Document:

EXHIBIT 10.55

 

PROMISSORY NOTE SECURED BY TRUST DEED

 

	
  $100,000

  	
   

  	
  San Diego, California

  	
   

  	
  January 20, 2004

  

 

FOR VALUE RECEIVED,    Electropure
Holdings, LLC (hereinafter, “Maker”), promises to pay to the order
of SECOND
SOURCE SOLUTIONS (“Holder”), the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000),
together with interest at the rate set forth below:

 

1.               Interest Rate and Date of Maturity.   The outstanding principal balance hereof,
shall bear simple interest at the rate of fifteen percent (15%) per annum, from date of
funding, until fully repaid or until maturity, when the entire
outstanding balance of principal and interest accrued shall become due and
payable in full, without further notice, demand or presentment.  The Maturity
Date on this Note will be March 1,
2004.

 

2.               Payments.  Maker shall pay equal monthly payments of one thousand two hundred fifty dollars
and no cents ($1,250.00), which shall be designated as interest only payments. The first
payment will be due on March 1, 2004, at which time the
entire unpaid principal balance shall also become due and payable.   No principal reduction payments shall be
sent by Maker.

 

3.               Late Charges.  If any sum payable under this Note is not paid on or before the
Maturity Date, Maker shall pay to Holder without further demand or request, an
amount equal to ten thousand dollars ($10,000.00).  It is agreed by Maker that the actual amount of the cost to
Holder incurred to defray costs and expenses directly attributable to the late
payment is difficult to calculate or predict, so Maker agrees to pay this
stipulated penalty, in addition to all other amounts due.

 

4.               Prepayment.  Maker may pay off the entire principal balance plus
outstanding interest prior to the maturity date without prepayment penalty.  However, no partial principal payments may be applied.  Any partial principal reduction payments are
subject to a penalty of fifteen hundred dollars ($1,500.00) for each
pre-payment requested. Upon such pre-payment of principal, and upon the payment
of the penalty, the interest calculated on the remaining unpaid principal
balance shall be recalculated. Monthly payments shall be made based on the same
interest rate of this note and multiplied by the then unpaid principal balance.

 

5.               Security Interest.  Pursuant to a Deed of Trust with same
date as the date of this Note, and which is signed by Maker at the time of the
execution of this Note, this Note shall be secured by the powers contained in
that Deed of Trust which shall encumber the real property that is particularly
described in the Deed of Trust.  Maker,
as a material consideration for Holder’s lending of the principal balance of
this Note, agrees that the Deed of Trust used as a security interest to protect
the interest of Holder shall be recorded in no lower than “second position”
against the real estate encumbered.

 

6.               Deficiency Judgment and Personal Obligation.  Maker agrees, as a material part of the
consideration for the loan evidenced by this Note, that Holder may, in the
event that the security interest in the Property does not equal in value the
amount of any deficiency following a foreclosure action, pursue an action in
any Court of Law having jurisdiction over the matters contained in this Note
for a judgment in a amount equal to the deficiency remaining following any
foreclosure (judicial or non-judicial) and subsequent Trustee Sale. This Note
evidences a re-finance of the Property, and the provisions of California Code of
Civil Procedure S.580b and S.580d are specifically waived by
Maker.  Maker further agrees that the
provisions of California Civil Code S. 2928 are waived, and the
obligations contained herein are personal in nature.

 

 

7.               Default.

 

a)              Events of Default.  Maker shall be in default of this Note upon
the occurrence of any of the following events:

 

i)                 Failure of Maker to make any payments
of principal, interest, or other charges as allowed under the terms of this
note when due,

ii)              Failure of Maker to perform or observe
any of their non-monetary obligations under this note, after ten (10) days written
notice of such default sent to the Maker by the Holder,

iii)           Maker’s breach or violation of any
representation or warranty contained herein, or contained in any other document
provided to Holder by Maker in contemplation of execution of this Note,

iv)          Any representation or warranty made by Maker,
or his representative, any other representation or warranty made or furnished
to Holder by or on behalf of Maker, including without limitation any statement
made by Maker, his representatives in any financial or credit statement or
application for credit made prior to the date of this Agreement, proves to have
been incorrect in any respect when made and remains inaccurate and not cured at
the time of the discovery by Holder,

v)             The default in the performance by any
guarantor of this Note of any of the terms, agreements or covenants of any
guaranty signed by Maker or guarantor at the request of Maker or Holder,

vi)          An event of default as specifically defined
or outlined in the Deed of Trust,

vii)       The making of any general assignment for the
benefit of creditors by Maker or any guarantor of this Note, or the
commencement by Maker or any guarantor of the Note of a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,

viii)    The appointment of a receiver, trustee or other
similar official for any of Maker’s assets or the property or assets of any
guarantor of this Note, or the filing of a bankruptcy petition against Maker or
any guarantor of this Note, whether voluntary or involuntary.  The provision of this sub paragraph shall
not amount to a breach or default if such a petition is removed or dismissed
within sixty (60) days from the date of filing, or,

ix)            If Holder determines, in Holders sole
discretion, that the obligations of Maker hereby are inadequately secured by
the Property subject to the Deed of Trust, and that the prospect of payment or
performance of any such obligation is thereby impaired,

 

b)             Acceleration Upon Default.  Upon a default by Maker hereunder, at
Holder’s option, the entire unpaid balance of interest and principal of this
Note shall become immediately due and payable.

 

8.               Usury Exemption.  Maker acknowledges that the loan evidenced
by this Note is subject to the provisions of California Civil Code S. 1916.1, in
that it has been arranged by a licensed Real Estate Broker, acting for
compensation for arranging the loan pursuant to an agreement with Holder, and
therefore such loan is exempt from the restrictions upon the interest rates
which may be imposed on borrowers pursuant to Section 1 of Article XV
of the California Constitution.

 

9.               Insurance.  At the request of Holder, Maker covenants to name Holder as an
additional insured on any Policy of Liability Insurance purchased by Maker to
insure all risks of loss at the Property subject to the Deed of Trust.  Maker agrees that certificates of insurance,
reflecting the inclusion of Holder as additional insured shall be provided to
Holder during the period of time that this Note is unpaid.  Should Maker fail to provide Holder with
proof of such insurance, Holder may, but shall not be required, to purchase
such insurance at the expense of Maker, and add the policy amount to the
principal balance of this note.  In this
event, the policy premium shall bear interest at the rate provided for herein.

 

As a material consideration for Holder to lend Maker the money subject
to the provisions of the Note, upon Holder’s request Maker shall purchase and
provide to Holder a standard form of Lenders’ Title Insurance, in an amount
equal to the face value of this Note.

 

 

10.         Notices. 
Except as may otherwise be provided for or required by law, any
notice shall be provided from one party to the other by either U.S. Mail,
postage prepaid, or by certified mail or messenger service to the following
addresses:

 

 

	
  To Holder:  Second Source
  Solutions

  	
   

  	
  To Maker:

  	
   

  	
  Electropure Holdings, LLC

  
	
   

  	
  11598 Scripps Creek Drive

  	
   

  	
   

  	
   

  	
  23456 South Pointe Drive

  
	
   

  	
  San Diego, CA  92131

  	
   

  	
   

  	
   

  	
   

  	
  Laguna Hills, CA  92653

  

 

11.         Miscellaneous Provisions.

 

a)              Attorney’s Fees.  In the event that any action is taken by
Maker or Holder in connection with the enforcement or interpretation of the
provisions of this Note, the prevailing party shall be entitled to recover from
the other party, in addition to the relief granted by the court, his or her
attorney fees and court costs.

b)             Costs.  Maker agrees to pay Holder’s costs in connection with the loan
evaluation, the preparation of this Note and the costs associated with the
preparation and recordation of the related documents. It is specifically agreed
that these costs shall include lender fees of $750, plus any fees including, but not limited to recording, wire transfer,
appraisal, credit report and title  insurance.

c)              Successors and Assigns.  The provisions and covenants contained
herein shall be binding upon the successors, transferees, heirs and assigns of
the parties herein.  Maker shall not
assign his rights or obligations without the prior written approval of the Holder.

d)             Interpretation.  Whenever possible, each provision of this
Note and any other related document shall be interpreted in such a manner as to
be valid under the applicable provision of California law.  Should any provision be rendered invalid or
unenforceable, the remainder of this Note shall be unaffected thereby.

e)              Time is of the Essence.  Time is of the essence as to the performance
of each and every obligation of the Maker and Holder pursuant to this Note.

f)                Further Assurances.  Each of the parties to this Note agrees and
covenants that they will take such further action as may be reasonably
necessary to carry out the provisions of this Note, the Deed of Trust, or any
other agreement or document relating hereto or in connection herewith.

 

IN WITNESS WHEREOF

 

“Maker”

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Electropure
  Holdings Inc.

  	
   

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /S/ FLOYD PANNING

  	
   

  	
  01/20/04

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  	
  DateExhibit 10.12

 

 

Equitable Resources, Inc.

 

 

EMPLOYEE DEFERRED COMPENSATION PLAN

 

 

Amended and Restated Effective December 3, 2003

 

 

EQUITABLE RESOURCES, INC.

EMPLOYEE DEFERRED COMPENSATION PLAN

 

Table of Contents

 

	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
   

  	
  1.1

  	
  STATEMENT
  OF PURPOSE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
   

  	
  2.1

  	
  ACCOUNT.

  	
   

  
	
   

  	
  2.2

  	
  BASE SALARY.

  	
   

  
	
   

  	
  2.3

  	
  BENEFICIARY.

  	
   

  
	
   

  	
  2.4

  	
  BOARD.

  	
   

  
	
   

  	
  2.5

  	
  BONUS.

  	
   

  
	
   

  	
  2.6

  	
  CHANGE IN
  CONTROL.

  	
   

  
	
   

  	
  2.7

  	
  CODE.

  	
   

  
	
   

  	
  2.8

  	
  COMMITTEE.

  	
   

  
	
   

  	
  2.9

  	
  COMPANY.

  	
   

  
	
   

  	
  2.10

  	
  COMPENSATION.

  	
   

  
	
   

  	
  2.11

  	
  CREDITED SERVICE.

  	
   

  
	
   

  	
  2.12

  	
  DEFERRAL ACCOUNT.

  	
   

  
	
   

  	
  2.13

  	
  DEFERRAL AMOUNT.

  	
   

  
	
   

  	
  2.14

  	
  DEFERRAL BENEFIT.

  	
   

  
	
   

  	
  2.15

  	
  DEFERRAL ELECTION.

  	
   

  
	
   

  	
  2.16

  	
  DISABILITY.

  	
   

  
	
   

  	
  2.17

  	
  EARLY RETIREMENT.

  	
   

  
	
   

  	
  2.18

  	
  ELIGIBLE EMPLOYEE.

  	
   

  
	
   

  	
  2.19

  	
  ELECTIVE DEFERRAL AMOUNT.

  	
   

  
	
   

  	
  2.20

  	
  EMPLOYER.

  	
   

  
	
   

  	
  2.21

  	
  HARDSHIP WITHDRAWAL.

  	
   

  
	
   

  	
  2.22

  	
  INVESTMENT RETURN RATE.

  	
   

  
	
   

  	
  2.23

  	
  MATCHING ACCOUNT.

  	
   

  
	
   

  	
  2.24

  	
  MATCHING AMOUNT.

  	
   

  
	
   

  	
  2.25

  	
  OTHER INCOME.

  	
   

  
	
   

  	
  2.26

  	
  PARTICIPANT.

  	
   

  
	
   

  	
  2.27

  	
  PARTICIPATION AGREEMENT.

  	
   

  
	
   

  	
  2.28

  	
  PLAN.

  	
   

  
	
   

  	
  2.29

  	
  PLAN YEAR.

  	
   

  
	
   

  	
  2.30

  	
  REGULAR DEFERRAL AMOUNT.

  	
   

  
	
   

  	
  2.31

  	
  REQUIRED DEFERRAL AMOUNT.

  	
   

  
	
   

  	
  2.32

  	
  RETIREMENT.

  	
   

  
	
   

  	
  2.33

  	
  SELECTED AFFILIATE.

  	
   

  
	
   

  	
  2.34

  	
  TOTAL DESIRED MATCH.

  	
   

  
	
   

  	
  2.35

  	
  VALUATION DATE.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  ELIGIBILITY AND
  PARTICIPATION

  	
   

  
	
   

  	
   

  
	
   

  	
  3.1

  	
  ELIGIBILITY.

  	
   

  
	
   

  	
  3.2

  	
  PARTICIPATION.

  	
   

  
	
   

  	
  3.3

  	
  CHANGE IN
  PARTICIPATION STATUS.

  	
   

  
	
   

  	
  3.4

  	
  INELIGIBLE
  PARTICIPANT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  
					

 

2

 

	
  DEFERRAL OF COMPENSATION

  	
   

  
	
   

  	
   

  
	
   

  	
  4.1

  	
  DEFERRAL
  AMOUNTS.

  	
   

  
	
   

  	
  4.2

  	
  MATCHING
  AMOUNT.

  	
   

  
	
   

  	
  4.3

  	
  CREDITING
  OF DEFERRAL AMOUNTS AND MATCHING AMOUNTS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  
	
   

  	
   

  
	
  BENEFIT ACCOUNTS

  	
   

  
	
   

  	
   

  
	
   

  	
  5.1

  	
  VALUATION
  OF ACCOUNT.

  	
   

  
	
   

  	
  5.2

  	
  CREDITING OF
  INVESTMENT RETURN.

  	
   

  
	
   

  	
  5.3

  	
  STATEMENT
  OF ACCOUNTS.

  	
   

  
	
   

  	
  5.4

  	
  VESTING
  OF AMOUNTS.

  	
   

  
	
   

  	
  5.5

  	
  INVESTMENT
  OF REGULAR, ELECTIVE AND REQUIRED DEFERRAL AMOUNTS.

  	
   

  
	
   

  	
  5.6

  	
  INVESTMENT OF
  MATCHING AMOUNTS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  
	
  PAYMENT OF BENEFITS

  	
   

  
	
   

  	
   

  
	
   

  	
  6.1

  	
  PAYMENT OF DEFERRAL BENEFITS.

  	
   

  
	
   

  	
  6.2

  	
  PAYMENT
  OF DEFERRAL BENEFIT UPON TERMINATION.

  	
   

  
	
   

  	
  6.3

  	
  PAYMENTS
  TO BENEFICIARIES UPON DEATH OF PARTICIPANT.

  	
   

  
	
   

  	
  6.4

  	
  HARDSHIP
  WITHDRAWAL.

  	
   

  
	
   

  	
  6.5

  	
  FORM OF
  PAYMENT.

  	
   

  
	
   

  	
  6.6

  	
  COMMENCEMENT OF PAYMENTS.

  	
   

  
	
   

  	
  6.7

  	
  SMALL BENEFIT.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  
	
  BENEFICIARY
  DESIGNATION

  	
   

  
	
   

  	
   

  
	
   

  	
  7.1

  	
  BENEFICIARY DESIGNATION.

  	
   

  
	
   

  	
  7.2

  	
  CHANGE OF
  BENEFICIARY DESIGNATION.

  	
   

  
	
   

  	
  7.3

  	
  NO DESIGNATION.

  	
   

  
	
   

  	
  7.4

  	
  EFFECT OF
  PAYMENT.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  
	
   

  	
  8.1

  	
  COMMITTEE.

  	
   

  
	
   

  	
  8.2

  	
  INVESTMENTS.

  	
   

  
	
   

  	
  8.3

  	
  AGENTS.

  	
   

  
	
   

  	
  8.4

  	
  BINDING EFFECT OF
  DECISIONS.

  	
   

  
	
   

  	
  8.5

  	
  INDEMNIFICATION OF
  COMMITTEE.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
   

  	
   

  
	
  AMENDMENT AND
  TERMINATION OF PLAN

  	
   

  
	
   

  	
   

  
	
   

  	
  9.1

  	
  AMENDMENT.

  	
   

  
	
   

  	
  9.2

  	
  TERMINATION.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
   

  	
  10.1

  	
  FUNDING.

  	
   

  
	
   

  	
  10.2

  	
  NONASSIGNABILITY.

  	
   

  
	
   

  	
  10.3

  	
  LEGAL
  FEES AND EXPENSES.

  	
   

  
					

 

3

 

	
   

  	
  10.4

  	
  CAPTIONS.

  	
   

  
	
   

  	
  10.5

  	
  GOVERNING LAW.

  	
   

  
	
   

  	
  10.6

  	
  SUCCESSORS.

  	
   

  
	
   

  	
  10.7

  	
  RIGHT TO CONTINUED SERVICE.

  	
   

  

 

4

 

ARTICLE I

 

1.1          Statement
of Purpose

 

This is the Equitable Resources, Inc. Employee Deferred Compensation Plan
(the “Plan”) made in the form of this Plan and in related agreements between
the Employer and certain management or highly compensated employees.  The purpose of the Plan is to provide
management and highly compensated employees of the Employer with the option to
defer the receipt of portions of their compensation payable for services
rendered to the Employer.  It is
intended that the Plan will assist in attracting and retaining qualified
individuals to serve as officers and managers of the Employer.

 

5

 

ARTICLE
II

 

DEFINITIONS

 

When used in this Plan and initially capitalized, the following words and
phrases shall have the meanings indicated:

 

2.1          Account.

 

“Account” means the sum of a Participant’s Deferral Account and Matching
Account.

 

2.2          Base Salary.

 

“Base Salary” means a Participant’s base earnings paid by the Employer to
a Participant without regard to any increases or decreases in base earnings as
a result of an election to defer base earnings under this Plan or (ii) an election
between benefits or cash provided under a Plan of an Employer maintained
pursuant to Section 125 or 401(k) of the Code, and as limited in Exhibit B
attached hereto.

 

2.3          Beneficiary.

 

“Beneficiary” means the person or persons designated or deemed to be
designated by the Participant pursuant to Article VII to receive benefits
payable under the Plan in the event of the Participant’s death.

 

2.4          Board.

 

“Board” means the Board of Directors of the Company.

 

2.5          Bonus.

 

“Bonus” means a Participant’s bonus or sales commission paid by the
Employer to a Participant under the plans listed in Exhibit B attached hereto
and to the degree limited in Exhibit B, as applicable, without regard to any
decreases as a result of an election to defer all or any portion of a bonus
under this Plan or (ii) an election between benefits or cash provided under a
plan of the Employer maintained pursuant to Section 401(k) of the Code.

 

2.6          Change in
Control.

 

“Change in Control” means any of the following events:

 

(a)           The sale or other
disposition by the Company of all or substantially all of its assets to a
single purchaser or to a group of purchasers, other than to a corporation with
respect to which, following such sale or disposition, more than eighty percent
(80%) of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of the Board of Directors is then owned
beneficially, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Company common stock and the combined voting power of the then
outstanding voting securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the outstanding Company
common stock and voting power immediately prior to such sale or disposition.

 

(b)           The acquisition in one
or more transactions by any person or group, directly or indirectly, of beneficial
ownership of twenty percent (20%) or more of the

 

6

 

outstanding
shares of Company common stock or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of the Board; provided, however, that any acquisition by (x) the
Company or any of its subsidiaries, or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its subsidiaries or (y)
any person that is eligible, pursuant to Rule 13d-1(b) under the Exchange
Act (as such rule is in effect as of November 1, 1995) to file a statement on
Schedule 13G with respect to its beneficial ownership of Company common stock
and other voting securities whether or not such person shall have filed a
statement on Schedule 13G, unless such person shall have filed a statement on
Schedule 13D with respect to beneficial ownership of fifteen percent (15%) or
more of the Company’s voting securities, shall not constitute a Change of
Control;

 

(c)           The Company’s
termination of its business and liquidation of its assets;

 

(d)           The reorganization,
merger or consolidation of the Company into or with another person or entity,
by which reorganization, merger or consolidation the persons who hold one
hundred percent (100%) of the voting securities of the Company prior to such
reorganization, merger or consolidation receive or continue to hold less than
sixty percent (60%) of the outstanding voting shares of the new or continuing
corporation; or

 

(e)           If, during any
two-year period, less than a majority of the members of the Board are persons
who were either (i) nominated or recommended for election by at least two-thirds
vote of the persons who were members of the Board or nominated by the Board at
the beginning of the period, or (ii) elected by at least two-thirds vote of the
persons who were members of the Board at the beginning of the period.

 

2.7          Code.

 

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

 

2.8          Committee.

 

“Committee” has the meaning set forth in Section 8.1.

 

2.9          Company.

 

“Company” means
Equitable Resources, Inc. and any successor thereto.

 

2.10        Compensation.

 

“Compensation” means the Base Salary and Bonus payable with respect to an
Eligible Employee for each Plan Year.

 

2.11        Credited
Service.

 

“Credited Service” means the sum of all periods of a Participant’s
employment by the Company or a Selected Affiliate for which service credit is
given under the Equitable Resources Pension Plan, as then in effect.

 

2.12        Deferral
Account.

 

“Deferral Account” means the account maintained on the books of the
Employer for the purpose of accounting for the amount of Compensation and Other
Income that each Participant elects or is required to defer under the Plan and
for the amount of investment return credited thereto for each Participant
pursuant to Article V.

 

7

 

2.13        Deferral
Amount.

 

“Deferral Amount” means the Regular Deferral Amounts, Elective Deferral
Amounts and Required Deferral Amounts deferred by a Participant under Section
4.1.

 

2.14        Deferral
Benefit.

 

“Deferral Benefit” means the benefit payable to a Participant or his or
her Beneficiary pursuant to Article VI.

 

2.15        Deferral
Election.

 

“Deferral Election” means the written election made by a Participant to
defer Compensation or Other Income pursuant to Article IV.  “Regular Deferral Election” shall mean the
written election made by a Participant to defer Compensation pursuant to
Section 4.1(a).  “Other Income Deferral
Election” shall mean the written election made by a Participant to defer Other
Income pursuant to Section 4.1(b).

 

2.16        Disability.

 

“Disability” means a Participant’s Disability as defined under the
Company’s Long Term Disability Plan or its successors.

 

2.17        Early
Retirement.

 

“Early Retirement” will be granted by the Committee at its sole
discretion.

 

2.18        Eligible
Employee.

 

“Eligible Employee” means a highly compensated or management employee of
the Employer who is designated by the Committee, by name or group or
description, in accordance with Section 3.1, as eligible to participate in the
Plan.

 

2.19        Elective Deferral Amount.

 

“Elective Deferral
Amount” means the amount of Other Income deferred by a Participant under
Section 4.1(b).

 

2.20        Employer.

 

“Employer” means, with respect to a Participant, the Company or the
Selected Affiliate which pays such Participant’s Compensation.

 

2.21        Hardship
Withdrawal.

 

“Hardship Withdrawal” has the meaning set forth in Section 6.4.

 

2.22        Investment
Return Rate.

 

“Investment Return Rate” means:

 

(a)           In the case of an investment named in
Exhibit C of a fixed income nature, the interest deemed to be credited as
determined in accordance with the procedures applicable to the same investment
option provided under the Equitable Resources, Inc. Employee Savings Plan,
originally adopted September 1, 1985, as amended (“Equitable 401(k) Plan”);

 

8

 

(b)           In the case of an
investment named in Exhibit C of an equity investment nature, the increase or
decrease in deemed value and dividends deemed to be credited as determined in
accordance with the procedures applicable to the same investment option
provided under the Equitable 401(k) Plan; or

 

(c)           In the case of the
Equitable Resources Common Stock Fund, the increase or decrease in the deemed
value, and the reinvestment in the Equitable Resources Common Stock Fund of any
dividends deemed to be credited, as determined in accordance with the
procedures applicable to investments in the Equitable Resources Common Stock
Fund under the Equitable 401(k) Plan.

 

2.23        Matching
Account.

 

“Matching Account”
means the account maintained on the books of the Employer for the purpose of
accounting for the Matching Amount and for the amount of investment return
credited thereto for each Participant pursuant to Article V.

 

2.24        Matching
Amount.

 

“Matching Amount”
means the Matching Amounts credited to a Participant’s Matching Account under
Section 4.2.

 

2.25        Other Income.

 

“Other Income”
means cash awards, excluding Compensation, paid by the Employer to a
Participant and awards of restricted stock to a Participant pursuant to another
plan of the Company.

 

2.26        Participant.

 

“Participant” means any Eligible Employee who elects to participate by
filing a Participation Agreement or who is automatically enrolled with respect
to a Required Deferral.

 

2.27        Participation
Agreement.

 

“Participation Agreement” means the agreement filed by a Participant, in
the form prescribed by the Committee, pursuant to Section 3.2.

 

2.28        Plan.

 

“Plan” means the Equitable Resources, Inc. Deferred Compensation Plan, as
amended from time to time.

 

2.29        Plan Year.

 

“Plan Year” means a twelve-month period commencing January 1 and
ending the following December 31.

 

2.30        Regular
Deferral Amount.

 

“Regular Deferral
Amount” means the amount of Compensation deferred by a Participant under
Section 4.1(a).

 

9

 

2.31        Required
Deferral Amount.

 

“Required Deferral Amount” means the amount, other than Compensation,
automatically credited to a Participant’s Deferral Account pursuant to the
terms of a special benefit or bonus plan (other than a plan listed on Exhibit
B).

 

2.32        Retirement.

 

“Retirement” means the termination of a Participant who has reached age
65.

 

2.33        Selected
Affiliate.

 

“Selected Affiliate” means (1) any company in an unbroken chain of
companies beginning with the Company if each of the companies other than the
last company in the chain owns or controls, directly or indirectly, stock
possessing not less than 50 percent of the total combined voting power of all
classes of stock in one of the other companies, or (2) any partnership or joint
venture in which one or more of such companies is a partner or venturer, each
of which shall be selected by the Committee.

 

2.34        Total
Desired Match.

 

“Total Desired Match” has the meaning set forth in Section 4.2(a).

 

2.35        Valuation Date.

 

“Valuation Date” means a date on which the amount of a Participant’s
Account is valued as provided in Article V. 
The Valuation Date shall be the last day of each calendar quarter and
any other date determined by the Committee.

 

10

 

ARTICLE
III

 

ELIGIBILITY AND PARTICIPATION

 

3.1          Eligibility.

 

Eligibility to participate in the Plan is limited to Eligible
Employees.  From time to time, and
subject to Section 3.4, the Committee shall prepare, and attach to the Plan as
Exhibit A, a complete list of the Eligible Employees, by individual name
or by reference to an identifiable group of persons or by descriptions of the
components of compensation of an individual which would qualify individuals who
are eligible to participate, and all of whom shall be a select group of
management or highly compensated employees.

 

3.2          Participation.

 

(a)           Regular Deferrals.  Participation in the Plan shall be limited
to Eligible Employees who elect to participate in the Plan by filing a
Participation Agreement with the Committee. 
An Eligible Employee shall commence participation in the Plan upon the
first day of the Plan Year following the receipt of his or her Participation
Agreement by the Committee or within 30 days of becoming a Participant if such
date occurs after the commencement of the Plan Year.

 

(b)           Required Deferrals.  Notwithstanding (a), an Eligible Employee
who is required to defer a Required Deferral Amount into the Plan under
Section 4.1(c) shall automatically become a Participant in the Plan
regardless of whether the Participant files a Participation Agreement.

 

3.3          Change
in Participation Status.

 

(a)           Regular Deferral
and Elective Deferral Amounts. 
Except as otherwise required in Section 3.2(b) and as otherwise
provided in Section 3.3(b) below, a Participant may elect to terminate his or
her participation in the Plan at any time by filing a written notice thereof
with the Committee.  A termination of
participation with respect to Regular Deferral and/or Elective Deferral Amounts
will become effective as of the beginning of the next Plan Year following
receipt of the termination election by the Committee and in accordance with the
Committee’s prevailing administrative procedures.

 

(b)           Required Deferral
Amounts.  A Participant shall only
be permitted to terminate the deferral of Required Deferral Amounts in
accordance with the provisions of the governing employee benefit or bonus plan
under which the payment was made.

 

(c)           Amounts Credited
Prior to Termination.  Amounts
credited to such Participant’s Account with respect to periods prior to the
effective date of a termination described in (a) or (b) shall continue to be
payable pursuant to, receive investment credit on, and otherwise be governed
by, the terms of the Plan.

 

3.4          Ineligible
Participant

 

Notwithstanding any other provisions of this Plan to the contrary, if the
Committee determines that any Participant may not qualify as a “management or
highly compensated employee” within the meaning of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), or regulations thereunder,
the Committee may determine, in its sole discretion, that such Participant
shall cease to be eligible to participate in this Plan.  Upon such determination, the Employer shall
distribute (in cash and/or in kind, as applicable) to the Participant an amount
equal to the vested amount credited to his Account as soon as administratively
practicable.  Upon such payment, no
benefit shall thereafter be payable under

 

11

 

this
Plan either to the Participant or any Beneficiary, and all of the Participant’
s elections as to the time and manner of payment of his Account will be deemed
to be canceled.

 

12

 

ARTICLE
IV

 

DEFERRAL OF COMPENSATION

 

4.1          Deferral
Amounts.

 

(a)           Regular Deferral
Amount.  With respect to each Plan
Year, a Participant may elect to defer a specified percentage of his or her
Compensation as provided in Exhibit B. 
A Participant may change the percentage of his or her Compensation to be
deferred by filing a new Regular Deferral Election with the Committee.  Any permitted changes in such deferral
election shall be effective as of the first day of the Plan Year immediately
following the Plan Year in which such Deferral Election is filed with the Committee
and shall continue in effect for future years.

 

(b)           Elective Deferral
Amount.  A Participant may elect to
defer a specified percentage or designated item of Other Income to the extent
such income is attributable to services performed by the Participant after the
election becomes effective, and, with respect to Other Income granted in the
form of restricted property or other property subject to any vesting criteria,
prior to the lapse of the restrictions thereon and during a period when such
lapse of restrictions or vesting is substantially uncertain to occur.  A Participant may change the percentage or
designated items of his or her Other Income to be deferred by filing a new
Other Income Deferral Election with the Committee.  Any such change in deferral election shall be effective as of the
first day of the Plan Year immediately following the Plan Year in which such
Deferral Election is filed with the Committee or, if later in the case of a
deferral of restricted property, the Plan Year immediately following the last
year in which such restrictions are scheduled to lapse

 

(c)           Required Deferral
Amount.  A Participant may be
entitled to receive an award, other than Compensation, under a special benefit
or bonus plan (other than a plan listed on Exhibit B), the terms of which
require deferral of some or all of the award into his or her Deferral
Account.  Notwithstanding anything
herein to the contrary, a Participant required to defer a Required Deferral
Amount shall not be permitted to elect to make a change in the deferral
election except as otherwise permitted by the terms of the special benefit or
bonus plan.

 

4.2          Matching
Amount.

 

(a)           Matching Amount.  The Employer shall provide Matching Amounts
under this Plan with respect to each Participant who is eligible to be
allocated matching contributions under the Equitable 401(k) Plan.  The total Matching Amounts under this Plan
on behalf of a Participant for each Plan Year shall not exceed the difference
between the Total Desired Match and the actual match under the Equitable 401(k)
Plan.  The “Total Desired Match” is the
match which would be credited to the Participant under the Equitable 401(k)
Plan based upon such Participant’s deferral election, absent the limitations of
Sections 402(g), 401(a)(17), and 415 of the Code.  Except as expressly provided herein, the terms and conditions of
any Matching Amount provided under this Plan shall be the same as provided in
the Equitable 401(k) Plan. 
Notwithstanding anything to the contrary provided herein, (i) no
Participant may receive a Matching Amount payable in shares of the Common Stock
of the Company in excess of 25% of the Participant’s cash compensation and
(ii) no Matching Amounts shall be payable hereunder in shares of the
Common Stock of the Company unless the Participants in the Plan include substantially
all of those employees of the Company whose compensation exceeds the amount set
forth in Section 401(a)(17) of the Code, or any successor provision.

 

(b)           Neither Elective
Deferral Amounts nor Required Deferral Amounts shall be credited with any matching
contributions under the Plan.

 

13

 

4.3          Crediting of Deferral Amounts and
Matching Amounts.

 

Participant’s
Deferral Amounts shall be credited by the Employer to the Participant’s
Deferral Account periodically, the frequency of which will be determined by the
Committee.  To the extent that the
Employer is required to withhold any taxes or other amounts from a
Participant’s Deferral Amounts pursuant to any state, federal or local law,
such amounts shall be withheld only from the Participant’s income other than
the Deferral Amounts.  The Matching
Amounts under the Plan for each Participant shall be credited by the Employer
to the Participant’s Matching Account periodically, the frequency of which will
be determined by the Committee.

 

14

 

ARTICLE
V

 

BENEFIT
ACCOUNTS

 

5.1          Valuation
of Account.

 

As of each Valuation Date, a Participant’s Account shall consist of the
balance of the Participant’s Account as of the immediately preceding Valuation
Date, plus the Participant’s Deferral Amounts and Matching Amounts credited
pursuant to Sections 4.1 and 4.2 since the immediately preceding Valuation
Date, plus or minus investment gain or loss credited as of such Valuation Date
pursuant to Section 5.2, minus the aggregate amount of distributions, if any,
made from such Account since the immediately preceding Valuation Date.

 

5.2          Crediting
of Investment Return.

 

As of each Valuation Date, each Participant’s Deferral Account and
Matching Account shall be increased or decreased by the amount of investment
gain or loss earned since the immediately preceding Valuation Date.  Investment return shall be credited at the
Investment Return Rate as of such Valuation Date based on the balance of the
Participant’s Deferral Account and Matching Account, respectively, since the
immediately preceding Valuation Date, but after such Accounts have been
adjusted for any contributions or distributions to be credited or deducted for
such period.  Investment return for the
period prior to the first Valuation Date applicable to a Deferral Account or a
Matching Account shall be deemed earned ratably over such period.  Until a Participant or his or her
Beneficiary receives his or her entire Account, the unpaid balance thereof
shall earn an investment return as provided in this Section 5.2.

 

5.3          Statement
of Accounts.

 

The Committee shall provide to each Participant, within 30 days after the
close of each calendar quarter, a statement setting forth the balance of such
Participant’s Account as of the last day of the preceding calendar quarter and
showing all adjustments made thereto during such calendar quarter.

 

5.4          Vesting of
Amounts.

 

Except as provided in Sections 10.1 and 10.2, a Participant shall be 100%
vested in the amounts credited to his or her Account in the event of a Change
in Control.  Prior to a Change in
Control, amounts credited to a Participant’s Deferral Account or Matching
Account shall vest in accordance with the following paragraphs of this Section
5.4.

 

(a)           Regular Deferral
Amounts.  A Participant shall be
100% vested in the Regular Deferral Amounts credited to his or her Deferral
Account at all times.

 

(b)           Elective Deferral Amounts.  A Participant shall be 100% vested in the
Elective Deferral Amounts credited to his or her Deferral Account at all times.

 

(c)           Required Deferral Amounts.  Required Deferral Amounts shall vest in
accordance with the provisions of the special benefit or bonus plan under which
the award is deferred into the Plan.

 

(d)           Matching Amounts.  A Participant’s Matching Amounts shall vest
in accordance with the vesting schedule for Company Contributions under the
Equitable 401(k) Plan.

 

(e)           Application of
Forfeitures.  Forfeitures under the
Plan shall be for the benefit of the Company and shall not be credited to other
Participants.

 

15

 

5.5          Investment
of Regular, Elective and Required Deferral Amounts.

 

A Participant may
direct that the portion of his or her Deferral Account attributable to Regular
and Elective Deferral Amounts under Sections 4.1(a) and 4.1(b) be deemed to be
invested in one or more of the investment options listed in Exhibit C, in
increments of whole percents (1%) or whole dollars ($1.00) of the value of his
or her Regular Deferral and Elective Deferral Amount (a “New Money
Election”).  A Participant also may
direct that Regular and Elective Deferral Amounts previously credited to his or
her Deferral Account and deemed to be invested in one or more of the investment
options listed in Exhibit C, be transferred, in increments of whole percents
(1%) or whole dollars ($1.00) of the value of his or her Regular and Elective
Deferral Amount between and among the then available investment options listed
in Exhibit C (a “Reallocation Election”); provided that a Participant may not
reallocate Regular and Elective Deferral Amounts previously credited to his or
her Deferral Account and deemed to be invested in the Equitable Resources
Common Stock Fund.  A New Money Election
or a Reallocation Election must be filed with the Committee in accordance with
uniform rules established by the Committee. 
A Reallocation Election shall not change a Participant’s existing New
Money election.  A Participant may
direct investment of his or her Required Deferral Amounts under Section 4.1(c)
in the same manner as Regular and Elective Deferral Amounts, unless otherwise
provided under the terms of the special benefit or bonus plan under which the
award was made.

 

The effective date
of any New Money Election or Reallocation Election shall be the Valuation Date
on which such election is received by the Committee in accordance with uniform
rules established by the Committee.  The
Company is not required to follow any deemed investment election of any
Participant and reserves the right to refuse to honor any Participant direction
related to investments or withdrawals, including transfers among investment
options, where necessary or desirable to assure compliance with applicable law
including U.S. and other securities laws. 
However, the Company does not assume any responsibility for compliance
by officers or others with any such laws, and any failure by the Company to
delay or dishonor any such direction shall not be deemed to increase the Company’s
legal exposure to the Participant or third parties.

 

The election of
deemed investments among the options provided above shall be the sole
responsibility of each Participant.  The
Company, the Employers, their employees and Committee members are not
authorized to make any recommendation to any Participant with respect to such
election.  Each Participant assumes all
risk connected with any adjustment to the value of his Deferral Account.  Neither the Committee, the Company, nor the
Employers in any way guarantees against loss or depreciation.

 

5.6          Investment
of Matching Amounts.

 

Notwithstanding anything in Section 5.5 to the contrary, all amounts
credited to a Participant’s Matching Account under Section 4.2 shall be deemed
to be invested in the Equitable Resources Common Stock Fund.  A Participant shall have no right to direct
the investment of the amounts to be credited to his Matching Account.

 

16

 

ARTICLE
VI

 

PAYMENT
OF BENEFITS

 

6.1          Payment
of Deferral Benefits.

 

Except as otherwise provided in Sections 6.2, 6.3, 6.4 or 6.7, the
Employer shall pay to the Participant or his Beneficiary a Deferral Benefit
equal to the balance of his or her vested Account determined pursuant to
Article V, less any amounts previously distributed, based on his written
Deferral Election, in such form as provided in Section 6.5.

 

6.2          Payment of Deferral Benefit upon
Termination.

 

Upon the termination of service of the Participant as an employee of the
Employer and all Selected Affiliates for reasons other than death, Disability,
Early Retirement or Retirement, the Employer shall pay to the Participant a
Deferral Benefit in a lump sum equal to the balance of his or her vested
Account determined pursuant to Article V, less any amounts previously
distributed, as soon as administratively practicable following such
termination.

 

6.3          Payments to Beneficiaries upon Death of
Participant.

 

In the event of the Participant’s death after commencement of installment
payments but prior to his or her receipt of all elected annual installments,
his or her Beneficiary will receive the remaining annual installments at such
times as such installments would have become distributable to the
Participant.  In the event of the
Participant’s death prior to commencement of installment payments due under the
Plan, the first installment payment to the Beneficiary, shall be made on the
last business day of March in the calendar year following the calendar year
during which the Participant’s death occurs and shall be paid in the same form
of payment as would have been applicable to the Participant had the Participant
survived.

 

6.4          Hardship
Withdrawal.

 

In the event that the Committee, upon the written request of a
Participant, determines, in its sole discretion, that the Participant has
suffered an unforeseeable financial emergency, the Company shall pay to the
Participant, as soon as practicable following such determination, an amount
necessary to meet the emergency (the “Hardship Withdrawal”), but not exceeding
the aggregate balance of such Participant’s vested Deferral Account as of the
date of such payment.  For purposes of
this Section 6.4, an “unforeseeable financial emergency” is an unanticipated
emergency caused by an event that is beyond the control of the Participant or
Beneficiary and that would result in severe financial hardship to the
Participant or Beneficiary if an early hardship withdrawal were not
permitted.  The Participant or
Beneficiary shall provide to the Committee such evidence as the Committee may
require to demonstrate that such emergency exists and financial hardship would
occur if the withdrawal were not permitted. 
The amount of a Hardship Withdrawal may not exceed the amount the
Committee reasonably determines to be necessary to meet such emergency needs
(including taxes incurred by reason of a taxable distribution).  For purposes of the Plan, a hardship shall
be considered to constitute an immediate and unforeseen financial hardship if
the Participant or Beneficiary has an unexpected need for cash to pay for
expenses incurred by him or her or a member of his or her immediate family
(spouse and/or natural or adopted children) such as illness, casualty loss or
death.  Cash needs arising from foreseeable
events, such as the purchase or building of a house or education expenses will
not by themselves be considered to be the result of an unforeseeable financial
emergency.  The amount of the Deferral
Benefit otherwise payable under the Plan to such Participant shall be adjusted
to reflect the early payment of the Hardship Withdrawal.

 

17

 

6.5          Form of
Payment.

 

The Deferral Benefit payable pursuant to Section 6.1 shall be paid in one
of the following forms, as elected by the Participant in his or her Deferral
Election on file with respect to the particular year to which the Deferral
Benefit relates:

 

(a)           Annual payments of a
fixed amount which shall amortize the vested Account balance as of the payment
commencement date over a period of five, ten or fifteen years (together, in the
case of each annual payment, with interest thereon credited after the payment
commencement date pursuant to Section 5.2).

 

(b)           A lump sum.

 

In the event a Participant fails to make a distribution election, his or
her vested Account balance shall be distributed in a lump sum.  Notwithstanding the foregoing, but except as
provided in Section 4.2, that portion of a Participant’s Account
attributable to all Matching Amounts shall be paid in Common Stock of the
Company, with any fractional shares paid in cash in a lump sum.

 

The Participant’s Deferral Election with respect to a particular year
shall, when made, specify the year or years of payment of the Deferral Amount
provided that the payment may not commence earlier than the year following the
Plan Year to which the Deferral Election relates.

 

6.6          Commencement
of Payments.

 

Commencement of payments under Section 6.1 of the Plan shall begin within
60 days following (i) receipt of written notice by the Committee of an event which
entitles a Participant (or a Beneficiary) to payments under the Plan or (ii)
the beginning of the particular year elected by the Participant in a Deferral
Election to which the benefits payable relate.

 

6.7          Small Benefit.

 

In the event the Committee determines that the balance of a Participant’s
vested Account is less than $5,000 at the time of commencement of payments, or
the portion of the balance of the Participant’s vested Account payable to any
Beneficiary is less than $5,000 at the time of commencement of payments, the
Committee may inform the Employer and the Employer, in its discretion, may
choose to pay the benefit in the form of a lump sum payment, notwithstanding
any provision of the Plan or a Participant election to the contrary.  Such lump sum payment shall be equal to the
balance of the Participant’s vested Account or the portion thereof payable to a
Beneficiary.

 

18

 

ARTICLE
VII

 

BENEFICIARY DESIGNATION

 

7.1          Beneficiary
Designation.

 

Each Participant shall have the sole right, at any time, to designate any
person or persons as his Beneficiary to whom payment under the Plan shall be
made in the event of his or her death prior to complete distribution to the
Participant of his or her Account.  Any
Beneficiary designation shall be made in a written instrument provided by the
Committee.  All Beneficiary designations
must be filed with the Committee and shall be effective only when received in
writing by the Committee.  In the event
that a Beneficiary form has not been filed, the Beneficiary to whom payment has
been designated under the Equitable 401(k) Plan shall be used.

 

7.2          Change of Beneficiary Designation.

 

Any Beneficiary designation may be changed by a Participant by the filing
of a new Beneficiary designation, which will cancel all Beneficiary
designations previously filed but which will not be effective and supersede all
prior designations until it is received and acknowledged by the Committee or
its delegate.  The designation of a
Beneficiary may be made or changed at any time without the consent of any
person.

 

7.3          No
Designation.

 

If a Participant fails to designate a Beneficiary as provided above, or
if all designated Beneficiaries predecease the Participant, then the
Participant’s designated Beneficiary shall be deemed to be the Participant’s
estate.

 

7.4          Effect of
Payment.

 

Payment to a Participant’s Beneficiary (or, upon the death of a primary
Beneficiary, to the contingent Beneficiary or, if none, to the Participant’s
estate) shall completely discharge the Employer’s obligations under the Plan.

 

19

 

ARTICLE
VIII

 

ADMINISTRATION

 

8.1          Committee.

 

The administrative committee for the Plan (the “Committee”) shall be the
Benefits Administration Committee of the Company.  The Committee shall have (i) complete discretion to supervise the
administration and operation of the Plan, (ii) complete discretion to adopt
rules and procedures governing the Plan from time to time, and (iii) sole
authority to give interpretive rulings with respect to the Plan.

 

8.2          Investments.

 

The Benefits
Investment Committee of the Company shall have the sole discretion to choose
the investment options available under the Plan and to change or eliminate such
investment options, from time to time, as it deems appropriate.

 

8.3          Agents.

 

The Committee may appoint an individual, who may be an employee of the
Company, to be the Committee’s agent with respect to the day-to-day
administration of the Plan.  In
addition, the Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and may from time
to time consult with counsel who may be counsel to the Company.

 

8.4          Binding
Effect of Decisions.

 

Any decision or action of the Committee with respect to any question
arising out of or in connection with the administration, interpretation and
application of the Plan shall be final and binding upon all persons having any
interest in the Plan.

 

8.5          Indemnification
of Committee.

 

The Company shall indemnify and hold harmless the members of the
Committee and the Benefits Investment Committee and their duly appointed agents
under Section 8.3 against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to the Plan,
except in the case of gross negligence or willful misconduct by any such member
or agent of the Committee or Benefits Investment Committee.

 

20

 

ARTICLE
IX

 

AMENDMENT AND TERMINATION OF PLAN

 

9.1          Amendment.

 

The Company, on behalf of itself and of each Selected Affiliate may at
any time amend, suspend or reinstate any or all of the provisions of the Plan,
except that no such amendment, suspension or reinstatement may adversely affect
any Participant’s Account, as it existed as of the day before the effective
date of such amendment, suspension or reinstatement, without such Participant’s
prior written consent.  Written notice
of any amendment or other action with respect to the Plan shall be given to
each Participant.

 

9.2          Termination.

 

The Company, on behalf of itself and of each Selected Affiliate, in its
sole discretion, may terminate this Plan at any time and for any reason
whatsoever unless otherwise provided by the special benefit or bonus plan
governing a particular account.  Upon
termination of the Plan, Participants shall be 100% vested in all amounts
credited to their Accounts.  On and after
Plan termination, the Committee shall take those actions necessary to administer
any Accounts existing prior to the effective date of such termination;
provided, however, that a termination of the Plan shall not adversely affect
the value of a Participant’s Account, the crediting of investment return under
Section 5.2 or the timing or method of distribution of a Participant’ s Account
except as otherwise provided in the Plan, without the Participant’s prior
written consent.

 

21

 

ARTICLE
X

 

MISCELLANEOUS

 

10.1        Funding.

 

Participants, their Beneficiaries, and their heirs, successors and
assigns, shall have no secured interest or claim in any property or assets of
the Employer or the Company.  The
Employer’s and the Company’s obligation under the Plan shall be merely that of
an unfunded and unsecured promise of the Employer or the Company to pay money
in the future. To the extent that any Participant or Beneficiary or other
person acquires a right to receive payments under the Plan, such right shall be
no greater than the right, and each Participant and Beneficiary shall at all
times have the status, of a general unsecured creditor of the Company or any
Employer. Notwithstanding the foregoing, in the event of a Change in Control,
the Company shall create an irrevocable trust, subject to the claim of
creditors, or before such time the Company may create such an irrevocable or
revocable trust, to hold funds to be used in payment of the obligations of
Employers under the Plan if such trust will not cause the Plan to be considered
a funded deferred compensation plan under ERISA or the Code.  In the event of a Change in Control or prior
thereto, the Employers shall fund such trust in an amount equal to not less
than the total value of the Participants’ Accounts under the Plan as of the
Valuation Date immediately preceding the Change in Control, provided that any
funds contained therein shall remain liable for the claims of the respective
Employer’s general creditors.

 

10.2        Nonassignability.

 

No right or interest under the Plan of a Participant or his or her
Beneficiary (or any person claiming through or under any of them) shall be
assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner
be liable for or subject to the debts or liabilities of any such Participant or
Beneficiary.  If any Participant or
Beneficiary shall attempt to or shall transfer, assign, alienate, anticipate,
sell, pledge or otherwise encumber his or her benefits hereunder or any part
thereof, or if by reason of his or her bankruptcy or other event happening at
any time such benefits would devolve upon anyone else or would not be enjoyed
by him or her, then the Committee, in its discretion, may terminate his or her
interest in any such benefit (including the Deferral Account) to the extent the
Committee considers necessary or advisable to prevent or limit the effects of
such occurrence.  Termination shall be
effected by filing a written “termination declaration” with the Clerk of the
Company and making reasonable efforts to deliver a copy to the Participant or
Beneficiary whose interest is adversely affected (the “Terminated
Participant”).

 

As long as the Terminated Participant is alive, any benefits affected by
the termination shall be retained by the Employer and, in the Committee’s sole
and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner and at
such times as the Committee shall deem proper. 
Upon the death of the Terminated Participant, all benefits withheld from
him or her and not paid to others in accordance with the preceding sentence shall
be disposed of according to the provisions of the Plan that would apply if he
or she died prior to the time that all benefits to which he or she was entitled
were paid to him or her.

 

10.3        Legal
Fees and Expenses.

 

It is the intent of the Company and each Selected Affiliate that no
Eligible Employee or former Eligible Employee be required to incur the expenses
associated with the enforcement of his or her rights under this Plan by
litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to an Eligible
Employee hereunder.  Accordingly, if
after a Change in Control it should appear that

 

22

 

the
Employer has failed to comply with any of its obligations under this Plan or in
the event that the Employer or any other person takes any action to declare
this Plan void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Eligible Employee the benefits intended to be provided
to such Eligible Employee hereunder, the Employer irrevocably authorizes such
Eligible Employee from time to time to retain counsel of his or her choice, at
the expense of the Employer as hereafter provided, to represent such Eligible
Employee in connection with the initiation or defense of any litigation or
other legal action, whether by or against the Employer or any director,
officer, stockholder or other person affiliated with the Employer in any
jurisdiction.  Notwithstanding any
existing or prior attorney-client relationship between the Employer and
such counsel, the Employer irrevocably consents to such Eligible Employee’s
entering into an attorney-client relationship with such counsel, and in
that connection the Employer and such Eligible Employee agree that a confidential
relationship shall exist between such Eligible Employee and such counsel, The
Employer shall pay and be solely responsible for any and all attorneys’ and
related fees and expenses incurred by such Eligible Employee as a result of the
Employer’s failure to perform under this Plan or any provision thereof; or as a
result of the Employer or any person contesting the validity or enforceability
of this Plan or any provision thereof. 
Notwithstanding the foregoing, nothing herein shall require the Company
to pay any attorney or related fees and expenses or to consent to an Employee’s
use of counsel retained by the Company prior to the occurrence of a Change in
Control.

 

10.4        Captions.

 

The captions contained herein are for convenience only and shall not
control or affect the meaning or construction hereof.

 

10.5        Governing Law.

 

The provisions of the Plan shall be construed and interpreted according
to the laws of the Commonwealth of Pennsylvania without regard to its conflicts
of laws provisions.

 

10.6        Successors.

 

The provisions of the Plan shall bind and inure to the benefit of the
Company, its Selected Affiliates, and their respective successors and
assigns.  The term successors as used
herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Company or a Selected
Affiliate and successors of any such Company or other business entity.

 

10.7        Right
to Continued Service.

 

Nothing contained herein shall be construed to confer upon any Eligible
Employee the right to continue to serve as an Eligible Employee of the Employer
or in any other capacity.

 

Executed this
3rd day of December, 2003

 

23

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