeks following the
Participant’s Disability or (ii) the Participant’s Normal Retirement Date.

          (b) Anything to the contrary notwithstanding, a Participant shall not be
entitled to a Disability Retirement Pension if his Disability is the result of
injury or disease sustained at any time while engaged in military service in
the armed forces of any country for which a service-connected veteran’s
disability benefit is payable.

          (c) The Employer, before approving the payment of any Disability
Retirement Pension, shall require reasonable proof of the Participant’s
Disability; and at any time during such Retirement prior to his Normal
Retirement Age when requested by the Employer (but not more often than
semi-annually) the Participant’s Disability and his eligibility for a
Disability Retirement Pension may be verified by medical examination. If at
any time prior to the Participant’s Normal Retirement Age the Employer
determines that the Participant is no longer disabled, or if the Participant
refuses to submit to a medical examination, or if the Participant shall engage
in substantially gainful employment or shall be sufficiently recovered to
engage in substantially gainful employment (except for the purpose of
rehabilitation, as determined by the Employer), his Disability Retirement
Pension shall be discontinued.

          5.4  Deferred Vested Pension. A Participant shall be eligible for a
Deferred Vested Pension if his employment is terminated for any reason before
his death after he has completed at least five (5) years of Continuous
Employment. Payment of a Participant’s Deferred

20

 

Vested Pension shall commence
as of his Normal Retirement Date. However, if a Participant requests the
Committee to authorize the commencement of his Deferred Vested Pension as of
the first day of any month after his attainment of age fifty-five (55) and
prior to his Normal Retirement Date, his Pension shall commence as of the first
day of the month so requested, but the amount thereof shall be reduced as
provided in Section 6.5.

          5.5  Deferred Vested Pension in Top-Heavy Years. A Participant shall be
eligible for a Deferred Vested Pension under Section 5.4 if his employment is
terminated for any reason before his death and he had completed at least three
(3) years of Continuous Employment during or prior to any Top Heavy Year.

          5.6  Vesting Following Plan Amendment. In the event that any amendment is
adopted to the Plan which affects, directly or indirectly, the computation of
the vested percentage of the Participants’ Accrued Benefits:

          (a) The vested percentage of the Accrued Benefit of each Participant shall
not, as a result of such amendment, be less than it would have been had the
Participant terminated his employment on the day immediately preceding the day
such amendment was adopted (or, if earlier, the effective date of such
amendment); and

          (b) The vested percentage of the
Accrued Benefit of a Participant who, on
the day the amendment is adopted (or, if earlier, the effective date of such
amendment), had completed at least three (3) years of Continuous Employment
shall thereafter be equal to the greater of the amount determined under the
Plan as so amended or the amount determined under the Plan without regard to
such amendment.

21

 

ARTICLE VI

Amount of Pensions

          6.1  Benefits Generally. Subject to the limitations hereinafter set forth
in this Article VI, each Participant who retires on or after he has fulfilled
the requirements for a Pension as set forth in Article V shall be entitled to
the Pension determined in accordance with the provisions of this Article VI.

          6.2  Normal Retirement Pension.

          (a) The monthly amount of a Participant’s Normal Retirement Pension
payable on a single-life basis shall be equal to one-twelfth (1/12) of the sum
of the following amounts:

		
	 	     (1) One percent (1%) of his Compensation for calendar year 1971 or
his average Compensation during his three (3) highest years of
Compensation, whichever is lower; multiplied by his years of Continuous
Employment prior to January 1, 1972 (if he participated in the Chalab
Plan on January 1, 1972); provided, however, that such amount shall not
be less than the benefit accrued as of December 31, 1971, under either
the PYROIL Pension Plan or the Champion Laboratories, Inc. Pension Plan,
as applicable; and
	 
	 	     (2) One and one-half percent (1.5%) of his Compensation during each
year of Continuous Employment on or after January 1, 1972; provided,
however, that any year of Continuous Employment which was considered
under subparagraph (1) above shall not be considered under this
subparagraph (2).

          (b) Effective as of the date on which the assets of the Luber-Finer
Incorporated Pension Trust are transferred to the Trustee, a Participant’s
Pension shall be increased by the amount of his Pension, if any, remaining
unpaid under the Luber-Finer Plan.

          (c) The Pension determined for a Participant who retires on or after his
Normal Retirement Age shall not be less than the Pension that would have been
payable to him had his Retirement occurred on his Normal Retirement Age.

          (d) If a Participant receives a distribution of his Accrued Benefit as a
result of the termination of the Participant’s employment and the Participant
is subsequently rehired, then the amount of the Pension to which the
Participant (or his Beneficiary) shall be entitled upon his subsequent
Retirement or death shall be determined by disregarding his years of Continuous
Employment taken into account in determining the amount of such previous
distribution, provided that if the amount of such distribution was less than
the present value of the Participant’s Accrued Benefit at such time (as
determined under Section 7.5, and disregarding the value of any subsidies for
early retirement or survivorship benefits), such years of Continuous Employment
shall not be disregarded, but any Pension to which the Participant (or his
Beneficiary) subsequently becomes entitled shall be reduced by the Actuarial
Equivalent of such distribution. If a Participant is not entitled to a
Deferred Vested Pension when he incurs a termination of employment, he shall be
deemed to have received a lump sum distribution of the entire vested
portion of his Accrued

22

 

Benefit. If such a Participant is subsequently
re-employed before incurring a Break in Service consisting of at least five
Plan Years, he shall be deemed to have repaid such distribution and his years
of Continuous Employment prior to such termination of employment shall be
included in determining his Accrued Benefit.

          6.3
Early Retirement Pension. The monthly amount of a Participant’s Early
Retirement Pension payable on a single-life basis commencing as of his Normal
Retirement Date shall be equal to his Accrued Benefit at his Retirement. The
monthly amount of the Pension shall be reduced by five-ninths of one percent
(5/9%) for each month that such commencement precedes his Normal Retirement
Date.

          6.4
Disability Retirement Pension. The monthly amount of a Participant’s
Disability Retirement Pension payable on a single-life basis shall be equal to
his Accrued Benefit at his Retirement.

          6.5
Deferred Vested Pension. The monthly amount of a Participant’s
Deferred Vested Pension payable on a single-life basis commencing as of his
Normal Retirement Date shall be equal to his Accrued Benefit at his Retirement
(or, in the event that a Participant is eligible for a Deferred Vested Pension
under Section 5.5, the vested percentage of his Accrued Benefit at his
Retirement determined under Section 5.5). In the event that the Participant
requests the payment of his Deferred Vested Pension prior to his Normal
Retirement Date, the monthly amount of the Pension shall be reduced by
five-ninths of one percent (5/9%) for each month that such commencement
precedes his Normal Retirement Date.

          6.6
Benefits for Former Participants. Anything to the contrary
notwithstanding, the Pension payable to a former Participant who participated
in accordance with the provisions of a predecessor plan to the Champ Plan shall
be equal to the Pension that was being provided to such former Participant
under the Champ Plan on June 19, 1975.

          6.7
Maximum Pensions.

          (a) Anything to the contrary notwithstanding, the Projected Annual Benefit
(as defined in subparagraph (f)(iii) below) payable with respect to a
Participant for any Plan Year commencing on or after the Effective Date shall
not exceed his Maximum Annual Benefit. A Participant’s Maximum Annual Benefit
shall be an Annual Benefit (as defined in subparagraphs (f)(i) and (ii) below)
equal to:

		
	 	     (i) The lesser of:

		
	 	     (A) One Hundred Twenty-Five Thousand Dollars
($125,000), increased to One Hundred Sixty Thousand Dollars
($160,000) effective January 1, 2002, adjusted as of January
1 of each Plan Year to take into account any cost-of- living
adjustment (as determined pursuant to Section 415(d) of the
Code) in effect as of January l of such Plan Year; or

23

 

		
	 	     (B) One hundred percent (100%) of the Participant’s
average Section 415 Compensation (as defined in subparagraph
(f)(iv) below) for the three (3) consecutive Plan Years
during which he participated in the Plan in which he
received the highest aggregate Section 415 Compensation.

		
	 	     (ii) In the event the Participant has fewer than ten (10) years of
Continuous Employment or fewer than ten (10) years of participation in
the Plan (as defined by Code Section 415(b)(5) and as modified by Code
Section 415(b)(6)(D)), then

		
	 	     (A) the amount set forth at Section 6.7(a)(i)(A) shall
be reduced by multiplying such amount by a fraction, the
numerator of which shall be the number of years, or parts
thereof, of participation in the Plan (but not less than one
(1)), and the denominator of which shall be ten (10); and
	 
	 	     (B) the amount set forth at Section 6.7(a)(i)(B) shall
be reduced by multiplying such amount by a fraction the
numerator of which shall be the number of years of
Continuous Employment (but not less than one (1)), with the
Employer the Company or any Related Company, and the
denominator of which is ten (10).

          (b) If a Participant’s Annual Benefit commences before the Social Security
Retirement Age (as that term is defined in paragraph (f)(iv), below), the
determination of whether or not the limitation set forth at Section
6.7(a)(i)(A) has been exceeded shall be made in accordance with the regulations
prescribed by the Secretary of the Treasury, by adjusting such benefit so that
it is equivalent in value to a benefit commencing at the Social Security
Retirement Age. Effective January 1, 2002, this paragraph (b) shall apply only
if the Annual Benefit commences prior to age 62, and the limitation in Section
6.6(a)(i)(A) shall be adjusted to be equivalent to one beginning at age 62.

          (c) If a Participant’s Annual Benefit commences after the Social Security
Retirement Age, the determination of whether or not the limitation set forth at
Section 6.7(a)(i)(A) has been exceeded shall be made in accordance with
regulations prescribed by the Secretary of the Treasury, by adjusting such
benefit so that it is equivalent in value to a benefit commencing at the Social
Security Retirement Age. Effective January 1, 2002, age 65 shall be
substituted for the Social Security Retirement Age for purposes of this
paragraph (c).

          (d) If a Participant who is covered under this Plan and under any Related
Plan (as defined in subparagraph (f)(ii) below) is entitled to an aggregate
Projected Annual Benefit under
said plans in a Plan Year which exceeds his Maximum Annual Benefit, the
aggregate Projected Annual Benefit shall be reduced to the extent necessary so
that it shall not exceed his Maximum Annual Benefit. In order to effectuate
said reduction among this Plan and the Related Plan(s), the Projected Annual
Benefit under each such plan shall be prorated according to the ratio which the
Projected Annual Benefit in the Plan Year under each such plan bears to the
total Projected Annual Benefit in the Plan Year under this Plan and the Related
Plans.

24

 

          (e) Notwithstanding the foregoing provisions of this Section 6.7, a
benefit payable with respect to a Participant under the Plan shall not be
deemed to exceed the limitations set forth in subparagraph (a)(1) if the total
benefits payable with respect to such Participant under the Plan and under all
Related Plans does not exceed Ten Thousand Dollars ($10,000) for the current
Plan Year or for any prior Plan Year, provided that the Employer, the Company
or any Related Company has never maintained a defined contribution plan (as
defined in Section 414(i) of the Code) in which such Participant was an active
participant. If a Participant has fewer than ten (10) years of Service with
the Employer, the Company or any Related Company, then the Ten Thousand dollar
($10,000) amount referred to in the immediately preceding sentence shall be
multiplied by a fraction, the numerator of which is an amount equal to the
Participant’s number of years of Continuous Employment and the denominator of
which is ten (10); provided, however, that the resulting product shall not be
less than one-tenth (1/10th) of the amount determined under this Section
6.7(e).

          (f) For purposes of this Section 6.7:

		
	 	     (i) The term “Annual Benefit” means a Pension payable annually in
the form of a single-life Pension or, if applicable, in the form of a
Qualified Joint and Survivor Pension (as defined in Section 7.1). In the
event that the Pension is payable in a form other than the foregoing, the
Annual Benefit shall be based on the Actuarial Equivalent of a
single-life Pension computed prior to January 1, 1995, on the basis of an
interest rate of five percent (5%).
	 
	 	     (ii) The term “Related Plan” means any other defined benefit plan
(as defined in Section 414(j) of the Code) maintained by the Employer,
the Company or any Related Company.
	 
	 	     (iii) The term “Projected Annual Benefit” means the Participant’s
Annual Benefit under the Plan provided by the Employer’s contributions on
the assumptions that the Participant will continue employment until his
Normal Retirement Age, that his Compensation will continue at the same
rate as in effect for the current Plan Year and that all other relevant
factors used to determine benefits under the Plan will remain constant as
of the current Plan Year for all future Plan Years.
	 
	 	     (iv) The term “Social Security Retirement Age” shall mean the age
used as a retirement age for the Participant under Section 216(e) of the
Social Security Act, as such section may be amended from time to time;
provided, however that such section shall be applied (x) without regard
to the age increase factor, and (y) as if the early retirement age under
Section 216(e)(2) of the Social Security Act were sixty-two (62).
	 
	 	     (v) The term “Section 415 Compensation” shall mean the Participant’s
Top-Heavy Compensation, as defined in Section 2.24(g), but shall exclude
elective contributions excluded from the Participant’s taxable income and
shall include amounts paid by employers that are treated as Related
Companies for purposes of this Section 6.7. Effective as of January 1,
1998, Section 415 Compensation shall also include elective 

25

 

		
	 	deferrals as
defined in Code Section 402(g)(3) and elective amounts not includible in
the Participant’s gross income by reason of Code Sections 125 and
132(f)(4).
	 
	 	     (vi) All actuarial adjustments to the limitations of this Section
6.7 shall be based upon an interest rate of five percent (5%) and the
mortality table otherwise used in determining Actuarial Equivalents under
the Plan, provided that effective January 1, 1995, the mortality table
used shall be that specified in Section 7.5(a) and the interest rate for
Pensions that are paid in accordance with Section 7.5 shall be that
specified in Section 7.5(a).

          (g) The provisions of this Section 6.7 and Section 6.8 below are intended
to comply with the provisions of Section 415 of the Code, as amended by Section
416 of the Code, so that the maximum benefits provided to a Participant shall
be exactly equal to the maximum amounts allowed under the Code. If there is
any inconsistency between this Section 6.7 or Section 6.8 and the provisions of
Sections 415 and 416 of the Code, such inconsistency shall be resolved in such
a way so as to give full effect to the provisions of the Code.

          6.8  Combined Plan Limitation.

          (a) Anything to the contrary notwithstanding, if during any Plan Year
prior to January 1, 2000, a Participant also participates in a defined
contribution plan (as defined in Section 414(i) of the Code) maintained by the
Employer, the Company or any Related Company, the benefits otherwise payable
under the Plan may be further reduced, to the extent necessary, as determined
by the Committee in its sole discretion, to ensure that the sum of the defined
benefit plan fraction (as defined in Section 415(e)(2) of the Code) and the
defined contribution plan fraction (as defined in Section 415(e)(3) of the
Code) do not exceed the combined plan limitations of Section 415 of the Code,
as amended by Section 416 of the Code, in order to prevent the disqualification
of the Plan under the Code.

          (b) In the event that a Participant also participates in a defined
contribution plan as described in paragraph (a), the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any Plan Year
shall not exceed 1.0. For purposes of this Section 6.8, the defined benefit
plan fraction for any Plan Year is a fraction, the numerator of which is the
Participant’s projected annual benefit under the defined benefit plan
(determined as of the close of its plan year) and the denominator of which is
the lesser of: (i) the product of 1.25 multiplied by the maximum dollar
limitation in effect under Section 415(b)(1)(A) of the Code for such Plan Year,
or (ii) the product of 1.4 multiplied by the amount which may be taken into
account under Section 415(b)(1)(B) of the Code for such Plan Year. The defined
contribution plan fraction for any Plan Year is a fraction, the numerator of
which is the sum of the annual additions to the Participant’s account under the
defined contribution plan as of the close of the Plan Year and the denominator
of which is the sum of the lesser of the following amounts determined for such
Plan Year and each
prior year of Continuous Employment (assuming, for this purpose, that
Section 415(c) of the Code had been in effect during such prior years of
Continuous Employment): (i) the product of 1.25 multiplied by the maximum
dollar limitation in effect under Section 415(c)(1)(A) of the Code for such
Plan Year (determined without regard to Section 415(c)(6) of the Code), or (ii)
the product of

26

 

1.4 multiplied by the maximum amount which may be taken into
account under Section 415(c)(1)(B) of the Code for such Plan Year.

          (c) Notwithstanding the foregoing, 1.0 shall be substituted for 1.25
wherever it appears in paragraph (b) for any Top-Heavy Year unless (i) such
Plan Year would not be a Top-Heavy Year if “90%” were substituted for “60%” in
Section 2.36, (ii) for such Plan Year the Plan and all other plans defined in
Section 2.35(b)) meet the requirements of Section 416(c) of the Code, as
modified by Section 416(h)(2)(A)(ii) of the Code.

          (d) For purposes of this Section 6.8, all defined benefit plans of the
Employer, the Company or any Related Company, whether or not terminated, are to
be treated as one defined benefit plan, and all defined contribution plans of
the Employer, the Company or any Related Company, whether or not terminated,
are to be treated as one defined contribution plan. If required to comply with
this Section 6.8, the benefit of a Participant under this Plan and all defined
benefit plans shall first be reduced in the manner provided in Section 6.7
before allocations are reduced under any defined contribution plan.

          6.9  Additional Restrictions.

          (a) In the event that the Plan terminates, the Pension paid to or on
behalf of any Highly-Compensated Employee or former Employee treated as a
Highly Compensated Employee shall be limited to a benefit that is
non-discriminatory under Code Section 401(a)(4).

          (b) Except as provided in paragraph (c), the annual payments to any member
of the Highly-Compensated Group (as defined in Section 6.9(d) shall be limited
to an amount equal to the payments that would be made on behalf of the
Participant under a single life annuity that is the Actuarial Equivalent of the
sum of (i) the Participant’s Accrued Benefit plus (ii) the Participant’s other
benefits (as defined in Section 6.9(d)), if any, under the Plan.

          (c) The limitations of Section 6.9(b) shall not apply if (i) after the
payment of the benefits described in Section 6.9(d)(ii) below to such
Participant, the value of the assets of the Plan equals or exceeds one hundred
and ten percent (110%) of the value of the Plan’s current liabilities (as that
term is defined in Code Section 412(l)(7)), or (ii) the value of the benefits
described in Section 6.9(d)(ii) for such member of the Highly-Compensated Group
is less than the greater of one percent (1%) of the value of the Plan’s current
liabilities or $3,500 ($5,000 effective January 1, 1998).

          (d) For purposes of this Section 6.9,

		
	 	     (i) The term “Highly-Compensated Group” shall mean the group of
individuals consisting of all Highly-Compensated Employees and former
Employees who are treated as Highly-Compensated Employees pursuant to
Section 2.21(d) other than those who were not among the top twenty-five (25) when ranked on the basis
of Compensation in the current or any prior Plan Year; and,

27

 

		
	 	     (ii) the term “benefit” shall include loans in excess of the amounts
set forth in Code Section 72(2)(A), any periodic income, any withdrawal
values payable to a living Participant, and any death benefits not
provided for by insurance on the Participant’s life.

          (e) The provisions of this Section 6.9 shall apply only to Plan Year
commencing on or after January 1, 1994. For prior Plan Years, the provisions
of Treasury Regulations Section 1.401-4(c) shall apply.

          6.10  Conditions Affecting Pensions.

          (a) Subject to the provisions of Section 7.7(c) and 7.8, no Pension
payments shall be made to a Participant during a period of employment and, in
the event that a retired Participant receiving Pension payments is re-employed
or continues to be employed by the Employer after the attainment of his Normal
Retirement Age in an employment position covered by the Plan, his Pension
payments shall be suspended during his period of re-employment or continued
employment.

          (b) Upon the subsequent termination of employment of a re-employed
Participant, he shall be entitled to receive a Pension under the Plan in an
amount equal to the sum of (i) his Accrued Benefit at his Retirement, based
upon his years of Continuous Employment and his Compensation as of such date,
plus (ii) his Accrued Benefit (if any) earned during his period of
re-employment, based upon his years of Continuous Employment during such period
and his Compensation (computed solely on the basis of his years of Continuous
Employment during such period) as of his subsequent termination of employment.

          (c) Notwithstanding paragraphs (a) and (b), if payment of a Participant’s
Pension is required to commence while he is still employed by reason of either
Section 7.7(c) or 7.8, the amount of his Pension shall be increased as of the
first month of each subsequent Plan Year to reflect any increase in his years
of Continuous Employment and/or Compensation.

          6.11  Minimum Benefits in Top-Heavy Years. Anything else contained herein
to the contrary notwithstanding, the Accrued Benefit of each Non-Key Employee
shall not be less than the product of (a) two percent (2%) of the Non-Key
Employee’s average monthly Top-Heavy Compensation during the consecutive five
(5) year period in which he had the greatest aggregate Top-Heavy Compensation
(excluding Top-Heavy Compensation received in any Plan Year that is not a
Top-Heavy Year), multiplied by (b) the number of Top-Heavy Years (not exceeding
ten (10)) during which the Non-Key Employee completed at least one thousand
(1,000) Hours of Service, regardless of the Non-Key Employee’s level of
Top-Heavy Compensation during such Top-Heavy Year, whether the Non-Key Employee
makes any mandatory contribution during such Top-Heavy Year, and whether the
Non-Key Employee is employed on any particular day during such Top-Heavy Year.
If, in any Top-Heavy
Year, the Non-Key Employee is also a participant in any other defined
benefit plan maintained by the Employer or a Related Company, the minimum
Accrued Benefit required under this Section 6.11 with respect to such Top-Heavy
Year shall be reduced by the benefit accrued during such Top-Heavy Year under
such other plan (other than a minimum benefit accrued only during a Top-Heavy
Year). If such Non-Key Employee is also covered by a

28

 

defined contribution
plan, he shall nevertheless receive the minimum Accrued Benefit described
herein. If in any Top-Heavy Year the provisions of Section 6.8(c) apply to any
Participant, then (i) three percent (3%) shall be substituted for two percent
(2%) for all Non-Key Employees for such Top-Heavy Year and (ii) twenty percent
(20%) shall be increased (but not by more than ten (10) percentage points) by
one percentage point for each Plan Year for which the Plan was Top-Heavy.

29

 

ARTICLE VII

Form and Payment of Pensions

          7.1 Payment of Pensions.

          (a) A Participant who is eligible for a Normal Retirement Pension under
Section 5.1 or an Early Retirement Pension under Section 5.2 and who has a
Spouse (as defined in paragraph (i) below) shall receive his Pension in the
form of a Qualified Joint and Survivor Pension, unless the Participant elects
otherwise in writing in accordance with the provisions of Section 7.4. The
Participant’s Qualified Joint and Survivor Pension shall be paid in accordance
with either subparagraph (i), (ii) or (iii) below, as elected by the
Participant; provided, however, that if no such election is made by the
Participant his Qualified Joint and Survivor Pension shall be paid in
accordance with subparagraph (iii) below.

		
	 	     (i)  One Hundred Percent (100%) Qualified Joint and Survivor Pension.
A Participant shall receive a reduced Pension during his lifetime and,
upon his death, one hundred percent (100%) of such reduced Pension shall
be paid to the Participant’s Spouse, if surviving, for the remainder of
her lifetime.
	 
	 	     (ii)  Sixty-Seven Percent (67%) Qualified Joint and Survivor Pension.
A Participant shall receive a reduced Pension during his lifetime and,
upon his death, sixty-seven percent (67%) of such reduced Pension shall
be paid to the Participant’s Spouse, if surviving, for the remainder of
her lifetime.
	 
	 	     (iii)  Fifty Percent (50%) Qualified Joint and Survivor Pension. A
Participant shall receive a reduced Pension during his lifetime and, upon
his death, fifty percent (50%) of such reduced Pension shall be paid to
the Participant’s Spouse, if surviving, for the remainder of her
lifetime.

          (b) A Participant who is eligible for a Disability Retirement Pension
under Section 5.3 or a Deferred Vested Pension under either Section 5.4 or
Section 5.5 and who has a Spouse (as defined in paragraph (i) below) shall
receive his Pension in the form of a fifty percent (50%) Qualified Joint and
Survivor Pension in accordance with subparagraph (a)(iii) above, unless the
Participant elects otherwise in writing in accordance with the provisions of
Section 7.4.

          (c) The last payment of a Qualified Joint and Survivor Pension shall be
made as of the first day of the month in which the death of the survivor of the
Participant and his Spouse occurs.

          (d) The reduced amount payable to the Participant under a Qualified Joint
and Survivor Pension shall be determined by multiplying the amount of his
Pension determined under the applicable provision of Article V by the
applicable option factor set forth in Exhibit A.

30

 

          (e) In lieu of a Qualified Joint and Survivor Pension, a Participant may
elect in writing, in accordance with the provisions of Section 7.4, to receive
for life a Pension determined under the applicable provision of Article V.

          (f) A Participant who is eligible for a Pension under Article V may elect
in writing, in accordance with the provisions of Section 7.4, to receive one of
the optional forms of benefit described under Section 7.3.

          (g) If a Participant does not have a Spouse, he shall receive the Pension
determined under the applicable provision of Article V, subject to his right,
if any, to elect in writing, in accordance with the provisions of Section 7.4,
to receive one of the optional forms of benefit described under Section 7.3.
Such a Participant’s single-life Pension shall be deemed to be a Qualified
Joint and Survivor Pension for purposes of all notice and election provisions
of Section 7.4.

          (h) The last payment of any single-life Pension shall be made as of the
first day of the month in which the death of the Participant occurs.

          (i) For purposes of this Article VII, a Participant’s Spouse shall be the
person to whom he is married on his Benefit Commencement Date. To the extent
provided in any Qualified Domestic Relations Order, and subject to the
provisions of Section 8.7(b), a former spouse of the Participant shall be
treated as the Participant’s Spouse on the Benefit Commencement Date, and the
vested percentage of the Participant’s Accrued Benefit may be paid in
accordance with such Qualified Domestic Relations Order at any time after the
Participant is eligible to retire and begin receiving a Pension under any
provision of Article V.

          7.2  Survivorship Benefits.

          (a) Upon the death of a Participant who is credited with at least one Hour
of Service on or after January 1, 1976, who is eligible for a Pension under the
applicable provision of Article V, and who dies prior to his Benefit
Commencement Date, a fifty percent (50%) Qualified Pre-retirement Survivor
Pension (as defined below) shall be payable to his Eligible Spouse (as defined
in paragraph (d)).

          (b) The date upon which the payment of the fifty percent (50%) Qualified
Pre-retirement Survivor Pension commences, and the amount of monthly payments
to the Eligible Spouse, shall be determined as if the Participant had
terminated his employment on the date of his death, survived to the earliest
date upon which he would have been eligible to begin receiving a Pension under
any of the provisions of Article V, retired with a fifty percent (50%)
Qualified Joint and Survivor Pension on such date, and died on the following
day. Payments to the Eligible Spouse shall continue until the first day of the
month in which the death of the Eligible Spouse occurs.

          (c) Except as otherwise provided in this Section 7.2 (or as provided in
the Amended Plan or the Luber-Finer Plan in the case of a Participant to whom
this Section 7.2 does not apply), no death or survivor benefits shall be
payable on behalf of a Participant who dies prior to his Benefit Commencement
Date; provided, however, that anything to the contrary

31

 

           notwithstanding, the death benefit payable on behalf of a Former
Participant who participated in a predecessor plan to the Champ Plan on
December 31, 1971 and became a participant in the Chalab Plan on June 20, 1975,
and whose death occurs prior to his Retirement, shall not be less than the
value of the death benefits, if any, which would have been payable under such
predecessor plan had his death occurred on January 1, 1972, assuming that the
provisions of such predecessor plan (including the actuarial assumption’s used
by the actuary) in effect on December 31, 1971 had remained in effect on
January 2, 1972.

          (d) For purposes of this Section 7.2, a Participant’s Eligible Spouse
shall be the person to whom he has been continuously married for one year on
the date of his death. To the extent provided in any Qualified Domestic
Relations Order, and subject to the provisions of Section 8.7(b), a former
spouse of the Participant shall be treated as the Participant’s Eligible
Spouse, provided that the Participant and his former spouse were married for at
least one year.

          7.3  Optional Forms of Benefits.

          (a) In lieu of a Normal Retirement Pension under Section 5.1, an Early
Retirement Pension under Section 5.2, or a Disability Retirement Pension under
Section 5.3, a Participant may elect in writing, in accordance with the
provisions of Section 7.4, to receive a Pension payable under one of the
options described below:

		
	 	     (i)  Contingent Annuitant Option. A Participant may elect to receive
a reduced Pension payable during his lifetime, with the provision that if
his contingent annuitant survives him, payment of the Pension in an
amount equal to either one hundred percent (100%), sixty-seven percent
(67%) or fifty (50%) of the Participant’s reduced Pension (as elected by
the Participant) shall continue to the contingent annuitant after his
death, with the last payment to be made as of the first day of the month
in which the death of the contingent annuitant occurs.
	 
	 	     (ii)  Single-Life Option. A Participant may elect to receive a
single-life Pension under which the last payment shall be made as of the
first day of the month in which the death of the Participant occurs.
	 
	 	     (iii)  Period-Certain and Life Option. A Participant may elect to
receive a reduced Pension payable until his death, and if the
Participant’s death occurs prior to the commencement of benefits or
within the ten (10) year period after payments commence, payment of the
Pension shall be continued in the same amount to the Beneficiaries
designated by the Participant for the balance of such ten (10) year
period.

          (b) An option shall be elected in writing on a form approved by the
Committee and shall be filed with the Committee during the period described in
Section 7.4. The amount of the Pension payable under an option shall be
determined by multiplying the Participant’s Pension under the applicable
provision of Article V by the applicable option factor set forth in Exhibit A.

          (c) Anything else contained herein as to the contrary notwithstanding, (i)
a Participant’s Pension shall be distributed in full beginning with his Benefit
Commencement Date,

32

 

over the life of the Participant (or the lives of the Participant and his
Beneficiary), or over a period not exceeding the life expectancy of the
Participant (or the life expectancies of the Participant and his Beneficiary)
in accordance with Section 401(a)(9)(A) of the Code and Treasury Regulations
promulgated thereunder.

		
	 	     (i) The Pension of a Participant who dies before his entire Pension
has been distributed shall, if distribution of such Participant’s Pension
has begun in accordance with subparagraph (a)(i), be distributed in full
at least as rapidly as under the method of distribution in effect at the
date of his death, or, if distribution has not so begun, be distributed
in full either by the end of the year that includes the fifth anniversary
of the date of death or, commencing not later than the last day of the
year that includes the first anniversary of the date of death (except as
otherwise provided in Section 401(a)(9)(B)(iv) of the Code in the case of
a surviving spouse), over the life of his Beneficiary (or a period not
exceeding the life expectancy of his Beneficiary), all in accordance with
Section 401(a)(9)(B) of the Code and Treasury Regulations promulgated
thereunder.
	 
	 	     (ii) The distribution of each Participant’s Pension shall comply
with the “incidental death benefit rule” as set forth in Section
401(a)(9)(G) of the Code and Treasury Regulations Section 1.409(a)(9)-2.
	 
	 	     (iii) The provisions of Section 401(a)(9) of the Code shall overrule
any other provision of this Agreement, including specifically any
distribution options contained herein.

          7.4  Election Procedures.

          (a) The Committee shall provide each Participant with a written
explanation, in nontechnical language, of the Qualified Joint and Survivor
Pension available under Section 7.1, and the optional forms of benefits
available under Section 7.3. Such explanation shall include a general
statement of the terms and conditions of such benefits, the circumstances under
which the Qualified Joint and Survivor Pension shall automatically be provided,
the Participant’s right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Pension and the rights of the Participant’s spouse
under paragraph (f) below, and shall inform the Participant that he has the
right to receive a written explanation of the effect of any such election on
his particular benefit, expressed in terms of dollars per monthly payment.
Such written explanation shall also comply with any regulations promulgated
under Section 417(a)(3)(A) of the Code, and any such regulations shall be
deemed incorporated herein by reference.

          (b) The written explanation referred to in paragraph (a) shall be provided
not less than 30 nor more than 90 days prior to the scheduled commencement of
benefits, or within such other period as may be provided by any applicable
provision of ERISA or the Code. A Participant may waive the requirement that
the written explanation be provided 30 days prior to the commencement of his
benefit and elect an early commencement date, but no waiver shall take effect
until at least seven days after the written explanation is provided. If it is
necessary to furnish the written explanation after payment of a Participant’s
benefit has commenced, the Participant shall be given an election period
consisting of the 30 days following the date on which the

33

 

explanation is furnished and any change necessary to his form of benefit
shall be made on a prospective basis.

          (c) A Participant may elect to not have his benefit paid in the form of a
Qualified Joint and Survivor Pension, or may (if eligible) elect an optional
form of benefit. Any such election shall be made in writing and shall clearly
indicate that the Participant is electing to waive his right to receive his
benefit in the form of a Qualified Joint and Survivor Pension and shall be
delivered to the Committee during the election period described in paragraph
(d). The Participant shall be entitled to make or change any such election at
any time during the election period.

          (d) Any election and any revocation of any election made under this
Section 7.4 may be made at any time or times during the ninety (90) day period
ending on the Participant’s Benefit Commencement Date.

          (e) An election made pursuant to this Article VII or a revocation or
cancellation of an election, or the exercise or revocation of a waiver
hereunder before the Participant’s Benefit Commencement Date, shall be made
without prejudice to the right of the Participant to make a new election. An
election, revocation or cancellation of an election, or the exercise or
revocation of a waiver, shall be made in writing on a form prescribed by the
Committee shall comply with the requirements of paragraph (f), below, and shall
be effective if submitted to the Committee prior to the Participant’s Benefit
Commencement Date.

          (f) Anything to the contrary notwithstanding, any election made under this
Section 7.4 shall be in accordance with rules established by the Committee. In
the case of a Participant whose Benefit Commencement Date occurs after December
31, 1984, an election to receive any benefit other than a Qualified Joint and
Survivor Pension shall be valid only if (i) such Participant’s waiver of his
right to receive a Qualified Joint and Survivor Pension pursuant to paragraph
(d) is consented to, in writing, by the person who is the Participant’s Spouse
on the Benefit Commencement Date, and the spouse’s signature is witnessed
either by a member of the Committee or other Plan representative designated by
the Committee or by a notary public, or (ii) the Participant establishes, to
the satisfaction of the Committee, that he is not married on the Benefit
Commencement Date or that, if he is married, his Spouse’s consent cannot be
obtained because his Spouse cannot be located, because he and his Spouse are
legally separated, because he has been abandoned by his Spouse (and has a court
order to such effect), or because of such other circumstances as may be
specified in regulations promulgated under Section 417(a)(2)(8) of the Code.
All elections made pursuant to this paragraph (f) may be revoked in writing by
the Participant at any time prior to his Benefit Commencement Date, but any new
election of an optional form of benefit shall require a new consent from the
Participant’s Spouse unless the original consent specifically authorized the
Participant to elect different forms of benefit without the Spouse’s further
consent. A Spouse’s consent to an election shall be irrevocable. The
Committee shall provide to each Participant, within the period of time set
forth in paragraph (b), the written explanation of the information described in
paragraph (a).

          (g) Anything else to the contrary notwithstanding, any Participant (i) who
was credited with at least one Hour of Service on or after September 2, 1974,
(ii) who would not, but for

34

 

           this paragraph (g), have the right to receive a fifty percent (50%)
Qualified Joint and Survivor Annuity, (iii) who is alive on August 23, 1984 and
(iv) whose Benefit Commencement Date is on or after August 23, 1984, shall have
the right to elect to receive a fifty percent (50%) Qualified Joint and
Survivor Annuity. The Committee shall send written notice of the provisions of
this paragraph (g) to each Participant to whom it applies, and shall also send
written notice of the provisions of Section 7.2 to each Participant whose
employment was terminated prior to August 23, 1984, and to whom Section 7.2
applies.

          7.5  Small Pensions.

          (a) Notwithstanding anything herein to the contrary, if the present value
of a Pension payable under the Plan is Three Thousand Five Hundred Dollars
($3,500) (Five Thousand Dollars ($5,000) effective January 1, 1998) or less,
payment of such Pension shall be made in a lump sum. Payment of a lump sum
pursuant to this Section 7.5 shall be made as soon as practicable following the
date on which a Participant has incurred a termination of employment or, in the
case of a payment to a Beneficiary, the Participant’s death. For distributions
paid on or after January 1, 1995, the present value of a Pension shall be
determined using the 1983 Group Annuity Mortality Table (Unisex) or such other
mortality table as may be specified under Section 417(e)(3)(A) of the Code and
an interest rate equal to the annual interest rate on 30-year Treasury
securities as announced by the Board of Governors of the Federal Reserve System
for the month that includes the first day of the Plan Year in which the
distribution occurs. In the event that Regulations or other administrative
guidance are issued under Section 417(e)(3)(A) of the Code providing that the
interest rate to be used for valuing distributions during a Plan Year shall be
determined on a date other than that set forth in the preceding sentence, the
Committee may provide for the interest rate to be determined as of such date in
accordance with such Regulations or other guidance.

          (b) Notwithstanding the foregoing, effective January 1, 1993, if the
amount of the lump sum payment payable to a Participant, Alternate Payee (but
only with respect to an Alternate Payee who is the spouse or former spouse of a
Participant) or Eligible Spouse is at least Two Hundred Dollars ($200), the
Participant, Alternate Payee or Eligible Spouse shall have the right to direct
that such payment be transferred directly to an individual retirement plan or
annuity (other than an endowment contract) qualified under Section 408 of the
Code or, in the case of a payment to a Participant or Alternate Payee but not
to an Eligible Spouse, a defined contribution plan qualified under Section 401
(a) of the Code or an annuity plan qualified under Section 403(a) of the Code
that will accept the transfer, or any other plan that constitutes an “eligible
retirement plan” as defined in Section 401(a)(31) of the Code. The
Participant, Alternate Payee or Eligible Spouse may also direct that a portion
of the payment be so transferred and that the balance be distributed in cash,
provided that the portion transferred is at least Five Hundred Dollars ($500).
Each Participant, Alternate Payee or Eligible Spouse who is eligible to receive
a lump sum payment under this paragraph (b) shall receive a written explanation
of his right to order a direct transfer of all or a portion of such payment,
and the tax consequences thereof, not more than ninety (90) nor less than
thirty (30) days before his Benefit Commencement Date, and no lump sum payment
shall be made before thirty (30) days after such explanation is given, unless
the Participant, Alternate Payee or Eligible Spouse waives such waiting period
in accordance with regulations issued under Section 401(a)(31) of the Code.
The provisions of this paragraph (b) shall not apply to any benefit payable to
a Beneficiary other than an Eligible Spouse, and shall not apply to the portion
of any

35

 

distribution that is required under Section 401(a)(9) of the Code. The
Committee may adopt administrative procedures to implement direct transfers,
which may vary the time periods and minimum amounts set forth above, to the
extent consistent with final Treasury Regulations issued under Section
401(a)(31) of the Code.

          7.6  Designation of Beneficiaries. A Participant who elects a form of
benefit that provides for continued payments after his death shall designate a
Beneficiary to receive such payments, and may change such designation prior to
the Benefit Commencement Date in accordance with Section 7.4 (subject to the
right of the Participant’s Spouse to consent to any change in accordance with
Section 7.4(f) if the Spouse’s original consent did not specifically authorize
the Participant to change Beneficiaries). In the case of a Qualified Joint and
Survivor or Contingent Annuitant Pension, the Beneficiary designation shall
become irrevocable on the Benefit Commencement Date (even if the Beneficiary is
the Participant’s spouse and they later divorce), and no further benefits shall
be payable after the death of the Participant and Beneficiary. In the case of
a Period Certain Pension, the Participant may designate contingent or
successive Beneficiaries, and may change Beneficiaries after the Benefit
Commencement Date by the filing of a new designation with the Committee,
without the necessity of obtaining the written consent of any Beneficiary. No
designation of a Beneficiary or change thereof shall be effective until it has
been received by the Committee. The Committee shall be entitled to rely upon
the last designation filed by the Participant prior to his death. If the
Participant and all designated Beneficiaries have died before all payments
under a Period Certain Pension have been paid, the remaining payments shall be
made to the estate of the last to die of the Participant and all Beneficiaries.

          7.7  Benefit Commencement Date.

          (a) The Benefit Commencement Date for each Participant shall be as set
forth in the applicable provision of Article V, subject to the provisions of
paragraphs (b), (c) and (d) below.

          (b) Except as provided in Section 7.5 above and paragraph (c) below,
unless the Participant consents to a later commencement date, the Benefit
Commencement Date shall be not later than the sixtieth (60th) day after the
close of the Plan Year in which the latest of the following events occurs:

		
	 	          (i) The Participant’s sixty-fifth (65th) birthday; or
	 
	 	          (ii) The termination of the Participant’s employment with the
Employer.

          (c) A Participant’s Benefit Commencement Date shall not be later than the
April 1 of the calendar year following the calendar year in which such
Participant attains the age of 70-1/2.

          7.8  Employment After Normal Retirement Age.

36

 

          (a) A Participant shall not receive a Pension for any calendar month,
including the calendar month in which, or any calendar month following which,
he satisfies the requirements for a Normal Retirement Pension under Section
5.1, if during any such calendar month he completes at least forty (40) Hours
of Service.

          (b) Subject to Section 7.7(c), if a Participant who continues to be
employed by the Employer after he satisfies the requirements for a Normal
Retirement Pension completes less than forty (40) Hours of Service during any
calendar month, such Participant shall be considered retired and shall receive
his Pension under the Plan. Any employment by the Participant during any
calendar month in which he receives Compensation for less than forty (40) Hours
of Service shall not be considered as part of his period of Continuous
Employment.

          (c) Upon the death of a Participant who continues his employment beyond
the attainment of his Normal Retirement Age and who is not considered retired
in accordance with the provisions of this Section 7.8, the provisions of
Sections 7.2 or 7.3 (as applicable) shall be operative, and the Pension payable
thereunder shall commence as of the first day of the month coincident with or
immediately following the Participant’s death in the amount which would have
been payable had the Participant retired on the day immediately preceding his
death.

          (d) The Committee shall provide each Participant who either continues to
be employed, or is re-employed, after attaining his Normal Retirement Age with
a written notice, which shall satisfy the requirements of Department of Labor
Regulations Section 2530.203-3, that his continued employment will result in
the suspension of his Pension pursuant to this Section 7.8.

37

 

ARTICLE VIII

Application for Benefits, Claims Procedure

and General Provisions

          8.1     Advance Written Applications Required. An application for the
commencement of a Pension must be made in writing on a form and in a manner
prescribed by the Committee, and must be submitted to the Committee in care of
the Personnel Department of the Employer by a Participant or Beneficiary, or
authorized representative acting on his behalf (the “claimant”). A claimant’s
benefits shall, subject to the applicable provision of Article V and the
provisions of Section 7.7, commence:

          (a)     Except as provided in paragraph (b) below, on the first day of the
month which follows his eligibility for a Pension and which is at least one
month after the date on which he filed his application.

          (b)     If the day determined in paragraph (a) above is more than two (2)
months after the close of the Plan Year in which he attained his Normal
Retirement Age and more than two (2) months after the close of the Plan Year in
which he was last employed by the Employer, the Company or any Related Company,
his benefits shall commence on the first day of the third month after the close
of such Plan Year.

Anything to the contrary notwithstanding, when the Employer terminates the
employment of a Participant, the application requirement shall be waived when
the effective date of such termination is less than thirty (30) days prior to
the effective date of Retirement.

          8.2     Information Required. The claimant shall furnish the Committee with
any information or proof requested by it and reasonably required to administer
the Plan. The Committee shall be the sole judge of the standard of proof
required in any case. No application shall be considered complete until such
information or proof requested by the Committee is submitted.

          8.3     Denial of Benefits. In the event that any application for benefits is
denied, in whole or in part, the Committee or the Plan Administrator shall
notify the claimant in writing of such denial and of his right to a review by
the Committee and shall set forth, in a manner calculated to be understood by
the claimant, the specific reasons for such denial, specific references to
pertinent Plan provisions on which the denial is based, a description of any
additional material or information necessary for the claimant to perfect his
application, an explanation of why such information is necessary, an
explanation of the Plan’s review procedure and the method of appeal as set
forth in Section 8.4 and,
for claims filed on or after January 1, 2002, an explanation of the
claimant’s right to bring an action under Section 502 of ERISA if the claim is
denied after review, including the limitations on such actions under Section
8.4(b). Such notice shall be furnished not more than ninety (90) days after
the claim is filed, unless special circumstances require an extension of such
period for not more than an additional ninety (90) days and the applicant is
notified of such extension by the end of the original 90 day period. Effective
for claims filed on or after January 1,

38

 

2002, the extension notice shall
explain the circumstances requiring the extension and the date by which a
determination on the claim is expected to be made.

          8.4     Review Procedure.

          (a)     A claimant who has received notice that his application has been
denied may, within sixty (60) days of receipt of such notice, secure review by
written request addressed to the Committee in care of the Personnel Department
of the Employer. In connection with such an appeal for a review, the claimant
shall have the right to information available to the Committee which may be
relevant to his appeal and may submit arguments or comments in writing.
Effective January 1, 2002, the claimant shall be provided, upon request and
free of charge, reasonable access to and copies of all documents, records and
other information relevant to the claim, and the claimant may submit written
comments, documents, records and other information relating to the claim to the
Committee for consideration on review. The Committee shall render a decision
as soon as possible and within sixty (60) days after the request for a review
unless special circumstances, such as the need to hold a hearing, require an
extension of up to an additional sixty (60) days; provided, however, that if
the Committee (or a subcommittee designated to resolve such appeals) holds
regularly scheduled meetings at least quarterly, the decision shall be made not
later than the next meeting of the Committee or subcommittee held at least 30
days after the appeal is received or, if special circumstances require, the
next meeting following such meeting. Effective for claims filed on or after
January 1, 2002, if an extension is required, a written notice indicating the
circumstances requiring the extension and the date by which a determination on
the claim is expected to be made shall be provided to the claimant during the
original 60-day period. The decision shall be by the full Committee, or by a
subcommittee for the full Committee or any fiduciary named for that purpose by
a standing resolution of the Committee delegating such review authority, and
shall be submitted to the claimant in writing and shall include the specific
reason or reasons for the decision and the specific references to the
provisions of the Plan on which the decision is based, and such decision shall
be final and binding on the claimant.

          (b)     In consideration of the benefits provided under this Plan, each
Participant agrees, for himself, his Beneficiaries, and any other person
claiming any benefit under the Plan through him, that he shall not commence or
maintain any action, whether legal or equitable, in any court or before any
agency, for any benefit under the Plan, unless the Participant or other
claimant shall first have filed a claim in accordance with Sections 8.1 and 8.2
and requested review of the denial of his claim under paragraph (a) of this
Section, and further agrees that in any event no such action shall be commenced
more than one year after the date on which the notice of the Committee’s
decision following review of the denial is delivered to him, or postmarked if
the notice is mailed to him. For purposes of the preceding sentence, if the
Committee or the Plan Administrator fails to respond to the claimant’s claim
within the period described in Section 8.3, the claim shall be deemed denied,
the claimant shall not be required to request review, and the one year
period for commencing an action shall run from the end of the period
specified in Section 8.3 (including any extension if notice of any extension
was given). If the Committee fails to respond to the claimant’s request for
review within the period described in paragraph (a), the request for review
shall be deemed denied and the one year period for commencing an action shall
run from the end of the period specified in paragraph (a) (including any
extension if notice of any extension was given).

39

 

          8.5     Responsibility for Correctness of Address. Neither the Committee nor
the Employer shall be required to determine, or to make an investigation to
determine, the identity or mailing address of any Participant, and the
Committee shall have discharged its obligation when it shall have sent checks
and other papers by registered or certified mail to such Participant at such
address as may be designated to it by such Participant or, if he makes no such
designation, at his last address on the records of the Employer.

          8.6     Payments for Incompetents. In the case of incompetency, either mental
or physical, of any Participant or Beneficiary, payments shall be made to the
court-appointed guardian of such person who has satisfied the Committee that he
or it is caring for said Participant or Beneficiary, and any such payments
shall be a complete discharge of the liabilities under the Plan.

          8.7     Non-Alienation of Benefits.

          (a)     Except with respect to Federal income taxes and for payments pursuant
to a Qualified Domestic Relations Order in accordance with paragraph (b), no
benefit payable at any time under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, attachment,
charge, garnishment, levy or encumbrance of any kind, voluntary or involuntary,
and any attempt to encumber such benefit in anyway whatsoever shall be void.
No benefit shall be subject in any manner to the debts or liabilities of any
person to whom the benefit is or shall be payable.

          (b)     Upon receiving any order, judgment or decree which may be a Qualified
Domestic Relations Order, the Committee shall promptly notify the Participant
involved and any Alternate Payee (as defined in Section 2.31) of the receipt of
the order and of the Plan’s procedure for determining whether the order is a
Qualified Domestic Relations Order, and shall proceed to determine whether the
order is a Qualified Domestic Relations Order. During the period during which
it is being determined whether such order is a Qualified Domestic Relations
Order, any payments which would, under such order, be payable to an Alternate
Payee, shall be placed in a separate account in the Trust. If, within eighteen
(18) months after the day on which payments pursuant to such order would be
required to begin, the Committee determines that such order is a Qualified
Domestic Relations Order, the amount of such separate account, with any
earnings thereon, shall be paid to the Alternate Payee as provided in such
order. If the status of such order has not been established within such
eighteen (18) month period, or if it is determined that the order is not a
Qualified Domestic Relations Order, the amount of such separate account shall
be paid to the Participant, or, if it would not otherwise have been payable
currently, shall be restored to the
Participant’s Accrued Benefit. Any determination made after the end of
such eighteen (18) month period shall be applied prospectively only.

40

 

ARTICLE IX

Administrative Committee and Plan Administrator

          9.1     Appointment of Committee.

          (a)     The Board may appoint an administrative Committee consisting of not
less than three (3) nor more than five (5) persons who shall serve at the
pleasure of the Board. The Committee may appoint one of its members to act as
its Chairman and one of its members to act as its Secretary and who shall keep
minutes of the Committee’s proceedings. The Committee may act by a majority of
its appointed members, and such action may be taken from time to time by a vote
at a meeting or in writing without a meeting. The Committee may authorize any
one of its members or its Secretary to execute any document on its behalf.

          (b)     In the event that the Board fails to appoint an Administrative
Committee pursuant to Section 9.1(a) or in the event that the Board has
terminated such appointment, and has failed to appoint a successor
Administrative Committee, then until such time, if ever, as the Board appoints
such an Administrative Committee, the Plan Administrator shall have the same
powers and duties under the Plan as the Committee, and all references in this
Plan to the Committee shall be deemed to refer to the Plan Administrator. In
such event, the powers of the Committee may be exercised by the President of
the Employer or such person as he may designate or, in the absence of such
designation, by the officers and management employees of the Employer generally
responsible for matters involving personnel and employee benefits. Such
persons may also exercise any powers delegated herein to the Committee to the
extent that they determine that such exercise is necessary for the management
and administration of the Plan, subject to review by the Committee.

          9.2     Committee Actions. The Committee may adopt such by-laws, rules and
regulations as it deems necessary, desirable or appropriate for the conduct of
its affairs. All rules and decisions of the Committee shall be uniformly and
consistently applied to all Participants and Beneficiaries in similar
circumstances. When making a determination, the Committee shall be entitled to
rely upon information furnished by a Participant or Beneficiary, the Employer,
the legal counsel of the Employer or the Trustee, and shall have no duty or
responsibility to verify such information.

          9.3     Resignation or Removal of Committee Member. (a) Any member of the
Committee may resign from office at any time by notifying the Employer and the
other members of the Committee in writing, at least ten (10) days in advance,
of such resignation; provided, however, that such notice may, at the option of
the parties, be waived.

          (b)     Any member of the Committee may be removed from office by the Employer
at any time, with or without cause. Such removal shall be effectuated by the
tendering to such member and the other members of the Committee of a written
notice of removal, to take effect on
the date specified therein; provided, however, that such notice may, at
the option of the parties, be waived.

41

 

          (c)     Upon such resignation or removal of a member of the Committee, or upon
his death, the Board shall promptly appoint a successor member of the
Committee, and shall give prompt written notice thereof to the other members of
the Committee. In the event of the failure of the Board to appoint such
successor by the effective date of such resignation of removal, or within ten
(10) days after such death, the remaining members of the Committee may appoint
such successor.

          (d)     Each successor member of the Committee shall have all the powers,
duties, responsibilities and obligations conferred by the Plan as if originally
named to the Committee. No successor member of the Committee shall be
personally liable for any act or failure to act of his predecessor or shall
have any duty to review the actions of his predecessor.

          9.4     Powers and Duties of Committee. The Committee shall be the named
fiduciary of the Plan under ERISA and, in such capacity, shall have the
responsibility for, and the authority to manage the operation and
administration of, the Plan. Benefits under the Plan will be paid only if the
Committee decides in its discretion that the applicant is entitled to them.
The Committee shall have all powers and duties which are reasonably necessary
to carry out its responsibilities under the Plan, including but not limited to
the power to:

          (a)     employ investment managers and advisors, accountants, legal counsel,
consultants and actuaries and any other person or organization it feels
necessary or proper to assist it in the performance of its duties under the
Plan, and all reasonable expenses therefor shall be paid as provided in Section
10.6;

          (b)     administer and construe the Plan, and correct any defects or supply
any omission or reconcile any inconsistency in such manner and to such extent
as it shall deem expedient to carry out the purpose of the Plan; provided,
however, that a member of the Committee shall not individually act on any
matter relating to himself;

          (c)     communicate its decisions and directions to the Trustee, a
Participant, the Employer or to any other person or organization who is to
receive such decision or direction, which may be relied upon by its recipient
as being the binding decision of the Committee;

          (d)     allocate or delegate, among the members of the Committee or to any
other person, any fiduciary responsibility (other than trustee
responsibilities) with respect to the Plan;

          (e)     determine the amount of and eligibility for benefits under the Plan;
provided, however, that all such determinations shall be made on a uniform and
nondiscriminatory basis; and

          (f)     establish rules, regulations and procedures for the administration of
the Plan. To the extent consistent with applicable provisions of ERISA and the
Code, such rules, regulations
and procedures may alter any provision of the Plan that is administrative
or procedural in nature (including any provision that specifies the time for
performing any act), and any such rule, regulation or procedure shall be deemed
incorporated into the Plan without the necessity of an amendment.

42

 

          All determinations and interpretations of the Plan by the Committee, and
all rules, regulations, and procedures adopted by the Committee, which are
consistent with the fiduciary requirements of ER1SA shall be final and binding
on all Participants, Beneficiaries and other persons claiming any interest in
the Plan.

          9.5     Discharge of Fiduciary Responsibilities. Each member of the
Committee, and any other fiduciary under the Plan, shall discharge his duties
and responsibilities with respect to the Plan:

          (a)     solely in the interest of the Participants and Beneficiaries, for the
exclusive purpose of providing benefits to the Participants and Beneficiaries
and defraying reasonable expenses of administering the Plan;

          (b)      with the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and
with like aims;

          (c)     by diversifying the investments of the Plan so as to minimize the risk
of large losses, unless under the circumstances it is prudent not to do so; and

          (d)      in accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with the applicable
provisions of ERISA.

          9.6     Records Required. To put into effect the purposes of the Plan, the
Committee shall cause to be maintained by the Employer a record of the
Compensation applicable to each Participant, the Beneficiaries designated by
each Participant, the Participant’s years of Continuous Employment, and such
other records as may be required for the efficient administration of the Plan.

          9.7     Indemnification. The Employer shall indemnify and save harmless the
Committee, each member of the Committee, and any officer or employee of the
Employer exercising any of the powers of the Plan Administrator from and
against any and all loss resulting from any liability to which such person may
be subjected by reason of any act or conduct (except willful misconduct or
gross negligence) in their official capacities in the administration of the
Plan, including all expenses reasonably incurred in their defense if the
Employer fails to provide such defense. 9.8 Liability of Committee. The
Employer shall reimburse the Committee for any bond or other security required
by law. The Employer agrees, to the extent permitted by law, that it shall pay
any insurance premium as directed by the Committee or (in default of a
direction by the Committee) shall reimburse any member of the Committee for any
insurance policy procured by the Committee (or a member) insuring any member of
the Committee and any of its agents with respect to any liability which may be
imposed by reason of any act of failure to act in carrying out the fiduciary
obligations imposed upon any of them.

          9.8     Liability of Committee. The Employer shall reimburse the Committee
for any bond or other security required by law. The Employer agrees, to the
extent permitted by law, that it shall pay any insurance premium as directed by
the Committee or (in default of a direction by

43

 

the Committee) shall reimburse
any member of the Committee for any insurance policy procured by the Committee
(or a member) insuring any member of the Committee and any of its agents with
respect to any liability which may be imposed by reason of any act of failure
to act in carrying out the fiduciary obligations imposed upon any of them.

          9.9     Plan Administrator.

          (a)     The Employer, or such person as the Company shall designate pursuant
to paragraph (b), shall serve as the Administrator of the Plan. The
Administrator shall be the “plan administrator” as defined in Section 414(g) of
the Code, and the “administrator” as defined in Section 3(16)(A) of ERISA. The
Administrator shall have the duty to file such plan descriptions and annual
reports as may be required by ERISA or similar legislation and shall be
designated to accept service of legal process and any other notices for the
Plan.

          (b)     The Company shall have the authority to appoint another corporation or
one or more persons to serve as the Administrator hereunder, in which event
such corporation or person (or persons) shall exercise all of the powers,
duties, responsibilities and obligations of the Administrator hereunder.

44

 

ARTICLE X

Contributions and Funding

          10.1     General.

          (a)     The Trustee shall hold, invest and distribute the assets of the Trust
Fund and shall serve at the pleasure of the Board. All contributions made by
the Employer under the Plan shall be paid to the Trustee.

          (b)     All Employer contributions made under the Plan are expressly
conditional upon the qualification of the Plan under Section 401 (a) of the
Code and upon the deductibility of the contribution under Section 404 of the
Code in the Plan Year for which such contribution is made and any amount which
subsequently determined to be non-deductible in such Plan Year, or which is
otherwise based on a good faith mistake of fact, shall be returned to the
Employer in accordance with Section 13.l.

          10.2     Amount of Contributions. The Employer shall make contributions to
the Trust Fund in such amounts and at such times as shall be determined by the
Board in accordance with a funding method and policy to be established by the
Employer which shall be consistent with the Plan’s objectives and in full
compliance with the minimum funding requirements imposed under Title I of
ERISA.

          10.3     Payment of Contributions. The Employer’s contribution shall be paid
to the Trustee in cash.

          10.4     Time for Payment. Except to the extent that quarterly or more
frequent contributions are required by Section 412 of the Code, all
contributions made by the Employer shall be delivered to the Trustee not later
than the earlier of (a) the date prescribed by law (including any extensions
thereof) for the filing of the Employer’s federal income tax return for the
Plan Year for which such contribution is made or (b) two and one-half (2-1/2)
months after the end of the Plan Year, plus any extensions granted by the
Internal Revenue Service under Section 412(c)(10) of the Code.

          10.5     Forfeitures. Amounts which are forfeited by a Participant because of
termination of employment before becoming eligible for a Pension shall be used
to reduce the Employer’s contribution to the Trust Fund as provided in Section
10.1, and shall not be applied to increase the benefits otherwise payable under
the Plan to the remaining Participants.

          10.6     Payment of Benefits and Expenses.
The Trust Fund shall be used to pay benefits as and to the extent
provided in the Plan. The Employer shall not have any obligation to make or
continue from its own funds any Pension or other payment provided for in the
Plan. Unless the Employer pays the expenses of the Plan directly, they shall
be paid from the Trust Fund.

          10.7     Participant Contributions. Participants are not required or
permitted to make any contributions under the Plan.

45

 

ARTICLE XI

Employee Rights

          11.1     Benefits of Participants and Beneficiaries. Every Participant and
Beneficiary receiving benefits under the Plan shall be entitled to receive, on
a regular basis, a written account of his personal benefit status and of the
relevant terms of the Plan which provides these benefits.

          11.2     Protection from Reprisal. No Participant or Beneficiary may be
discharged, fined, suspended, expelled, disciplined, or otherwise discriminated
against for exercising any right to which he is entitled or for cooperating
with any inquiry or investigation under the provisions of the Plan or any
governing law or regulations, including ERISA. No person shall, directly or
indirectly, through the use or threatened use of fraud, force or violence,
restrain, coerce or intimidate any Participant or Beneficiary for the purpose
of interfering with or preventing the exercise of or enforcement of any right,
remedy or claim to which he is entitled under the terms of the Plan or any
governing law or regulations, including ERISA.

          11.3     Non-Guarantee of Employment. Participation in the Plan shall not
grant any Participant the right to be retained in the service of the Employer
nor form a part of any employment agreement nor grant any other rights or
interest in the Plan assets other than those specifically set forth herein, nor
shall it be construed as giving any Participant any equity or other interest in
the assets, business or affairs of the Employer.

          11.4     Nonforfeitability of Benefits. Subject only to the specific
provisions of the Plan, nothing shall be deemed to divest a Participant during
his lifetime of his right to the nonforfeitable benefit to which he becomes
entitled in accordance with the provisions of the Plan.

          11.5     No Decrease in Benefits. In the case of a Participant or Beneficiary
who is receiving benefits under the Plan, or a Participant who is separated
from service and who has nonforfeitable rights to benefits, such benefits shall
not be decreased by reason of any increase in the benefit levels payable under
Title II of the Social Security Act or any increase in the wage base under such
Title II, if such increase takes place after the earlier of the date of first
receipt of such benefits or the date of such separation.

46

 

ARTICLE XII

Amendment and Termination

          12.1     Permanency. Although it is the expectation of the Employer that the
Plan and the payment of contributions hereunder shall be continued
indefinitely, the continuance of the Plan is not assumed as a contractual
obligation of the Employer. The Plan may be amended or terminated only as
provided in this Article XII.

          12.2     Amendments.

          (a)     The Employer reserves the right to amend the Plan from time to time by
action of the Board or any person to whom the Board may delegate such right,
and to modify or cancel any such amendments. Any amendments shall be as set
forth in an instrument in writing executed by the Employer.

          (b)     No amendment to this Plan shall:

		
	 	          (1)     Cause any of the assets of the Trust Fund to be used for or
diverted to purposes other than for the exclusive benefit of Participants
and their Beneficiaries, except as provided in Article XIII;

		
	 	          (2)     Have any retroactive effect so as to deprive any Participant or
Beneficiary of any benefit already accrued or, except to the extent
permitted by Treasury Regulations issued pursuant to Section 411 (d)(6)
of the Code, eliminate or reduce any early retirement benefit or
retirement-type subsidy or eliminate any optional form of benefit with
respect to a Participant’s Accrued Benefit.

		
	 	          (3)     Create or effect any discrimination in favor of Participants who
are highly compensated or who are officers of the Employer; or

		
	 	          (4)     Affect the rights, responsibilities or duties of the Trustee
without first obtaining the Trustee’s written consent thereto.

          12.3     Permanent Discontinuance of Contributions. The permanent
discontinuance of contributions by the Employer shall not be deemed to be a
complete or partial termination of the Plan or operate to accelerate any
payments or distributions to or for the benefit of the Participants. The
Trustee shall continue to administer the Trust in accordance with the
provisions thereof.

          12.4     Termination.
In accordance with the procedures set forth in this Article XII, the
Employer may terminate the Plan at any time. In the event of the dissolution,
merger, consolidation or reorganization of the Employer, the Plan shall
terminate and the Trust Fund shall be liquidated unless the Plan is continued
by a successor to the Employer, in which event provision may be made by the
successor for continuing the Plan and, in that event, the successor shall be
automatically substituted for the Employer under the Plan. In the event that
the Employer is

47

 

judicially declared to be bankrupt or insolvent, the Plan shall
be terminated. Subject to the applicable requirements, if any, of ERISA
governing the termination of employee pension benefit plans (as defined in
ERISA), the Employer shall direct and require the Trustee to liquidate the
Trust Fund, or the applicable portion thereof, in accordance with the
provisions of this Article XII.

          12.5     Partial Termination. Upon termination of the Plan with respect to a
group of Participants which constitutes a partial termination of the Plan the
Employer shall cause the proportionate interest of the Participants affected by
such partial termination to be determined. The determination of such
proportionate interest shall be done in an equitable manner, considering the
remaining Participants as well as the Participants affected by the termination,
and on the basis of the contributions made by the Employer, the provisions of
this Article XII and other appropriate considerations. After such
proportionate interest has been determined, the Trustee shall allocate and
segregate the assets of the Trust Fund according to such proportionate
interest. Neither the Trustee nor the Committee shall have any responsibility
with respect to the determination of any such proportionate interest. The
assets of the Trust Fund so allocated and segregated shall be used by the
Trustee to pay benefits to or on behalf of Participants in accordance with the
provisions of Sections 12.6 and 12.7.

          12.6     Liquidation of Trust Fund. Upon the termination of the Plan, or upon
the termination of employment by a group of Participants which constitutes a
partial termination of the Plan, the Accrued Benefit of each Participant
affected by the termination shall, as of the date of termination, become fully
vested and nonforfeitable to the extent funded, but such Participants’ recourse
toward satisfaction of the right thereto shall be limited to the assets of the
Trust Fund or the portion thereof segregated in accordance with Section 12.5.
The assets of the Trust Fund, or the portion thereof segregated in accordance
with Section 12.5 above, shall be liquidated (after provision is made for the
expenses of liquidation) and shall be allocated by the Committee among the
affected Participants (and their Beneficiaries) in the following order of
priority:

          (a)     First, in the case of benefits payable as a Pension:

		
	 	          (1)     In the case of a Pension which was in pay status as of the
beginning of the three (3) year period ending on the termination of the
Plan, to each such Pension, based on the provisions of the Plan (as in
effect during the five (5) year period ending on such date) under which
such Pension would be the least; or

		
	 	          (2)     In the case of a Pension which would have been in pay status as
of the beginning of such three (3) year period if the Participant had
retired prior to the beginning
of the three (3) year period and if his Pension had commenced (in
the standard form of a Pension under the Plan) as of the beginning of
such period, to each such benefit based on the provisions of the Plan (as
in effect during the five (5) year period ending on such date) under
which the Pension would be the least.

		
	 	          (3)     For purposes of this first priority, the lowest Pension in pay
status during the three (3) year period shall be considered the Pension
in pay status for such period.

48

 

          (b)     Second:

		
	 	          (1)     To all other benefits (if any) of individuals under the Plan
guaranteed under Title IV of ERISA (determined without regard to the
limitation in the amount of monthly benefits computed by multiplying
Seven Hundred Fifty Dollars ($750) by a fraction, the numerator of which
is the contribution and benefit base pursuant to Section 230 of the
Social Security Act at the time the Plan terminates and the denominator
of which is such contribution and benefit base in effect in calendar year
1974); and

		
	 	          (2)     To the additional benefits (if any) which would be determined
under paragraph (a) above, if the restrictions on benefits with respect
to a Participant who owns, directly on indirectly, more than ten percent
(10%) in value of either the voting stock of the Employer did not apply.

          (c)     Third, to all other nonforfeitable benefits under the Plan.

          (d)     Fourth, to all other benefits under the Plan.

          12.7     Allocation Procedures. For purposes of Section 12.6 above:

          (a)     The amount allocated under any paragraph of Section 12.6 with respect
to any benefit shall be properly adjusted for any allocation of assets with
respect to that benefit under a prior paragraph of such Section 12.6.

          (b)     If the assets available for allocation under any paragraph of Section
12.6 (other than paragraphs (c) and (d)) are insufficient to satisfy in full
the benefits of all individuals which are described in that paragraph, the
assets shall be allocated pro rata among such individuals on the basis of the
actuarial present value (as of the termination date) of the respective benefits
described in that paragraph.

          (c)     This paragraph (c) applies if the assets available for allocation
under Section 12.6(c) are not sufficient to satisfy in full the benefits of
individuals described therein.

		
	 	          (1)     If this subparagraph applies, except as provided in subparagraph
(2) below, the assets shall be allocated to the benefits of individuals
described in Section
12.6(c) on the basis of the benefits of individuals which would have
been described in such Section 12.6(c) under the Plan as in effect at the
beginning of the five (5) year period ending on the date of Plan
termination.

		
	 	          (2)     If the assets available for allocation under subparagraph (1)
above are sufficient to satisfy in full the benefits described in such
subparagraph (without regard to this subparagraph), then for purposes of
subparagraph (1) the benefits of individuals described in such
subparagraph shall be determined on the basis of the Plan as amended by
the most recent Plan amendment effective during such five (5) year period
under which the assets available for allocation are sufficient to satisfy
in full the benefits of individuals described in subparagraph (1), and
any assets remaining shall be allocated under 

49

 

		
	 	subparagraph (1) on the
basis of the Plan as amended by the next succeeding Plan amendment
effective during such five (5) year period.

          (d)     If the Secretary of the Treasury (or his delegate) determines that any
allocation made pursuant to this Section 12.7 (without regard to this
paragraph) results in discrimination prohibited by Section 401(a)(4) of the
Code, then, if required to prevent the disqualification of the Plan (or the
Trust Fund) under the Code, the assets allocated under Sections 12.6(b)(2),
12.6(c) and 12.6(d) shall be reallocated to the extent necessary to avoid such
discrimination.

          (e)     If the assets allocable pursuant to this Section 12.7 shall prove to
be insufficient to provide the benefits specified for all members of a group
within a particular level of priority specified therein, then the assets
allocable to the members of that group within the particular priorities shall
be allocated among members in that group in the following order:

		
	 	          (1)     First, to provide benefits for Participants who have retired and
to provide benefits to Beneficiaries of Participants who have died.

		
	 	          (2)     Second, to provide benefits for all Participants who have
attained their Normal Retirement Age but have not yet retired.

		
	 	          (3)     Third, to provide benefits for all Participants not included
above who would have qualified for an Early Retirement Pension on the
date of the termination of the Plan.
	 
	 	          (4)     Fourth, to provide benefits for all other Participants.

          (f)      Except as may be otherwise required by the Pension Benefit Guaranty
Corporation, Pensions payable to any Participant or Beneficiary described in
Sections 12.6(a) and 12.6(b) above shall continue to be paid or shall become
payable on the first day of the month following the allocation of Plan assets,
and all other Pensions shall be payable on the Participant’s Normal Retirement
Age.

          (g)     If, after a diligent search, the Committee is unable to locate any
Participant or Beneficiary entitled to benefits under the Plan, an amount equal
to the designated benefit, as defined in Section 4050 of ERISA, shall be
transferred to the Pension Benefit Guaranty Corporation in
accordance with said Section 4050, which shall fully discharge all
liability of the Plan with respect to such Participant or Beneficiary.

          12.8     Distribution Procedures.

          (a)     The Plan’s actuary shall calculate the allocation of assets of the
Trust Fund in accordance with the above priority categories and shall certify
his calculations to the Employer, the Trustee and the Committee.

50

 

          (b)     The provisions of Section 12.6 and 12.7 are intended to comply with
the provisions of ERISA. If there is any discrepancy between Sections 12.6 and
12.7 and the provisions of ERISA, such discrepancy shall be resolved in such a
way as to comply with ERISA.

          (c)     Anything to the contrary notwithstanding, no liquidation of assets and
payment of benefits (or provision therefor) shall actually be made by the
Trustee until after it is advised by the Employer in writing that the
applicable requirements, if any, of ERISA governing the termination of employee
pension benefit plans have been, or are being complied with, or that
appropriate authorizations, waivers, exemptions or variances have been, or are
being, obtained.

          (d)     Effective as of the date established in regulations issued under
Section 4050 of ERISA, if the Committee is unable after a diligent effort to
locate any Participant entitled to receive benefits under the Plan, the Trustee
shall transfer the applicable amount determined under Section 4050 of ERISA to
the Pension Benefit Guaranty Corporation, which shall fully discharge all
liability of the Plan with respect to such Participant.

          12.9     Residual Amounts. In no event shall the Employer receive any amounts
from the Trust Fund upon termination of the Plan other than as permitted by
Article XIII, except that, and notwithstanding any other provision of the Plan,
the Employer shall receive such amounts, if any, as may remain after the
satisfaction of all liabilities of the Plan and arising out of any variations
between actual requirements and expected actuarial requirements.

          12.10     Merger, Consolidation or Transfer of Assets or Liabilities. In the
case of a merger, consolidation or transfer of assets or liabilities to any
other qualified employee plan, each Participant in the Plan shall (if the Plan
had then terminated) receive a benefit immediately after such merger,
consolidation or transfer of assets or liabilities which is equal to or greater
than the benefit that the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer of assets or
liabilities (if the Plan had then terminated).

          12.11     Withdrawal. Luber-Finer may withdraw from the Plan at any time
provided that it has first given not less than ninety (90) days prior written
notice to the Board. If, following such
withdrawal, Luber-Finer establishes its own pension plan for its Employees
such plan may assume the liability for the payment of the portion of all
Pension’s attributable to Participants’ periods of Continuous Employment as
Employees of Luber-Finer. In such event, the Trustee shall transfer to the
trust established to fund such plan an amount equal to the balance in the Trust
Fund multiplied by a fraction, the numerator of which is the Actuarial
Equivalent of all Accrued Benefits so assumed and the denominator of which is
the Actuarial Equivalent of all Accrued Benefits immediately prior to such
transfer. Upon the completion of such transfer, no further payments shall be
made to the Participants with respect to the Pensions so assumed, provided that
the requirements of Section 12.10, and all other requirements at ERISA and the
Code, are satisfied. If Luber-Finer does not establish a successor pension
plan, such withdrawal shall constitute a partial termination with respect to
the Participants employed by Luber-Finer, and the provisions of Section 12.5
shall apply.

51

 

ARTICLE XIII

No Reversion to Employer

          13.1     Trust Fund Recovery.

          (a)     Except as otherwise expressly provided herein, no part of the corpus
or income of the Trust Fund shall revert to the Employer or be used for, or
diverted to, purposes other than for the exclusive benefit of Participants and
their Beneficiaries and payment of the expenses of the Plan and Trust.

          (b)     In the event that any portion of a contribution is made by the
Employer to the Plan because of either a good faith mistake of fact or a good
faith mistake in determining that such contribution is deductible in the Plan
Year for which such contribution is made under Section 404 of the Code, the
Trustee shall return to the Employer, upon written notice thereof, an amount
equal to the portion of such contribution which would not have been made but
for such mistake of fact, or which is determined to be non-deductible, as the
case may be, subject to the following conditions and limitations. No amount
shall be returned to the Employer pursuant to this paragraph (b) unless such
amount is returned not later than one year after the date on which the
contribution was made in the case of a contribution based on a mistake of fact
was made, or the date on which the deduction is disallowed in case of a
contribution mistakenly believed to be deductible. For purposes of the
preceding sentence, a deduction shall be considered to be disallowed on either
(i) the day on which the Employer voluntarily files an amended federal income
tax return correcting the error; (ii) the day on which the Internal Revenue
Service issues a statutory notice of deficiency, notice of final partnership or
S corporation administrative adjustment, or other determination from which no
further administrative appeal is possible, which notice is based in whole or
part upon disallowance of such deduction, provided that, if applicable, no
person files a timely petition for judicial review of such determination; or
(iii) if such a petition for judicial review is filed, the day on which a final
judgment is entered dismissing such petition or upholding the disallowance of
such deduction from which judgment no further appeal is possible, or as to
which the time for filing an appeal expires. The amount returned to the
Employer shall not include any earnings attributable to the erroneous
contribution, but shall be reduced by any losses attributable thereto.

52

 

ARTICLE XIV

Multiple Employers

          The Trust Fund may be commingled with other pension trust funds, in which
case it shall be held and invested as a single fund except as otherwise
provided in the Plan, but at all times the portion of the Trust Fund
attributable to Participants employed by the Employer shall be ascertainable by
the Committee. The adoption of this Plan by an Employer shall not create a
joint venture or partnership relation between it and any other party thereto,
nor shall such action ever be construed as having that effect. Any rights,
duties, liabilities and obligations assumed hereunder by the Employer, or
imposed upon it under or as a result of the terms and provisions hereof, shall
relate to and only affect the Employer above.

53

 

ARTICLE XV

Miscellaneous

          15.1     Limitation of Liability. Neither the Employer nor any member of the
Committee, nor any Trustee acting hereunder, shall be liable in any manner if
the Trust Fund should be insufficient to provide for the payment of benefits
called for by the Plan.

          15.2     Reference to Other Documents. Wherever in the Plan reference is made
to Participants’ rights under the Plan, it shall be construed as reference to
Participants’ rights also under any other instrument, trust agreement or
insurance or annuity contract created or entered into to effect the purpose of
the Plan.

          15.3     Governing Law. This Plan shall be regulated, construed and
administered under the laws of the State of Illinois to the extent that such
laws are not preempted by the laws of the United States of America.

          15.4     Severability. In the event that any provision of this Plan shall be
held illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions of this Plan, but such remaining provisions
shall be fully severable and this Plan shall be construed and enforced as if
said illegal or invalid provision had never been inserted therein.

          15.5     Litigation. In any action or proceeding regarding the assets or
administration of the Plan, Employees, former Employees, Participants,
Beneficiaries or any other persons having or claiming to have an interest in
the Plan shall not be necessary parties and shall not be entitled to any notice
or process. Any final judgment which is not appealed or appealable and may be
entered in any such action or proceeding shall be binding and conclusive on the
parties hereto and all persons having or claiming to have any interest in this
Plan. To the extent permitted by law, if a legal action is begun against the
Company, the Employer, the Plan Administrator, the Committee, or the Trustee by
or on behalf of any person and such action results adversely to such person or
if a legal action arises because of conflicting claims to a Participant’s or
other person’s benefits, the costs to the Company, the Employer, the Plan
Administrator, the Committee, or the Trustee of defending the action will be
charged to the amounts, if any, which were involved in the action or were
payable to the Participant or other person concerned. To the extent permitted
by applicable law, acceptance of participation in the Plan shall constitute a
release of the Company, the Employer, the Plan Administrator, the Committee,
and the Trustee and their respective agents from any and all liability and
obligation not involving willful misconduct or gross neglect.

          15.6     Conformance with Code and ERISA. The Plan is intended to comply in
all respects with the requirements of Section 401 (a) of the Code and Titles I
and IV of ERISA, and shall be so construed. References to specific provisions
of the Code or ERISA in certain provisions of the Plan shall not be construed
to limit reference to other provisions of the Code or ERISA in construing other
provisions of the Plan where such reference is consistent with the purpose of
the Plan. If any provision of the Code or ERISA is amended, any reference in
the Plan to such provision shall, if appropriate in the context and consistent
with the purpose of the Plan, be deemed to refer to any successor to such
provision.

54

 

          15.7     Adequacy of Evidence. Evidence that is required of anyone under this
Plan shall be executed or presented by proper individuals or parties and may be
in the form of certificates, affidavits, documents or other information which
the person acting on such evidence considers pertinent and reliable.

          15.8     Waiver of Notice. Any notice under this Plan may be waived by the
person entitled to notice.

          15.9     Successors. This Plan will be binding on the Company and Employer,
and on all persons entitled to benefits hereunder, and their respective
successor, heirs and legal representatives.

          15.10     Validity of Actions. Any action by any person purporting to act on
behalf of the Company, the Employer, or any fiduciary pursuant to this Plan may
be ratified by the person on whose behalf the action is taken, which shall have
the same effect as if such action was originally authorized. Any action by the
Company, the Employer or any fiduciary under the Plan, or by any person acting
on behalf of the Company, the Employer or any fiduciary, which fails to comply
with any procedural requirement of the Plan shall nevertheless be given effect
to the extent equitable and consistent with the purposes of the Plan.

* * * * *

          IN WITNESS WHEREOF, each Employer has caused the Plan to be executed by
its duly authorized corporate officers, on this 22nd day of February, 2002.

	 	 	 	 	 
	 	 	CHAMPION LABORATORIES, INC.
	 
	 
	 	 	
By:
	 	/s/ Authorized Person
	 	 	 	 	

	 
	 	 	
Its:
	 	Vice President Human Resources
	 	 	 	 	

55

 

FOURTH AMENDED AND RESTATED

CHAMPION LABORATORIES

PENSION PLAN

EXHIBIT A

This Exhibit A, attached to and made of the Plan, states that the unisex
option factors which are used under the Plan are as follow

	 	1.	 	Qualified Joint and Survivor Pensions.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Add for each full	 	 	 	 
	 	 	 	 	 	 	 	year spouse is	 	 	 	 
	 	 	 	 	 	 	 	older or subtract	 	 	 	 
	 	 	 	Factor for equal	 	for each full year	 	 	 	 
	 	 	 	ages	 	spouse is younger	 	Maximum Factor
	 	 	 	
	 	
	 	

	Non-Disability Pensions:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	100% continued
	 	 	79	%                      	 	 	.6	%	 	 	96	%
	 	67% continued
	 	 	85	%                      	 	 	.5	%	 	 	97	%
	 	50% continued
	 	 	88	%                      	 	 	.4	%	 	 	99	%
	Disability Pensions:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	100% continued
	 	 	63.0	%                     	 	 	.6	%	 	 	80	%
	 	67% continued
	 	 	72.0	%                     	 	 	.5	%	 	 	84	%
	 	50% continued
	 	 	77.5	%                     	 	 	.4	%	 	 	88	%

	 	2.	 	Ten-Year-Certain and Life Pension.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Add for	 	 	 	 	 	 	 	 
	 	 	Factor for	 	each full year	 	subtract for each	 	 	 	 
	 	 	age 65	 	under 65	 	full year over 65	 	Maximum Factor
	 	 	
	 	
	 	
	 	

	Non-Disability
Pensions:
	 	 	91	%	 	 	.6	%	 	 	1.2	%	 	 	99	%
	Disability Pensions:
	 	 	78.5	%             	 	 	5	%	 	 	—	 	 	 	85	%

56<PAGE>
                                                                    Exhibit 10.1

              AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT

         THIS AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT (this
"AGREEMENT") is entered into and made effective as of the 21st day of July 2003
by and between GLADSTONE COMMERCIAL CORPORATION, a Maryland corporation (the
"COMPANY"), and GLADSTONE MANAGEMENT CORPORATION, a Delaware corporation (the
"ADVISER").

                              W I T N E S S E T H:

         WHEREAS, the Company intends to be treated as a real estate investment
trust (REIT);

         WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "ADVISERS Act"), and the rules
and regulations promulgated thereunder;

         WHEREAS, the Adviser desires to serve as the Company's investment
adviser and, in connection therewith, to perform certain services for the
Company with respect to the administration of the Company and its investment
activities, in all cases under the supervision and control of the Company's
Board of Directors and on the terms and subject to the conditions set forth
herein; and

         WHEREAS, the Company desires to retain the Adviser to serve as its
investment adviser and, in connection therewith, to perform certain
administrative and investment advisory services under the supervision of the
Company's Board of Directors and on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:

         1.       APPOINTMENT OF ADVISER; DUTIES OF ADVISER.

                  (A) The Company hereby retains the Adviser to serve as its
investment adviser for the period and on the terms and subject to the conditions
as set forth in this Agreement.

                  (B) Subject to the supervision and control by the Company's
Board of Directors, the Adviser shall:

                           (I) (A) consistent with the Company's investment
policies adopted by the Company's Board of Directors, as revised from time to
time, manage the investment and reinvestment of the Company's assets;

                           (B) continuously review, supervise and administer the
Company's investment program to determine in its discretion the securities to be
purchased or sold and the portion of the Company's assets to be held
un-invested;

                           (C) provide the Company with all required records
concerning the Adviser's efforts on behalf of the Company; and
<PAGE>
                           (D) provide regular reports to the Company's Board of
Directors concerning the Adviser's activities on behalf of the Company;

                           (II) (A) consistent with the Company's investment
policies adopted by the Company's Board of Directors, as revised from time to
time, manage the acquisition and divesture of real estate and mortgage loans
purchased or originated for the account of the Company;

                                    (B) manage the Company's portfolio of real
estate and mortgage loans; and

                                    (C) manage any other investments of the
Company;

                           (III) use its best efforts to present the Company
with investment opportunities consistent with the Company's investment policies
and objectives as adopted by the Company's Board of Directors and as revised
from time to time; and

                           (IV) devote sufficient resources to the business of
the Company to discharge its obligations under this Agreement.

                  (C) The Company's Board of Directors retains, and has the
exclusive right, to:

                           (I) Grant stock compensation to the officers of the
Company and any employee of the Adviser;

                           (II) Hire, fire and control the activities of the
Adviser's employees in connection with and to the extent of such employees' work
for the Company;

                           (III) Determine the economic value of the services
performed by the Adviser's employees that are assigned to the Company (including
wages and the number of units and value of any stock compensation granted); and

                           (IV) Remit funds sufficient to cover the complete
compensation, including all payroll taxes, of the Adviser's employees assigned
to the Company, if the Board of Directors so desires.

         2.       ACCEPTANCE BY ADVISER.

         The Adviser hereby accepts appointment as investment adviser to the
Company on the terms and conditions set forth on this Agreement, and agrees to
discharge the foregoing responsibilities in compliance with the investment
objectives, policies and limitations set forth in the Company's prospectus (as
it may be amended or supplemented from time to time, the "PROSPECTUS") and
applicable laws and regulations, and under the supervision and control of the
Company's Board of Directors.

                                       2.
<PAGE>
         3.       COMPENSATION.

                  (A) The Adviser shall pay all of its own costs and expenses,
including such costs and expenses as the Adviser may incur in the performance of
its duties pursuant to this Agreement. In consideration for the Adviser's
services as set forth in this Agreement, the Company shall reimburse the Adviser
for expenses that it incurs as described in this Section 3.

                  (B) The Company will reimburse the Adviser promptly, against
the Adviser's voucher, for any expenses incurred the by the Adviser for the
Company's account. Without limitation, such expenses shall include (i) expenses
of the Company's organization, (ii) expenses incurred in connection with the
Company's initial public offering, (iii) expenses of any offering and sale by
the Company of its securities, (iv) the fees and disbursements of the Company's
counsel, accountants, custodian, transfer agent and registrar, (v) fees and
expenses incurred in producing and effecting filings with federal and state
securities administrators, (vi) costs of the Company's periodic reports to and
other communications with the Company's stockholders, (vii) fees and expenses of
members of the Company's Board of Directors who are not directors, managers,
officers or employees of the Adviser, and are not managers, officers or
employees of any entity managed by the Adviser, (viii) fees of members of the
Company's Board of Directors who are such directors, managers, officers or
employees, and (ix) premiums for any fidelity bond and similar insurance
maintained by the Company.

                  (C) The Company shall also reimburse the Adviser promptly,
against the Adviser's voucher, for all fees charged by third parties that are
directly related to the Company's business, which may include, without
limitation (i) any origination fee with respect to any loan, lease or investment
made by the Company, and (ii) and all transaction costs incident to the
acquisition and disposition by the Company of securities, leases, mortgage
loans, real estate and other investments and assets, including, without
limitation, legal and accounting fees and other professional or technical fees
and expenses (e.g., credit reports, appraisals, title search and delivery
charges, costs of specialized consultants such as accountants or
industry-specific technical experts, and deal-specific travel expenses) incurred
in monitoring, negotiating and working-out such securities, leases, mortgage
loans or real estate and other investments and assets, as well as responding to
any litigation or other disputes arising therefrom. All such origination fees
described in clause (i) above shall be reviewed as of the end of each calendar
quarter by the Company's Board of Directors.

                  (D) The Company shall also reimburse the Adviser for its pro
rata portion of the Adviser's total operating expenses not incurred for direct
benefit of any party whom the Adviser manages (e.g., payroll and other overhead
expenses) ("OVERHEAD"). This expense reimbursement is the equivalent of a
management fee and is hereafter referred to as the "MANAGEMENT FEE." The
Management Fee shall be computed monthly on the following basis:

                           (I) The Adviser shall calculate the total aggregate
hours of service performed by all of its employees, directors and associates
during the month, and that number shall be the "DENOMINATOR."

                                       3.
<PAGE>
                           (II) The Adviser and each of the Adviser's employees,
directors and associates shall calculate the total aggregate number of hours of
service performed on behalf of the Company during the month, and that number
shall be the "NUMERATOR."

                           (III) The percentage derived by dividing the
Numerator by the Denominator shall be the percentage of all Overhead that shall
be billed to the Company for that month (the "MONTHLY PERCENTAGE").

                           (IV) The Adviser will estimate its total operating
expenses (less expenses incurred directly for the benefit of parties that the
Adviser manages, such as those expenses described in Section 3(b) and 3(c)) for
the month (the "ESTIMATED OVERHEAD"), based on historical monthly expenses, and
make any adjustments to the prior monthly bills in order to reconcile the actual
results with the earlier estimates. The Adviser shall then calculate the month's
Management Fee by multiplying the Monthly Percentage by the Estimated Overhead.
The Adviser will then bill the Company for an amount equal to Management Fee for
that month. The expenses will be billed to the Company on the first day of each
month and shall be paid within three days thereafter.

                           (V) The Management Fee is subject to an annual
maximum of 2.0% of the Company's average invested assets (as determined jointly
by the Company and the Adviser) (the "ANNUAL MANAGEMENT FEE CAP") during each
calendar year. The Adviser shall reimburse the Company no less frequently than
annually for the amount by which amounts billed to and paid by the Company
exceed the Management Fee Cap during a given year.

                           (VI) To the extent that aggregate Management Fees
payable or reimbursable by the Company exceed the Annual Management Fee Cap
(such amount, the "EXCESS FEES") and the Company's independent directors
determine, by majority vote, that the excess Management Fees were justified
based on unusual and nonrecurring factors which they deem sufficient, the
Company may reimburse the Adviser in future years for the full amount of the
Excess Fees, or any portion thereof, but only to the extent that the
reimbursement would not cause the Company's Management Fees and Excess Fees to
collectively exceed the Annual Management Fee Cap in any year.

                           (VII) In the event this Agreement is terminated, any
compensation to which the Adviser may be entitled to receive pursuant to this
Section 3(d) shall be computed as of the period ending on the last business day
on which this Agreement is in effect, subject to pro rata adjustment based on
the number of days elapsed in the current month as a percentage of the total
number of days in such month, as appropriate.

                  (E) The Company shall establish an Equity Incentive Plan for
the officers and directors of the Company. The plan shall be administered by the
Board of Directors or by its Compensation Committee if the Board of Directors
delegates that authority to the Compensation Committee.

                                       4.
<PAGE>
         4.       LIMITATION OF LIABILITY.

         In the absence of: (i) willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its obligations and
duties hereunder; (ii) reckless disregard by the Adviser of its obligations and
duties hereunder; or (iii) a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services, the Adviser shall not be
subject to liability to the Company or any of its stockholders for any error of
judgment, mistake of law or any other act or omission in the course of, or
connected with, its rendering of services hereunder including, without
limitation, for any losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security by the Adviser on behalf
of the Company.

         5.       EXCLUSIVITY.

         The services provided by the Adviser hereunder are not exclusive and
the Adviser shall therefore remain free to render such services to others.

         6.       RECORDS.

         The Adviser agrees to preserve the records required by Rule 204-2
promulgated under the Advisers Act for the period specified therein.

         7.       WRITTEN DISCLOSURE STATEMENT.

         The Adviser has previously delivered to the Company a written
disclosure statement as required by Section 204-3(a) of the Advisers Act in the
form of either a copy of Part II of the Adviser's Form ADV which complies with
Section 204-1(b) of the Advisers Act or a written document containing at least
the information required by Part II of Form ADV. Such written disclosure
statement was delivered by the Adviser to the Company within the time period
specified by Section 204-1(b) of the Advisers Act.

         8.       DURATION.

         This Agreement shall be effective beginning on the date set forth in
the preamble hereof, and shall remain in force through December 31, 2006. Upon
expiration of the initial term, the term of this Agreement shall be
automatically extended for successive one (1) year periods, unless either the
Company or the Adviser notifies the other party of its intention not to renew
this Agreement at least 120 days prior to the end of the term.

         9.       TERMINATION.

                  (A)      This Agreement may be terminated by

                           (I) the Company's Board of Directors, immediately,
for Cause or upon the Bankruptcy of the Adviser;

                           (II) the vote of a majority of the Company's
Independent Directors upon sixty (60) days prior written notice to the Adviser;
or

                                       5.
<PAGE>
                           (III)    the Adviser, immediately, with Good Reason.

                  (B) Definitions. For the purposes of this Section 9, the
following terms shall have the following definitions:

                           (I) "CAUSE" shall mean fraud, criminal conduct,
willful or negligent breach of fiduciary duty, or the commission of a material
breach of this Agreement;

                           (II) "GOOD REASON" shall mean either (A) a failure to
obtain a satisfactory agreement from any successor to the Company to assume and
agree to perform the Company's obligations under this Agreement, or (B) a
material breach of this Agreement; and

                           (III) "BANKRUPTCY" shall mean the happening of any of
the following: (A) the filing of an application by the Adviser for the
appointment of a trustee, receiver or similar person over all or substantially
all of his or its assets; (B) the filing by the Adviser of a voluntary petition
in bankruptcy or the filing of a pleading in any court of record admitting in
writing the Adviser's inability to pay substantially all of its debts as they
become due; (C) the making by the Adviser of a general assignment for the
benefit of creditors in connection with the winding up or liquidation of the
Adviser's business; (D) the expiration of 60 calendar days after a petition for
involuntary bankruptcy shall have been filed against the Adviser, or the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of the Adviser or of a substantial part of its property shall have
occurred, provided that the same shall not have been vacated or dismissed within
such 60-day period or there shall be remaining open any motion to vacate or
dismiss such petition filed before the expiration of any such 60-day period;
provided that such motion shall not remain open in excess of 120 calendar days
in the aggregate; (E) the filing by the Adviser of an answer admitting the
material allegations of, or its consenting to, or defaulting in answering, a
bankruptcy petition filed against the Adviser in any bankruptcy proceeding; or
(F) the entry of an order, judgment, or decree by any court of competent
jurisdiction adjudicating the Adviser bankrupt or appointing a trustee over its
assets, and such order, judgment or decree continuing unstayed and in effect for
a period of 60 consecutive calendar days.

         10.      AMENDMENTS.

         This Agreement may be amended with the mutual consent of the parties;
PROVIDED, HOWEVER, that the Company shall not consent to any such amendment
unless such amendment shall be approved by (i) a majority of the Company's
directors and (ii) a majority the Company's independent directors.

         11.      SEVERABILITY.

         If any term or condition of this Agreement shall be found to be invalid
or unenforceable to any extent or in any application, the remainder of this
Agreement, including such term or condition, except to the extent or in such
application such term or condition is held invalid or unenforceable, shall not
be affected thereby, and each and every term and condition of this Agreement
shall be valid and enforceable to the fullest extent and in the broadest
application permitted by law.

                                       6.
<PAGE>
         12.      CAPTIONS.

         The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.

         13.      DEFINITIONS.

         For purposes of this Agreement, "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES," "ASSIGNMENT" and "INTERESTED PERSON" shall have the respective
meanings assigned to them in the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission pursuant to its rule-making
authority as set forth in the Investment Company Act or the Advisers Act, as the
case may be. "INDEPENDENT DIRECTOR" shall have the meaning ascribed to such term
under the rules of the Nasdaq Stock Market or such other securities market on
which the securities of the Company are traded.

         14.      NOTICES.

         All notices required or permitted to be delivered under or pursuant to
this Agreement shall be so delivered by certified mail, postage prepaid, as
follows:

         If to the Adviser:        Gladstone Management Corporation
                                   1750 Tysons Blvd., 4th Floor
                                   McLean, VA 22102
                                   Attn:  President

          If to the Company:       Gladstone Commercial Corporation
                                   1750 Tysons Blvd., 4th Floor
                                   McLean, VA 22102
                                   Attn:  Chairman

         Any notice delivered pursuant to this Section 14 shall be deemed
delivered on the third day following its deposit in the United States mail or
the date such notice is actually received by the addressee, whichever shall
occur first.

         15.      ASSIGNMENT.

         This Agreement is generally not assignable or transferable by either
party hereto without the prior written consent of the other party. HOWEVER, (i)
the Adviser may assign this Agreement to an affiliate of the Adviser without the
Company's consent if the Adviser guarantees the performance of the obligations
hereunder, and (ii) either party may assign or transfer this Agreement to a
successor in interest.

         16.      ENTIRE AGREEMENT.

         This Agreement contains the entire agreement of the parties with
respect to the matters referred to herein and supersedes all prior agreements,
negotiations, commitments or understandings.

                                       7.
<PAGE>
         17.      COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be taken to be an original and
together shall constitute one and the same document.

         18.      GOVERNING LAW.

         This Agreement shall be construed in accordance with the laws of the
State of Virginia and the applicable provisions of the Advisers Act.

                [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

                                       8.
<PAGE>
         IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.

                                        GLADSTONE COMMERCIAL CORPORATION

                                        By:  /s/ DAVID GLADSTONE
                                             -----------------------------------
                                             David Gladstone
                                             Chairman of the Board and CEO

                                        GLADSTONE MANAGEMENT CORPORATION

                                        By:  /s/ TERRY BRUBAKER
                                             -----------------------------------
                                             Terry Brubaker
                                             President and COO

                                       9.

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