Document:

Exhibit 10.2

 

FAIRPOINT COMMUNICATIONS, INC.

PERFORMANCE UNIT AWARD AGREEMENT

FOR PERFORMANCE PERIOD

BEGINNING JANUARY 1, 2009 THROUGH DECEMBER 31, 2011

 

THIS
PERFORMANCE UNIT AWARD AGREEMENT (this “Agreement”), made and entered
into this          day of             ,
2009, by and between FairPoint Communications, Inc. (the “Company”)
and «Name»  (the “Participant”).

 

W I T N E S S E T H:

 

WHEREAS,
the Compensation Committee of the Board of Directors of the Company (the “Committee”)
desires to award the Participant Performance Units under the Company’s 2008
Long Term Incentive Plan (the “Plan”) for the Performance Period
beginning January 1, 2009 and ending December 31, 2011 (the “Performance
Period”); and

 

WHEREAS,
the Company and the Participant desire to enter into a written agreement that
sets forth the terms and provisions of the Participant’s Performance Unit
award.

 

NOW,
THEREFORE, in consideration of the premises and the mutual promises contained
herein, the Company and the Participant hereby agree as follows:

 

1.                                       The Participant acknowledges that the
Performance Unit award is governed by this Agreement and the terms of the
Plan.  The terms of the Plan are
incorporated into this Agreement in their entirety and made a part hereof by
reference.  Unless otherwise defined
herein, capitalized terms used herein shall have the meanings set forth in the
Plan.  In the event of any conflict
between the terms of the Plan and this Agreement, the terms of the Plan shall
govern and control.

 

2.                                       The Participant is awarded a target award of «Target Award» Performance Units.  The actual number of Performance Units earned
by the Participant for the Performance Period shall be determined in accordance
with the Plan and this Agreement.

 

3.                                       The number of Performance Units earned by the
Participant shall be based on the levels of performance achieved during the
Performance Period as set forth on Exhibit A attached hereto.  The performance levels achieved for the
Performance Period (Threshold, Target or Maximum) and the number of Performance
Units earned by the Participant shall be determined by the Committee following
the expiration of the Performance Period.

 

4.                                       Except as provided in Paragraph 5 below, one
Share of the Company’s Common Stock will be distributed to the Participant for
each whole Performance Unit earned by the Participant.  Dividends on the Shares underlying the
Performance Units will not accrue or be paid during the Performance Period.

 

5.                                       Any Shares to be distributed in respect of
the Performance Units earned by the Participant will be delivered to the
Participant as soon as practicable after December 31, 2011, 

 

 

but
no later than March 15, 2012 (the date Shares are delivered, the “Payment
Date”).  If the Participant’s
employment with the Company terminates prior to the Payment Date for any reason
other than the Participant’s death, Disability or Normal Retirement, the
Participant shall forfeit the Performance Units and any Shares distributable in
respect of such Performance Units.  If a
Participant’s employment with the Company terminates during the Performance
Period due to the Participant’s death, Disability or Normal Retirement, the
Performance Units awarded to the Participant shall remain outstanding and
earned by the Participant as set forth in Exhibit A attached
hereto; provided, however, the number of Shares to be distributed
to the Participant in respect of the Performance Units earned by the
Participant will be determined by multiplying such number of earned Performance
Units by a fraction, the numerator of which is the number of completed calendar
months during the Performance Period that the Participant was employed, and the
denominator of which is the total number of calendar months in the Performance
Period.

 

6.                                       In the event a Change in Control occurs
before the end of the Performance Period, Shares for one hundred percent (100%)
of the Performance Units awarded to the Participant hereunder shall be
distributed to the Participant at the Target Performance (as defined in Exhibit A)
level without any adjustment for the levels of performance actually achieved
during the Performance Period prior to or after the Change in Control.  Any Shares to be distributed in respect of
the Performance Units earned by the Participant upon a Change in Control will
be delivered to the Participant immediately prior to the Change in Control.

 

7.                                       Unless otherwise elected by the Participant
in accordance with procedures adopted by the Committee, the Company shall
deduct from any Shares otherwise distributable to the Participant that number
of Shares having a value equal to the amount of any taxes required by law to be
withheld from awards made under the Plan.

 

8.                                       Participants may elect, by entering into a
Deferral Agreement with the Company, to defer delivery of all (or any portion)
of the Shares otherwise payable to the Participant in respect of the
Performance Units earned by the Participant. 
To be effective, the Participant must complete and return the Deferral
Agreement to the Company in accordance with procedures established by the
Committee.

 

9.                                       The Performance Units awarded hereunder to
the Participant shall not entitle the Participant to any rights as a
shareholder of the Company.

 

10.                                 The Participant’s award under this Agreement
and the Plan may not be assigned or alienated. 
Subject to any limitations under the Plan on transferability, this
Agreement will be binding upon and inure to the benefit of the heirs, legatees,
legal representatives, successors and assigns of the parties hereto.  Neither the Plan, nor this Agreement, nor any
action taken under the Plan or this Agreement shall be construed as giving to
the Participant the right to be retained in the employ of the Company.

 

11.                                 Any distribution of Shares may be delayed
until the requirements of any applicable laws or regulations or any stock
exchange requirements are satisfied.  The
Shares distributed to the Participant shall be subject to such restrictions and
conditions on disposition as counsel for the Company shall determine to be
desirable or necessary under applicable law.

 

2

 

12.                                 The Participant may designate a beneficiary
or beneficiaries to receive all or part of the Shares to be distributed to the
Participant under this Award Agreement in the event of the Participant’s
death.  If no beneficiary is designated,
such Shares shall be paid to the estate of the Participant.

 

13.                                 This Agreement and the Plan constitute the
entire understanding of the parties with respect to the award of Performance
Units to the Participant for the Performance Period.  Except with respect to modifications of the
Plan as provided therein, this Agreement can be amended only in writing
executed by the Participant and a duly authorized officer of the Company.

 

14.                                 This Agreement
shall be governed by the laws of the State of Delaware to the extent not
preempted by applicable federal law.

 

IN WITNESS WHEREOF, the
parties hereto have executed or caused this Agreement to be executed in
duplicate as of the date first above written.

 

	
   

  	
  FAIRPOINT
  COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Eugene B. Johnson

  
	
   

  	
   

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  «Name»

  

 

3

 

EXHIBIT A

 

PERFORMANCE CRITERIA

FOR THE

PERFORMANCE PERIOD BEGINNING JANUARY 1, 2009 AND ENDING DECEMBER 31,
2011

 

Definitions:

 

“Adjusted EBITDA” means the Company’s consolidated net income (including
distributions from investments) plus (a) the following to the extent
deducted from consolidated net income: provision for income taxes, consolidated
interest expense, depreciation, amortization, losses on sales of assets and
other extraordinary losses, certain one-time charges recorded as operating
expenses related to the transactions contemplated by the merger agreement,
non-cash retirement expenses, expenses incurred under the Transition Services
Agreement and certain other non-cash charges to the extent such charges will
not require cash payment in the future, and minus (b) gains on sales of
assets and other extraordinary gains and all non-cash items increasing
consolidated net income.

 

“Maximum Performance” means:

 

(a)                                  for the Total
Shareholder Return performance measure, the Company’s Total Shareholder Return
for the Performance Period is greater than or equal to the Total Shareholder
Return of 60% of the companies comprising the Telecommunications Peer Group.

 

(b)                                 for the Adjusted EBITDA
performance measure, the Company’s Adjusted EBITDA for the Performance Period
exceeds the Target Adjusted EBITDA by 5% or more.

 

“Target Adjusted EBITDA” means cumulative,
aggregate Adjusted EBITDA for the Performance Period of
$               .

 

“Target Performance” means:

 

(a)                                  for the Total
Shareholder Return performance measure, the Company’s Total Shareholder Return
for the Performance Period is greater than or equal to the Total Shareholder
Return of 40% of the companies comprising the Telecommunications Peer Group;
and

 

(b)                                 for the Adjusted EBITDA
performance measure, the Company’s Adjusted EBITDA for the Performance Period
equals the Target Adjusted EBITDA.

 

“Telecommunications Peer Group” means all of the
companies included in the Dow Jones Telecommunication Index on both the first
and last day of the Performance Period.

 

“Threshold Performance”
means:

 

 

(a)                                  for the Total
Shareholder Return performance measure, the Company’s Total Shareholder Return
for the Performance Period is greater than or equal to the Total Shareholder
Return of 20% of the companies comprising the Telecommunications Peer Group;
and

 

(b)                                 for the Adjusted EBITDA
performance measure, the Company’s Adjusted EBITDA for the Performance Period
equals at least 95% of the Target Adjusted EBITDA.

 

“Total Shareholder Return” means, with respect to
a company for the Performance Period, the percentage determined by dividing the
sum of Amount A plus Amount B by Amount C where:

 

Amount A is (i) the average of the closing prices
for one share of such company’s common stock during the 30 days trading period
immediately preceding the expiration of the Performance Period minus (ii) the average of the closing prices for one
share of such stock during the 30 day trading period immediately preceding the
beginning of the Performance Period.

 

Amount B is (i) the number of shares of such company’s
common stock that would have been purchased during the Performance Period if
all dividends paid during the Performance Period had been reinvested in such
stock multiplied by (ii) the average of
the closing prices for one share of such company’s common stock during the 30
days trading period immediately preceding the expiration of the Performance
Period.

 

Amount
C is the average of the closing prices for one share
of such company’s common stock during the 30 days trading period immediately
preceding the beginning of the Performance Period.

 

Performance Measures:

 

Adjusted EBITDA.  The Company’s Adjusted EBITDA for the
Performance Period will determine the extent to which 50% of the target number
of Performance Units are earned.

 

	
  Adjusted EBITDA for the

  Performance Period

  	
   

  	
  Percentage of Target Performance Units

  Earned Based on Adjusted EBITDA

  	
   

  
	
  Below Threshold Performance

  	
   

  	
  0

  	
  %

  
	
  Threshold Performance

  	
   

  	
  40

  	
  %

  
	
  Target Performance

  	
   

  	
  100

  	
  %

  
	
  Maximum Performance or Above

  	
   

  	
  200

  	
  %

  

 

The
percentage of target Performance Units earned for Adjusted EBITDA between
Threshold Performance (40%) and Maximum Performance (200%) will be determined
by linear interpolation.

 

 

Total Shareholder Return.  The
Company’s Total Shareholder Return for the Performance Period will determine
the extent to which the remaining 50% of the target number of Performance Units
are earned.

 

	
  Company’s Total Shareholder

  Return

  	
   

  	
  Percentage of Target Performance Units

  Earned Based on Total Shareholder Return

  	
   

  
	
  Below Threshold Performance

  	
   

  	
  0

  	
  %

  
	
  Threshold Performance

  	
   

  	
  40

  	
  %

  
	
  Target Performance

  	
   

  	
  100

  	
  %

  
	
  Maximum Performance or Above

  	
   

  	
  200

  	
  %

  

 

The
percentage of target Performance Units earned for Total Shareholder Return
between Threshold Performance (40%) and Maximum Performance (200%) will be
determined by linear interpolation.EXHIBIT 10.23

 

SYNOPSYS, INC.

 

AMENDED AND RESTATED

 

DEFERRED COMPENSATION PLAN II

 

EFFECTIVE DECEMBER 31, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE(S)

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  1

  	
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Account

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Base Pay

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Beneficiary

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Change in Control

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Code

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.6

  	
  Committee

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.7

  	
  Company

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.8

  	
  Compensation

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.9

  	
  Contributions

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.10

  	
  Deferral Period

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.11

  	
  Disabled

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.12

  	
  Distributable Amount

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.13

  	
  Eligible Employee

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.14

  	
  Employee

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.15

  	
  ERISA

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.16

  	
  Fiscal Year

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.17

  	
  Fund or Funds

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.18

  	
  Fund Return

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.19

  	
  Initial Election Period

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.20

  	
  Insurable Participant

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.21

  	
  Key Employee

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.22

  	
  Participant

  	
  4

  
	
   

  	
   

  	
   

  
	
  1.23

  	
  Plan

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.24

  	
  Plan Year

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.25

  	
  Retirement

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.26

  	
  Target Compensation

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.27

  	
  Termination of Participant’s Employment

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.28

  	
  Variable Pay

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  	
  PARTICIPATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  	
  CONTRIBUTIONS

  	
  6

  

 

i

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  Page(s)

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Elections to Defer Compensation

  	
  6

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Initial Election Period

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  General Rule

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Deferral Election Computation

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Minimum Deferrals

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Effect of Initial Election

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Duration of Base Pay Deferral Election or Variable
  Pay Deferral Election

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Elections Other Than Elections During the Initial
  Election Period

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Special Rules for Deferral Elections

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Cancellation of Compensation Deferrals

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Automatic Cancellation

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Permissible Cancellation

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Section 401 and Section 409A Compliance

  	
  9

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Company Discretionary Contributions

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  	
  INVESTMENT ELECTIONS

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Participant Investment Designation

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Change in Investment Designation

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Company Responsibility for Investment Alternatives

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
  ACCOUNTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Participant Accounts

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Trust Funding

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Trustee Duties

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Employee Deferrals and Company Contributions

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  General Creditors

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  	
  VESTING

  	
  11

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Base Pay and Variable Pay Deferrals

  	
  11

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Company Contributions

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  	
  DISTRIBUTIONS

  	
  12

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Distributions from a Participant’s Account

  	
  12

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Distribution Election and Minimum Requirements

  	
  12

  

 

ii

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  Page(s)

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Payment of Scheduled In-Service Withdrawals

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Payment Upon Termination of Participant’s Employment
  for Any Reason Other Than Retirement, Death or Becoming Disabled

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Payment Upon Termination of Participant’s Employment
  as a Result of Retirement or Becoming Disabled

  	
  13

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Changes in Form or Time of Distribution

  	
  14

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Default Provisions If No Election of Form of
  Distribution

  	
  15

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Death Benefits

  	
  16

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Unforeseeable Emergency

  	
  17

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Inability To Locate A Participant

  	
  17

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Key Employee Special Distribution Rule

  	
  17

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Special Acceleration of Distribution Rules

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  ADMINISTRATION

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Committee

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Committee Action

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Powers and Duties of the Committee

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Construction and Interpretation

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Information

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Compensation, Expenses and Indemnity

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Quarterly Statements

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  MISCELLANEOUS

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Unsecured General Creditor

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Restriction Against Assignment

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Withholding

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Disputes

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Amendment, Modification, Suspension or Termination

  	
  23

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  Governing Law

  	
  23

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  Receipt or Release

  	
  23

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  Payments on Behalf of Incapacitated Persons

  	
  24

  
	
   

  	
   

  	
   

  
	
  9.9

  	
  No Employment Rights

  	
  24

  
	
   

  	
   

  	
   

  
	
  9.10

  	
  Department of Labor Determination

  	
  24

  

 

iii

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  Page(s)

  
	
   

  	
   

  	
   

  
	
  9.11

  	
  Headings, etc. Not Part of Agreement

  	
  24

  
	
   

  	
   

  	
   

  
	
  9.12

  	
  Compliance with Section 409A of the Code

  	
  24

  
	
   

  	
   

  	
   

  
	
  9.13

  	
  Electronic or Other Forms

  	
  24

  

 

iv

 

SYNOPSYS, INC.

AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN II

 

SYNOPSYS, INC. (the “Company”)
acting on behalf of itself and its designated subsidiaries hereby adopts the SYNOPSYS, INC. AMENDED AND RESTATED DEFERRED COMPENSATION PLAN II
(the “Plan”).  Except as specifically
provided herein or as necessary to comply with Section 409A of the Code,
the Plan as amended and restated is effective as of December 31, 2008.

 

RECITALS

 

(a)           The
Company intends to maintain the Plan as a supplemental retirement plan for the
benefit of a select group of management or highly compensated employees as may
be designated by the Company in its sole discretion.

 

(b)           The
Plan provides for the payment of vested accrued benefits to Plan participants
and their beneficiaries in accordance with the terms of this document.

 

(c)           Under
the Plan, the Company pays all of the accrued benefits from its general assets.

 

(d)           The
Company has entered into an agreement (the “Trust Agreement”) with a person or
persons, including an entity that serves as trustee (the “Trustee”) under an
irrevocable trust (the “Trust”) to be used in connection with the Plan.

 

(e)           The
Company wishes to make contributions to the Trust so that contributions to be
held by the Trustee shall be invested, reinvested and distributed, all in
accordance with the provisions of the Plan and the Trust Agreement.

 

(f)            The
Company intends that the amounts contributed to the Trust and the earnings
thereon shall be used by the Trustee to satisfy the liabilities of the Company
under the Plan with respect to each Plan Participant for whom an Account has
been established and such use of the Trust assets shall be made in accordance
with the procedures set forth herein.

 

(g)           The
Company intends that the Trust be a “grantor trust” with the principal and
income of the Trust treated as assets and income of the Company for federal and
state income tax purposes.

 

(h)           The
Company intends that the assets of the Trust shall at all times be subject to
the claims of the general creditors of the Company as provided in the Trust
Agreement.

 

(i)            The
Company intends that the existence of the Trust shall not alter the
characterization the Plan as “unfunded” for purposes of ERISA, and shall not be
construed to provide income to Participants under the Plan prior to actual
payment of the accrued benefits thereunder.

 

NOW THEREFORE, the Company does
hereby adopt the Plan as follows:

 

1

 

ARTICLE 1

DEFINITIONS

 

Whenever used in the Plan, the following terms shall
have the meanings indicated below, unless a different meaning is plainly
required by the context.  The singular
shall include the plural, unless the context indicates otherwise.

 

1.1          Account.  “Account” means for each Participant the
bookkeeping account maintained by the Committee that is credited with amounts
equal to (i) the portion of the Participant’s Base Pay that he or she
elects to defer, (ii) the portion of the Participant’s Variable Pay that
he or she elects to defer, (iii) the Company’s discretionary
contributions, if any, credited under the Plan for the Participant’s benefit,
and (iv) adjustments to reflect deemed gains or losses pursuant to Section 5.1(c).

 

1.2          Base Pay.  “Base Pay” means the non-variable portion of
an Eligible Employee’s annual cash compensation and such other non-cash,
non-variable amounts payable to (or for the benefit of) an Eligible Employee as
the Committee in its sole discretion may determine shall be included in the
definition of “Base Pay” for the purposes of the Plan.

 

1.3          Beneficiary.  “Beneficiary” or “Beneficiaries” means the
beneficiary last designated in writing by a Participant in accordance with
procedures established by the Committee to receive the benefits specified
hereunder in the event of the Participant’s death.  No beneficiary designation shall become
effective until it is filed with the Committee.

 

1.4          Change in Control.  “Change in Control” means

 

(a)           The date that any
one person or persons acting as a group acquires ownership of Company stock
constituting more than fifty percent (50%) of the total fair market value or
total voting power of the Company;

 

(b)           The date that any
one person or persons acting as a group acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of the stock of the Company possessing thirty-five
percent (35%) or more of the total voting power of the stock of the Company;

 

(c)           The date that any
one person or persons acting as a group acquires assets from the Company that
have a total gross fair market value equal to or more than forty percent (40%)
of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition; or

 

(d)           The date that a
majority of members of the Company’s Board of Directors is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board of Directors prior to the date of the
appointment or elections.

 

2

 

(e)           The term “Change in
Control” is to be interpreted in accordance with Section 409A of the Code
and regulations and guidance issued thereunder (including Treas. Reg. Section 1.409A-3(i)(5)).

 

1.5          Code.  “Code” means the Internal Revenue Code of
1986, as amended from time to time, and applicable valid regulations
thereunder.

 

1.6          Committee.  “Committee” means the Synopsys Deferred
Compensation Plans Committee.

 

1.7          Company.  “Company” means Synopsys, Inc., any
successor corporation and any entity that is directly or indirectly controlled
by the Company or any entity in which the Company has a significant equity or
investment interest, as determined by the Company.

 

1.8          Compensation.  “Compensation” means a Participant’s Base Pay
and Variable Pay that is subject to deferral pursuant to Section 3.1.

 

1.9          Contributions.  “Contributions” means Base Pay or Variable
Pay that a Participant elects to defer to the Plan pursuant to Article III,
plus discretionary contributions contributed to the Participant’s Account by
the Company pursuant to Section 3.3.

 

1.10        Deferral Period.  “Deferral Period” means, for each Plan Year, (i) the
period from the first day of such Plan Year through the last day of the Fiscal
Year of the Company that ends within that Plan Year, and (ii) the period
from the first day of the Fiscal Year of the Company that begins within the
Plan Year through the last day of that Plan Year.  Notwithstanding the foregoing, if a payroll
period begins in one Deferral Period but ends in the subsequent Deferral
Period, then, for purposes of the Plan, that payroll period shall be treated as
if the payroll period both began and ended in the Deferral Period in which the
payroll period actually ends.

 

1.11        Disabled.  “Disabled” means that a Participant is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for
a period of not less than three (3) months under an accident and health
plan covering employees of the Company.

 

1.12        Distributable Amount.  “Distributable Amount” means the vested
amount credited to a Participant’s Account.

 

1.13        Eligible Employee.  “Eligible Employee” for a Plan Year means (i) an
Employee regularly performing services for the Company in the United States of
America whose Target Compensation equals or exceeds, as of the October 1
immediately preceding the first day of the Plan Year, a dollar amount to be
determined for each Plan Year by the Committee, (ii) an Employee (x) who
was an Eligible Employee for a preceding Plan Year and (y) for whom an
Account was maintained with a positive balance as of the end of the immediately
preceding Plan Year, or (iii) any other Employee (x) who is
designated by the Committee or an authorized representative of the Committee
pursuant to procedures established by the Committee as eligible to participate
in the Plan (including by being within a category of employee that has been so 

 

3

 

designated) and (y) 
who has been given notice by the Committee or its authorized representative of
such eligibility.  Notwithstanding the
foregoing, the Committee may determine that an otherwise Eligible Employee
shall not be eligible to participate in the Plan, shall not be eligible to
continue to participate in the Plan or shall be eligible to participate
beginning on a later date than would otherwise be provided by this Section 1.13.

 

1.14        Employee.  “Employee” means a common law employee of the
Company who is treated by the Company as an employee for U.S. federal
employment tax purposes and who has not been excluded by contract or employment
classification from participating in employee benefit plans of the Company.

 

1.15        ERISA.  “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and applicable valid
regulations thereunder.

 

1.16        Fiscal Year.  “Fiscal Year” means the Company’s fiscal year
as determined by the Company’s Board of Directors.

 

1.17        Fund or Funds.  “Fund” or “Funds” means one or more of the
investment funds selected by the Committee pursuant to Section 4.1.

 

1.18        Fund Return.  “Fund Return” means, for each Fund, an amount
equal to the net rate of gain or loss on the assets of such Fund during each
month.

 

1.19        Initial Election Period.  “Initial Election Period” means the period
beginning on the date the Eligible Employee is first notified by the Committee
or the Committee’s authorized representative that the Eligible Employee is
eligible to participate in the Plan and ending on the later of (i) the day
immediately preceding commencement of the Plan Year for which such Eligible
Employee may elect to become a Participant, and (ii) thirty (30) days
after the date of delivery of such notice if the Plan Year for which such
Eligible Employee may elect to become a Participant commenced prior to the date
of delivery of such notice. 
Notwithstanding the foregoing, in no event shall the Initial Election
Period extend beyond the time period permitted by Treas. Reg. Section 1.409A-2(a).

 

1.20        Insurable Participant.  “Insurable Participant” means a Participant
who satisfies underwriting standards for the issuance of life insurance
determined by the insurance company selected by the Committee to provide the
pre-termination death benefit described in Section 7.4(a).

 

1.21        Key Employee.  “Key Employee” means, for purposes of this
Plan, and in accordance with Section 409A of the Code, a key employee as
defined in Section 416(i) of the Code, without regard to paragraph (5) thereof,
of the Company and any Eligible Employee who has been designated as a Key
Employee by the Committee.

 

1.22        Participant.  “Participant” means any Eligible Employee (or
former Eligible Employee) for whom an Account is maintained under the
Plan.  For the avoidance of doubt, the
term “Participant” shall not include a Beneficiary for whom an Account is
maintained under the Plan following the death of a Participant.

 

4

 

1.23        Plan.  “Plan” means the Synopsys Deferred
Compensation Plan II set forth herein and in amendments from time to time made
hereto.

 

1.24        Plan Year.  “Plan Year” means the calendar year.

 

1.25        Retirement.  “Retirement” means Termination of Participant’s
Employment on or after attaining age fifty-five (55).

 

1.26        Target Compensation.  “Target Compensation” means annualized Base
Pay plus annualized target commissions and target bonuses.

 

1.27        Termination of Participant’s Employment.  “Termination of Participant’s Employment”
means a “separation from service” from the Company as defined in Treas. Reg. Section 1.409A-1(h)(1).

 

1.28        Variable Pay.  “Variable Pay” means any variable cash
compensation including commissions, sales bonuses and/or other incentive
compensation that is allocable to a Deferral Period as having been earned in
such Deferral Period.  Variable Pay shall
not include (a) retention bonuses, (b) other bonuses subject to
possible repayment as a result of a specified future event (including sign-on
bonuses and relocation bonuses), (c) severance payments, (d) any cash
compensation if the Participant has the discretion to determine whether the
compensation will be payable in cash or some other medium,  (e) any payments to the Participant from
the Plan, the Synopsys Deferred Compensation Plan, or a plan sponsored by the
Company under Section 125 or 401(k) of the Code, (f) a payment
received from the Company by the Participant upon the exercise of a stock
appreciation right, and (g) except with respect to commissions, payments
made after the December 31st of the calendar year in which the payment
became earned and vested.  
Notwithstanding the foregoing, (x) Variable Pay shall include
bonuses subject to possible repayment solely as a result of the Compensation
Recovery Policy adopted by the Compensation Committee of the Board of Directors
of the Company on December 10, 2008 as such policy may be amended from
time to time, (y) cash compensation paid in the Company’s discretion in
cash or in some other medium shall be excluded from Variable Pay if the
inclusion of such compensation as Variable Pay would result in potential tax
under Section 409A of the Code if the Plan were operated as described
herein, and (z) the Committee may, in its sole discretion, determine from
time to time that amounts excluded from the definition of Variable Pay by this Section 1.28
shall be included in the definition of “Variable Pay” for the purposes of the
Plan.

 

ARTICLE 2

PARTICIPATION

 

An Eligible Employee shall become a Participant in the
Plan by (a) electing to defer all or a portion of his or her Compensation,
in accordance with Article III, and (b) if required by the Committee
in its sole and absolute discretion, by filing a completed life insurance
application along with his or her deferral election form, and complying with
such applicable medical underwriting requirements as determined by a life
insurance carrier elected by the Committee. 
An Eligible Employee who completes the requirements of the preceding
sentence shall become a 

 

5

 

Participant in the Plan as of
the first day of the first month in which such Eligible Employee’s Compensation
is deferred.  In the event it is
determined by the Committee that the proposed life insurance policy, if
applicable, cannot be obtained in a cost efficient manner after medical
underwriting requirements have been met, the Participant shall not be eligible
to receive death benefits as provided under Section 7.4(a) of the
Plan but shall otherwise be eligible to participate in the Plan.

 

ARTICLE 3

CONTRIBUTIONS

 

3.1          Elections to Defer Compensation.

 

(a)           Initial Election Period.  Each newly hired employee who becomes an
Eligible Employee by designation and notification pursuant to Section 1.13 may
elect to defer Compensation (as described in Section 3.1(e)) for the
remainder of the Plan Year following such Eligible Employee’s Initial Election
Period by filing with the third party administrator an election for such
remaining Plan Year that conforms to the requirements of this Section.  Such election shall specify the amount to be
deferred, if any, for the remainder of each Deferral Period in the relevant
Plan Year as specified in Section 3.1(e) below.  Such election also shall specify the time at
which and the form in which such deferred amounts shall be distributed to the
Participant, as provided in Article VII. 
Such election to defer Compensation and designate the distribution form
and time must be received by the third party administrator no later than the
last day of such Eligible Employee’s Initial Election Period.

 

(b)           General Rule.  Subject to the limitation set forth in Section 3.1(d) below,
the amount of Compensation which an Eligible Employee may elect to defer during
each Deferral Period is as follows:

 

(i)            Any whole
percentage of Base Pay up to fifty percent (50%); and/or

 

(ii)           Any whole
percentage of Variable Pay up to one hundred percent (100%);

 

provided, however, that no election made for one or
both Deferral Periods in a Plan Year shall reduce the Compensation paid to an
Eligible Employee for a calendar year to an amount that is less than the amount
necessary to pay (a) applicable employment taxes (e.g., FICA, hospital
insurance) payable with respect to amounts deferred hereunder, (b) except
as provided in Section 3.1(c), amounts necessary to satisfy any other
benefit plan withholding obligations, (c) any resulting income taxes
required to be withheld with respect to Compensation that cannot be so
deferred, and (d) any amounts necessary to satisfy any wage garnishment or
similar type obligations.

 

(c)           Deferral Election Computation.  Deferral elections to the Plan shall be
computed before taking into account (i)  any reduction in taxable income
by contributions to plans sponsored by the Company under Sections 125 or 401(k) of
the Code or (ii) any 

 

6

 

withholding of Compensation,
for example, to participate in the Synopsys Employee Stock Purchase Plan.

 

(d)           Minimum Deferrals.  For each Plan Year during which the Eligible
Employee is a Participant, the minimum amount that may be deferred for any Plan
Year is one percent (1%) of the lesser of the eligible  Base Pay or the eligible Variable Pay during
one of the Deferral Periods occurring within the Plan Year.

 

(e)           Effect of Initial Election.  An election to defer Compensation during the
Initial Election Period shall be effective with respect to (i) Base Pay
earned during the first pay period beginning after both the date the initial
election becomes irrevocable and the start of the Deferral Period for which the
election is made, and (ii) Variable Pay for services performed after the
date on which the initial election becomes irrevocable and paid after the  start of the Deferral Period for which the
election is made as provided by Treas. Reg. Section 1.409A-2(a)(7).

 

(f)            Duration of Base Pay Deferral
Election or Variable Pay Deferral Election.  Except as provided in Section 3.1(h) below,
a Base Pay deferral election or Variable Pay deferral election shall remain in
effect from Plan Year to Plan Year, notwithstanding any change in a Participant’s
Base Pay or Variable Pay, as applicable, until the Participant elects to amend
or discontinue his or her Base Pay deferral election or Variable Pay deferral
election, as applicable.  If the
Participant does not amend or discontinue his or her deferral election for a
Plan Year during the applicable election period that precedes such Plan Year,
then the Participant will be deemed to have made a deferral election for that
Plan Year, and for the Deferral Periods within the Plan Year, that is identical
to the deferral election that was in effect for the Participant in the Plan
Year that immediately preceded the Plan Year at issue.

 

If the Participant does amend or discontinue his or
her deferral election for a Plan Year during the applicable election period
that precedes such Plan Year, the percentage or dollar amount of Base Pay or
Variable Pay designated by the Participant may be amended or discontinued by
filing a new election, in accordance with the terms of this Section, with the
third party administrator within the applicable election period for the Plan
Year which contains the Deferral Period for which the election shall be in
effect.  A Participant’s deferral
election shall terminate with respect to future Base Pay or Variable Pay, as
applicable, upon the earlier of (x) the Participant ceasing to be eligible
to participate in the Plan, or (y) the Participant’s timely election to
discontinue all deferrals for any subsequent Deferral Period.

 

Except as provided in Section 3.1(e), in the case
of Variable Pay, the Participant’s elections in effect at the following times
shall control:

 

(i)            In the case of commissions,
the elections in effect at the beginning of the Plan Year in which the
commission is paid.

 

(ii)           In the case of
Variable Pay that is paid in a Plan Year and 
qualifies as performance compensation within the meaning of Treas. Reg. Section 1.409A-1(e) with
a performance period of at least twelve (12) months and with a performance
period that commenced no earlier than the date that is two and one-half (2-1/2)
months prior to the commencement of either such Plan Year or an earlier Plan
Year and otherwise satisfying the 

 

7

 

conditions for an initial
deferral election set forth in Treas. Reg. Section 1.409A-2(a)(8), the
elections in effect at the commencement of the Plan Year that first follows the
commencement of the performance period.

 

(iii)         In the case of all
other Variable Pay, the elections in effect at the commencement of the period
to which the Variable Pay relates.

 

(g)           Elections Other Than Elections During
the Initial Election Period. 
Any Eligible Employee who fails to elect to defer Compensation during
his or her Initial Election Period may subsequently become a Participant
provided he or she remains an Eligible Employee, and any Eligible Employee who
has suspended a prior deferral election, may elect to defer Compensation
provided he or she remains an Eligible Employee.  Such an election to defer Compensation shall
be in such form as determined by the Committee in its sole discretion, must be
filed with the third party administrator within the applicable election period
for the relevant Plan Year and will be effective for Base Pay earned during pay
periods beginning after such Plan Year begins and Variable Pay as provided in Section 3.1(f).

 

(h)           Special Rules for Deferral
Elections.  The
following special rules shall apply for the Plan Year beginning January 1,
2005 and the Plan Year beginning January 1, 2006, as applicable.

 

(i)            This Section 3.1(h)(i) applies
only to a Participant who is notified by the Committee or the Committee’s
delegate that the Participant is eligible to make the elections described in
this Section 3.1(h)(i) (“Eligible Participant”).  Notwithstanding any other provision of the
Plan to the contrary, for the Plan Year beginning January 1, 2005 (the “2005
Plan Year”) only, an Eligible Participant who elected to participate in the
Plan for the 2005 Plan Year by filing a deferral of Compensation election form
(or who is deemed to have filed such a deferral of Compensation election form
pursuant to the deemed election procedures of Section 3.1(f)) on or before
December 31, 2004, may elect to cancel the previously made deferral
election for the 2005 Plan Year.  Such
election to cancel a previously made election for the 2005 Plan Year shall be
made by filing a change in election form with the third party administrator
during the applicable election period, but no later than December 31,
2005.

 

An Eligible Participant who elects to cancel his or
her previously made election for the 2005 Plan Year may elect to cancel (i) his
or her entire election for the first Deferral Period in 2005, (ii) his or
her entire election for the second Deferral Period in 2005, or (iii) his
or her entire election for both Deferral Periods in 2005.  No partial cancellations of a previously made
election for any Deferral Period in 2005 will be permitted; provided, however,
that an election with respect to Base Pay shall be treated as a separate
election from an election with respect to Variable Pay for the purposes of this
Section 3.1(h)(i).  Any previously
deferred amounts (including any gains and reduced by any losses) that are
cancelled as provided under this Section 3.1(h)(i) shall be
includable in the income of the Eligible Participant for the Eligible
Participant’s 2005 taxable  year, or, if
later, in the taxable year in which the amounts are earned and vested.

 

(ii)           Notwithstanding the
foregoing provisions of this Section 3.1, for the Plan Year beginning January 1,
2006 (the “2006 Plan Year”), each Eligible Employee who 

 

8

 

intends to participate in the
Plan for the 2006 Plan Year, must file an election to defer Compensation during
the designated election period that precedes January 1, 2006.  For the 2006 Plan Year only, the provisions
of Section 3.1(f) relating to deferral elections remaining in effect
from year to year shall not be applicable.

 

(iii)         Notwithstanding any
other provisions of this Plan to the contrary, the Committee may permit
Participants to change payment elections prior to December 31, 2006; provided,
however, that no such change may be permitted if such change would result in an
impermissible subsequent deferral or acceleration as set forth in Section XI.C.
of the preamble to the proposed regulations issued under Section 409A on September 29,
2005 (REG-158080-04).  For the avoidance
of doubt, no change to a payment election shall be permitted in 2006 if either (x) the
payment would have been made in 2006 in the absence of the change or (y) the
change would cause a payment to be made in 2006.

 

3.2          Cancellation of Compensation Deferrals.

 

(a)           Automatic Cancellation.  In the event that a Participant receives a
financial hardship withdrawal from the Synopsys 401(k) Savings and Success
Sharing Plan or any other plan maintained by the Company which contains a
qualified cash or deferred arrangement under Section 401(k) of the
Code (the “401(k) Plan”), the Participant’s Compensation deferrals under
this Plan (if any) shall be cancelled (i.e., the Participant’s deferral
elections shall be deemed to be zero) for a period until the Participant elects
a deferral election greater than zero effective with the commencement of a Plan
Year that begins no earlier than six (6) months from the date that the
Participant receives such hardship withdrawal. 
Notwithstanding the foregoing, the Participant’s Compensation deferrals
under this Plan shall not be so cancelled if the Committee determines that such
cancellation is not required in order to preserve the tax-qualification of the
401(k) Plan.

 

(b)           Permissible Cancellation.  In the event that a Participant incurs an
Unforeseeable Emergency (as defined in Section 7.5), the Committee, in its
sole discretion, may cancel the Participant’s Compensation deferrals for the
remainder of the Plan Year.  However, an
election to make Compensation deferrals under Article III shall be
irrevocable as to amounts deferred as of the effective date of any cancellation
in accordance with this Section.

 

(c)           Section 401 and Section 409A
Compliance.   The
cancellation of deferrals described in  Section 3.2(a) shall
be required to the extent necessary to preserve the tax-qualification of the
401(k) Plan.  The cancellation of
deferrals described in Section 3.2(a) and Section 3.2(b) shall
be permitted only in compliance with the requirements of Section 409A of
the Code and regulations and other guidance issued thereunder.  Any Participant whose deferrals are cancelled
under this Section 3.2 must meet the requirements for a new deferral
election in order to restart deferrals under the Plan.  In the event the cancellation of deferrals
described in this Section 3.2 are too short for the Plan to be in
compliance with the requirements of Section 409A of the Code and
regulations and other guidance issued thereunder, or for the 401(k) Plan
to maintain its tax-qualification, such cancellation shall be automatically
extended to the minimum extent necessary to be in such compliance or to
maintain the tax-qualification of the 401(k) Plan.

 

9

 

3.3          Company Discretionary Contributions.  The Company may, in its sole discretion,
credit discretionary contributions to the Accounts of one or more Participants
at such times and in such amounts as the Committee may determine.

 

ARTICLE 4

INVESTMENT ELECTIONS

 

4.1          Participant Investment Designation.  The Committee shall provide each Participant
with a list of Funds available for hypothetical investment.  The Participant may designate, in such manner
as provided by the Committee, one or more Funds that his or her Account will be
deemed to be invested in for purposes of determining the amount of gains or
losses to be credited to his or her Account; provided, however, that if the
Participant does not designate the deemed investment of his or her Account, the
Participant’s Account shall be deemed to be invested in the money market fund
offered under the Plan.  The Fund Return
of each Fund shall be used to determine the amount to be credited to each
Participant’s Account under Section 5.1(c).  In making the designation pursuant to this
Section, the Participant may specify that all or any whole percentage of his or
her Account be deemed to be invested in one or more of the Funds selected by
the Committee.

 

4.2          Change in Investment Designation.  A Participant may change the designation made
under Section 4.1 by filing an election with the third party administrator
at the time and in the manner specified.

 

4.3          Company Responsibility for Investment
Alternatives.  The
Company may, but need not, acquire investments corresponding to those designated
by the Participants hereunder, and the Company is not under any obligation to
maintain any investment it may make.  Any
such investments, if made, shall be the Company’s sole property in which no
Participant shall have any interest.

 

ARTICLE 5

ACCOUNTS

 

5.1          Participant Accounts.  The Committee shall establish and maintain an
Account for each Participant under the Plan. 
Each Participant’s Account shall be further divided into separate
subaccounts (“investment fund subaccounts”), each of which corresponds to a
Fund designated by the Participant pursuant to Section 4.1.  A Participant’s Account shall be credited as
follows:

 

(a)           Not later than the
last day of each month, the Committee shall cause the investment fund
subaccounts of the Participant’s Account to be credited with an amount equal to
the Base Pay deferred by the Participant during each pay period ending in that
month and/or the Variable Pay deferred during that month in accordance with the
Participant’s election; that is, the portion of the Participant’s deferred Base
Pay or Variable Pay that the Participant has elected to be deemed to be
invested in a certain Fund shall be credited to the investment fund subaccount
corresponding to that Fund.

 

10

 

(b)           Not later than the
last day of the Plan Year or such earlier time or times as the Committee may
determine, the Committee shall credit the investment fund subaccounts of the
Participant’s Account with an amount equal to the portion, if any, of any Company
contribution for the Participant’s benefit in accordance with Section 3.3;
that is, the portion of the Participant’s Company contribution, if any, that
the Participant has elected to be deemed to be invested in a certain Fund shall
be credited to the investment fund subaccount corresponding to that Fund.

 

(c)           Not later than the
last day of each month, each investment fund subaccount of a Participant’s
Account shall be credited with gains, losses, expenses and fees allocated to
such investment fund subaccount through the allocation date for the
corresponding Fund.

 

5.2          Trust Funding.

 

(a)           Trustee Duties.  The Trustee shall manage, invest and reinvest
the Trust assets as provided in the Trust Agreement.  The Trustee shall collect the income on the
Trust assets, and shall make distributions therefrom all as provided in the
Plan and in the Trust Agreement.

 

(b)           Employee Deferrals and Company
Contributions.  While
the Plan remains in effect, the Company shall make contributions to the Trust
at such times as determined in the discretion of the Committee.  Within three (3) months after the close
of each Plan Year, the Company shall make an additional contribution to the
Trust, if necessary, such that the value of the assets held in the Trust
following such contribution are at least equal to ninety percent (90%) of the
amount that is equal to (i) the balances in the Accounts of the
Participants as of the end of such Plan Year minus (ii) any distributions
to Participants after the end of such Plan Year and prior to the date of such
contribution.  For the purposes of this Section 5.2(b),
the direct payment by the Company of an obligation arising under the Plan shall
be deemed to be a contribution to the Trust. 
The Trustee shall not be liable for any failure by the Company to
provide contributions sufficient to pay all accrued benefits under the Plan in
accordance with the terms of the Plan.

 

(c)           General Creditors.  Neither the Participants nor their
Beneficiaries shall have any preferred claim on, or any beneficial ownership
in, any assets of the Trust prior to the time such assets are paid to the
Participants or Beneficiaries as benefits. 
All rights created under the Plan shall be unsecured contractual rights
of Plan Participants and Beneficiaries against the Company.  Any assets held in the Trust will be subject
to the claims of the Company’s general creditors under federal and state law in
the event of insolvency, as defined in the Trust Agreement.

 

ARTICLE 6

VESTING

 

6.1          Base Pay and Variable Pay Deferrals.  A Participant’s Account attributable to Base
Pay and Variable Pay deferred by a Participant pursuant to the terms of the
Plan, together 

 

11

 

with any earnings credited to
the Participant’s Account under Section 5.1(c) with respect to such
deferrals, shall be one hundred percent (100%) vested at all times.

 

6.2          Company Contributions.  The portion of a Participant’s Account
attributable to Company contributions pursuant to Section 3.3, if any,
including the Fund Return credited with respect thereto, shall vest at such
time or times as the Committee shall specify in connection with any such
amounts.

 

ARTICLE 7

DISTRIBUTIONS

 

7.1          Distributions from a Participant’s
Account.

 

(a)           Distribution Election and Minimum Requirements.  At the time a Participant makes (or is deemed
to make, pursuant to Section 3.1(f)) an election to defer a portion of his
or her Base Pay or Variable Pay for a Plan Year, he or she also must elect to
receive or commence receiving distribution of Contributions for that Plan Year
on a certain future date (a “Scheduled In-Service Withdrawal”), upon
Termination of Participant’s Employment or upon Retirement and the form in
which such amount shall be paid.  If, at
the date of Termination of Participant’s Employment for any reason, the
Participant has less than two (2) years of service with the Company or if
the Participant’s total Account value is less than One Hundred Thousand Dollars
($100,000), then the Participant’s Account will be paid to the Participant in a
lump sum within ninety (90) days following Termination of Participant’s
Employment.  If at such time the
Participant is credited with two (2) years of service with the Company and
if his or her total Account value is One Hundred Thousand Dollars ($100,000) or
more, then the provisions set forth in Sections 7.1(c) through 7.1(e) below
shall apply.  Notwithstanding the
foregoing, if the Participant is a Key Employee, then such Participant’s
distribution will be subject to the restrictions of Section 7.7.

 

If a Participant elects, with his or her Compensation
deferral election, a time and form of distribution for that deferral election,
and the Participant does not change that deferral election with respect to
distribution upon Termination of Participant’s Employment or Retirement for
subsequent Plan Years, then the Participant shall be deemed to have elected for
each subsequent Plan Years’ deferrals the same time and form of distribution
with respect to distribution upon Termination of Participant’s Employment or
Retirement that was in effect for deferrals made in the immediately preceding
Plan Year.  Notwithstanding the
foregoing, a Participant must make an affirmative election for a Plan Year if
the Participant intends to receive deferrals made for that Plan Year in the
form of a Scheduled In-Service Withdrawal.

 

(b)           Payment of Scheduled In-Service
Withdrawals.

 

(i)            If a Participant
elects a Scheduled In-Service Withdrawal with respect to a Plan Year, then the
Participant shall receive such amount in a lump sum paid in January of the
year identified on the election form. 
The lump sum payment shall be the portion of the Participant’s Account
(as adjusted for gains and losses) attributable to Contributions in the Plan
Year for which the election form or deemed election applies.

 

12

 

(ii)           The scheduled
distribution date must be two (2) years or more after the election
date.  A Participant may delay receipt of
a Scheduled In-Service Withdrawal by filing a subsequent election pursuant to
the requirements of Section 7.2(a).

 

(iii)         A Participant may
revoke a Scheduled In-Service Withdrawal election and instead elect a later
distribution upon Termination of Participant’s Employment or Retirement in
accordance with Sections 7.1(c) and 7.1(d) below by filing an
election pursuant to the requirements of Section 7.2(a).

 

(iv)          Notwithstanding the
foregoing, in the case of Termination of Participant’s Employment for any
reason prior to the payment of a Scheduled In-Service Withdrawal, then the
provisions of this Plan with respect to payment upon Termination of Participant’s
Employment or Retirement shall override and take precedence over such Scheduled
In-Service Withdrawal and payments from the Plan shall be made pursuant to
Sections 7.1(c) or 7.1(d), as applicable.

 

(c)           Payment Upon Termination of
Participant’s Employment for Any Reason Other Than Retirement, Death or
Becoming Disabled.  At
the time the Participant makes the election described in Section 7.1(a),
the Participant also must elect the form of distribution permitted under this Section 7.1(c) in
which the Participant’s benefits for Termination of Participant’s Employment
other than for Retirement, death or becoming Disabled shall be paid.  If Termination of Participant’s Employment is
for any reason other than Retirement, death or becoming Disabled, then, subject
to the minimum distribution requirements of Section 7.1(a) above, and
the provisions of Section 7.2 below and Section 409A of the Code, the
following forms of payment are available to the Participant:

 

(i)            a lump sum payable
within ninety (90) days following Termination of Participant’s Employment (or
following a date not less than that required under Section 7.2 and Section 409A
of the Code if a change in form or time of distribution is made pursuant to Section 7.2);
or

 

(ii)           substantially equal
annual installments over a period of five (5) years beginning within
ninety (90) days following Termination of Participant’s Employment  (or beginning within ninety (90) days
following a date not less than that required under Section 7.2 and Section 409A
of the Code if a change in form or time of distribution is made pursuant to Section 7.2).

 

Notwithstanding the foregoing, any distribution to a
Key Employee pursuant to this Section 7.1(c) will be subject to the
restrictions of Section 7.7.

 

(d)           Payment Upon Termination of
Participant’s Employment as a Result of Retirement or Becoming Disabled.  At the time the Participant makes the
election described in Section 7.1(a), the Participant also must elect the
form of distribution specified in this Section 7.1(d) in which the
Participant’s benefits upon Retirement or upon becoming Disabled shall be paid.

 

(i)            In the case of
Termination of Participant’s Employment as a result of Retirement or becoming
Disabled, the Participant’s Distributable Amount shall be paid to the 

 

13

 

Participant, at the Participant’s
election, and subject to the requirements of Section 7.1(d)(ii) below
in the form of:

 

(1)           a cash lump sum
payable within ninety (90) days following (A) the date of Retirement (or
following a date not less than that required under Section 7.2 and Section 409A
of the Code if a change in form or time of distribution is made pursuant to Section 7.2)
or (B) becoming Disabled; or

 

(2)           substantially equal
annual installments over five (5), ten (10) or fifteen (15) years
beginning within ninety (90) days following (A) the date of Retirement (or
following a date not less than that required under Section 7.2 and Section 409A
of the Code if a change in form or time of distribution is made pursuant to Section 7.2)
or (B) becoming Disabled.

 

Notwithstanding the foregoing, any distribution to a
Key Employee pursuant to this Section 7.1(d)(i) will be subject to
the restrictions of Section 7.7.

 

(ii)           If Termination of
Participant’s Employment is as a result of Retirement or the Participant
becoming Disabled, and if the Participant has elected annual installments, then
at the time distribution is to commence the Committee shall aggregate the
distribution amounts that the Participant has elected to be paid in annual
installments.

 

(1)           If the total
distributable amount of such elections equals or exceeds One Hundred Thousand
Dollars ($100,000), then such amount shall be paid to the Participant in the
annual installments elected by the Participant beginning within ninety (90)
days following (A) the date of Retirement (or following a date not less
than that required under Section 7.2 and Section 409A of the Code if
a change in form or time of distribution is made pursuant to Section 7.2)
or (B) becoming Disabled.  If the
total distributable amount of such elections is less than One Hundred Thousand
Dollars ($100,000), then such amount will, subject to paragraph (2) below,
be paid to the Participant in five (5) annual installments beginning
within ninety (90) days following (A) the date of Retirement (or following
a date not less than that required under Section 7.2 and Section 409A
of the Code if a change in form or time of distribution is made pursuant to Section 7.2)
or (B) becoming Disabled.

 

(2)           If the total of
such amounts is less than Fifty Thousand Dollars ($50,000), then such amount
will be paid to the Participant in a cash lump sum payable within ninety (90)
days following (A) the date of Retirement (or following a date not less
than that required under Section 7.2 and Section 409A of the Code if
a change in form or time of distribution is made pursuant to Section 7.2)
or (B) becoming Disabled.

 

Notwithstanding the foregoing, any distribution to a
Key Employee pursuant to this Section 7.1(d)(ii) will be subject to
the restrictions of Section 7.7.

 

7.2          Changes in Form or Time of
Distribution.

 

(a)           Changes to
Scheduled In-Service Withdrawals may be made only as set forth in this Section 7.2(a).  A change in the time of a Scheduled
In-Service Withdrawal shall be given effect only if the election to change the
distribution date (i) does not take effect until at 

 

14

 

least twelve (12) months after
the date on which the election change form is filed with the third party
administrator, (ii) the payment with respect to which such change in
election is made is deferred for a period of not less than five (5) years
after the date such payment would otherwise have been made, and (iii) the
election change must be made at least twelve (12) months prior to the date that
such Scheduled In-Service Withdrawal would otherwise have been made.

 

(b)           A Participant entitled
to payment as a result of Termination of Participant’s Employment or Retirement
may change his or her form of distribution from a lump sum to an installment
form or from an installment form to another installment form with a longer
period of payment in accordance with the rules of this Section 7.2(b).  A change in the form of distribution shall be
given effect only if the election to change the form of distribution (i) does
not take effect until at least twelve (12) months after the date on which the
election change form is filed with the third party administrator, and (ii) the
first payment with respect to such change in election is made is deferred for a
period of not less than five (5) years after the date such payment would
otherwise have been made.

 

(c)           Except as otherwise
provided by the Committee, all distributions to a single Participant pursuant
to a single distribution election shall be treated as a single payment.  For the avoidance of doubt, the provisions of
this Section 7.2(c) are intended to provide that installment payments
are not to be treated as separate payments as permitted by Treas. Reg. Section 1.409A-2(b)(2)(iii).

 

7.3          Default Provisions If No Election of Form of
Distribution.  If, at
the time of Termination of Participant’s Employment, for reasons other than
death, the Participant has made no election as to the form of distribution of
his or her Account, or if a distribution election is incomplete or
inapplicable, then the Participant’s Distributable Amount shall be distributed
as follows:

 

(a)           If Termination of
Participant’s Employment is a result of Retirement or becoming Disabled, and
the Participant’s Distributable Amount is less than Fifty Thousand Dollars
($50,000), then the Participant’s Distributable Amount will be paid to the
Participant in a cash lump sum payable within ninety (90) days following (A) the
date of Retirement or (B) becoming Disabled;

 

(b)           If Termination of
Participant’s Employment is a result of Retirement or becoming Disabled, and
the Participant’s Distributable Amount equals or exceeds Fifty Thousand Dollars
($50,000), then the Participant’s Distributable Amount will be paid to the
Participant in five (5) annual installments beginning within ninety (90)
days following (A) the date of Retirement or (B) becoming Disabled;
or

 

(c)           If Termination of
Participant’s Employment is for reasons other than Retirement or becoming
Disabled then, regardless of the value of the Participant’s Distributable
Amount at the time of Termination of Participant’s Employment, the Participant’s
Distributable Amount will be paid to the Participant in a cash lump sum payable
within ninety (90) days following Termination of Participant’s Employment.

 

15

 

Notwithstanding the foregoing, any distribution to a
Key Employee pursuant to this Section 7.3 will be subject to the
restrictions of Section 7.7.

 

7.4          Death
Benefits.

 

(a)           In
the case of a Participant who dies prior to Termination of Participant’s Employment,
that portion of the death benefit of any 
Death Benefit Policy as defined below which is equal to the lesser of (i) the
actual Death Benefit Policy death benefit or (ii) two and one-half (2.5)
times the Participant’s Base Pay (for Participants who are not paid on a
commission basis) or Target Compensation (for Participants who are paid on a
commission basis) at the time the Participant dies, shall be paid to the
Participant’s beneficiary under the Death Benefit Policy by the insurance
company that issued the Death Benefit Policy. 
Any such Death Benefit Policy shall be subject to the conditions set
forth in a “Split-Dollar Life Insurance Agreement” between the Participant and
the Trustee, pursuant to which the Participant may designate a beneficiary (subject
to Section 7.4(c) below) with respect to the portion of the Death
Benefit Policy proceeds described in the preceding sentence in the event the
Participant dies prior to Termination of Participant’s Employment.  Subject to Section 7.4(c) below,
the Participant shall have the right to designate and change such beneficiary
(which need not be his or her Beneficiary as determined under Section 1.3)
on a form provided by and filed with the insurance company, and the life
insurance proceeds designated in this Section 7.4(a) shall be paid to
such beneficiary.  A “Death Benefit
Policy” is a life insurance policy that was purchased by the Company pursuant
to Article 2 to insure the life of the Participant and that was designated
by the Committee, in its sole discretion, at the time the Participant completed
the life insurance application as entitling the Participant to a potential
death benefit pursuant to this Section 7.4.

 

(b)           The
benefit payable pursuant to Section 7.4(a) shall be paid only if a
Death Benefit Policy has been issued on the Participant’s life and is in full
force at the time of the Participant’s death and any such payment shall be
subject to all conditions and exceptions set forth in the Death Benefit
Policy.  A Participant who is entitled to
a death benefit pursuant to this Section shall not be entitled to any
other Company-paid group term life insurance benefits from the Company under
the Plan or any other Death Benefit Policy provided by the Company.  Notwithstanding any provision of the Plan or
any other document to the contrary, the Company shall not have any obligation
to pay the Participant or his or her Beneficiary any amounts described in Section 7.4(a);
any such amounts shall be payable solely from the proceeds of the Death Benefit
Policy, and if no Death Benefit Policy is in force, no such payment shall be
made.

 

(c)           As
of the beginning of each Plan Year, the Committee shall review the existing
Policies, and if a Participant or Eligible Employee has not elected to make
deferrals to the Plan and does not have an Account balance under the Plan, then
the Participant shall not be entitled to name a Beneficiary for that Plan Year
for any Death Benefit Policy insuring his or her life.  Furthermore, the Company is not obligated to
maintain any Death Benefit Policy; and no death benefit shall be payable
hereunder if the Company has been notified by the Committee to discontinue the
Death Benefit Policy for the Participant. 
In addition, no Death Benefit Policy shall be allocated to any Account.

 

(d)           Notwithstanding
any payment election to the contrary, following the death of a Participant, any
balance remaining in the Participant’s Account shall be paid to his or her 

 

16

 

Beneficiary or Beneficiaries in
a lump sum within ninety (90) days of the date the Committee is notified of the
Participant’s death.

 

7.5          Unforeseeable
Emergency.

 

(a)           If
a Participant incurs an Unforeseeable Emergency, the Committee may, in its sole
and absolute discretion and at any time, accelerate the date of distribution of
a Participant’s Account or permit a Participant to suspend his or her
Contributions for the remainder of the Plan Year.  Notwithstanding the foregoing, the
suspensions of deferrals described in this Section 7.5(a) shall be in
compliance with the provisions of Section 3.2.

 

(b)           “Unforeseeable
Emergency” shall mean an unanticipated emergency that is caused by an event
beyond the control of the Participant that would result in severe financial
hardship to the Participant not covered by insurance, liquidation of other
assets (to the extent the liquidation itself will not cause severe financial
hardship) or cessation of deferrals under this Plan, resulting from (i) a
sudden and unexpected illness or accident of the Participant or a dependent (as defined in Section 152 of
the Code, without regard to subsections (b)(1), (b)(2), and (d)(1)(B) of Section 152
of the Code), (ii) a loss of the Participant’s property due to
casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee.

 

(c)           Distribution
pursuant to this Section of less than the Participant’s entire interest in
the Plan shall be made pro rata from his or her investment Fund subaccounts
according to the balances in such subaccounts. 
Subject to the foregoing, payment of any amount with respect to which a
Participant has filed a request under this Section shall be made as soon
as practicable after approval of such request by the Committee.

 

(d)           The
amount that may be distributed to a Participant pursuant to this Section 7.5
as the result of the Participant experiencing an Unforeseeable Emergency shall
be the lesser of (i) the Participant’s Distributable Amount or (ii) the
amount necessary to meet such Unforeseeable Emergency, including amounts
necessary to pay taxes on the distributed amount.

 

7.6          Inability
To Locate A Participant. 
It is the responsibility of a Participant to apprise the Committee of
any change in his or her address.  In the
event that the Committee is unable to locate a Participant or Beneficiary for
two (2) years, the Participant’s Account shall be forfeited and amounts
returned to the Company unless otherwise required by applicable law.

 

7.7          Key
Employee Special Distribution Rule.  Notwithstanding any provision of this Plan to
the contrary, distributions to a Key Employee as a result of Termination of
Participant’s Employment or Retirement, whether the distribution is made in the
form of a lump sum or installments, shall not be made or the payments may not
commence before the date that is six (6) months following the date of
Termination of Participant’s Employment or Retirement, or, if earlier, the date
of death of the Key Employee.  For the
avoidance of doubt, this Section 7.7 shall not override the timing of
distributions that are not as a result of Termination of Participant’s
Employment or Retirement (e.g., distributions pursuant to Section 7.8(e) or
Section 9.5) even if such distributions would commence within six (6) months
following the Termination of Participant’s Employment or Retirement.

 

17

 

7.8          Special
Acceleration of Distribution Rules.  Distributions under the Plan may be
accelerated only upon the occurrence of an event specified in this Section 7.8.

 

(a)           A
payment may be accelerated if such payment is made to an alternate payee to the
extent necessary to fulfill a domestic relations order as defined in Section 414(p)(1)(B) of
the Code.

 

(b)           A
payment may be accelerated as may be necessary to comply with a certificate of
divestiture as defined in Section 1043(b)(2) of the Code.

 

(c)           With
respect to all deferrals under the Plan, a payment may be accelerated in the
event of a de minimis amount if

 

(i)            the
payment accompanies the termination of the entirety of the Participant’s
interest in the Plan;

 

(ii)           the
payment is made on of before the later of

 

(1)           December 31
of the calendar year in which occurs the Termination of Participant’s
Employment, or

 

(2)           the
date two and one half (21⁄2) months after the date of Termination of Participant’s
Employment;

 

(iii)         the
amount of the payment is not greater than the amount then permitted under
Sections 402(g)(1)(B) and 409A of the Code; and

 

(iv)          the
amount is paid in a lump sum.

 

(d)           A
payment may be accelerated to the extent required to pay the Federal Insurance
Contributions Act tax imposed under Sections 3101 and 3121(v)(2) of the
Code with respect to compensation deferred under the Plan (the “FICA Amount”).  Additionally, a payment may be accelerated to
pay the income tax on wages imposed under Section 3401 of the Code on the
FICA Amount and to pay the additional income tax at source on wages
attributable to the pyramiding Section 3401 wages and taxes.  The total payment under this Section 7.8(d) may
not exceed the aggregate of the FICA Amount and the income tax withholding
related to the FICA Amount.

 

(e)           Notwithstanding
any other provision of this Plan other than Section 9.5 of the Plan, the
Participant may elect that upon a Change in Control, his or her Account under
the Plan shall be paid or retained as follows:

 

(i)            Paid no later than sixty (60) days
following the Change in Control in the form of a lump sum payment of the
Participant’s Account; or

 

(ii)           Retained in the Plan and administered
and distributed in accordance with the terms of the Plan as in effect from time
to time following the Change in Control.

 

18

 

The Change in Control distribution election provided
in this Section 7.8(e) must be made in writing by the Participant at
the time the Participant files the applicable deferral of Compensation election
form with the Company as provided in Section 7.1(a).

 

ARTICLE 8

ADMINISTRATION

 

8.1          Committee.  The composition of the Committee, including
the number of Committee members and the manner of adding or removing members of
the Committee, shall be determined by procedures adopted by the Committee.

 

8.2          Committee
Action.  The Committee
shall act pursuant to procedures adopted by the Committee.  A member of the Committee shall not vote or
act upon any matter which relates solely to himself or herself as a
Participant.  The Chairperson of the
Committee, the Secretary of the Committee or any other member or members of the
Committee designated by the Chairperson may execute any certificate or other
written direction on behalf of the Committee.

 

8.3          Powers
and Duties of the Committee.

 

(a)           The
Committee, on behalf of the Participants and their Beneficiaries, shall enforce
the Plan in accordance with its terms, shall be charged with the general
administration of the Plan and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the following:

 

(i)            To
select the investments to determine the Fund Return in accordance with ARTICLE
IV hereof;

 

(ii)           To
construe and interpret the terms and provisions of the Plan;

 

(iii)         To
amend, modify, suspend or terminate the Plan in accordance with Section 9.5;

 

(iv)          To
compute and certify to the amount and kind of benefits payable to Participants
and their Beneficiaries and to direct the distribution of Plan benefits;

 

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

 

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

 

(vii)         To
make and publish such rules for the regulation of the Plan and procedures
for the administration of the Plan as are not inconsistent with the terms
hereof, including, without limitation, requiring, if so determined by the
Committee, Participants to make elections and designations by electronic or
other means;

 

19

 

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

 

(ix)          To
make any changes that may be necessary to operate and administer the Plan in
compliance with Section 409A of the Code, including, without limitation,
rejecting or reversing a deferral election or implementing the provisions of Section 9.12.

 

8.4          Construction
and Interpretation. 
The Committee shall have full discretion to construe and interpret the
terms and provisions of the Plan, which interpretation or construction, subject
to Section 9.4, shall be final and binding on all parties, including but
not limited to the Company and any Participant or Beneficiary.  The Committee shall administer such terms and
provisions in accordance with any and all laws applicable to the Plan,
including, without limitation, Section 409A of the Code.

 

8.5          Information.  To enable the Committee to perform its
functions, the Company shall supply full and timely information to the
Committee on all matters relating to the Compensation of all Participants,
their deaths or other causes of termination, and such other pertinent facts as
the Committee may reasonably require.

 

8.6          Compensation,
Expenses and Indemnity.

 

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

 

(b)           The
Committee is authorized at the expense of the Company to employ such legal
counsel as it may deem advisable to assist in the performance of its duties
hereunder.  The Company shall pay
expenses and fees in connection with the administration of the Plan.  For the avoidance of doubt, the obligation of
the Company to pay expenses and fees in connection with the administration of
the Plan shall not supersede the allocation of expenses and fees to a
Participant’s Account pursuant to Section 5.1(c).

 

(c)           The
Company indemnifies and holds harmless, to the extent permitted by law, each
member of the Committee and any employee, officer or director of the Company,
from and against any and all direct and indirect liabilities, demands, claims,
losses, taxes, costs and expenses, including (without limitation) reasonable
attorney’s fees, arising out of, relating to, or resulting from any action,
inaction or conduct in their official capacity in the oversight and
administration of the Plan or in his or her defense; provided, however, that (i) any
such person shall not be indemnified and held harmless if his or her actions,
inactions or conduct arise out of, relate to, or result from his or her gross
negligence, bad faith or willful misconduct, or otherwise are in willful
violation of the law, including (without limitation) a breach of fiduciary duty
under ERISA; and (ii) such individual shall promptly notify the Company of
any litigation involving the Plan, shall cooperate in the defense of any such
lawsuit, and shall give the Company sole and exclusive authority to act on his
or her behalf in the event of any such litigation or other claim or demand
arising out of, relating to, or resulting from his or her action, inaction or
conduct in his or her official capacity with respect to the Plan.  The Company may purchase insurance to satisfy
its obligation under this Section.

 

20

 

8.7          Quarterly
Statements.  Under
procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant’s Account on a quarterly basis.

 

ARTICLE 9

MISCELLANEOUS

 

9.1          Unsecured
General Creditor. 
Participants and their Beneficiaries, heirs, successors, and assigns
shall have no legal or equitable rights, claims, or interests in any specific
property or assets of the Company.  No
assets of the Company shall be held in any way as collateral security for the
fulfillment of the obligations of the Company under the Plan.  Any and all of the Company’s assets shall be,
and remain, the general unpledged, unrestricted assets of the Company.  The Company’s obligation under the Plan shall
be merely that of an unfunded and unsecured promise of the Company to pay money
in the future, and the rights of the Participants and Beneficiaries shall be no
greater than those of unsecured general creditors.

 

9.2          Restriction
Against Assignment. 
The Company shall pay all amounts payable hereunder only to the person
or persons designated by the Plan and not to any other person or
corporation.  No part of a Participant’s
Account shall be liable for the debts, contracts, or engagements of any
Participant, his or her Beneficiary, or successors in interest, nor shall a
Participant’s Account be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, commute, pledge, encumber, or
assign any benefits or payments hereunder in any manner whatsoever.  If any Participant, Beneficiary or successor
in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any distribution or payment from
the Plan, voluntarily or involuntarily, the Committee, in its discretion, may
cancel such distribution or payment (or any part thereof) to or for the benefit
of such Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.  Notwithstanding
the foregoing, amounts may be distributed in accordance with Section 7.8(a) to fulfill a “domestic relations
order” (as defined in Section 414(p)(1)(B) of the Code).

 

9.3          Withholding.  There shall be deducted from each payment
made under the Plan all taxes that are required to be withheld by the Company
in respect to such payment.  The Company
shall have the right to reduce any payment by the amount of cash sufficient to
provide the amount of said taxes.  Except
as provided in Section 3.1, in the event no payment is being made under
the Plan at the time that withholding of taxes is required (or at such time as
it is determined that withholding of taxes was required), the Company may
reduce the Participant’s Account by the amount of such withholding.

 

9.4          Disputes.

 

(a)           The
Committee shall administer the Plan.  The
Committee (either directly or through its designee) shall have the power and
authority to interpret, construe, and administer the Plan.

 

21

 

(b)           Neither
the Committee, its designee nor its advisors, shall be liable to any person for
any action taken or omitted in connection with the interpretation and
administration of the Plan.

 

(c)           The
Committee shall determine each Participant’s and Beneficiary’s right to
payments under the Plan.  If a
Participant or Beneficiary disagrees with the Committee’s determination, he or
she may make a written claim for payments inconsistent with that
determination.  Any such claim shall be
filed with the Committee at the principal executive offices of the Company.  The Committee shall review the claim and
notify the claimant of its decision in writing within sixty (60) days after the
claim is received.  If the Committee
denies the claim, in whole or in part, the notice shall specify the reasons for
denial, references to the Plan provisions upon which denial is based, any
additional information or material necessary to perfect the claim, and
procedures for further review of the claim. 
Within sixty (60) days after receipt of the notice of denial, the
claimant may file a written appeal of the denial of the claim, identifying the
grounds, facts and any other matter upon which the appeal is based.  The Committee shall give the claimant a final
decision within sixty (60) days after receipt of the request for review.  If the Committee affirms the denial of the
claim in whole or in part, it shall specify in writing the reasons for the
affirmance, with specific references to the Plan provisions upon which the
affirmance is based.

 

(d)           If
the Committee has affirmed the denial of a claim pursuant to the procedure
described in Section 9.4(c) above, the Participant or his or her
Beneficiary may, if he or she desires, submit any denied claim for payment
under the Plan to arbitration.  This
right to select arbitration shall be solely that of the Participant or his or
her Beneficiary and the Participant or his or her Beneficiary may decide
whether or not to arbitrate in his or her discretion.  The “right to select arbitration” is not
mandatory on the Participant or his or her Beneficiary and the Participant or
his or her Beneficiary may choose in lieu thereof to bring an action in an
appropriate civil court.  Once an
arbitration is commenced, however, it may not be discontinued without the
mutual consent of both parties to the arbitration.  During the lifetime of the Participant, only
he or she can use the arbitration procedure set forth in this Section.

 

(e)           Any
claim for arbitration may be submitted as follows:  if the Participant or his or her Beneficiary
disagrees with the Committee regarding the interpretation of the Plan and the
claim is finally denied by the Committee in whole or in part, such claim may be
filed in writing with an arbitrator of the Participant’s or Beneficiary’s
choice who is selected by the method described in the next four sentences.  The first step of the selection shall consist
of the Participant or his or her Beneficiary submitting a list of five (5) potential
arbitrators to the Committee.  Each of
the five arbitrators must be either (1) a member of the National Academy
of Arbitrators located in the State of California or (2) a retired
California Superior Court or Appellate Court judge.  Within one week after receipt of the list,
the Committee shall select one of the five (5) arbitrators as the
arbitrator for the dispute in question. 
If the Committee fails to select an arbitrator in a timely manner, the
Participant or his or her Beneficiary shall then designate one of the five (5) arbitrators
as the arbitrator for the dispute in question.

 

(f)            The
arbitration hearing shall be held within seven (7) days (or as soon
thereafter as possible) after selection of the arbitrator.  No continuance of said hearing shall be
allowed without the mutual consent of the Participant or his or her Beneficiary
and the 

 

22

 

Committee.  Absence from or nonparticipation at the
hearing by either party shall not prevent the issuance of an award.  Hearing procedures that will expedite the
hearing may be ordered at the arbitrator’s discretion, and the arbitrator may
close the hearing in his or her sole discretion when he or she decides he or
she has heard sufficient evidence to satisfy issuance of an award.

 

(g)           The
arbitrator’s award shall be rendered as expeditiously as possible and in no
event later than one (1) week after the close of the hearing.  In the event the arbitrator finds that the
Company has breached the Plan, he or she shall order the Company to immediately
take the necessary steps to remedy the breach. 
The award of the arbitrator shall be final and binding upon the
parties.  The arbitrator’s award may be
enforced in any appropriate court as soon as possible after its rendition.  If an action is brought to confirm the
arbitrator’s award, both the Company and the Participant agree that no appeal
shall be taken by either party from any decision rendered in such action.

 

(h)           Solely
for purposes of determining the allocation of the costs described in this
Section, the Committee will be considered the prevailing party in a dispute if
the arbitrator determines (1) that the Company has not breached the Plan
and (2) the claim by the Participant or his or her Beneficiary was not
made in good faith.  Otherwise, the
Participant or his or her Beneficiary will be considered the prevailing
party.  In the event that the Company is
the prevailing party, the fee of the arbitrator and all necessary expenses of
the hearing (excluding any attorneys’ fees incurred by the Company) including
stenographic reporter, if employed, shall be paid by the other party.  In the event that the Participant or his or
her Beneficiary is the prevailing party, the fee of the arbitrator and all
necessary expenses of the hearing (including all attorneys’ fees incurred by
the Participant or his or her Beneficiary in pursuing his or her claim),
including the fees of a stenographic reporter, if employed, shall be paid by
the Company.

 

9.5          Amendment,
Modification, Suspension or Termination.  The Committee may amend, modify, suspend or
terminate the Plan in whole or in part, except that no amendment, modification,
suspension or termination shall have any retroactive effect to reduce any
amounts credited to a Participant’s Account other than pursuant to a
distribution to such Participant. 
Notwithstanding the foregoing, if (i) there is a Change in Control,
(ii) lump sum distributions of all remaining Account balances can be made
within the twelve (12) months following the Change in Control, and (iii) the
successor employer, by resolution of its board of directors, within twelve (12)
months following the Change in Control, elects to terminate the Plan, then the
Account balances, or remaining Account balances, of each Participant, whether
such Participant is receiving installment payments or not, shall be paid to the
Participant in a single lump sum payment. 
Such lump sum payment shall be made no later than sixty (60) days
following the adoption of the resolutions of the board of directors of the
successor employer to terminate the Plan and within twelve (12) months
following the Change in Control.

 

9.6          Governing
Law.  The Plan shall be
construed, governed and administered in all respects in accordance with ERISA,
the Code and other pertinent Federal laws and, to the extent not preempted by
ERISA, in accordance with the laws of the State of California (irrespective of
the choice of law principles of the State of California as to all matters).

 

9.7          Receipt
or Release.  Any
payment to a Participant or the Participant’s Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full 

 

23

 

satisfaction of all claims
against the Committee and the Company. 
The Committee may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such
effect.

 

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

 

9.9          No
Employment Rights. 
Participation in the Plan shall not confer upon any person any right to
be employed by the Company or any other right not expressly provided hereunder.

 

9.10        Department
of Labor Determination. 
In the event that any Participant is found to be not a member of a
select group of management or highly compensated employees or is ineligible to
participate in the Plan, according to a determination made by the Department of
Labor or the Committee, the Committee shall take whatever steps it deems
necessary, in its sole discretion, to exclude the Participant from
participation in the Plan while equitably protecting the affected Participant’s
existing Account balance.

 

9.11        Headings,
etc. Not Part of Agreement.  Headings and subheadings in the Plan are
inserted for convenience of reference only and are not to be considered in the
construction of the provisions hereof.

 

9.12        Compliance
with Section 409A of the Code.  This Plan is intended to comply with the
requirements of Section 409A of the Code and regulations and other
guidance thereunder such that no amount deferred under the Plan shall be
subject to an additional tax as provided in Section 409A(a)(1)(b) of
the Code.  To the extent one or more
provisions of this Plan do not so comply (a “Non-complying Provision”) with Section 409A
of the Code and an amendment to such provision would result in the provision
ceasing to be a Non-complying Provision, notwithstanding any such provision of
the Plan to the contrary, the Non-complying Provision shall be automatically
amended to the minimum extent necessary consistent with preserving the economic
effect of the Non-complying Provision so that such provision ceases to be a
Non-complying Provision.  In the event of
any such automatic amendment of the Plan, the Plan document shall be amended as
soon as administratively feasible to reflect such amendment.

 

9.13        Electronic
or Other Forms.  Unless
otherwise provided by the Committee, any reference herein to a form, election,
designation, application, notice, statement or similar term shall include any
electronic process or procedure adopted or required by the Committee.

 

[INTENTIONALLY BLANK, SIGNATURE
PAGE FOLLOWS]

 

24

 

IN WITNESS WHEREOF, the Company
has caused this document to be executed by its duly authorized officer.

 

 

	
   

  	
  SYNOPSYS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Erika Varga

  
	
   

  	
   

  	
  Erika Varga, Assistant Secretary

  

 

25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]