Document:

EX-10.4

Exhibit 10.4

PENTAIR, INC.

RESTORATION PLAN

As Amended and Restated Effective January 1, 2009

 

 

PENTAIR, INC.

RESTORATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1.	 	Name of Plan
	 	 	1	 
	SECTION 2.	 	General Definitions
	 	 	1	 
	SECTION 3.	 	Participation, Vesting And Benefit Service, And Rules Governing The Crediting Of Service,
	 	 	6	 
	 	 	Disability And The Determination Of Compensation And Final Average Compensation
	 	 	 	 
	(a)	 	Participation
	 	 	6	 
	(b)	 	Vesting
	 	 	7	 
	(c)	 	Benefit Service
	 	 	7	 
	(d)	 	Service Credits
	 	 	7	 
	(e)	 	Disability
	 	 	8	 
	(f)	 	Compensation
	 	 	10	 
	SECTION 4.	 	Payments In The Event Of Death Before The Benefit Commencement Date
	 	 	10	 
	SECTION 5.	 	Payment Of Retirement Benefits
	 	 	10	 
	SECTION 6.	 	Confidentiality, Covenants Not To Compete, And Non - Solicitation
	 	 	10	 
	(a)	 	General
	 	 	10	 
	(b)	 	Forfeiture and Other Remedies
	 	 	11	 
	SECTION 7.	 	Funding And Payment Of Benefits
	 	 	12	 
	(a)	 	General
	 	 	12	 
	(b)	 	Employer Company
	 	 	12	 
	(c)	 	Company Assumption of Liability
	 	 	12	 
	(d)	 	Participation by Other Group Members
	 	 	13	 
	SECTION 8.	 	Default
	 	 	13	 
	SECTION 9.	 	Administration Of The Plan
	 	 	13	 
	(a)	 	General
	 	 	13	 
	(b)	 	Committee
	 	 	14	 
	(c)	 	Discretion
	 	 	14	 
	(d)	 	Indemnity
	 	 	14	 
	(e)	 	Code Section 409A
	 	 	14	 
	(f)	 	Use of Professional Services
	 	 	14	 
	(g)	 	Communications
	 	 	15	 
	SECTION 10.	 	Effect of KEESA
	 	 	15	 
	SECTION 11.	 	Amendment Or Termination
	 	 	15	 
	(a)	 	General
	 	 	15	 
	(b)	 	Limitation on Power to Amend or Terminate
	 	 	15	 
	(c)	 	Change in Control
	 	 	16	 
	(d)	 	Continuation of Plan Provisions
	 	 	16	 
	SECTION 12.	 	Claims
	 	 	16	 
	(a)	 	Filing Claims
	 	 	16	 
	(b)	 	Decision on Claim
	 	 	17	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	(c)	 	Appeal of Denied Claim
	 	 	17	 
	(d)	 	Decision by Appeals Committee
	 	 	17	 
	SECTION 13.	 	Miscellaneous
	 	 	17	 
	(a)	 	Employer’s Rights
	 	 	17	 
	(b)	 	Interpretation
	 	 	18	 
	(c)	 	Withholding of Taxes
	 	 	18	 
	(d)	 	Offset for Amounts Due
	 	 	18	 
	(e)	 	Computational Errors
	 	 	18	 
	(f)	 	Requirement of Proof
	 	 	18	 
	(g)	 	Tax Consequences
	 	 	18	 
	(h)	 	Communications
	 	 	19	 
	(i)	 	Not Compensation Under Other Benefit Plans
	 	 	19	 
	(j)	 	Choice of Law
	 	 	19	 
	(k)	 	Savings Clause
	 	 	19	 
	(l)	 	Change in Control
	 	 	19	 
	SECTION 14.	 	Transition Rules
	 	 	19	 
	(a)	 	General
	 	 	19	 
	(b)	 	2004 Vested Participants Benefits
	 	 	19	 
	(c)	 	Excess 
	 	 	20	 

ii

 

PENTAIR, INC. RESTORATION PLAN

     SECTION 1. Name of Plan. This plan shall be known as the Pentair, Inc. Restoration Plan.

     SECTION 2. General Definitions. Unless the context requires otherwise, when used herein the terms
listed below, when capitalized or applied to such capitalized terms, shall have the following
meanings:

               (1) “Adjustment Factor” is the factor used in adjusting the Pension Amount to reflect the
period of time between the date a Participant has a Separation from Service and his or her Benefit
Commencement Date. The Adjustment Factor shall be the same adjustment factor applicable to such
Participant under the SERP.

               (2) “Administrator” is the Company.

               (3) “Beneficiary” is a person entitled to receive benefits, if any, payable under the Plan
after a former Participant’s death.

               (4) “Benefit Commencement Date” is the first day of the first calendar month as of which a
Participant’s Retirement Benefit is payable and shall be the same date as the Participant’s benefit
commencement date under the SERP.

               (5) “Benefit Service” is the number of Years of Service, beginning with the calendar year
which includes the individual’s Benefit Service Date, during which an individual completes 1,000
Hours of Service as an Eligible Employee. Notwithstanding anything herein to the contrary, Benefit
Service shall not be credited for any period after December 31, 2017.

               (6) “Benefit Service Date” is the date from and after which an individual may earn Benefit
Service, and shall be the same date as an individual’s benefit service date under the SERP.

               (7) “Benefit Service Percentage” is the sum of the percentages for each Year of Benefit
Service completed, with the percentage for each such year determined as described below and
dependent upon the individual’s age in whole years as of the first day of the calendar year in
which that Year of Benefit Service is completed.

	 	 	 	 	 
	Attained Age in Whole Years	 	 
	at Beginning of Relevant	 	 
	Year of Benefit Service	 	Percentage
	< 25
	 	 	4	%
	> 25 and < 35
	 	 	5.5	%
	> 35 and < 45
	 	 	7	%
	> 45 and < 55
	 	 	9	%
	> 55
	 	 	12	%

 

 

          Example: Employee A, date of birth January 25, 1954, has a Benefit Service Date of
May 1, 1999. Employee A remains an Eligible Employee and completes 1,000 Hours of Service in each
calendar year from and including 1999 through 2010. Employee A retires on March 1, 2011 and does
not complete 1,000 Hours of Service in that year. Employee A’s Benefit Service Percentage is 109%
computed as follows:

	 	 	 	 	 
	Year of Benefit Service	 	Percentage
	1999
	 	 	7	%
	2000 - 2009, inclusive
	 	 	90	%
	2010
	 	 	12	%
	 
	 	 	 	 
	Total
	 	 	109	%

     Notwithstanding the foregoing, a Participant’s Benefit Service Percentage shall not increase
after December 31, 2017.

               (8) “Change In Control” is a change in control of the Company as defined in the KEESA.

               (9) “Code” is the Internal Revenue Code of 1986, as amended. Any reference to specific
provision of the Code shall be deemed to refer to any successor provision thereto and the
regulations promulgated thereunder.

               (10) “Committee” is the Compensation Committee of the Board of Directors of the Company.

               (11) “Company” is Pentair, Inc., a Minnesota corporation, or any successor thereto.

               (12) “Compensation” is any item or class of remuneration or part thereof listed or described
in the left-hand column of Schedule 1 and not any such items listed or described in the right-hand
column of Schedule 1. In the event a remuneration item is not listed or described in Schedule 1,
the Administrator shall determine whether such item is included or excluded from Compensation by
taking into account the nature of the item and its similarity to an item which is so listed.

               (13) “Conversion Factor” is the factor used to convert the Pension Amount into the Monthly
Installment, and shall be the same as the conversion factor under the SERP.

               (14) “Covered Compensation” is Final Average Compensation reduced by Section 401(a)(17)
Compensation. Covered Compensation earned after December 31, 2017 shall not be counted under the
Plan.

2

 

               (15) “Covered Termination” is a covered termination, as defined in the KEESA, which entitles a
Participant to a termination payment pursuant to Sections 8 and 9(a) of the KEESA.

               (16) “Disabled” or “Disability” is a physical or mental condition, resulting from physical or
mental sickness or injury, which prevents the individual from engaging in any substantial gainful
activity, and which condition can be expected to last for a continuous period of not less than
twelve (12) months.

               (17) “Effective Date” of the Plan is January 1, 1999; the effective date of this amended and
restated Plan document is January 1, 2009.

               (18) “Eligible Employee” is an individual who is an eligible employee under the SERP.
Notwithstanding the foregoing, only individuals who are Eligible Employees on December 31, 2007
shall be entitled to be treated as an Eligible Employee for any period on or after January 1, 2008.

               (19) “Employer Company” is the Group member which employs a Participant as of the date the
Participant has a Separation from Service or otherwise terminates all Group employment due to death
or Disability.

               (20) “ERISA” is the Employee Retirement Income Security Act of 1974, as amended. Any
reference to a specific provision of ERISA shall be deemed to include any successor provision
thereto and the regulations promulgated thereunder.

               (21) “Final Average Compensation” is the average Compensation determined by averaging
Compensation in those five (5) consecutive calendar years out of the last ten (10) consecutive
calendar years, ending with the earlier of (i) the calendar year which ends coincident with or
immediately preceding the date the Participant has a Separation from Service, or otherwise ceases
to be an Eligible Employee, whichever occurs first, or (ii) the calendar year ending December 31,
2017, for which the average Compensation is the highest.

          Notwithstanding the immediately preceding paragraph, Final Average Compensation shall not be
less than the average Compensation for the sixty (60) months immediately preceding the date the
Participant has a Separation from Service or otherwise ceases to be an Eligible Employee, whichever
occurs first, determined as the sum of Compensation in the final calendar year of such employment
plus Compensation in each of the four (4) calendar years preceding the final calendar year of such
employment plus a percentage of the Compensation for the entire fifth calendar year preceding the
final calendar year of such employment; such percentage shall be determined as twelve minus the
number of full calendar months for which Compensation was payable in the final calendar year of
such employment divided by the number of months for which Compensation was paid in the fifth
calendar year preceding the final calendar year of such employment.

          If the Participant’s relevant Compensation history is for less than the stated period of time
(e.g., less than five (5) years; less than ten (10) years), then such actual period shall be
substituted in determining Final Average Compensation (e.g., if the individual has six (6) years of
Compensation history, the high five (5) consecutive years within such six (6) years shall be
used in determining the average; if the individual has three (3) years of Compensation
history, all such Compensation shall be used in determining the average).

3

 

               (22) “Group” is the Company and, except as prescribed by the Administrator, each other
corporation or unincorporated business which is a member of a controlled group of corporations or a
group of trades or businesses under common control (within the meaning of Code section 414(b) or
(c)) which includes the Company, but with respect to other business entities during only the
periods of such common control with the Company.

               (23) “Hour Of Service” is each hour which an individual is paid or entitled to payment from a
Group member for (i) the performance of duties as its employee and (ii) reasons related to such
employment but other than for the performance of duties, such as vacation, illness, jury duty,
military duty or leave of absence other than (x) payments made or due under a plan maintained
solely to comply with worker’s compensation, unemployment compensation, or disability insurance
laws, or (y) payments made solely for reimbursement of medical or medically related expenses;
provided, however, no more than 501 Hours of Service shall be credited under clause (ii)
immediately preceding for any single continuous period during which no duties as such an employee
are performed. An individual shall not receive duplicate Hour of Service credits for the same
period of service or absence.

          Regardless of the actual number of Hours of Service completed during a year, in determining
whether 1,000 Hours of Service have been completed during a calendar year an individual shall be
credited with forty-five (45) Hours of Service for each calendar week the individual is otherwise
credited with an Hour of Service pursuant to the immediately preceding paragraph.

               (24) “KEESA” is the Key Executive Employment and Severance Agreement, if any, in effect
between the Company and the Participant.

               (25) “Monthly Installment” is a monthly payment, commencing as of the Participant’s Benefit
Commencement Date, payable for a term certain of one hundred eighty (180) consecutive months, and
shall be determined by dividing the Participant’s Pension Amount by the Conversion Factor, with
such monthly payment rounded to the nearest whole dollar amount.

               (26) “Participant” is an Eligible Employee who has become a participant under the SERP. Once
an individual becomes a Participant, he or she shall remain a Participant, except as provided in
Section 3, until the first to occur of his or her death, Disability, or Separation from Service;
provided, however, if the individual has a non-forfeitable right to a Retirement Benefit as of the
date he or she incurs such an event (determined without regard to the forfeiture provision of
Section 6(b) unless such section has been actually enforced as to such individual), then absent
death the individual shall remain a Participant until the individual has received his or her entire
Retirement Benefit or the Retirement Benefit has been forfeited as provided for in Section 6(b).

4

 

               (27) “Participation Date” is an Eligible Employee’s participation date under the SERP.

               (28) “Pension Amount” is an amount equal to the Participant’s Covered Compensation multiplied
by his or her Benefit Service Percentage, with such amount then multiplied by the Adjustment Factor
if the Participant survives to his or her Benefit Commencement Date.

               (29) “Pension Plan” is the Pentair, Inc. Pension Plan, or any successor plan thereto.

               (30) “Plan” is the retirement plan herein described. When this term is modified by or with
reference to a certain date (e.g., Plan as in effect before year XXXX), it shall refer to the Plan
as described in the Plan document in effect for the period referenced.

               (31) “Retirement Benefit” is the monthly retirement benefit payable under the Plan as the
Monthly Installment.

               (32) “Section 401(A)(17) Compensation” is the amount which would constitute Final Average
Compensation if the determination of Final Average Compensation was limited by the provisions of
Code section 401(a)(17). Except as modified pursuant to the Administrator’s discretion as provided
for under section 3(f)(2), for this purpose Code section 401(a)(17) shall be applied as under the
Pension Plan, regardless of whether the Participant concerned is covered by the Pension Plan or any
other tax-qualified defined benefit plan sponsored by a Group member.

               (33) “Separates from Service” or “Separation from Service” is the termination of employment as
an employee, from all business entities that comprise the Group, for reasons other than death or
Disability. A Participant will be deemed to have incurred a Separation from Service when the level
of bona fide services performed by the Participant for the Group permanently decreases to a level
equal to twenty percent (20%) or less of the average level of services performed by the Participant
for the Group during the immediately preceding thirty-six (36) month period (or such lesser period
of service). Notwithstanding the foregoing, a Participant on a bona fide leave of absence from the
Group shall be considered to have incurred a Separation from Service no later than the six (6)
month anniversary of the absence (or twenty-nine (29) months in the event of an absence due to a
medically determinable physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than six (6) months, where such
impairment causes the Participant to be unable to perform the duties of his or her position or a
substantially similar position) or the end of such longer period during which the individual has
the right by law or agreement to return to employment upon the expiration of the leave.
Notwithstanding the foregoing, if following the Participant’s termination of employment from the
Group the Participant becomes a non-employee director or becomes or remains a consultant to the
Group, then the date of the Participant’s Separation from Service may be delayed until the
Participant ceases to provide services in such capacity to the extent required by Code section
409A.

5

 

               (34) “SERP” is the Pentair, Inc. Supplemental Executive Retirement Plan as amended and
restated effective January 1, 2009, but without regard to Appendix A thereto.

               (35) “Spouse” is an individual, of a sex opposite to that of a Participant, whose marriage to
a Participant is recognized under the laws of the United States (or one of the United States) or
any other generally recognized jurisdiction.

               (36) “Year of Service” is a calendar year in which an individual completes 1,000 Hours of
Service.

     SECTION 3. Participation, Vesting And Benefit Service, And Rules Governing The Crediting Of
Service, Disability And The Determination Of Compensation And Final Average Compensation.

          (a) Participation.

               (1) General. The primary purpose of the Plan is to provide supplemental retirement
benefits to Eligible Employees to reflect the loss of pension benefits under tax-qualified defined
benefit plans sponsored by a member or members of the Group due to the provision of Code section
401(a)(17). It is intended that the employees covered by the Plan constitute a select group of
management or highly paid employees, within the meaning of ERISA section 201(2), of the Group.
Except as provided in Section 3(d)(6), in the event an individual who is not within such a select
group becomes covered by the Plan, then notwithstanding any Plan provision to the contrary such
individual’s participation in the Plan shall immediately cease and retroactively he or she shall be
treated as never having been covered by the Plan.

          Because the Plan is described in ERISA section 201(2), and other ERISA provisions
corresponding thereto, certain provisions of ERISA do not apply to it and the benefits earned
thereunder, including the provisions of Parts 2, 3, and 4 of Title I of ERISA relating to
participation and vesting, funding, and fiduciary responsibilities, respectively. In addition, the
Plan is not a tax-qualified plan under the Code, and thus the Plan and benefits paid hereunder are
not subject to certain rules which apply to benefits payable under such qualified plans, including
the manner in which a Participant’s or Beneficiary’s Plan benefits are subject to income tax.

               (2) Repeal of Code Section 401(a)(17). Notwithstanding any other provision of the
Plan to the contrary, if Code section 401(a)(17) is repealed and no similar or corresponding
provision is immediately enacted to replace it, then until further action by the Committee, if any,
the Covered Compensation and Benefit Percentages of each Participant shall be frozen as of the end
of the calendar year which includes the effective date of such repeal; provided, however, upon a
Change in Control this Section 3(a)(2) shall not apply to a Participant so long as such Participant
may incur a Covered Termination with respect to that Change in Control and shall not apply
thereafter to a Participant who incurs a Covered Termination with respect to that Change in
Control.

               (3) Participation Freeze. Notwithstanding the foregoing, only individuals who are
Eligible Employees on December 31, 2007 shall be entitled to participate in
the Plan. Accordingly, any individual who is hired on or after January 1, 2008, will not be
covered by the Plan.

6

 

          (b) Vesting.

               (1) General. Except as otherwise expressly provided herein, all benefits otherwise
payable under the Plan to or with respect to a Participant shall be forfeited if the Participant
has a Separation from Service before completing five (5) Years of Service.

               (2) Death or Disability. A Participant who dies or becomes Disabled while employed by
a Group Member shall be fully vested in his or her Retirement Benefit.

               (3) Automatic Acceleration of Vesting. If a Participant has a Covered Termination
under his or her KEESA, then immediately before such termination the Participant shall be
considered fully vested in his or her Retirement Benefit.

               (4) Other Forfeiture. Notwithstanding the foregoing provisions of this Section 3(b)
or the number of Years of Service completed or deemed completed, all benefits otherwise payable
under the Plan to or with respect to a Participant or former Participant shall be subject to
forfeiture to the extent provided in Section 6(b).

          (c) Benefit Service.

               (1) Death. An individual who ceases to be a Participant and terminates employment
from the Group by reason of death shall be considered to have completed a Year of Service in the
year of death for purposes of determining the Benefit Service earned by such individual, regardless
of the Hours of Service credited for such year.

               (2) Benefit Service Upon a Covered Termination. If a Participant has a Covered
Termination under his or her KEESA, then immediately before such termination the Participant shall
be credited with additional Years of Service for determining Benefit Service equal to the lesser of
(i) three (3) and (ii) the greater of (x) seven (7) minus the Benefit Service credited to such
Participant under the Plan, determined without regard to this Section 3(c)(2), as of the first day
of the Plan Year beginning immediately after such termination and (y) zero (0); provided, however,
the Benefit Percentage for each such additional year of service, if any, shall be determined based
upon what would be the Participant’s attained age in whole years as of January 1 of each calendar
year beginning after the date of the Covered Termination corresponding to such additional year of
service (e.g., if the Participant, date of birth March 3, 1947, incurs a Covered Termination in the
year 2000 and receives three (3) additional years of service hereunder, then the aggregate Benefit
Percentage for such years shall be 30% (9% + 9% + 12%). The Benefit Service provided for by this
Section 3(c)(2) shall be in addition to a Participant’s Benefit Service under the Plan determined
without regard to this Section 3(c)(2).

          (d) Service Credits.

               (1) General. Subject to other Plan provisions, a Participant’s Years of Service shall
be based upon the completion of 1,000 Hours of Service during a calendar year.

7

 

               (2) No Vesting Service Before Participation Date. No Year of Service completed before
the calendar year which includes an individual’s Participation Date shall be considered for
purposes of applying Section 3(b)(1).

               (3) Non-Duplication of Service Credit. In no event shall a Participant be credited
for more than one (1) Year of Service with respect to any one (1) calendar year. In the event
service credit for a period must be provided under the Plan by reason of applicable law (e.g.,
USERRA) and such credit duplicates service credit otherwise provided under the Plan, then the
service crediting provision which is most beneficial to the Participant under the circumstances
shall be applied but without duplication of service credit for the same period.

               (4) Leaves of Absence. In the sole discretion of the Committee, a Participant may be
granted service credit for a period of absence from active employment due to illness, personal
circumstances, or such other events as the Committee may authorize under the circumstances and in
such amount or manner of service credit as the Committee deems appropriate under the circumstances,
but in no event shall such service credit duplicate any such credit otherwise provided under the
Plan for the same period or extend beyond the date the Participant Separates from Service. Unless
otherwise expressly provided by the Committee, however, in no event shall a Participant earn
Benefit Service during the period of such absence.

               (5) Break in Service. Except as determined in the sole discretion of the Committee,
if a Participant incurs a Separation from Service before he or she has a nonforfeitable right to a
Retirement Benefit by reason of Section 3(b)(1) and thereafter returns to employment as an Eligible
Employee, all service credits earned prior to such termination shall be ignored and, if the
individual again becomes a Participant, the individual’s service credits under the Plan shall be
determined as if he or she had not been previously employed by any Group member.

               (6) Transfer. If an individual becomes a Participant and subsequently, and without a
Separation from Service, becomes employed as other than an Eligible Employee, then upon the
occurrence of such event the individual shall cease all active participation under the Plan (e.g.,
he or she will no longer accrue benefits under the Plan).

          (e) Disability.

               (1) General. This Section describes special service credit and other rules which
apply to a Participant who becomes Disabled before age sixty-five (65) and while he or she is an
Eligible Employee (i.e., a “Disabled Participant”). In no event shall a Participant be considered
Disabled until and unless he or she supplies all information and takes all acts (e.g., submits to
medical examinations) reasonably requested by the Administrator to establish the fact of his or her
Disability.

               (2) Credit for Benefit Service. A Disabled Participant shall receive credit for
Benefit Service during the Disability period. This service credit shall be determined, without
duplication of other service credit provided under the Plan for the same period, based upon the
complete whole years (with fractional years being rounded to the nearest whole year) which elapse
during the Disability period. The Disability period shall begin on the date of

8

 

Disability as determined by the Administrator, taking into account any applicable waiting
period (e.g., end of short-term disability period) prescribed by the Administrator for this
purpose, and shall end on the earliest of (i) the date the Participant is no longer Disabled or is
considered not to be Disabled, (ii) the date the Disabled Participant attains age sixty-five (65),
and (iii) the date of the Participant’s death.

               (3) Covered Compensation. Except as described in the immediately following paragraph,
a Participant’s Covered Compensation, determined as of the beginning of the Disability period,
shall not change during the Disability period, and if a Disabled Participant recovers from the
Disability before attaining age sixty-five (65) and returns to employment as an Eligible Employee,
Covered Compensation shall be determined as otherwise provided under the Plan and by assuming the
Participant’s (x) Compensation during the Disability period was equal to the Participant’s Final
Average Compensation as of the beginning of the Disability period and (y) Section 401(a)(17)
Compensation during the Disability period was equal to the Participant’s Section 401(a)(17)
Compensation as of the beginning of the Disability period.

          Notwithstanding the immediately preceding paragraph, a Disabled Participant’s Covered
Compensation shall be decreased during the Disability period if and to the extent such
Participant’s final average compensation or similar amount taken into account under the Pension
Plan (or any other tax-qualified defined benefit plan sponsored by a Group member) increases due to
the imputation of compensation, during the Disability period and by reason of such disability, for
purposes of determining retirement benefits under such plan. In such event, the Participant’s
Covered Compensation during the Disability period shall be decreased by the same amount by which
final average compensation under such other plan is so increased, and clause (y) of the immediately
preceding paragraph shall be applied by substituting the phrase “as of the end of the Disability
period” for the phrase “as of the beginning of the Disability period.”

               (4) Payment of Disability Benefit. A Disabled Participant shall be entitled to a
Retirement Benefit commencing as of the first day of the month next following the Participant’s
attainment of age sixty-five (65), even if such individual recovers from such Disability prior to
such date.

               (5) Death During the Disability Period. If a Disabled Participant dies during the
Disability period or the Disability ends by reason of attainment of age sixty-five (65) and the
Disabled Participant dies before benefits commence, a death benefit shall be paid after such
Disabled Participant’s death to the extent provided in Section 4.

               (6) Proof of Disability. The Administrator shall determine whether and when a
Participant is Disabled and may adopt such rules and procedures as it deems appropriate for this
purpose. Once a Participant is determined to be Disabled, the Administrator may require the
Participant to verify that he or she remains Disabled, and such verification may include requiring
the Participant to submit to one or more medical examinations. If a Participant fails to supply
information or take action as requested by the Administrator in order to determine whether the
Participant is or remains Disabled, the Participant shall not be considered Disabled or shall be
considered to have recovered from the Disability, as the case may be, except that in no event shall
benefits commence prior to the Participant’s age sixty-five (65).

9

 

          (f) Compensation.

               (1) General. Compensation, Final Average Compensation and Section 401(a)(17)
Compensation shall be determined solely with respect to such remuneration earned from and after a
Participant’s Benefit Service Date and during the period of employment as an Eligible Employee. In
the event a Participant is employed with a Group member before becoming an Eligible Employee or,
subject to the provisions of Section 3(d)(6), after ceasing to be an Eligible Employee, the
Administrator shall determine such compensation allocable to periods of such employment in each
capacity in such manner as it deems reasonable in its sole discretion under the circumstances
(e.g., allocation of MIP bonuses for the year in which an individual is promoted to an Eligible
Employee).

               (2) Determination. The amount of Compensation, Final Average Compensation and Section
401(a)(17) Compensation shall be as determined from the books and records of the employing Group
member and shall be determined on the basis of when such remuneration is paid to the Participant;
provided, however, items of remuneration or portions thereof may be determined on the basis of when
the item is earned (in which case the item or portion shall not be again counted when paid) by the
Participant if and to the extent the Administrator determines such treatment is appropriate under
the circumstances (e.g., including MIP bonuses earned during the final year of employment as
Compensation before such bonus is actually paid; including an amount deferred at the election of
the Participant as Compensation when it otherwise would have been paid but for such election).

     SECTION 4. Payments In The Event Of Death Before The Benefit Commencement Date. A pre-retirement
death benefit shall be payable under the same events, at the same time, in the same way and to the
same persons and in the same proportions, and subject to the same adjustments, terms and conditions
as provided for the pre-retirement death benefit payable under Section 4 of the SERP, but solely
with respect to the Pension Amount hereunder.

     SECTION 5. Payment Of Retirement Benefits. A Retirement Benefit shall be payable under the same
events, at the same time, in the same way and to the same persons and in the same proportions, and
subject to the same adjustments, terms and conditions as provided for the retirement benefit
payable under Section 5 of the SERP, but solely with respect to the Pension Amount hereunder.

     SECTION 6. Confidentiality, Covenants Not To Compete, And Non-Solicitation.

          (a) General. Each Eligible Employee acknowledges that as a key executive of the Company or
other Group member he or she has become familiar and will continue to be familiar with the trade
secrets, know-how, executive personnel, strategies, other confidential information and data of the
Group and its members. Each Eligible Employee further acknowledges that the financial security of
the Group and the Company’s shareholders depends in large part on the efforts of executives like
the Eligible Employee, and that a basic premise for the Plan is to compensate such individuals for
their efforts in causing the Group to grow and prosper, thereby helping to insure the Group’s
financial future for years well beyond the time the individual leaves. Therefore, in consideration
of the extension of the Plan to an Eligible Employee, he or she agrees that (i) after Termination
of Employment he or she shall not (directly

10

 

or indirectly), without the Company’s prior written
consent, use or disclose to any other person any confidential information or data concerning the
Company or other Group members or former Group members, and (ii) for a period of three (3) years
from Termination of Employment he or she shall not (directly or indirectly) and without the
Company’s prior written consent:

	 	(1)	 	own, manage, control, participate in, consult
with or render services of any kind for any concern which engages in a
business which is competitive with any business being conducted, or
contemplated being conducted, by the Group as of the date of
Termination of Employment;
	 
	 	(2)	 	become an employee or agent of any publicly
traded corporation or other entity, or any division or subsidiary of
such a corporation or entity, where more than 5% of such organization’s
business is in competition with any business being conducted, or
contemplated being conducted, by the Group as of the date of
Termination of Employment, unless the annual sales of such organization
do not exceed $40 million;
	 
	 	(3)	 	participate in any plan or attempt to acquire
the business or assets of the Group or control of the voting stock of
any member thereof, or in any manner interfere with the control of the
Company, whether by friendly or unfriendly means; or
	 
	 	(4)	 	induce or attempt to induce any individual to
leave the employ of the Company or other Group member or hire any such
individual who approaches him or her for employment.

If at the time of enforcement of the terms of this Section 6, a court shall hold that the duration,
scope or area of restriction stated herein are unreasonable under the circumstances then existing,
the Eligible Employee agrees that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope, or area.

          (b) Forfeiture and Other Remedies. Upon any breach of the covenants described in this
Section, all benefits then due under the Plan (and all benefits which otherwise would be due under
the Plan in the future) to the Eligible Employee or his or her beneficiaries shall be forfeited.
The covenants described in this Section run in favor of and shall be enforceable by the Company or
its assigns. The Company shall be entitled to all legal and equitable remedies to prevent, cure
and compensate for a breach of the covenants described herein, without posting of bond, and all
such remedies shall be in addition to such forfeiture. By accepting coverage under the Plan, each
Eligible Employee acknowledges and agrees that his or her breach or breach of the covenants
described in this Section 6 will result
in irreparable harm to the Company. Therefore, to remedy or prevent such a breach the Company
shall be entitled to enjoin the Eligible Employee from taking or failing to take such actions as
will or which may be reasonably considered to cause such a breach, including an injunction to
prevent the Eligible Employee from breaching the terms of this Section 6.

11

 

     SECTION 7. Funding And Payment Of Benefits.

          (a) General. Except as expressly provided herein, the Plan is an unfunded deferred
compensation arrangement. No Group member shall establish or is required to establish any trust to
fund benefits provided under the Plan, and no such member shall establish or is required to
establish any type of earmarking or segregation of its assets to provide for such benefits. In the
event of default of a Group member’s obligations hereunder, each Participant and his or her
beneficiaries shall have no greater entitlements or security than does a general creditor of the
Group member.

          (b) Employer Company. Except as otherwise expressly provided herein, the Employer Company
shall pay or provide for the payment of benefits hereunder. If the Employer Company does not
timely pay such benefits, then, except as described in subsection (c) immediately following, the
sole recourse of the claimant Participant or Beneficiary is against such Employer Company and no
other member of the Group shall be responsible to pay or provide for the payment of such benefits
or liable for the nonpayment thereof.

          (c) Company Assumption of Liability. Under the following circumstances, the Company shall
assume and be responsible for the payment of benefits hereunder even though it is not the Employer
Company:

	 	(i)	 	the Employer Company is not participating in
the Plan as of the date benefits hereunder are scheduled to commence to
a Participant or his or her beneficiaries;
	 
	 	(ii)	 	the Employer Company does not timely pay or
provide for the payment of benefits hereunder and such failure is not
corrected within thirty (30) days; or
	 
	 	(iii)	 	the Participant has a Termination of
Employment due to a sale of the stock (or rights analogous to stock) or
assets of a Group member, and the Participant has earned a
non-forfeitable Retirement Benefit (determined without regard to the
forfeiture provision of Section 6(b) unless such section has been
actually enforced as to such individual) on or before the date of such
termination.

The Company’s obligation under paragraph (i) immediately preceding shall cease when the Employer
Company agrees to participate in the Plan. The Company’s obligation under
paragraph (ii) immediately preceding shall cease when the Employer Company is current on its
payment of benefits. The Company’s obligation under paragraph (iii) immediately preceding shall
not come into effect (or if previously effective, shall cease) as of the date the person who
purchased such stock or assets, or a person who controls such person, agrees in writing to assume
the liability for the benefits the Participant has then earned hereunder; provided, however, that
upon a Change in Control the Company, any person in control of the Company, and the Employer
Company if not the Company, shall be jointly and severally responsible for payment of benefits
hereunder regardless of the other provisions of this Section 7 and the assumption of
such liability
by another person shall not discharge the Company, any person in control of the Company, and such
Employer Company from liability hereunder.

12

 

          (d) Participation by Other Group Members. A member of the Group may join in this Plan by
adopting a written resolution of its board of directors, and delivering such resolution to the
Administrator. Any Group member, other than the Company, may end its participation under the Plan
by a written resolution of its board of directors delivered to the Committee, provided, however,
that no such resolution ending participation shall be effective until thirty (30) days after it is
received by the Administrator. By agreeing to join in the Plan, each Group member agrees to pay or
provide for the payment o£ benefits hereunder to those Participants and their beneficiaries with
respect to whom such member is the Employer Company. No such member, other than the Company, shall
have any power or authority to terminate, amend, administer, modify, or interpret the Plan, all
such powers being reserved to the Administrator and the Committee.

     SECTION 8. Default. Should the Employer Company (and the Company to the extent provided for in
Section 7(c)) fail to pay when due any benefit under the Plan to or with respect to a Participant
or Beneficiary and such failure to pay continues for a period of sixty (60) days from receipt of a
written notice of nonpayment from the affected Participant or Beneficiary, the Employer Company
(and the Company to the extent provided in Section 7(c)) shall be in default hereunder and shall
pay to the Participant or Beneficiary the benefits past due and the reasonable costs of collection
of any such amount, including reasonable attorney’s fees and costs; provided, however, if the
Administrator in good faith disputes the amount of such benefit due or whether a person is entitled
to such a benefit, then to the extent and duration of such a dispute the Employer Company (and the
Company to the extent provided for in Section 7(c)) shall not be considered in default hereunder;
provided further, however, a Participant for whom a KEESA becomes operative due to a Change in
Control, and regardless of whether such Participant incurs a Covered Termination, shall be entitled
to payment or reimbursement of such costs of collection as provided under Section 13(l).

     SECTION 9. Administration Of The Plan.

          (a) General. The Company, through its designated officers and agents, shall be the
Administrator and thereby handle the day-to-day administration of the Plan and such other
administrative duties as
are allocated to the Administrator under the Plan. All such administrative duties and powers shall
be performed by and rest in the Company’s Senior Vice President of Human Resources (or persons
designated by such Senior Vice President). Except as otherwise provided under the Plan, the
Administrator shall:

	 	(1)	 	determine the rights and benefits of
individuals and other persons under the Plan;
	 
	 	(2)	 	interpret, construe, and apply the provisions
of the Plan;
	 
	 	(3)	 	process and direct the payment of Plan
benefits;
	 
	 	(4)	 	adopt such forms as it deems appropriate or
desirable to administer the Plan and pay benefits thereunder; and

13

 

	 	(5)	 	adopt such rules and procedures as it deems
appropriate or desirable to administer the Plan.

          (b) Committee. The Committee shall exercise such powers as are allocated to it under the
Plan and shall be empowered to direct other persons as to Plan administration, and its directions
shall be followed to the extent consistent with the powers delegated to the Committee and not
otherwise contrary to the provisions of the Plan.

          (c) Discretion. In exercising their powers and duties under this Section, and their other
powers and duties granted under the Plan, the Committee and the Administrator and each member or
delegate thereof is granted such discretion as is appropriate or necessary to carry out such duties
and powers. This discretion necessarily follows from the fact that the Plan does not, and is not
intended to, prescribe all rules necessary to administer the Plan or anticipate all circumstances
or events which may arise in the course of such administration.

          (d) Indemnity. No member of the Committee or person acting on behalf of the Administrator
shall be subject to any liability with respect to the performance of his or her duties under the
Plan or a related document unless he or she acts fraudulently or in bad faith. The Company shall
indemnify and hold harmless the members of the Committee and the Company’s officers and employees,
and the officers and employees of another Group member, from any liability with respect to the
performance of their duties under the Plan, unless such duties were performed fraudulently or in
bad faith. Such indemnification shall cover any and all reasonable attorneys’ fees and expenses,
judgments, fines and amounts paid in settlement, but only to the extent such amounts are (i)
actually and reasonably incurred, (ii) not otherwise paid or reimbursable under an applicable
employer paid insurance policy, and (iii) not duplicative of other payments made or reimbursements
due by the Company or its affiliates under other indemnity agreements.

          (e) Code Section 409A. The Plan shall be administered, and the Administrator and the
Committee shall exercise their discretionary authority under the Plan, in a manner consistent with
Code section 409A and Treasury Regulations and other applicable guidance thereunder. Any
permissible discretion to accelerate or defer a Plan payment under such Regulations, the power
which to exercise is not otherwise described expressly in the Plan, shall be exercised by the
Committee. Any other discretion with respect to, or which directly or indirectly impact, the
application of Code section 409A, the exercise of which is not expressly lodged in the Committee,
shall be exercised by the Administrator. In the event the matter over which such discretion may be
exercised relates to a Committee member or a delegate of the Administrator, or such member or
delegate is otherwise unable to freely exercise such discretion, such member or delegate shall not
take part in the deliberations and decisions regarding that matter.

          (f) Use of Professional Services. The Administrator and the Committee may obtain the
services of such attorneys, accountants, record keepers or other persons as it deems appropriate,
any of whom may be the same persons who are providing services to the Company or other Group
member. In any case in which the Administrator and the Committee utilizes such services, it shall
retain exclusive discretionary authority and control over the administration and operation of the
Plan.

14

 

          (g) Communications. Requests, claims, appeals, and other communications related to the
Plan shall be in writing and shall be made by transmitting the same via the U.S. Mail to the
Company’s Senior Vice President of Human Resources, at the Company’s corporate headquarters
address.

     SECTION 10. Effect of KEESA. If a Participant incurs a Covered Termination, then as or with
respect to that Participant:

	 	(i)	 	notwithstanding the provisions of Section 6,
the scope or duration (or both) of such Participant’s covenants under
Section 6 shall be no greater or longer than similar covenants provided
for in such Participant’s KEESA and, to the extent there are no such
similar covenants in such Participant’s KEESA, then Section 6 shall be
void and of no force and effect;
	 
	 	(ii)	 	if the Participant is not fully vested in his
or her accrued benefit under the Pension Plan when he or she so
terminates employment, such Participant’s Pension Amount as of the
Benefit Commencement Date shall be increased by the present value of
such non-vested accrued benefit; such present value shall be determined
(x) as of the Benefit Commencement Date, (y) by using the amount of
such non-vested accrued benefit payable as of the Benefit Commencement
Date as calculated under the terms of the Pension Plan and by assuming
the Participant was eligible to
receive such non-vested accrued benefit under the Pension Plan on and
after the attainment of age fifty-five (55), and (z) by using UP 84
mortality and seven percent (7%) interest; and
	 
	 	(iii)	 	in the case of any conflict between the terms
and provisions of this Plan and the terms and provisions of such
Participant’s KEESA, the terms of such Participant’s KEESA shall
control to the extent more beneficial to such Participant, and the
obligations of the Company under such KEESA shall be in addition to any
of its obligations under the Plan.

     SECTION 11. Amendment Or Termination.

          (a) General. This Plan may be terminated or amended, in whole or in part, at any time by
written resolution of the Board of Directors of the Company. Any such action may apply to the Plan
as a whole, or any individual Participant or group of Participants. Except as provided in Section
11(b) and (c), any such action may reduce or eliminate (retroactively or prospectively, or both)
any benefits under the Plan that otherwise would be payable but for such action.

          (b) Limitation on Power to Amend or Terminate.

               (1) Vested Participants. As to any Participant who has earned a non-forfeitable
Retirement Benefit (determined without regard to Section 6) before the date the Plan

15

 

is amended or
terminated (or, if later, before the date such action is effective), no such amendment or
termination shall (without the specific written consent of the Participant):

	 	(i)	 	reduce the Retirement Benefit earned by the
Participant;
	 
	 	(ii)	 	reduce the amount of Plan benefits then being
paid to a Participant or change the form in which such benefits are
being paid; or
	 
	 	(iii)	 	terminate, amend, or otherwise change the
liability of the Company, Employer Company, or other person to pay or
provide for the payment of Retirement Benefits protected under clauses
(i) and (ii) immediately preceding.

               (2) Beneficiaries. As to any former Participant who has died before the date the Plan
is amended or terminated (or, if later, before the date such action is effective), no such
amendment or termination shall (without the specific written consent of such Participant’s
Beneficiary):

	 	(i)	 	reduce the amount of Plan benefits to which
such Beneficiary is entitled or change the form in which benefits are
payable; or
	 
	 	(ii)	 	terminate, amend, or otherwise change the
liability of the Company, Employer Company, or other person to pay or
provide
for the payment of benefits protected under clause (i) immediately
preceding.

          (c) Change in Control. In addition to the limitations described in Section 11(b), upon a
Change in Control for which a Participant’s KEESA becomes operative and under which a Covered
Termination has or may occur, then without the specific written consent of the Participant (or
Beneficiary in the event of the Participant’s death), the Plan as in existence immediately prior to
the Change in Control may not be (directly or indirectly) terminated, amended, or otherwise changed
in any respect during the three year period beginning with the date of the Change in Control, but
only with respect to such individual. The prohibition herein described shall apply to any action
which affects or is intended to affect the terms and provisions of the Plan as then in effect
during such three year period, regardless of when made or effective.

          (d) Continuation of Plan Provisions. To the extent that any Plan benefits, and rights and
obligations allocable thereto, are protected under Section 11(b) and (c), then as to the persons
described in Section 11(b) and (c) the Plan shall continue in force and effect, as if no such
amendment or termination had occurred, until such benefits are fully paid or fully provided for to
such persons.

     SECTION 12. Claims.

          (a) Filing Claims. A Participant or Beneficiary (or a person who in good faith believes he
or she is a Participant or Beneficiary, i.e., a “claimant”) who believes he or she has been wrongly
denied benefits under the Plan may file a written claim for benefits with the
Administrator.
Although no particular form of written claim is required, no such claim shall be considered unless
it provides a reasonably coherent explanation of the claimant’s position.

16

 

          (b) Decision on Claim. The Administrator shall in writing approve or deny the claim within
sixty (60) days of receipt, provided that such sixty (60) day period may be extended for reasonable
cause by notifying the claimant. If the claim is denied, in whole or in part, the Administrator
shall provide notice in writing to the claimant, setting forth the following:

	 	(1)	 	the specific reason or reasons for the denial;
	 
	 	(2)	 	a specific reference to the pertinent Plan
provisions on which the denial is based;
	 
	 	(3)	 	a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material is necessary; and
	 
	 	(4)	 	the steps to be taken if the claimant wishes to
appeal the decision to the Committee.

          (c) Appeal of Denied Claim.

               (1) Filing Appeals. A claimant whose claim has been denied in whole or in part may
appeal such denial to the Committee by filing a written appeal with the Administrator within sixty
(60) days of the date of the denial. A decision of the Administrator which is not appealed within
the time herein provided shall be final and conclusive as to any matter which was presented to the
Administrator.

               (2) Rights on Appeal. A claimant (or a claimant’s duly authorized representative) who
appeals the Administrator’s decision shall, for the purpose of preparing such appeal, have the
right to review any pertinent Plan documents, and submit issues and comments in writing to the
Committee.

          (d) Decision by Appeals Committee. The Committee shall make a final and full review of any
properly appealed decision of the Administrator within sixty (60) days after receipt of the appeal,
provided that such period may be extended for reasonable cause by notifying the claimant. The
Committee’s decision shall be in writing and shall include specific reasons for its decisions and
specific references to the pertinent Plan provisions on which its decision is based.

     SECTION 13. Miscellaneous.

          (a) Non-Alienation.. Except as otherwise provided under the Plan or as required under
applicable law, unless otherwise determined by the Administrator, no right or benefit under this
Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void, and no such right or benefit shall be in any
manner liable for or subject to the debts, contracts, liabilities, engagements, or torts of any
person entitled to such right or benefit, and no such right or benefit shall be subject to
garnishment, attachment, execution, or levy of any kind.

17

 

          (b) Employer’s Rights. The right of a Group member to discipline or discharge employees or
to exercise rights related to the tenure of employment shall not be adversely affected in any
manner by reason of the existence of the Plan or any action hereunder.

          (c) Interpretation. Section and subsection headings are for convenient reference only and
shall not be deemed to be part of the substance of this instrument or in any way to enlarge or
limit the contents of any
Section or subsection. Masculine gender shall include the feminine, and vice versa, and singular
shall include the plural, and vice versa, unless the context clearly requires otherwise.

          (d) Withholding of Taxes. All benefits earned under the Plan or the payment of such
benefits, as the case may be, shall be subject to withholding for federal, state, local and other
taxes as required by law. If and to the extent any such withholding is required before such
benefits are paid to the Participant or Beneficiary, such withholdings shall be made from amounts
otherwise payable to such person by a Group member (e.g., salary). If no such other amounts are
available to satisfy such withholdings, the Company may reduce the Participant’s Retirement Benefit
by the amount needed to pay the Participant’s portion of such tax, plus, with respect to a
distribution for FICA taxes, an amount equal to the withholding taxes due under federal, state or
local law resulting from the payment of such FICA tax, and an additional amount to pay the
additional income tax at source on wages attributable to the pyramiding of the section 3401 wages
and taxes, but no greater than the aggregate of the FICA amount and the income tax withholding
related to such FICA amount.

          (e) Offset for Amounts Due. A Participant’s Retirement Benefit may be reduced by one or
more offsets to repay any amounts then due and owing by the Participant to a Group member, unless
another means of repayment is agreed to by the Administrator. Except for the right to immediate
offset by reduction of the vested Pension Amount for an amount up to $5,000, or such higher amount
as allowed in Treasury Regulations under Code section 409A or other applicable guidance, no such
offset shall be made before an amount is scheduled to be paid to the Participant or Beneficiary and
the amount then offset shall not exceed the amount that would be then otherwise paid.

          (f) Computational Errors. In the event mathematical, accounting, actuarial or other errors
are made in administration of the Plan due to mistakes of facts, the Administrator may make
equitable adjustments, which may be retroactive, to correct such errors. Such adjustments shall be
conclusive and binding on all Participants and Beneficiaries.

     (g) Requirement of Proof. In discharging their duties and responsibilities under the Plan,
the Administrator and the Committee may require proof of any matter concerning this Plan, and no
person shall acquire any rights or be entitled to receive any benefits under this Plan until such
proof is furnished.

     (h) Tax Consequences. Neither the Company nor any other Group member represents or
guarantees that any particular federal, foreign, state or local income, payroll, or other tax
consequence will result from participation in this Plan or payment of benefits under the Plan.

18

 

     (i) Communications The Administrator shall prescribe the forms of communication, including forms for benefit
application and the like, with respect to the Plan as it deems appropriate. Any such communication
and assent or consent thereto may be handled by electronic means.

     (j) Not Compensation Under Other Benefit Plans. No amounts paid or payable to a
Participant under the Plan shall be deemed to be salary or compensation for purposes of any other
employee benefit plan of the Company or any other Group member except as and to the extent
otherwise specifically provided in such other plan.

          (k) Choice of Law. To the extent not preempted by ERISA or any other federal statute, the
construction and interpretation of the Plan shall be governed by the laws of the State of
Minnesota, without reference to conflict of law principles thereof.

          (l) Savings Clause. Should any valid federal or state law or final determination of any
agency or court of competent jurisdiction affect any provision of this Plan, the Plan provisions
not affected by such determination shall continue in full force and effect.

          (m) Change in Control. A Participant for whom a KEESA becomes operative due to a Change in
Control, and regardless of whether such Participant incurs a Covered Termination, shall be entitled
to adjudicate any dispute regarding his or her benefits or rights and entitlements under the Plan,
after compliance to the extent necessary with the claim procedures under Section 12, in the forums
and venues as provided in Section 22 of the KEESA, and shall be entitled to payment or
reimbursement of costs and expenses related to such adjudication as provided in Section 15 of the
KEESA.

     SECTION 14. Transition Rules.

          (a) General. Except as described in this Section, this Plan document shall govern when and
how Plan benefits are payable with respect to individuals who are Participants on or after January
1, 2009. For the period that began on January 1, 2005 and ended December 31, 2008, the Plan as in
effect on December 31, 2004 governed the rights and obligations of the Company and Participants,
except as modified by the Administrator in its discretion so that the Plan and its operations were
in good faith compliance with Code section 409A.

          (b) 2004 Vested Participants Benefits. The Plan document in effect as of December 31, 2004
(the “2004 Plan”) shall govern when and how then vested Plan benefits are payable, including the
elections available or discretion granted to choose or affect the form or commencement date of such
benefits. In determining such vested
Plan benefits, the Pension Amount as of such date shall be determined as if the Participant had a
Separation from Service on the earlier of (i) December 31, 2004 and (ii) the actual date of such
event. The Pension Amount as so determined shall be increased by the adjustment factor for the
period from the first of the month next following the earlier of such dates to the annuity
commencement date, and shall be converted into the annuity forms available for payment, all as
provided for in the 2004 Plan.

19

 

          (c) Excess. The excess, if any, of the total Plan benefit payable to or with respect to a
Participant expressed as the Monthly Installment over the Plan benefit so payable expressed as the
Monthly Installment and described in subsection (b) immediately preceding shall be subject to this
Plan document.

          The undersigned, by the authority of the Board of Directors of Pentair, Inc., does hereby
approve the form and content of this amended and restated Plan document.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 

20

 

SCHEDULE 1

	 	 	 
	Items Included	 	Items Excluded
	 
	 	 
	Base salary or wages, including
such salary or wages deferred
at the election of an
individual under the Pentair,
Inc. Non-Qualified Deferred
Compensation Plan

401(k) plan before-tax and
after-tax employee
contributions

Section 125 plan (flexible
benefit plan) pre-tax employee
contributions

Pentair, Inc. Employee Stock
Purchase and Bonus Plan
employer bonus contributions

Pentair, Inc. Management
Incentive Plan bonus, including
such bonus deferred at the
election of an individual under
the Pentair, Inc. Non-Qualified
Deferred Compensation Plan

Holiday pay

Sick leave pay

Bereavement pay

Jury duty pay

Military pay 

Gain-sharing payments

Profit-sharing payments

Short-term disability benefits

Perquisites

	 	Cash payments made and property or rights
in property other than cash granted under
or pursuant to the Pentair Omnibus Stock
Incentive Plan

Special awards under the Pentair, Inc.

Management Incentive Plan

Severance pay

Moving expense reimbursements

Employee business expense reimbursements

Tuition reimbursement

Adoption assistance payments

Computer hardware and software purchase
reimbursements

Special cash awards

Foreign duty pay enhancements

Except as expressly provided in the
column immediately to the left, amounts
contributed to (e.g., deferred salary) or
received under or pursuant to
non-qualified deferred compensation
arrangements including, but not limited
to, the Pentair, Inc. Non-Qualified
Deferred Compensation Plan

Except as expressly provided in the
column immediately to the left, all
contributions (other than after-tax
employee contributions) to and all
benefits received under a tax-qualified
planEX-10.8

Exhibit 10.8

PENTAIR, INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

As Amended and Restated Effective January 1, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article I HISTORY, PURPOSE AND EFFECTIVE DATE OF PLAN
	 	 	1	 
	 
	 	 	 	 
	Article II DEFINITIONS AND CONSTRUCTION
	 	 	3	 
	Section 2.1. Definitions
	 	 	3	 
	Section 2.2. Eligibility to Participate
	 	 	7	 
	Section 2.3. Purpose
	 	 	8	 
	Section 2.4. Construction
	 	 	8	 
	 
	 	 	 	 
	Article III PARTICIPANT DEFERRALS
	 	 	9	 
	Section 3.1. Election to Participate
	 	 	9	 
	Section 3.2. Amount of Participant’s Deferrals
	 	 	10	 
	Section 3.3. Payment of Deposits to Trustee
	 	 	11	 
	 
	 	 	 	 
	Article IV EMPLOYER CONTRIBUTIONS
	 	 	12	 
	Section 4.1. Employer Discretionary Contribution
	 	 	12	 
	Section 4.2. Employer Matching Contribution
	 	 	12	 
	Section 4.3. Limit on Compensation for Purposes of Employer Contributions
	 	 	13	 
	Section 4.4. Payment of Deposits to Trustee
	 	 	13	 
	 
	 	 	 	 
	Article V TRUSTEE AND TRUST AGREEMENT
	 	 	14	 
	Section 5.1. Appointment
	 	 	14	 
	Section 5.2. Fees and Expenses
	 	 	14	 
	Section 5.3. Use of Trust
	 	 	14	 
	Section 5.4. Responsibility and Authority for Fund Management
	 	 	14	 
	Section 5.5. Trust Assets
	 	 	15	 
	 
	 	 	 	 
	Article VI INVESTMENT; PARTICIPANT’S ACCOUNTS
	 	 	16	 
	Section 6.1. Allocation and Reallocation of Before-Tax Deposits and
Employer Contributions
	 	 	16	 
	Section 6.2. Allocation of Deferred Equity Awards
	 	 	16	 
	Section 6.3. Investment of Deposits and Employer Contributions
	 	 	17	 
	Section 6.4. Participant’s Accounts
	 	 	18	 
	Section 6.5. Beneficiaries
	 	 	18	 
	 
	 	 	 	 
	Article VII PAYMENT OF ACCOUNTS
	 	 	19	 
	Section 7.1. Time and Form of Payments
	 	 	19	 
	Section 7.2. Distribution Due to Death
	 	 	20	 
	Section 7.3. Payment of Employer Contributions
	 	 	20	 
	Section 7.4. Later Payment Deferral Elections
	 	 	21	 
	Section 7.5. Miscellaneous
	 	 	21	 
	 
	 	 	 	 
	Article VIII EMERGENCY WITHDRAWALS
	 	 	22	 
	Section 8.1. Restricted Withdrawals
	 	 	22	 

i 

 

	 	 	 	 	 
	Article IX PLAN ADMINISTRATION
	 	 	23	 
	Section 9.1. Committee
	 	 	23	 
	Section 9.2. Organization and Procedure
	 	 	24	 
	Section 9.3. Delegation of Authority and Responsibility
	 	 	24	 
	Section 9.4. Use of Professional Services
	 	 	24	 
	Section 9.5. Fees and Expenses
	 	 	24	 
	Section 9.6. Communications
	 	 	24	 
	Section 9.7. Claims
	 	 	25	 
	 
	 	 	 	 
	Article X PLAN AMENDMENTS, PLAN TERMINATION, AND MISCELLANEOUS
	 	 	26	 
	Section 10.1. Amendments and Termination
	 	 	26	 
	Section 10.2. Non-Guarantee of Employment
	 	 	27	 
	Section 10.3. Rights to Trust Asset
	 	 	27	 
	Section 10.4. Suspension of Rules
	 	 	27	 
	Section 10.5. Requirement of Proof
	 	 	28	 
	Section 10.6. Indemnification
	 	 	28	 
	Section 10.7. Non-Alienation and Taxes
	 	 	28	 
	Section 10.8. Not Compensation Under Other Benefit Plans
	 	 	29	 
	Section 10.9. Savings Clause
	 	 	29	 
	Section 10.10. Facility of Payment
	 	 	29	 
	Section 10.11. Requirement of Releases
	 	 	29	 
	Section 10.12. Board Action
	 	 	30	 
	Section 10.13. Computational Errors
	 	 	30	 
	Section 10.14. Unclaimed Benefits
	 	 	30	 
	Section 10.15. Communications
	 	 	30	 
	 
	 	 	 	 
	Article XI TRANSITIONAL RULES
	 	 	31	 
	Section 11.1. Introduction
	 	 	31	 
	Section 11.2. Amounts Deferred Under Prior Plan
	 	 	31	 

 

 

PENTAIR, INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

ARTICLE I

HISTORY, PURPOSE AND EFFECTIVE DATE OF PLAN

          Effective January 1, 1993, Pentair, Inc. (“Pentair”) established a non-qualified deferred
compensation plan (the “Plan”) for the benefit of certain management and highly compensated
employees of Pentair and various companies in the Pentair controlled group. Under the Plan as so
initially established, eligible participants could elect to defer receipt of base and bonus
compensation in exchange for the unfunded, unsecured promise of the participant’s employing company
to pay the amounts deferred, plus earnings, at the time and in the manner selected by the
participant when making a deferral election. Until the time of payment, the amounts deferred under
the Plan, adjusted for any earnings credited with respect to those amounts, remain subject to the
claims of the general creditors of the participant’s employing company.

          Pentair amended and restated the Plan, effective January 1, 1996, January 1, 1999, and January
1, 2002. As so amended and restated, the Plan continued to permit eligible employees of Pentair
and its affiliates to defer receipt of base and bonus compensation in exchange for the unsecured
promise of the participant’s employing company to pay these amounts, as adjusted for earnings or
losses by reference to deemed investment options selected by each participant, and commencing
January 1, 1996 provided for the replacement of benefits no longer available to certain
participants under the Pentair Retirement Savings and Stock Incentive Plan due to certain
limitations imposed by the Internal Revenue Code of 1986.

          Pentair amended the Plan in 2005 to reflect the 2004 acquisition of the WICOR, Inc. group of
companies, and the extension of the Plan in 2005 to eligible employees of such group, and to
qualify generally the Plan, the elections made thereunder, and the Plan’s administration, for
amounts deferred and contributed for periods after 2004, by the provisions of Section 409A of the
Internal Revenue Code of 1986 and guidance thereunder issued by the Internal Revenue Service.

          Pentair now hereby amends and restates the Plan effective January 1, 2009. This document
reflects changes made to the Plan to reflect final Treasury Regulations under Section 409A of the
Internal Revenue Code of 1986, as well as certain other changes. This document governs amounts
deferred on or after January 1, 2005. Amounts deferred prior to January 1, 2005, are governed by
terms of the Plan as in effect on December 31, 2004, which are contained in a separate document.

          The Plan is for the benefit of a select group of management and highly compensated employees.
Benefits under the Plan are unfunded and unsecured general obligations of Pentair and its
participating affiliates. Plan participants have the status of unsecured general creditors of
their employing company. Any assets acquired or set aside for purposes of providing or measuring,
or both, this deferred compensation may be held in a grantor
trust as the property of the participant’s employing company and subject to the claims of its
general creditors. To the extent any assets are held in a grantor trust, the terms and provisions
of the trust document will control in all cases where it is in conflict with the Plan.

 

 

ARTICLE II

DEFINITIONS AND CONSTRUCTION

     Section 2.1. Definitions. Unless the context clearly or necessarily indicates the contrary, when
capitalized the following words and phrases shall have the meanings shown when used in this Article
or other parts of the Plan.

          (1) “Accounts” are the accounts under the Plan to be maintained for each Participant or the
Beneficiary of a deceased former Participant.

          (2) “Administrator” is the person assigned by the Company or Committee to handle the
day-to-day administration of the Plan.

          (3) “Base Compensation” is remuneration from which an Employee may elect before-tax deposits
under the RSIP, with such remuneration determined without regard to the dollar limit imposed under
Code section 401(a)(17), but excluding amounts included in Bonus Compensation; plus, if not taken
into account as such remuneration under the RSIP but without duplication of an amount described in
the immediately preceding sentence, any Before-tax Deposits. If and during the period an Employee
is not eligible to participate in the RSIP, his or her Base Compensation shall be determined as
through he or she were eligible to participate in the RSIP.

          (4) “Before-tax Deposits” are compensation deferrals of Base Compensation and/or Bonus
Compensation made under the Plan at the election of a Participant pursuant to Article III.

          (5) “Beneficiary” is the individual, trust or other entity designated as such in writing by a
Participant in accordance with applicable Plan provisions, or such person as otherwise determined
under the Plan, to receive benefits accumulated hereunder in the event of the Participant’s death.
If a Participant is married at the time of death, the sole Beneficiary shall be the Participant’s
Spouse at such time unless the Spouse has otherwise waived or released the right to be named as a
beneficiary hereunder, or to be considered as the Participant’s surviving Spouse for such purposes
(e.g., an enforceable prenuptial agreement), as determined in the discretion of the Committee, or
the Spouse has consented in writing to the designation of a different Beneficiary and such consent
is witnessed by an authorized Plan representative or a notary public.

          (6) “Bonus Compensation” is compensation awarded to an Employee pursuant to the Employer’s
annual performance-based management bonus plan or plans, and may also include other bonuses or
other non-periodic items or performance-based compensation for services rendered, as determined by
the Committee. Bonus Compensation includes only items from which an Employee may elect before-tax
deposits under the RSIP determined without regard to the dollar limit imposed under Code section
401(a)(17). Bonus Compensation shall not include Equity Awards.

 

 

          (7) “Change in Control” or “CIC” is any one of the following:

	 	(i)	 	When a person, or more than one person acting as a group,
acquires more than fifty percent (50%) of the total fair market value or total
voting power of the Company’s stock;
	 
	 	(ii)	 	When a person, or more than one person acting as a group,
acquires within a twelve (12) month consecutive period, ending with the date of
the most recent stock acquisition, stock of the Company possessing at least
thirty percent (30%) of the total voting power of the Company’s stock;
	 
	 	(iii)	 	When a majority of the members of the Company’s board of
directors is replaced within a twelve (12) month period by directors whose
appointment or election is not endorsed by a majority of the members of such
board as constituted before such appointment or election; or
	 
	 	(iv)	 	When a person, or more than one person acting as a group,
acquires within a twelve (12) month consecutive period assets from the Company
or an entity controlled by the Company that have a total gross fair market
value equal to seventy-five percent (75%) of the total fair market value of the
assets of the Company and all such entities.

Once a person or group acquires stock meeting the thresholds set forth in paragraphs (i) and (ii)
immediately preceding, additional acquisitions of such stock by that person or group shall be
ignored in determining whether another CIC has occurred. Asset transfers between or among
controlled entities as determined before such transfers shall not be considered in applying
paragraph (iv) immediately preceding. This provision shall be interpreted and administered in a
manner consistent with the definition of a “change of control” under Code section 409A.

          (8) “Code” is the Internal Revenue Code of 1986, as amended and in effect from time to time.
Any reference to a specific provision of the Code shall be deemed to refer to successor provisions
thereto and the regulations promulgated thereunder.

          (9) “Committee” is the Committee described in Article IX.

          (10) “Company” is Pentair, Inc., a Minnesota corporation, or any successor thereto.

          (11) “Disabled” or “Disability” is a physical or mental condition, resulting from physical or
mental sickness or injury, which prevents the individual while an Employee from engaging in any
substantial gainful activity, and which condition can be expected to last for a continuous period
of not less than twelve (12) months. For purposes of applying Section 3.2(c), however, the
immediately preceding sentence shall be applied by substituting “six (6) months” for “twelve (12)
months.”

          (12) “Employee” is an individual who is (i) employed by a Participating Employer, (ii) a
highly compensated or key management employee of a Participating Employer as determined by the
Committee, (iii) in an employment position or salary grade classified by the Company as eligible to
participate in the Plan, and (iv) eligible to participate in the RSIP. In the event an individual
satisfies the foregoing requirements except he or she is not eligible to

 

 

participate in the RSIP (e.g., an individual within an employee group to which the RSIP has
not been extended), such individual may, in the discretion of the Committee, be considered an
Employee solely for purposes of allowing such individual to elect Before-tax Deposits and not for
purposes of being eligible for Employer Contributions.

          (13) “Employer” is the Company and, except as prescribed by the Committee, each other
corporation or unincorporated business which is a member of a controlled group of corporations or a
group of trades or businesses under common control (within the meaning of Code section 414(b) or
(c)) which includes the Company, but with respect to other business entities during only the
periods of such common control with the Company.

          (14) “Employer Contributions” are amounts contributed under the Plan by Participating
Employers pursuant to Article IV, and includes Employer Discretionary Contributions described in
Section 4.1 and Employer Matching Contributions described in Section 4.2.

          (15) “Equity Awards” are stock-related awards granted under the Omnibus Incentive Plan that
are designated as eligible to be deferred under this Plan in the award letter or other document
evidencing such award.

          (16) “ERISA” is the Employee Retirement Income Security Act of 1974, as amended. Any
reference to a specific provision of the Code shall be deemed to refer to successor provisions
thereto and the regulations promulgated thereunder.

          (17) “Fair Market Value” has the meaning ascribed in the Omnibus Incentive Plan.

          (18) “Investment Fund” is a deemed investment made available by the Committee and selected (or
deemed selected) by a Participant for purposes of crediting investment earnings and losses to a
Participant’s Account.

          (19) “Omnibus Incentive Plan” is the Pentair, Inc. 2008 Omnibus Stock Incentive Plan, or any
successor thereto, as it may be amended from time to time.

          (20) “Participant” is an individual who has validly elected to participate hereunder and who
has elected Before-tax Deposits, deferrals of Equity Awards or is entitled to receive Employer
Contributions. An individual who has become a Participant shall continue as a Participant until
the earlier of his or her death and the date the balance in his or her Account has been paid.

          (21) “Participating Employer” is the Company and each other Employer, except as otherwise
prescribed by the Committee or the terms of any purchase agreement entered into with respect to the
Company’s or an affiliates acquisition of such Employer.

          (22) “Performance-Based Compensation” is Bonus Compensation or Equity Awards the amount of
which, or the entitlement to which, is contingent on the satisfaction of preestablished
organizational or individual performance criteria relating to a performance period of at least
twelve (12) months. Goals are considered preestablished if established in writing no

 

 

later than ninety (90) days after the commencement of the performance period.
Performance-Based Compensation does not include any amount or payment that will be paid either
regardless of performance, or based upon a level of performance that is substantially certain to be
met at the time the criteria is established. Notwithstanding the foregoing, Bonus Compensation or
Equity Awards will be considered Performance-Based Compensation if the compensation will be paid
regardless of satisfaction of the performance goals in the event of the Participant’s death,
Disability or a CIC, provided that payment under such circumstances without regard to the
satisfaction of the performance criteria will not constitute Performance-Based Compensation.

          (23) “Plan Year” is the calendar year.

          (24) “Pre-Deferral Compensation” is the combined amount of Base and Bonus Compensation which
would have been paid in a Plan Year but for a Before-tax Deposit election hereunder or a before-tax
deposit election under the RSIP, or both.

          (25) “Retirement” is an individual’s Separation from Service on or after the attainment of age
fifty-five (55) and the completion of at least ten (10) years of service with one or more
Employers.

          (26) “RSIP” is the Pentair, Inc. Retirement Savings and Stock Incentive Plan, as amended, or
any successor plan thereto.

          (27) “Separation from Service” is the termination of employment as an employee, from all
business entities that comprise the Employer, for reasons other than death or Disability. A
Participant will be deemed to have incurred a Separation from Service when the level of bona fide
services performed by the Participant for the Employer permanently decreases to a level equal to
twenty percent (20%) or less of the average level of services performed by the Participant for the
Employer during the immediately preceding thirty-six (36) month period (or such lesser period of
service). Notwithstanding the foregoing, a Participant on a bona fide leave of absence from an
Employer shall be considered to have incurred a Separation from Service no later than the six (6)
month anniversary of the absence (or twenty-nine (29) months in the event of an absence due to a
Disability described in the last sentence of Section 2.1(11)) or the end of such longer period
during which the individual has the right by law or agreement to return to employment upon the
expiration of the leave. Notwithstanding the foregoing, if following the Participant’s termination
of employment from the Employer the Participant becomes a non-employee director or becomes or
remains a consultant to the Employer, then the date of the Participant’s Separation from Service
may be delayed until the Participant ceases to provide services in such capacity to the extent
required by Code section 409A.

          (28) “Share” is a share of the Company’s Common Stock, par value of $0.16-2/3. No Shares
have been authorized for issuance under this Plan. All Shares payable under this Plan are issued
from the Omnibus Incentive Plan.

          (29) “Share Unit Fund” is the Investment Fund described in Section 6.2(b), which is deemed
invested in Shares. The Share Unit Fund shall be used solely as a means to track deferrals of
Equity Awards.

          (30) “Share Unit” is a unit that has a value equal to one Share.

 

 

          (31) “Specified Employee” is a Participant who is a key employee for a Plan Year, with such
status as to that period becoming effective as of April 1st next following such Plan Year and
lasting until the following April 1st. A key employee is an employee of an Employer who (i) at any
time during the Plan Year owns at least five percent (5%) of the stock (or capital or profits
interest) of an Employer, (ii) owns one percent (1%) of the stock (or capital or profits interest)
of an Employer and whose compensation exceeds the dollar limit for such period described in Code
section 416(1)(iii), or (iii) is an officer of an Employer and whose compensation exceeds the
dollar limit for such period described in Code section 416(1)(i), as adjusted. No more than the
lesser of fifty (50) employees or ten percent (10%) of all employees shall be treated as officers
for that period by reason of clause (iii) immediately preceding. In the event the number of
officers exceeds such number, the employees included in such number will be those with the highest
compensation for that period.

          (32) “Spouse” is an individual, of a sex opposite to that of a Participant, whose marriage to
a Participant is recognized under the laws of the United States (or one of the United States) or
any other generally recognized jurisdiction.

          (33) “Trust” is the Pentair, Inc. Non-Qualified Deferred Compensation Plan Trust.

          (34) “Trustee” is the person appointed as the trustee under the Trust.

          (35) “Unforeseeable Emergency” is a severe financial hardship to the Participant resulting
from: an illness or accident to the Participant or his or her Spouse or tax-dependent; the loss of
a home due to an uncompensated (by insurance or otherwise) casualty; and other similar
extraordinary and unforeseeable circumstances beyond the control of the Participant.

          (36) “Valuation Date” is, with respect to Investment Funds which correspond to funds available
under the RSIP, a date as of which such corresponding funds are valued under the RSIP; with respect
to other Investment Funds, it is the last day of each Plan Year and such other dates as are
prescribed by the Committee.

     Section 2.2. Eligibility to Participate.

          (a) Eligibility to Make Before-tax Deposits and Deferrals of Equity Awards. Subject
to the provisions of Article III, all Employees are eligible to elect Before-tax Deposits and to
defer Equity Awards.

          (b) Eligibility for Employer Contributions. Employees eligible to receive an Employer
Discretionary Contribution for a Plan Year are described in Section 4.1(a), and Employees eligible
to receive an Employer Matching Contribution for a Plan Year are described in 

Section 4.2(a).

          (c) Suspension of Eligibility. (1) Failure to Qualify as an Employee. Once
an individual becomes an Employee, such individual shall remain an Employee, regardless of the
identity of his or her Participating Employer, so long as he or she continues to be described in
Section 2.1(12). In the event an individual becomes an Employee and thereafter remains

 

 

employed by an Employer but not as an Employee or such Employer is not then a Participating
Employer, except as directed by the Committee such individual’s eligibility to elect Before-tax
Deposits or deferrals of Equity Awards shall be suspended at the end of the Plan Year in which such
status change occurs and such individual’s eligibility to receive an allocation of Employer
Contributions shall be suspended immediately on the date such status change occurs.

          (2) Resumption. Upon resuming status as an Employee, an individual whose eligibility
to participate in the Plan has been suspended may again elect Before-tax Deposits or deferrals of
Equity Awards under the Plan pursuant to the provisions of Article III.

     Section 2.3. Purpose. As a tax-qualified plan, the RSIP is subject to various Code provisions
which limit artificially the contributions which can be made on behalf of participants. The Plan
is designed to offer the same contribution formulas (without duplication) as are offered under the
RSIP but without regard to such Code provisions, including Code sections 401(a)(17) (compensation
cap), 401(k) and 401(m) (annual discrimination tests and related rules for elective and matching
contributions), 402(g) and 414(v) (annual dollar limit on elective contributions), and 415(c)
(limit on annual additions). In addition, the Plan is designed to offer participants the ability
to defer certain items of compensation that would not be able to be deferred under the RSIP, such
as equity awards granted under the Omnibus Incentive Plan. It is intended that all Accounts
represent retirement income within the meaning of 4 USC § 114(b)(1)(I)(ii) if paid after
termination of employment. The Plan is not solely intended to provide benefits in excess of the
Code section 415 limits, however, and therefore it is not an “excess benefit plan” as defined in
ERISA section 3(36).

     Section 2.4. Construction.

          (a) General. Wherever any words are used herein in the singular, masculine, feminine
or neuter form, they shall be construed as though they were used in the plural, feminine, masculine
or non-neuter form, respectively, in all cases where such interpretation is reasonable. The words
“hereof ,” “herein,” “hereunder,” and other similar compounds of the word “here” shall mean and
refer to this entire document and not to any particular Article or Section. Titles of Articles and
Sections are for general information only, and the Plan is not to be construed by reference
thereto.

          (b) Applicable Law. To the extent not preempted by ERISA or any other federal
statute, the Plan shall be construed and its validity determined according to the substantive laws
of the State of Minnesota, without reference to conflict of law principles thereof. In case any
provision of the Plan shall be held illegal or invalid for any reason, the Plan shall be construed
and enforced as if it did not include such provision.

 

 

ARTICLE III

PARTICIPANT DEFERRALS

     Section 3.1. Election to Participate.

          (a) General. (1) Annual Election. Prior to January 1 of each Plan Year, an
Employee may elect: (A) to make Before-tax Deposits from his or her Base Compensation that will be
earned and paid in such Plan Year, (B) to make Before-tax Deposits from his or her Bonus
Compensation that will be earned (or begin to be earned) in such Plan Year, (C) to defer all or a
portion of his or her Equity Awards that will be granted in such Plan Year (for this purpose, an
Equity Award shall be considered granted when the Company takes action to approve such grant), and
(D) the form and time of distribution of the Account with respect to such Plan Year, as permitted
by Section 7.1(b). Such election shall be made as of the times the Committee may prescribe and
shall be irrevocable as of December 31 of the year immediately preceding the Plan Year for which
such elections are effective.

          (2) Mid-Year Elections: Bonus Compensation or Equity Award. If and to the extent
allowed by the Committee, an Employee also may elect Before-tax Deposits from his or her Bonus
Compensation and may elect to defer all or a portion of his or her Equity Awards as follows:

	 	(i)	 	If the Bonus Compensation or Equity Award qualifies as
Performance-Based Compensation, the election may be made no later than six (6)
months before the end of the performance period; or
	 
	 	(ii)	 	If the Bonus Compensation or Equity Award is subject to a
substantial risk of forfeiture that will not lapse until at least thirteen (13)
months after the date of award or grant (or earlier upon death, Disability or a
CIC), the election may be made no later than the first thirty (30) days after
the date of award or grant; provided that if the Bonus Compensation actually
vests within the first thirteen (13) months by reason of the Employee’s death,
Disability, or a CIC, then the deferral election shall be cancelled; or
	 
	 	(iii)	 	If the Bonus Compensation or Equity Award is subject to a
substantial risk of forfeiture that will not lapse until at least one year
after the date of grant, the election may be made at least one year prior to
the date such award will vest, provided that the amount is deferred for a
minimum of five (5) years from the date the Bonus Compensation or Equity Award
vests.

          Such election shall be made as of the times the Committee may prescribe and shall be
irrevocable as of the latest date permitted hereunder. If an Employee has not previously elected a
time and form of distribution with respect to the Account to which the deferrals described herein
will be credited, he or she may do so as part of his or her deferral election hereunder.

 

 

          (b) Participation During Plan Year.

          (1) Initial Participation. An Employee who first becomes eligible to participate in
the Plan during a Plan Year may elect, within the first thirty (30) days of becoming so eligible,
(A) Before-tax Deposits from his or her Base Compensation for that Plan Year earned and paid after
such election, and (B) the form and time of distribution of the Account with respect to such Plan
Year, as permitted by Section 7.1(b). Such individual may also make the elections described in
Section 3.1(a)(2), if applicable.

          (2) Resumption of Participation. An individual who has been eligible to participate
in the Plan, who loses such eligibility by reason of a Separation from Service or otherwise, and
who again becomes eligible to participate in the Plan, shall not be eligible to participate in the
Plan for purposes of authorizing Before-tax Deposits or deferrals of Equity Awards, and shall not
be eligible to receive an allocation of Employer Contributions, for the Plan Year in which he or
she again becomes so eligible unless he or she (i) has not been eligible to make Before-tax
Deposits or deferrals of Equity Awards for two (2) or more consecutive years or (ii) has previously
incurred a Separation from Service and been paid all benefits under the Plan after such separation
and before again becoming eligible for the Plan.

     Section 3.2. Amount of Participant’s Deferrals.

          (a) Deferral Elections. At the time an Employee elects to make Before-tax Deposits or
defer an Equity Award for a Plan Year, he or she shall designate the percentage of Base
Compensation, Bonus Compensation, or Equity Awards to be deferred. Except as described subsection
(c), the percentage elected shall be irrevocable with respect to the compensation to which it
relates. In the event a payroll period with respect to Base Compensation straddles the end of a
Plan Year, the election, if any, to defer for the Plan Year in which the payroll period ends shall
control the amount or rate to be deferred.

          (b) Maximum Deferrals and Coordination with the RSIP. The maximum deferrals which may
be elected by a Participant for a Plan Year shall be established from time to time by the Committee
and may be expressed as a maximum amount or percentage. Different maximums may be applied to
deferrals of Base, Bonus Compensation, and Equity Awards or different items of Bonus Compensation
and Equity Awards. Such maximums shall be established before a Plan Year and shall apply
throughout that year, or shall apply to the award to which the maximum relates. Any such maximums
on Base and Bonus Compensation shall be first absorbed by Before-tax Deposits and then, to the
extent the maximum has not been reached, by before-tax deposits under the RSIP.

          (c) Intra-Year Cessation of Before-tax Deposits. In the event a Participant dies,
becomes Disabled, or, as directed by the Committee, applies for and is granted a distribution
pursuant to Article VIII, Before-tax Deposits on behalf of such Participant for the balance of the
Plan Year shall be suspended. The suspension shall be effective no later than the second payroll
period ending after the Participant’s death; two and one-half (2-1/2) months after the Participant
becomes Disabled; or the second payroll period ending after the Committee approves the distribution
and directs the suspension, whichever is applicable.

 

 

     Section 3.3. Payment of Deposits to Trustee. Unless otherwise directed by the Committee, a
Participating Employer shall remit amounts withheld as Before-tax Deposits to the Trustee as soon
as administratively feasible after such amounts are withheld. In the event the Committee so
otherwise directs or if the Trust (or some other funding arrangement) does not then exist, then the
amounts so withheld shall be retained by the Participating Employer as part of its general assets
and, in order to determine investment earnings and losses thereon, shall be allocated to one or
more Investment Funds as determined by the Committee no later than the first day of the second
calendar month immediately following the calendar month of such withholding.

 

 

ARTICLE IV

EMPLOYER CONTRIBUTIONS

     Section 4.1. Employer Discretionary Contribution.

          (a) Eligibility for Employer Discretionary Contributions. Employees eligible to
receive an Employer Discretionary Contributions for a Plan Year shall be those individuals

	 	(i)	 	eligible to elect Before-tax Deposits for that year;
	 
	 	(ii)	 	who are eligible to receive an employer discretionary
contribution under the RSIP for that year,
	 
	 	(iii)	 	whose covered compensation under the RSIP for that Plan Year
is:

	 	(1)	 	actually limited by the applicable dollar
amount provided for under Code section 401(a)(17), or
	 
	 	(2)	 	reduced by reason of Before-tax Deposits; and

	 	(iv)	 	who are employed by an Employer as of the end of that Plan
Year; provided, however, that such year-end employment shall not be required
for the year in which employment ends due to death, Disability, or Retirement.

          (b) Amount of Discretionary Contribution. Participating Employers shall make an
Employer Discretionary Contribution on behalf of their eligible Employees for a Plan Year in an
amount equal to (i) the employer standard discretionary contribution rate in effect under the RSIP
for the Plan Year (as determined by the Committee) multiplied by the eligible Employee’s
Pre-Deferral Compensation for the Plan Year, up to the applicable dollar limit under Section 4.3,
less (ii) the employer standard discretionary contribution (as determined by the Committee) made on
behalf of such Employee to the RSIP for that year.

     Section 4.2. Employer Matching Contribution.

          (a) Eligibility for Employer Matching Contributions. Employees eligible to receive an
Employer Matching Contribution for a Plan Year shall be those individuals

	 	(i)	 	who are eligible to receive an employer matching contribution
under the RSIP for such year,
	 
	 	(ii)	 	whose covered compensation under the RSIP for that Plan Year
is:

	 	(1)	 	actually limited by the applicable dollar
amount provided for under Code section 401(a)(17), or
	 
	 	(2)	 	reduced by reason of Before-tax Deposits; and

 

 

	 	(iii)	 	who are employed by an Employer as of the end of that Plan
Year; provided, however, that such employment shall not be requested for the
year in which such employment ends due to death, Disability, or Retirement.

          (b) Amount of Matching Contribution. With respect to each Employee eligible to
receive an Employer Matching Contribution for a Plan Year, that Employee’s Participating Employer
shall contribute a matching contribution equal to A — B, where A equals the matching contribution
which would have been made on his or her behalf under the RSIP for that year assuming:

	 	(i)	 	the covered compensation limit thereunder was the applicable
dollar limit for that year under Section 4.3,
	 
	 	(ii)	 	the provisions of Code sections 401(k) and (m), 402(g), 414(v),
and 415(c) (and any similar or analogous Code limits on the amount or rate of
contributions under the RSIP) did not apply,
	 
	 	(iii)	 	all Before-tax Deposits for such year had been made for that
year under the RSIP,
	 
	 	(iv)	 	covered compensation thereunder included Before-tax Deposits
made with respect to that year, and

B equals the matching contributions made on his or her behalf under the RSIP for that year. In
determining B, payment of the matching contribution to the Employee under the RSIP to satisfy Code
section 401(m) shall be ignored but any forfeiture of such contribution shall, if in fact taken
into account in determining B, reduce B.

     Section 4.3. Limit on Compensation for Purposes of Employer Contributions. The maximum amount of
the aggregate of a Participant’s Base Compensation and Bonus Compensation that will be considered
for purposes of determining Employer Contributions shall be established from time to time by the
Committee and shall be communicated to the Participants. For the Plan Year beginning January 1,
2008, the maximum amount of the aggregate of a Participant’s Base Compensation and Bonus
Compensation for purposes of determining Employer Contributions shall be $700,000.

     Section 4.4. Payment of Deposits to Trustee. Unless otherwise directed by the Committee, a
Participating Employer shall pay its share of the Employer Contributions for a Plan Year as soon as
administratively feasible after the entire Employer Contribution for such year has been determined.
In the event the Committee so otherwise directs or if the Trust (or some other funding
arrangement) does not then exist, then such share shall be retained by the Participating Employer
as part of its general assets and, in order to determine investment earnings and losses thereon,
shall be allocated to one or more Investment Funds as determined by the Committee no later than the
first day of the calendar
month immediately following the calendar month in which such entire Contribution has been
determined.

 

 

ARTICLE V

TRUSTEE AND TRUST AGREEMENT

     Section 5.1. Appointment.

          (a) General. The Plan is an unfunded deferred compensation arrangement. Neither the
Company nor any Participating Employer shall be required to establish a trust or to in any way
segregate assets for purposes of funding or otherwise providing benefits under the Plan. The
Company may, however, in its sole discretion, establish and maintain an unfunded grantor trust with
one or more persons selected by the Committee to act as Trustee. If a Trustee is so appointed,
such Trustee shall hold, manage, administer and invest the assets of the Trust, reinvest any
income, and make distributions in accordance with the directions of the Committee and the
provisions of the Plan and Trust. The trust agreement shall be in such form and contain such
provisions as the Committee deems necessary and appropriate to effectuate the purposes of the Plan.
The terms and provisions of the trust agreement shall control in case of a conflict between the
terms and provisions of such agreement and the terms and provisions of the Plan.

          (b) Removal and Resignation. Pursuant to the notice requirements and other procedures
contained in the Trust agreement, and in accordance with the Trust agreement, the Committee may, at
any time and from time to time, remove a Trustee or any successor Trustee and any such Trustee or
any successor Trustee may resign. If the provisions of the Trust agreement remain in effect at the
time of removal or resignation of the Trustee, the Committee shall appoint a successor Trustee.

     Section 5.2. Fees and Expenses. Except as directed by the Company, the Trustee’s fee, and related
fees and expenses, shall be paid by the Company and Participating Employers. Brokerage fees,
asset-based fees for custodial, investment and management services, and other investment expenses
(e.g., participant record-keeping fees) which relate to Investment Funds, shall be paid out of the
Trust and charged to the fund of the Trust and the Accounts of the Participant to which such fees
and costs are attributable.

     Section 5.3. Use of Trust. To the extent any assets are held in the Trust, such assets shall at
all times be the property of the Company or a Participating Employer and, as such, shall remain
subject to the claims of general creditors of the Company or the Participating Employer, as the
case may be, in the event of bankruptcy or insolvency. No Participant or Beneficiary shall by
reason of the Plan and Trust have any rights to any assets of the Trust, the Company or a
Participating Employer nor to Investment Funds or other property generally, and neither the
existence of the Plan nor the establishment of a Trust shall be interpreted or construed as a
guaranty that any funds which may be held in trust will be available or sufficient for the payment
of benefits under the Plan.

     Section 5.4. Responsibility and Authority for Fund Management. The Company may, in its sole
discretion, establish and maintain a funding policy, and may delegate to the Committee the
following duties and authority:

 

 

	 	(i)	 	to establish Investment Funds for purposes of crediting
investment earnings and losses to Accounts, including the authority to add to
or change the number and nature of the Investment Funds from time to time;
	 
	 	(ii)	 	to direct the investment and reinvestment of all or any portion
of the assets, if any, held by the Trustee under the Trust; and
	 
	 	(iii)	 	to periodically review the performance of the Investment
Funds.

     Section 5.5. Trust Assets. Neither the Company, a Participating Employer nor the Trustee shall be
obligated to purchase any asset or Investment Fund designated by a Participant pursuant to the
provisions of Article VI for purposes of crediting investment earnings and losses to such
Participant’s Accounts. To the extent the Company and Participating Employers remit Before-tax
Deposits or Employer Contributions to the Trustee, however, and the Investment Fund designated by
the Participant as a deemed investment for his or her Accounts consists of an asset which the
Trustee cannot purchase or an investment which is not readily available on the open market, the
Trustee shall, subject to the direction of the Committee, return any such amounts to the Company
and Participating Employers in the form of cash. To the extent a Participant reallocates all or a
portion of the balance in his or her Accounts into an Investment Fund which consists of an asset
the Trustee cannot purchase, the Trustee shall withdraw from the Trust cash equal to the fair
market value of such investment designation and return such cash to the Company or other
Participating Employers.

 

 

ARTICLE VI

INVESTMENT; PARTICIPANT’S ACCOUNTS

     Section 6.1. Allocation and Reallocation of Before-Tax Deposits and Employer Contributions.

          (a) Allocation. For purposes of crediting earnings to his or her Accounts, a
Participant shall elect to allocate Before-tax Deposits and Employer Contributions to one or more
of the Investment Funds. A Participant may elect to change the mix of such allocations in
accordance with rules prescribed by the Committee. An election under this Section 6.1(a) shall
remain in effect unless changed by the Participant; provided, however, that neither the Company, a
Participating Employer, the Committee nor the Trustee shall be obligated to purchase any investment
designated by a Participant. Investment Funds are selected by a Participant solely for purposes of
determining the investment earnings and losses to be credited to a Participant’s Accounts.

          (b) Reallocation. In accordance with rules prescribed by the Committee, a Participant
may reallocate the balance credited to his or her Accounts among the available Investment Funds.
Any such reallocation shall apply to the entire balance of such Accounts attributable to
participation in the Plan, and not just to Before-tax Deposits and Employer Contributions made
subsequent to such reallocation.

          (c) Participant-Directed Investment. (1) General. The availability of
Investment Funds for purposes of crediting earnings to Accounts is not a recommendation to
designate a deemed investment in any one Investment Fund. The selection of deemed investments is
solely the responsibility of each Participant. No officer, employee or other agent of an Employer
or the Trustee is authorized to advise or make any recommendation concerning the selection of
Investment Funds and no such person is responsible for determining the suitability or advisability
of any such selection.

          (2) Participant Responsibility. Participants shall be solely responsible for
selecting, monitoring, and changing the Investment Funds in or by which their Account balances are
invested. Neither the Company, a Participating Employer, Committee member, nor the Administrator
shall be responsible for such investment decisions. To the extent a Participant does not expressly
exercise investment discretion over his or her Accounts, he or she shall be deemed to have elected
to direct investments to or by the same Investment Fund used for such purposes under the RSIP,
except as otherwise provided by the Committee.

     Section 6.2. Allocation of Deferred Equity Awards.

          (a) Allocation. Deferrals of Equity Awards shall be automatically allocated to the
Share Unit Fund on the date of vesting, unless otherwise determined by the Committee. A
Participant shall not have the right to re-allocate such deferrals out of the Share Unit Fund.

          (b) Share Unit Fund. A deferral of an Equity Awards shall be allocated, to the Share
Unit Fund as follows: (i) if the deferral relates to Shares, or Equity Awards whose value equals
the Fair Market Value of a Share, the Participant’s Account shall be credited with a number of
Shares Units equal to the number of Shares (or Share-related Equity Awards)

 

 

deferred, or (ii) if the deferral relates to cash (such as dividend equivalents), such amount
shall be converted to whole and fractional Share Units, with fractional units calculated to three
decimal places, by dividing the amount to be allocated by the Fair Market Value of a Share on the
effective date of such allocation. If any dividends or distributions (other than in the form of
Shares) are paid on Shares while a Participant has Share Units credited to his Account, such
Participant shall be credited with additional Shares Units equal to the amount of the cash dividend
paid or Fair Market Value of other property distributed on one Share, multiplied by the number of
Share Units credited to the Participant’s Account on the date the dividend is declared. Any other
provision of this Plan to the contrary notwithstanding, if a dividend is paid on Shares in the form
of a right or rights to purchase shares of capital stock of the Company or any entity acquiring the
Company, no additional Share Units shall be credited to the Participant’s Account with respect to
such dividend, but each Share Unit credited to a Participant’s Account at the time such dividend is
paid, and each Share Unit thereafter credited to the Participant’s Account at a time when such
rights are attached to Shares, shall thereafter be valued as of any point in time on the basis of
the aggregate of the then Fair Market Value of one Share plus the then Fair Market Value of such
right or rights then attached to one Share.

          (c) Transactions Affecting Common Stock. In the event of any transaction affecting
Shares that would cause an adjustment to be made under Section 16(a) of the Omnibus Incentive Plan,
the Committee may make appropriate equitable adjustments with respect to the Share Units credited
to the Account of each Participant, including without limitation, adjusting the date as of which
such units are valued and/or distributed, as the Committee determines is necessary or desirable to
prevent the dilution or enlargement of the benefits intended to be provided under the Plan.

          (d) No Shareholder Rights With Respect to Share Units. Participants shall have no
rights as a stockholder pertaining to Share Units credited to their Accounts.

     Section 6.3. Investment of Deposits and Employer Contributions. The Committee may, in its
discretion, direct the Trustee to invest a Participant’s Before-tax Deposits and Employer
Contributions in the Investment Funds designated by the Participant, to the extent such investment
is available on the open market and can be purchased by the Trustee and owned by the Trust.
Regardless of whether any deposits or Employer Contributions are actually invested in the
Investment Funds designated by Participants, however, the Committee shall maintain a bookkeeping
account on behalf of each Participant to which shall be credited the investment results of each
Investment Fund so designated to adjust the amounts in each Participant’s Accounts. At least each
calendar quarter, the Committee shall make available or cause to be made available a report or
other information indicating the increase or decrease in the value of each Participant’s Accounts.
Any earnings of an Investment Fund shall be deemed to be reinvested in the same Investment Fund for
purposes of maintaining a Participant’s Accounts.

 

 

     Section 6.4. Participant’s Accounts.

          (a) Establishment of Accounts. Separate Accounts shall be established and maintained
for each Participant by Plan Year and Investment Fund. To the extent necessary or appropriate to
provide for proper administration of the Plan, including the tracking of payment date and form
elections, a Participant’s Account for a Plan Year shall include separate balances or subaccounts
for interests derived from Before-tax Deposits, deferred Equity Awards, Employer Contributions and
such other separate balances as the Committee shall determine. The Committee shall also identify
or otherwise maintain separate Accounts or subaccounts for Participants by reference to the
identity of the Participant’s Employer, to the extent practicable.

          (b) Crediting of Accounts. The appropriate Accounts of each Participant shall be
credited with the amounts of Before-tax Deposits, deferred Equity Awards and Employer Contributions
made for each Plan Year. The reallocation of a Participant’s Accounts, if permitted, shall be
appropriately credited as of the Valuation Date coincident with or next following the effective
date of the reallocation. The maintenance of such Accounts shall not, however, entitle a
Participant to any ownership, preferred claim or beneficial interest in any Investment Fund or in
any specific asset of the Trust. Investment Funds are deemed investments and used solely for
purposes of determining the earnings and losses to be credited to a Participant’s Accounts.

          (c) Vesting of Accounts. A Participant’s Account shall be fully vested, except that
the portion of the Account arising from the deferral of an Equity Award shall vest in accordance
with the terms of the Equity Award to which it relates.

     Section 6.5. Beneficiaries. The foregoing provisions of this Article VI shall be applied, to the
extent relevant, with respect to Accounts payable under the Plan to a Beneficiary of a deceased
former Participant.

 

 

ARTICLE VII

PAYMENT OF ACCOUNTS

     Section 7.1. Time and Form of Payments.

          (a) General. Except as otherwise provided in the Plan, a Participant shall receive
his or her entire vested Account balance allocable to a Plan Year in a lump sum within ninety (90)
days of the first to occur of his or her (i) Separation from Service, (ii) Disability, or (iii) a
CIC. In the event the payment event is due to a Separation from Service and as of the date of the
Separation from Service the Participant is a Specified Employee, however, the lump sum shall be
paid within thirty (30) days after the six (6) month anniversary of such date.

          (b) Election of Distribution. A Participant may elect, in accordance with Section 3.1
and subject to such limitations as may be prescribed by the Committee, to receive distribution of
his or her vested Account balance allocable to a Plan Year:

          (1) Time of Payment. As of one specific future date, provided such date is at least
two (2) years following the last date by which such an election can be made for that year (or with
respect to the portion of the Account relating to an Equity Award, the date the award is fully
vested, if later) and such date cannot be more than five (5) years after the earlier of the date
the Participant becomes Disabled and the date he or she has a Separation from Service. In the
event the date finally selected is less than two (2) years, the Participant shall be treated as
having not made a specific date election for that year, or, by reason of subsequent event, is more
than five (5) years after the relevant date, the Participant shall be treated as having selected
the fifth (5th) anniversary of such date as the date of payment. Except as provided in Section
8.5, such an election once finally effective cannot be changed by the Participant.

          (2) Calculation of Payment. In annual installments over five (5) or ten (10) years.
Each such installment shall be determined by using the vested Account balance for such year as of
the most recent Valuation Date before the payment date and dividing such balance by the number of
years left in the installment period and the final installment shall include the remaining vested
Account balance. The second year and later installments shall be paid, as far as practicable, on
the anniversary date of the first installment. Except as provided in Section 7.4, such an election
once finally effective cannot be changed by the Participant. In the event the payment event is due
to a Separation from Service, and as of the date of Separation from Service the Participant is a
Specified Employee, however, the first installment payment may not be made until after the six (6)
month anniversary of such date.

          (c) Form of Payment. All payments made under a Participant’s Account, other than from
the Share Unit Fund, shall be made in cash. Payment from the Share Unit Fund shall be distributed
in the form of Shares, with each whole Share Unit being paid in the form of one Share. Fractional
Share Units shall be distributed in cash by multiplying the fractional Share Unit by the Fair
Market Value of a Share immediately prior to the date of payment. All Shares payable under the
Plan shall be issued from the Omnibus Incentive Plan.

 

 

     Section 7.2. Distribution Due to Death.

          (a) Death Benefit. If a Participant dies before receiving payment of all of the
vested amounts allocated to his or her Accounts, then notwithstanding the payment dates or forms of
payment elected, and regardless of whether the Participant had Separated from Service before death
or was a Specified Employee as of such separation, all such unpaid benefits shall be paid to his or
her Beneficiary within ninety (90) days of the date of death. Notwithstanding the foregoing, the
Employer shall not be obligated to make payment to a Beneficiary (and will not be liable for any
failure to make distribution within ninety (90) days of the date of death) unless and until the
Committee has verified the identity of the Beneficiary and the Beneficiary has established the
right to receive payment of such benefits.

          (b) Default. If a Participant fails to make a valid Beneficiary designation, makes
such a designation but is not survived by any named Beneficiary, or makes such a designation but
the designation does not effectively dispose of all benefits payable after the Participant’s death,
then, to the extent benefits are payable after the Participant’s death, all such benefits shall be
paid to the Participant’s Spouse (if the Spouse survives the Participant), or if the Participant
has no Spouse or such Spouse does not survive the Participant, the personal representative or
equivalent of the Participant’s estate or, if no such person has been appointed, then in accordance
with the laws of intestate succession of the jurisdiction in which the Participant was domiciled as
of the date of death.

          (c) Form of Distribution. Distribution to a Beneficiary shall be made in a lump sum
in cash or Shares in accordance with Section 7.1(c).

          (d) Death of Beneficiary. If a Beneficiary dies after the Participant but before
receiving payment of all benefits under the Plan which would have been paid to such Beneficiary but
for his or her death, then all such unpaid benefits shall be paid within ninety (90) days after
such death to the personal representatives or equivalent of such beneficiary’s estate.
Notwithstanding the foregoing, the Employer shall not be obligated to make payment to the
beneficiary’s estate (and will not be liable for any failure to make distribution within ninety
(90) days of the date of death) unless and until the Committee has verified the identity of such
representative.

     Section 7.3. Payment of Employer Contributions. To the extent a Participant or Beneficiary, as the
case may be, has received or commenced receiving benefits hereunder, and the Participant or former
Participant is subsequently determined to be entitled to an allocation of Employer Contributions
for the Plan Year in which the Participant’s active participation in the Plan ceased, then the
Company or Participating Employer shall timely pay any such contribution to such person or, if such
person is receiving an installment form of distribution, the Committee shall adjust the balance of
the installments due to reflect the amount of such Employer Contribution effective with the due
date of the next installment payment. Any such amount shall remain subject to all applicable
provisions of the Plan until so paid.

 

 

     Section 7.4. Later Payment Deferral Elections.

          (a) General. A Participant who elected a specific payment date pursuant to Section
7.1(b) may, in accordance with the provisions of this Section 7.4 and while an Employee, elect to
change the date or form, or both, of payment of the vested Account balance allocable to a Plan
Year. No more than two (2) such elections shall be allowed as to the Account balance for a Plan
Year.

          (b) Election Rules. The later election must be otherwise valid pursuant to Section
7.2(b), as if an original election, and must be (i) made at least one (1) year before the then
scheduled payment date and (ii) extend the then scheduled payment date by five (5) or more years.

          (c) Form of Payment. For purposes of applying this Section 7.4 and implementing the
six (6) month delay rule for Specified Employees, each of the forms of payment awards under the
Plan shall be treated as a single payment due to be made as of the first scheduled payment date.

     Section 7.5. Miscellaneous.

          (a) De Minimis Amount Payout. In the event a Participant who has a Separation from
Service has a vested Account balance or portion thereof for all years which in the aggregate (under
all such arrangements treated as the same plan for this purpose under Section 409A and Treasury
Regulations thereunder) is $15,500 (or such higher amount described in Code section 402(g)(1)(B) as
is then in effect) or less, then such vested balance or portion under all such plans so combined
shall be immediately paid in a cash lump sum notwithstanding the other Plan provisions or the
Participant’s payment elections.

          (b) Permissible Delay and Acceleration. The payment provisions of Article VII are
subject to exceptions or overrides in the discretion of the Committee or other person, other than
the Participant concerned, as otherwise provided in the Plan or as allowed under Code section 409A.

 

 

ARTICLE VIII

EMERGENCY WITHDRAWALS

     Section 8.1. Restricted Withdrawals.

          (a) General. A Participant who is not otherwise then entitled to an immediate lump
sum distribution may, upon a showing of an Unforeseeable Emergency which cannot be satisfied by
other available liquid assets, request a withdrawal from the Participant’s vested Account balance,
but excluding amounts allocated to the Share Unit Fund. An emergency withdrawal cannot be
requested more frequently than once each Plan Year.

          (b) Determination. The Committee or its delegate shall determine whether the relevant
facts and circumstances represent an Unforeseeable Emergency and the amount necessary to satisfy
such need. The Committee may require such proof as it deems appropriate to evidence the existence
of and the amount necessary to satisfy the emergency or extraordinary circumstances, including a
certification that the need cannot be relieved (i) through reimbursement from insurance, (ii) by
reasonable liquidation of other assets (but such available assets shall be determined without
regard to the Participant’s account balances under the RSIP and the Plan, whether attributable to
amounts deferred before 2005 or after 2004), or (iii) by cessation of Before-tax Deposits. If and
to the extent the cessation of Before-tax Deposits can remedy such need, the Committee may direct
such immediate cessation and suspend the Participant’s right, for such period of time as it deems
appropriate, to elect Before-tax Deposits.

          (c) Time for Payment. Distributions pursuant to this Article shall be made in cash
within ninety (90) days after the withdrawal is approved by the Committee. If a Participant should
die after requesting an emergency withdrawal, but prior to the distribution thereof, the withdrawal
election shall be deemed revoked.

          (d) Committee Discretion. Approval of an emergency withdrawal shall be in the sole
discretion of the Committee, and no such approval shall be given if the Committee determines that
allowing such withdrawal may have an adverse tax consequence to the Company, Participating
Employers, the Plan or other Participants. In the Committee’s sole discretion, such approval may
require the suspension of a Participant’s right to elect Before-tax Deposits for such period of
time as the Committee directs.

 

 

ARTICLE IX

PLAN ADMINISTRATION

     Section 9.1. Committee.

          (a) General. The Committee shall consist of the persons listed on Schedule A. The
Committee shall have exclusive responsibility for the general administration and operation of the
Plan and the power to take any action necessary or appropriate to carry out such responsibilities.
In addition, the Committee shall provide generally for the operation of the Plan and be a liaison
between Employers to assure uniform procedures as appropriate. The duties of the Committee shall
include, but not be limited to, the following:

	 	(i)	 	to prescribe, require and use appropriate forms;
	 
	 	(ii)	 	to formulate, issue and apply rules and regulations;
	 
	 	(iii)	 	to prepare and file reports, notices and any other documents
relating to the Plan which may be required by law;
	 
	 	(iv)	 	to interpret and apply the provisions of the Plan;
	 
	 	(v)	 	to authorize and direct benefit payments.

In exercising such powers and duties, and other powers and duties granted under the Plan or Trust
to the Committee, the Committee and each member thereof is granted such discretion as is
appropriate or necessary to carry out the duties and powers so delegated. This discretion
necessarily follows from the fact that the Plan, the Trust and related documents do not, and are
not intended to, prescribe all rules necessary to administer the Plan or anticipate all
circumstances or events which may arise in the course of such administration.

          (b) Code Section 409A. The Plan shall be administered, and the Committee, its
delegate and the Administrator shall exercise their discretionary authority under the Plan, in a
manner consistent with Code section 409A. Any permissible discretion to accelerate or defer a Plan
payment under such Regulations, the power to exercise which is not otherwise described expressly in
the Plan, shall be exercised by the Committee. In the event the matter over which such discretion
may be exercised relates to a Committee member, or such member is otherwise unable to fairly
exercise such discretion, such member shall not take part in the deliberations and decisions
regarding that matter.

          (c) Allocation to Participating Employers. To the extent practicable, the Committee
shall account for the Trust assets in such manner as will permit the accurate allocation of
Accounts or parts thereof, including the investment earnings and losses attributable thereto, to
the relevant Participating Employer. The Committee shall provide to each Participating Employer all
information necessary to permit each such Employer to prepare any reports or tax filings which may
be required by reason of its status as a Participating Employer.

          (d) Action by Compensation Committee of the Board. Notwithstanding the foregoing, if
any action or determination of the Committee as set forth in the Plan is required to

 

 

be taken by the Compensation Committee of the Board of Directors of the Company in order to
comply with applicable law, the Company’s governance charters or the listing requirements of any
exchange on which the Company’s common stock is then listed, then all references herein to the
“Committee” shall include the Compensation Committee of the Board to the extent deemed necessary or
advisable.

     Section 9.2. Organization and Procedure. The Committee may have a chairman, a secretary, and such
other officers as it deems appropriate. Subject to Section 9.1, action on any matter shall be
taken on the vote of at least a majority of all members of the Committee at any meeting or upon
unanimous written consent of all members without a meeting. The Committee may adopt such bylaws,
procedures and operating rules as it deems appropriate.

     Section 9.3. Delegation of Authority and Responsibility. The Committee may, in writing, delegate
to any one or more of its members the authority to execute documents on behalf of the Committee and
to represent the Committee in any matters or dealings involving such Committee.

     The Committee may delegate in writing certain of its powers to a person employed by an
Employer under such terms and conditions as may be specified by the Committee. Employees of an
Employer who are not members of the Committee or persons to whom powers are delegated, shall
perform such duties and functions relating to the Plan as the Committee may direct and supervise.
It is expressly provided, however, that the Committee shall retain full and exclusive authority
and responsibility for and respecting any such activities by other employees, and nothing contained
in this Section 9.3 shall be construed to confer upon any such employee any discretionary authority
or control respecting the administration or operation of the Plan.

     Section 9.4. Use of Professional Services. The Committee may obtain the services of such
attorneys, accountants, record keepers or other persons as it deems appropriate, any of whom may
be the same persons who are providing services to an Employer. In any case in which the Committee
utilizes such services, it shall retain exclusive discretionary authority and control over the
administration and operation of the Plan.

     Section 9.5. Fees and Expenses. Committee members who are employees of the Company or a
Participating Employer shall serve without compensation but shall be reimbursed for all reasonable
expenses incurred in their capacity as Committee members. No employee members of the Committee or
persons performing services pursuant to Section 9.4 shall receive greater than reasonable
compensation for their services. All compensation for services and expenses shall be paid from the
Trust unless the Company, in its sole discretion, elects to pay them. To the extent not paid by the
Company, such compensation and expenses shall be paid out of the principal or income of the Trust
and charged to Accounts.

     Section 9.6. Communications. Requests, claims, appeals, and other communications related to the
Plan and directed to the Company or the Committee shall be in writing and shall be made by
transmitting the same via the U.S. Mail, certified, return receipt requested, to the Sidekick
Committee, c/o Senior Vice President of Human Resources, at the address listed in the latest
summary description for the Plan.

 

 

     Section 9.7. Claims.

          (a) Filing Claims. A Participant or Beneficiary (or a person who in good faith
believes he or she is a Participant or Beneficiary, i.e., a “claimant”) who believes he or she has
been wrongly denied benefits under the Plan may file a written claim for benefits with the
Administrator. Although no particular form of written claim is required, no such claim shall be
considered unless it provides a reasonably coherent explanation of the claimant’s position.

          (b) Decision on Claim. The Administrator shall in writing approve or deny the claim
within sixty (60) days of receipt, provided that such sixty (60) day period may be extended for
reasonable cause by notifying the claimant. If the claim is denied, in whole or in part, the
Administrator shall provide notice in writing to the claimant, setting forth the following:

          (1) the specific reason or reasons for the denial;

          (2) a specific reference to the pertinent Plan provisions on which the denial is based;

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

          (4) the steps to be taken if the claimant wishes to appeal the decision to the Committee.

          (c) Appeal of Denied Claim. (1) Filing Appeals. A claimant whose claim has
been denied in whole or in part may appeal such denial to the Committee by filing a written appeal
with the Administrator within sixty (60) days of the date of the denial. A decision of the
Administrator which is not appealed within the time herein provided shall be final and conclusive
as to any matter which was presented to the Administrator.

          (2) Rights on Appeal. A claimant (or a claimant’s duly authorized representative) who
appeals the Administrator’s decision shall, for the purpose of preparing such appeal, have the
right to review any pertinent Plan documents, and submit issues and comments in writing to the
Committee.

          (d) Decision by Appeals Committee. The Committee shall make a final and full review
of any properly appealed decision of the Administrator within sixty (60) days after receipt of the
appeal, provided that such period may be extended for reasonable cause by notifying the claimant.
The Committee’s decision shall be in writing and shall include specific
reasons for its decisions and specific references to the pertinent Plan provisions on which
its decision is based.

 

 

ARTICLE X

PLAN AMENDMENTS, PLAN TERMINATION,

AND MISCELLANEOUS

     Section 10.1. Amendments and Termination.

          (a) General. While it is intended the Plan shall continue in effect indefinitely, the
Company may from time to time modify, alter or amend the Plan or the Trust, provided that no
amendment affecting the rights, duties or responsibilities of the Trustee may be made without the
Trustee’s consent. Except as otherwise inconsistent with Section 9.1(b), the Company may at any
time order the temporary suspension or complete discontinuance of Before-tax Deposits, deferrals of
Equity Awards or Employer Contributions, or may terminate the Plan. Except as described in
subsection (b) following, no such amendment shall reduce the balance in any Participant’s Accounts
determined as of the later of the date the amendment is adopted or effective.

          (b) Amendments to Comply with Applicable Law. Nothing herein shall be construed to
prevent any modification, alteration or amendment of the Plan or Trust which is required to comply
with the provision of any applicable law or regulation relating to the establishment or maintenance
of this Plan and Trust. Except as otherwise provided herein, or as necessary to comply with such
law or regulation, no such amendment shall reduce the balance in any Participant’s Accounts
determined as of the later of the date the amendment is adopted or effective.

          (c) Participating Employers. An Employer may become a Participating Employer by
agreeing to withhold and make contributions for its Employees as provided for herein. An Employer
which becomes a Participating Employer thereby agrees to pay or provide for the payment of benefits
hereunder to those Participants (and their Beneficiaries) employed by it, but only to the extent
such benefits are attributable to contributions, and investment earnings and losses credited
thereon, related to the period of such employment. A Participating Employer shall have no
discretionary authority or control over the administration of the Plan or the Fund.

          An Employer, other than the Company, which becomes a Participating Employer thereby agrees
that any subsequent modifications, alterations and amendments to the Plan by the Company shall be
deemed to have been adopted by the Participating Employer.

          An Employer, other than the Company, may cease to be a Participating Employer by adopting a
written resolution of its board of directors and delivering such resolution to the Committee. No
resolution ending participation in the Plan shall be effective until thirty (30) days after it is
received by the Committee. Unless otherwise provided herein, ceasing to be a Participating
Employer shall not relieve such Employer of its obligation hereunder to provide for the payment of
benefits credited to Accounts on behalf of Participants during the time such Employer was a
Participating Employer.

          (d) Plan Termination. If the Plan is terminated, the Committee may elect to either
terminate or retain the Trust. Any decision to terminate the Plan or the Trust shall not reduce
the balance of a Participant’s Accounts under the Plan as of the effective date of such
termination, nor shall it terminate, amend or otherwise change the liability of the Company or
Participating Employer to pay or provide for the payment of benefits under the Plan.

 

 

     Section 10.2. Non-Guarantee of Employment. Nothing contained in this Plan shall be construed as a
contract of employment between an Employer and a Participant, or as a right of any Participant to
be continued in the employment of an Employer, or as a limitation on the right of an Employer to
discharge any Participant with or without notice or with or without cause.

     Section 10.3. Rights to Trust Asset.

          (a) Rights of Participants. No Participant or any other person shall have any right
to, or interest in, any part of the Trust assets upon termination of employment or otherwise,
except as otherwise provided under the Plan. If the assets of the Trust are insufficient to pay
the vested amounts credited to a Participant’s Accounts, the Participant’s Employer shall pay any
such amounts from its other general assets. If such Employer does not timely pay such benefits,
then, except as described in Section 10.2(b), the sole recourse of a claimant Participant or
Beneficiary shall be against such Employer and neither the Company nor any other Employer shall be
responsible to pay or provide for the payment of such benefits or liable for the nonpayment
thereof.

          (b) Company Assumption of Liability. If the Participant’s employment is terminated
due to the sale of the stock (or rights analogous to stock) or assets of his or her Employer by the
Company, the Company shall assume and be responsible for the payment of benefits to such
Participant as necessary pursuant to this Section 10.3 even though it may not have been such
Participant’s Employer. The Company’s obligation under this Section 10.3(b) shall cease as of the
earlier of the date all such benefits are paid to the affected Participant or the date the person
who purchased such stock or assets, or a person who controls such person, agrees in writing to
assume the liability for the benefits credited to the affected Participants by reason of their
participation in the Plan.

     Section 10.4. Suspension of Rules.

          (a) Federal Securities and Other Laws. Notwithstanding anything in the Plan to the
contrary, and to the extent and for the time reasonably necessary to comply with federal securities
laws (or other applicable laws or regulations), elective deferrals, Participant
investment-direction, and payment dates and forms under the Plan may be suspended, changed, or
delayed as necessary to comply with such laws or regulations; provided, however, any payments so
delayed shall be paid to the Participant or Beneficiary as of the earliest date the Committee
determines that such payment will not cause a violation of any such laws or regulations.

          (b) Section 162(m). If the Committee reasonably determines that a scheduled payment
of benefits under the Plan will not be deductible by an Employer by reason of Code section 162(m),
it may, if and to the extent permitted by Code section 409A, suspend all such payments to the
extent not so deductible. Payments so suspended shall be paid by the fifteenth (15th) day of the
third month after the affected Participant dies, becomes Disabled, or incurs a
Separation from Service, or if earlier, when such payment is deductible by the Company;

 

 

provided, however, if the Participant is a Specified Employee when he or she incurs a Separation
from Service, payments suspended pursuant to this subsection shall be paid as described except the
six (6) month anniversary of the actual Separation from Service shall be treated as the date the
affected Participant Separated from Service.

          (c) Offset for Amounts Due. A Participant’s vested Account balance may be reduced by
one or more offsets to repay any amounts then due and owing to an Employer, unless another means of
repayment is agreed to by the Committee. Except for the right to immediate offset for an amount up
to $5,000, or such higher amount as allowed under Treasury Regulations or other directives, the
Account balance shall not be so offset before it is otherwise scheduled to be paid to the
Participant or Beneficiary and the amount then offset shall not exceed the amount that would be
otherwise so paid.

     Section 10.5. Requirement of Proof. In discharging their duties and responsibilities under the
Plan, the Committee or other individual may require proof of any matter concerning this Plan, and
no person shall acquire any rights or be entitled to receive any benefits under this Plan until
such proof is furnished.

     Section 10.6. Indemnification. The Company shall indemnify each member of the Committee and hold
each of them harmless from the consequences of acts or conduct when done in their capacity as
Committee members. This provision shall apply only if the member acted in good faith and in a
manner reasonably believed to be solely in the best interests of the Participants and Beneficiaries
and, with respect to any criminal action or proceeding, had no reasonable cause to believe the
conduct was unlawful. Such indemnification shall cover any and all reasonable attorneys’ fees and
expenses, judgments, fines and amounts paid in settlement, but only to the extent such amounts are
(i) actually and reasonably incurred, (ii) not otherwise paid or reimbursable under an applicable
Employer paid insurance policy, and (iii) not duplicative of other payments made or reimbursements
due by the Company or its affiliates under other indemnity agreements.

     In no event shall this Section 10.6 be construed to require the Company to indemnify third
parties with whom it may contract to perform administrative or investment management duties or to
indemnify the Trustee to any extent beyond what may be required under such contract or the Trust
agreement, respectively.

     Section 10.7. Non-Alienation and Taxes.

          (a) General. Except as otherwise expressly provided herein or as otherwise required
by law, no right or interest of any Participant or Beneficiary in the Plan and the Trust shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, attachment, garnishment, execution, levy, bankruptcy, or any other disposition of any
kind, either voluntary or involuntary, prior to actual receipt of payment by the person entitled to
such right or interest under the provisions hereof, and any such disposition or attempted
disposition shall be void.

          (b) Tax Withholdings. (1) General. Benefits earned under the Plan and
payment of such benefits shall be subject to tax reporting and withholding as required by law and

 

 

the amount of such withholding may be determined by treating such benefits as being in the nature
of supplemental wages. If tax withholdings must be made before such benefits are paid to a
Participant or Beneficiary (e.g., FICA taxes on Before-tax Deposits), they shall be made from other
wages paid to such individual apart from the Plan to the extent reasonably possible; provided,
however, if such other wages are insufficient for that purpose, the withholdings shall be made from
and reduce Before-tax Deposits or Employer Contributions, as applicable, for the individual
concerned or, if no such contributions are available, the relevant Employer shall advance the
withholdings, the appropriate Account balance of the individual concerned shall be reduced in the
same amount, and upon the direction of the Committee the Trustee shall remit to the Employer an
amount equal to such reduction.

          (2) Tax Consequences. Neither the Company nor any other Employer represents or
guarantees that any particular federal, foreign, state or local income, payroll, or other tax
consequence will result from participation in this Plan or payment of benefits under the Plan.

     Section 10.8. Not Compensation Under Other Benefit Plans. No amounts allocated to a Participant’s
Account shall be deemed to be salary or compensation for purposes of the RSIP or any other employee
benefit plan of the Company or any other Employer except as and to the extent otherwise
specifically provided in such other plan.

     Section 10.9. Savings Clause. If any term, covenant, or condition of this Plan, or the application
thereof to any person or circumstance, shall to any extent be held to be invalid or unenforceable,
the remainder of this Plan, or the application of any such term, covenant, or condition to persons
or circumstances other than those as to which it has been held to be invalid or unenforceable,
shall not be affected thereby, and, except to the extent of any such invalidity or
unenforceability, this Plan and each term, covenant, and condition hereof shall be valid and shall
be enforced to the fullest extent permitted by law.

     Section 10.10. Facility of Payment. If the Committee shall determine a Participant or Beneficiary
entitled to a distribution hereunder is incapable of caring for his or her own affairs because of
illness or otherwise, it may direct any distribution from such Participant’s Accounts be made, in
such shares as it shall determine, to the Spouse, child, parent or other blood relative of such
Participant or Beneficiary, or any of them, or to such other person or persons as the Committee may
determine, until such date as it shall determine such incapacity no longer exists; provided,
however, the exercise of this discretion shall not cause an acceleration or delay in the time of
payment of Plan benefits except to the extent, and only for the duration of, the time reasonably
necessary to resolve such matters or otherwise protect the interests of the Plan. The Committee
shall be under no obligation to see to the proper application of the distributions so made to such
person or persons and any such
distribution shall be a complete discharge of any liability under the Plan to such Participant or
Beneficiary, to the extent of such distribution.

     Section 10.11. Requirement of Releases. If in the opinion of the Committee, any present or former
Spouse or dependent of a Participant or other person shall by reason of the law of any jurisdiction
appear to have any bona fide interest in Plan benefits that may become payable to a Participant or
with respect to a deceased Participant, or otherwise has asserted such a claim, the Committee may
direct such benefits be withheld pending receipt of such written

 

 

releases as it deems necessary to
prevent or avoid any conflict or multiplicity of claims with respect to the payment of such
benefits, but only to the extent and for the duration reasonably necessary to resolve such matters
or otherwise protect the interests of the Plan.

     Section 10.12. Board Action. Any action which is required or permitted to be taken by the Board of
Directors of the Company under the Plan may be taken by the Compensation Committee of such board or
any other authorized committee of such board.

     Section 10.13. Computational Errors. In the event mathematical, accounting, or similar errors are
made in processing or paying a benefit under the Plan, the Committee may make such equitable
adjustments as it deems appropriate (which may be retroactive) to correct such errors.

     Section 10.14. Unclaimed Benefits. In the event any person who is entitled to benefits hereunder
cannot be located despite reasonable and diligent efforts to do so, then such person’s benefits
shall be automatically forfeited as of the last day of the Plan Year next following the year in
which such benefits first became payable; provided, however, in the event such person subsequently
makes a valid claim for such forfeited benefits prior to the termination of the Plan, such benefits
shall be reinstated and immediately paid.

     Section 10.15. Communications. The Committee, or its delegate, or the Trustee, as to the function
or authority concerned, shall prescribe such forms of communication, including forms for benefit
application and the like, with respect to the Plan and Fund as it deems appropriate. Except as
otherwise prescribed by such persons or otherwise provided by governing statute or regulation, any
such communication and assent or consent thereto may be handled by electronic means.

 

 

ARTICLE XI

TRANSITIONAL RULES

     Section 11.1. Introduction. This Plan document is effective on January 1, 2009 (i.e., the
“effective date”) and, except as otherwise provided herein, shall apply only to those Participants
who are eligible to actively participate in the Plan on or after the effective date. For the
period that began on January 1, 2005 and ended December 31, 2008, the Plan as in effect on December
31, 2004 governed the rights and obligations of the Company and Participants, except as modified by
the Company in its discretion so that the Plan and its operations were in good faith compliance
with Code Section 409A.

     Section 11.2. Amounts Deferred Under Prior Plan. Account balances (including earnings and losses
on such balances regardless of when incurred) attributable to deposits and contributions for
periods before 2005 shall be accounted for separately from account balances attributed to deposits
and contributions for periods after 2004 and such pre-2005 deferrals shall be governed by the terms
and conditions of the Plan as in effect on December 31, 2004, which are contained in a separate
plan document.

     The undersigned, by the authority of the Board of Directors of Pentair, Inc., does hereby
approve the form and content of this amended and restated Plan document.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 

 

 

SCHEDULE A

COMMITTEE MEMBERS

1. Senior Vice President of Human Resources

2. Vice President of Compensation and Benefits

3. Vice President of Treasury and Tax

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]