Document:

exv10w1

Exhibit 10.1

Retirement Savings Plan for

Employees of Seacoast National Bank

(As Amended and Restated Effective January 1, 2009)

 

 

Retirement Savings Plan for

Employees of Seacoast National Bank

(As Amended and Restated Effective January 1, 2009)

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE 1 INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	1.01 History of the Plan
	 	 	 1	 
	1.02 Amended and Restated Plan
	 	 	 1	 
	1.03 Plan Governs Distribution of Benefits
	 	 	 1	 
	1.04 Purpose
	 	 	 1	 
	 
	 	 	 	 
	ARTICLE 2 DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	Account
	 	 	 2	 
	Adjustment
	 	 	 2	 
	Affiliate
	 	 	 2	 
	Authorized Leave of Absence
	 	 	 2	 
	Beneficiary
	 	 	 2	 
	Board
	 	 	 3	 
	Break in Service
	 	 	 3	 
	Code
	 	 	 3	 
	Committee
	 	 	 3	 
	Company
	 	 	 3	 
	Company Stock
	 	 	 3	 
	Company Stock Fund
	 	 	 3	 
	Compensation
	 	 	 4	 
	Contribution Agreement
	 	 	 4	 
	Disability
	 	 	 4	 
	Effective Date
	 	 	 4	 
	Elective Profit Sharing Contribution
	 	 	 4	 
	Eligible Employee
	 	 	 4	 
	Employee
	 	 	 5	 
	Employee Contribution
	 	 	 5	 
	Employer
	 	 	 5	 
	Employer Contribution
	 	 	 5	 
	Employer Matching Contribution
	 	 	 5	 
	Employer Matching Contribution Account
	 	 	 5	 
	Entry Date
	 	 	 5	 
	ERISA
	 	 	 5	 
	Fiduciary
	 	 	 5	 
	Highly Compensated Employee
	 	 	 5	 
	Hour of Service
	 	 	 5	 
	Investment Fund
	 	 	 6	 
	Leased Employee
	 	 	 6	 
	Non-elective Contribution
	 	 	 6	 
	Non-Elective Profit Sharing Contribution
	 	 	 6	 
	Normal Retirement Age
	 	 	 6	 
	One-Year Break in Service
	 	 	 6	 
	Participant
	 	 	 7	 

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	Plan
	 	 	 7	 
	Plan Administrator or Administrator
	 	 	 7	 
	Plan Year
	 	 	 7	 
	Port St. Lucie Participant
	 	 	 7	 
	Profit Sharing Contribution
	 	 	 7	 
	Profit Sharing Contribution Account
	 	 	 7	 
	Qualified Domestic Relations Order
	 	 	 7	 
	Qualified Non-elective Contribution
	 	 	 7	 
	Qualified Plan
	 	 	 7	 
	Retirement
	 	 	 7	 
	Retirement Contribution
	 	 	 7	 
	Retirement Contribution Account
	 	 	 7	 
	Rollover Contribution
	 	 	 7	 
	Rollover Contribution Account
	 	 	 7	 
	Roth 401(k) Contribution
	 	 	 7	 
	Roth 401(k) Contribution Account
	 	 	 8	 
	Salary Savings Contribution
	 	 	 8	 
	Salary Savings Contribution Account
	 	 	 8	 
	Separated Participant
	 	 	 8	 
	Spouse
	 	 	 8	 
	Termination of Employment
	 	 	 8	 
	Transfer Contribution
	 	 	 9	 
	Transfer Contribution Account
	 	 	 9	 
	Treasury Regulation
	 	 	 9	 
	Trust or Trust Agreement
	 	 	 9	 
	Trust Fund or Fund
	 	 	 9	 
	Trustee
	 	 	 9	 
	Valuation Date
	 	 	 9	 
	Voluntary After-Tax Contributions
	 	 	 9	 
	Voluntary After-Tax Contribution Account
	 	 	 9	 
	Year of Eligibility Service
	 	 	 9	 
	Year of Vesting Service
	 	 	 9	 
	 
	 	 	 	 
	ARTICLE 3 PARTICIPATION
	 	 	10	 
	 
	 	 	 	 
	3.01 Participation
	 	 	10	 
	3.02 Year of Eligibility Service
	 	 	11	 
	3.03 Participation and Rehire
	 	 	11	 
	3.04 Acquisitions
	 	 	11	 
	3.05 Not Contract for Employment
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 4 EMPLOYEE CONTRIBUTIONS
	 	 	12	 
	 
	 	 	 	 
	4.01 Employee Contributions
	 	 	12	 
	4.02 Elections Regarding Employee Contributions
	 	 	13	 
	4.03 Changes in Employee Contribution Percentage or Suspension of Contributions
	 	 	14	 
	4.04 Deadline for Contribution and Allocation of Salary Savings Contributions
	 	 	14	 
	4.05 Rollover Contributions
	 	 	14	 
	4.06 Transfer Contribution
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 5 EMPLOYER CONTRIBUTIONS
	 	 	16	 
	 
	 	 	 	 
	5.01 Employer Matching Contribution
	 	 	16	 
	5.02 Profit Sharing Contributions
	 	 	17	 
	5.03 Retirement Contribution
	 	 	18	 
	5.04 Qualified Non-Elective Contributions
	 	 	18	 
	5.05 Form and Timing of Contributions
	 	 	19	 
	5.06 Forfeitures
	 	 	19	 

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	5.07 Employment on Last Day of Plan Year
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 6 ACCOUNTS AND ALLOCATIONS
	 	 	20	 
	 
	 	 	 	 
	6.01 Participant Accounts
	 	 	20	 
	6.02 Allocation of Adjustments
	 	 	21	 
	6.03 Investment Funds and Elections
	 	 	21	 
	6.04 Errors
	 	 	22	 
	6.05 Valuation For Purposes of Distributions
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 7 VESTING
	 	 	24	 
	 
	 	 	 	 
	7.01 Retirement
	 	 	24	 
	7.02 Disability
	 	 	24	 
	7.03 Death
	 	 	24	 
	7.04 Other Termination of Employment
	 	 	24	 
	7.05 Year of Vesting Service
	 	 	25	 
	7.06 Forfeitures
	 	 	26	 
	7.07 Amendment of Vesting Schedule
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 8 DISTRIBUTIONS
	 	 	28	 
	 
	 	 	 	 
	8.01 Commencement of Distribution
	 	 	28	 
	8.02 Method of Distribution
	 	 	29	 
	8.03 Minimum Distribution Requirements
	 	 	30	 
	8.04 Required Minimum Distributions for 2009
	 	 	34	 
	8.05 Application for Benefits
	 	 	34	 
	8.06 Distributions Pursuant to Qualified Domestic Relations Orders
	 	 	35	 
	8.07 Direct Transfer of Account to an Eligible Retirement Plan
	 	 	35	 
	8.08 Direct Trust to Trust Transfers by Non-Spouse Beneficiaries
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 9 HARDSHIP WITHDRAWALS; IN-SERVICE DISTRIBUTIONS
	 	 	38	 
	 
	 	 	 	 
	9.01 Hardship Withdrawal of Account
	 	 	38	 
	9.02 Definition of Hardship
	 	 	38	 
	9.03 Maximum Hardship Distribution
	 	 	39	 
	9.04 Procedure to Request Hardship
	 	 	40	 
	9.05 Valuation for Purposes of Withdrawals
	 	 	40	 
	9.06 Age 591/2 In-Service Distributions
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 10 ADMINISTRATION OF THE PLAN
	 	 	41	 
	 
	 	 	 	 
	10.01 Named Fiduciaries
	 	 	41	 
	10.02 Board of Directors
	 	 	41	 
	10.03 Trustee
	 	 	41	 
	10.04 Committee
	 	 	41	 
	10.05 Standard of Fiduciary Duty
	 	 	42	 
	10.06 Claims Procedure
	 	 	42	 
	10.07 Indemnification of Committee; Board
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 11 AMENDMENT AND TERMINATION
	 	 	46	 
	 
	 	 	 	 
	11.01 Right to Amend
	 	 	46	 
	11.02 Termination and Discontinuance of Contributions
	 	 	46	 
	11.03 IRS Approval of Termination
	 	 	46	 
	 
	 	 	 	 
	ARTICLE 12 SPECIAL DISCRIMINATION RULES
	 	 	47	 
	 
	 	 	 	 
	12.01 Definitions
	 	 	47	 
	12.02 Limit on Salary Savings Contributions and Roth 401(k) Contributions
	 	 	49	 
	12.03 Average Actual Deferral Percentage
	 	 	52	 
	12.04 Special Rules For Determining Average Actual Deferral Percentage
	 	 	52	 

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	12.05 Distribution of Excess ADP Deferrals
	 	 	53	 
	12.06 Average Actual Contribution Percentage
	 	 	55	 
	12.07 Special Rules For Determining Average Actual Contribution Percentages
	 	 	56	 
	12.08 Distribution of Employer Matching Contributions
	 	 	56	 
	12.09 Forfeiture of Excess ACP Contributions
	 	 	57	 
	12.10 Order of Applying Certain Sections of Article
	 	 	57	 
	 
	 	 	 	 
	ARTICLE 13 HIGHLY COMPENSATED EMPLOYEES
	 	 	58	 
	 
	 	 	 	 
	13.01 In General
	 	 	58	 
	13.02 Highly Compensated Employees
	 	 	58	 
	13.03 Former Highly Compensated Employee
	 	 	58	 
	13.04 Definitions
	 	 	58	 
	13.05 Other Methods Permissible
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 14 MAXIMUM BENEFITS
	 	 	60	 
	 
	 	 	 	 
	14.01 General Rule
	 	 	60	 
	14.02 Definitions
	 	 	61	 
	 
	 	 	 	 
	ARTICLE 15 TOP HEAVY RULES
	 	 	63	 
	 
	 	 	 	 
	15.01 General
	 	 	63	 
	15.02 Definitions
	 	 	63	 
	15.03 Minimum Benefit
	 	 	64	 
	 
	 	 	 	 
	ARTICLE 16 MISCELLANEOUS
	 	 	65	 
	 
	 	 	 	 
	16.01 Headings
	 	 	65	 
	16.02 Action by Employer
	 	 	65	 
	16.03 Spendthrift Clause
	 	 	65	 
	16.04 Distributions Upon Plan Termination
	 	 	65	 
	16.05 Discrimination
	 	 	65	 
	16.06 Release
	 	 	65	 
	16.07 Compliance with Applicable Laws
	 	 	66	 
	16.08 Merger
	 	 	66	 
	16.09 Governing Law
	 	 	66	 
	16.10 Legally Incompetent
	 	 	66	 
	16.11 Location of Participant or Beneficiary Unknown
	 	 	66	 
	16.12 Protected Benefits
	 	 	66	 
	16.13 Qualified Military Service
	 	 	67	 
	 
	 	 	 	 
	APPENDIX A PREDECESSOR EMPLOYERS AND PAST SERVICE CREDIT RULES
	 	 	69	 

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Retirement Savings Plan for

Employees of Seacoast National Bank

(As Amended and Restated Effective January 1, 2009)

ARTICLE 1

INTRODUCTION

	1.01	 	History of the Plan.
	 
	 	 	Effective January 1, 1983, Seacoast Banking Corporation of Florida
adopted and established the Retirement Savings Plan for First
National Bank & Trust Company of Treasure Coast (the “Plan”) for the
exclusive benefit of its Eligible Employees. The Plan was thereafter
amended, and amended and restated in its entirety, from time to time.
Effective as of April 28, 2006, the name of the Plan was changed to
the Retirement Savings Plan for Employees of Seacoast National Bank.
Effective as of January 1, 2009, sponsorship of the Plan was
transferred to Seacoast National Bank (the “Company”). The Plan has
at all times been maintained as a plan meeting the requirements of
qualification under Section 401(a) of the Internal Revenue Code of
1986, as amended (the “Code”).
	 
	1.02	 	Amended and Restated Plan.
	 
	 	 	Effective January 1, 2009, the Plan is continued in an amended and
restated form as set forth in its entirety in this document. Certain
provisions of this Plan may have effective dates prior to or later
than January 1, 2009, and are noted accordingly.
	 
	1.03	 	Plan Governs Distribution of Benefits.
	 
	 	 	The distribution of benefits for all Participants (whether employed
by the Employer before or after the Effective Date) shall be governed
by the provisions of this Plan. Nevertheless, early retirement
benefits, retirement-type subsidies, or optional forms of benefits
protected under Code Section 411(d)(6) shall not be reduced or
eliminated with respect to such benefits that have already accrued
unless such reduction or elimination is permitted under the Code,
Treasury Regulations, authority issued by the Internal Revenue
Service, or judicial authority.
	 
	1.04	 	Purpose.
	 
	 	 	The purpose of this Plan is to encourage savings on the part of
Participants by allowing them to accumulate tax-deferred savings
while providing an incentive through matching contributions made by
the Employer. Further, the benefits described in the Plan are
provided for the exclusive benefit of the Participants and their
Beneficiaries and this Plan shall be administered and interpreted in
accordance with such purpose.

 

 

ARTICLE 2

DEFINITIONS

Certain terms of this Plan have defined meanings that are set forth in this Article and that shall
govern unless the context in which they are used clearly indicates that some other meaning is
intended.

A defined term, such as “Retirement,” will normally govern the definitions of derivatives
therefrom, such as “Retire,” even though such derivatives are not specifically defined and even if
they are or are not initially capitalized. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly indicates to the
contrary. Singular and plural nouns and pronouns shall be interchangeable as the factual context
may allow or require. The words “hereof,” “herein,” “hereunder” and other similar compounds of the
word “here” shall mean and refer to the entire Plan and not to any particular provision or Section.

Account shall mean the Account established and maintained by the Committee or Trustee for
each Participant or their Beneficiaries to which shall be allocated each Participant’s interest in
the Trust Fund. Each Account shall be comprised of the sub-accounts described in Section 6.01.

Adjustment shall mean for any Valuation Date the aggregate earnings, realized or unrealized
appreciation, losses, expenses, and realized or unrealized depreciation of the Trust Fund since the
immediately preceding Valuation Date. For purposes of such adjustment, all assets of the Trust
Fund shall be valued at their fair market value as of each Valuation Date. The determination of
the valuation of assets and the adjustment shall be made by the Trustee and shall be final and
binding.

Affiliate shall mean any corporation that is a member of a controlled group of corporations
(as defined in Code Section 414(b)) that includes the Company; any trade or business that is under
common control (as defined in Code Section 414(c)) with the Company; any organization that is a
member of an affiliated service group (as defined in Code Section 414(m)) that includes the
Company; and any other entity required to be aggregated with the Company pursuant to regulations
under Code Section 414(o).

Authorized Leave of Absence shall mean any temporary layoff or any absence authorized by
the Employer under the Employer’s standard personnel practices provided that all persons under
similar circumstances must be treated alike in the granting of such Authorized Leaves of Absence
and provided further that the Participant returns within the period of authorized absence. An
absence due to service in the Armed Forces of the United States shall be considered an Authorized
Leave of Absence to the extent required by federal law.

Beneficiary shall mean:

	 	(a)	 	Unmarried Participants. For unmarried Participants, any individual(s),
trust(s), estate(s), partnership(s), corporation(s) or other entity or entities
designated by the Participant in accordance with procedures established by the
Committee to receive any distribution to which the Participant is entitled under the
Plan in the event of the Participant’s death. The Committee may require certification
by a Participant in any form it deems appropriate of the Participant’s marital status
prior to accepting or honoring any Beneficiary designation. Any Beneficiary
designation shall be void if the Participant
revokes the designation or marries. Any Beneficiary designation shall be void to
the

- 2 -

 

	 	 	 	extent it conflicts with the terms of a “qualified domestic relations order,” as
defined in Code Section 414(p).
	 
	 	 	 	If an unmarried Participant fails to designate a Beneficiary or if the designated
Beneficiary fails to survive the Participant and the Participant has not designated
a contingent Beneficiary, the Beneficiary shall be the Participant’s estate.
	 
	 	(b)	 	Married Participant. A married Participant’s Beneficiary shall be his
Spouse at the time of his death unless the Participant has designated a non-Spouse
Beneficiary (or Beneficiaries) with the written consent of his Spouse given in the
presence of a notary public on a form provided by the Committee, or unless the terms of
a qualified domestic relations order require payment to a non-Spouse Beneficiary. A
married Participant’s designation of a non-Spouse Beneficiary in accordance with the
preceding sentence shall remain valid until revoked by the Participant or until the
Participant marries a Spouse who has not consented to a designation in accordance with
the preceding sentence. A Spouse’s consent to the Participant’s designation of a
non-Spouse Beneficiary (or Beneficiaries) must state the specific non-spouse
Beneficiary (including any class of Beneficiaries or contingent Beneficiaries) and the
particular optional form of benefit. The Participant may not subsequently substitute
another non-spouse Beneficiary or select another optional form of benefit without the
Spouse’s consent. Notwithstanding the preceding sentence, the Spouse may execute a
general consent that allows the Participant to subsequently change the designated
Beneficiary or optional form of benefit without Spousal consent, provided the Spouse
acknowledges that (i) the Spouse may limit consent to a specific beneficiary or a
specific optional form of benefit, and (ii) the Spouse voluntarily elects to relinquish
such rights.

For the purposes of this Section, revocation of prior Beneficiary designations will occur when a
Participant (i) files a subsequent valid designation with the Committee; or (ii) files a signed
statement with the Committee evidencing his intent to revoke any prior designations.

Board shall mean the Board of Directors of Seacoast National Bank.

Break in Service shall mean a period of five consecutive One-Year Breaks in Service.

Code shall mean the Internal Revenue Code of 1986, as amended. A reference to a specific
provision of the Code shall include such provision and any applicable Treasury Regulation
pertaining thereto.

Committee shall mean the committee appointed by the Board or its designee under Article 10
to administer the Plan.

Company shall mean Seacoast National Bank, its successors and assigns.

Company Stock shall mean shares of common stock issued by Seacoast Banking Corporation of
Florida. The Company Stock is intended to constitute “Qualifying Employer Securities” as defined
in ERISA Section 407(d)(5). It is hereby expressly provided that the Plan may acquire and hold
Qualifying Employer Securities.

Company Stock Fund shall mean the portion of the Plan and the Trust Fund invested in
Company Stock, including cash and cash equivalents to the extent needed to facilitate transactions.

- 3 -

 

Compensation shall mean the gross annual earnings required to be reported on a
Participant’s Form W-2 (box 1) under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
shall also (i) include Salary Savings Contributions, salary reduction contributions to any Section
125 Plan maintained by the Employer, amounts applied at the election of the Participant under an
arrangement described in Code Section 132(f) and salary deferrals under Code Sections 402(a)(8),
402(h), 403(b), 457 and 414(h); (ii) exclude Non-elective Contributions under a Section 125 Plan
maintained by the Employer, reimbursements or other expense allowances, fringe benefits (cash and
non-cash), moving expenses, deferred compensation (and for this purpose, benefits under a stock
option plan are “deferred compensation”) and welfare benefits (and for this purpose, worker’s
compensation payments of any type and severance pay of any type shall be considered to be “welfare
benefits,” but sick pay, short term disability and vacation pay are not considered to be “welfare
benefits”); and (iii) disregard any income exclusions under Code Section 3401(a) based on the
nature or location of employment.

The annual Compensation of each Participant taken into account in determining allocations for any
Plan Year shall not exceed $245,000 as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. Annual Compensation means Compensation during the Plan Year or
such other consecutive 12-month period over which Compensation is otherwise determined under the
Plan (the determination period). The cost-of-living adjustment in effect for a calendar year
applies to annual Compensation for the determination period that begins with or within such
calendar year.

Contribution Agreement shall mean an agreement between the Employer and a participating
Eligible Employee whereby such Eligible Employee authorizes the Employer to withhold a specified
percentage of his Compensation for deposit to the Plan on his behalf on a pre-tax basis as Salary
Savings Contributions and/or, effective on and after September 1, 2009, on an after-tax basis as
Roth 401(k) Contributions.

Disability shall mean an illness or injury of a potentially permanent nature certified by a
physician selected by or satisfactory to the Company that prevents the Employee from engaging in
any occupation for wage or profit for which the Employee is reasonably fitted by training,
education or experience. An Employee requesting payment under the Plan as a result of a Disability
must be eligible for and receive disability benefits under the Social Security Act.

Effective Date shall mean January 1, 2009.

Elective Profit Sharing Contribution shall have the meaning set forth in Section 5.02.

Eligible Employee. Except for those Employees identified in the following sentence, all
Employees employed by the Employer shall be considered Eligible Employees. The following Employees
shall not be considered Eligible Employees: (i) any employee included in a collective bargaining
unit for which a labor organization is recognized as collective bargaining agent unless such
employee has been designated by the Board of Directors as an “Eligible Employee” for the purposes
of this Plan; (ii) any Employee who is a nonresident alien and who does not receive earned
income from the Company that constitutes income from sources within the United States; (iii) any
“Leased Employee,” within the meaning of Code Section 414(n)(2), with respect to the Employer; (iv)
any Leased Employee, regardless of whether such employee meets the definition of leased employee in
Code Section 414(n)(2); and (v) any person who is classified by the Employer as an independent
contractor for purposes of withholding and payment of employment taxes, even if such person is
later determined, whether by the Employer or otherwise, to be a common law Employee of the
Employer.

- 4 -

 

Employee shall mean any person employed by or on Authorized Leave of Absence from the
Employer, and any person who is a “Leased Employee” within the meaning of Code Section 414(n)(2)
with respect to the Employer. However, if such Leased Employees constitute less than 20 percent of
the Company’s and Affiliates’ combined non-highly compensated work force, within the meaning of
Code Section 414(n)(1)(C)(ii), the term “Employee” shall not include Leased Employees covered by a
plan described in Code Section 414(n)(5).

Employee Contribution shall mean Non-elective Contributions deferred to the Plan under the
Section 125 Plan maintained by the Employer, Salary Savings Contributions, Roth 401(k)
Contributions and/or Voluntary After-Tax Contributions (made to the Plan prior to April 1, 2001).

Employer shall mean the Company and all the Affiliates.

Employer Contribution shall mean Employer Matching Contributions, Profit Sharing
Contributions, Retirement Contributions or Qualified Non-Elective Contributions.

Employer Matching Contribution shall have the meaning defined in Section 5.01.

Employer Matching Contribution Account shall mean the portion of a Participant’s total
Account attributable to Employer Matching Contributions, and the total of the Adjustments that have
been credited to or deducted from a Participant’s Account with respect to Employer Matching
Contributions.

Entry Date shall mean the first day of the month coinciding with or immediately following
the date an Eligible Employee satisfies the eligibility requirements in Article 3.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time. Reference to a specific provision of ERISA shall include any applicable regulations
pertaining thereto.

Fiduciary shall mean any party named as a Fiduciary in Article 10 of the Plan. Any party
shall be considered a Fiduciary of the Plan only to the extent of the powers and duties
specifically allocated to such party under the Plan.

Highly Compensated Employee shall have the meaning set forth in Section 13.02.

Hour of Service shall mean:

	 	(a)	 	Each hour for which an Employee is paid, or entitled to payment, for
performance of duties for the Employer. These hours shall be credited to the Employee
for the period during which the duties were performed;
	 
	 	(b)	 	Each hour for which an Employee is paid, or entitled to payment, by the
Employer, on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to vacation,
holiday, illness, incapacity, layoff, jury duty, military duty, or leave of absence.
No more than 501 Hours of Service will be credited under this paragraph for any single
continuous period (whether or not such period occurs in a single computation period).
	 
	 	(c)	 	Each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. These hours shall be credited to the Employee
for the

- 5 -

 

	 	 	 	computation period or period to which the award or agreement pertains, rather
than the computation period in which the award, agreement, or payment is made.
	 
	 	(d)	 	In lieu of the foregoing, an Employee who is not compensated on an hourly basis
(such as salary, commission or piecework employees) shall be credited with 45 Hours of
Service for each week in which such Employee would be credited with Hours of Service in
hourly pay. However, this method of computing Hours of Service may not be used for any
Employee whose Hours of Service is required to be counted and recorded by any Federal
law, such as the Fair Labor Standards Act. Any such method must yield an equivalency
of at least 1,000 hours per computation period.
	 
	 	(e)	 	Notwithstanding any provision of the plan to the contrary, an Employee shall be
credited with each hour for which the Employee is not paid but which is required to be
credited to such employee under the Family and Medical Leave Act or the Uniformed
Services Reemployment Rights Act. Hours credited under this paragraph shall be
credited to the minimum extent and solely for the purpose required under the applicable
law.

Hours of Service shall be credited for employment with the Company and with any Affiliate.

The following rules shall apply in determining whether an Employee completes an Hour of Service:

	 	1.	 	The same hours shall not be credited under subparagraphs (a) or (b) above, as
the case may be, and subparagraph (c) above, nor shall the same hours credited under
subparagraphs (a) through (d) above be credited under subparagraph (e) above.
	 
	 	2.	 	The rules relating to determining Hours of Service for reasons other than the
performance of duties and for crediting Hours of Service to particular periods of
employment shall be those rules stated in Department of Labor Regulations Sections
2530.200b-2(b) and -2(c), respectively.

Investment Fund shall mean the separate funds under the Trust Fund that are distinguished
by their investment objectives. See Section 6.03.

Leased Employee. Any person (other than an Employee of the Employer) who, pursuant to an
agreement between the Employer and any other person, has performed services for the Employer (or
for the Employer and related persons determined in accordance with Section 414(n)(6)
of the Code) on a substantially full-time basis for a period of at least one year, and such
services were performed under the primary direction or control of the Employer.

Non-elective Contribution shall mean contributions made to the Plan during the Plan Year by
the Employer, at the election of the Participant in lieu of cash compensation, and that are made
pursuant to the Section 125 Plan maintained by the Employer. Such contributions are fully vested
and nonforfeitable when made and distributable only as specified in Article 8.

Non-Elective Profit Sharing Contribution shall have the meaning as set forth in Section
5.02.

Normal Retirement Age shall mean age 65.

One-Year Break in Service shall mean any Plan Year during which an Employee accrues 500 or
fewer Hours of Service. A One-Year Break in Service shall not occur during any Plan Year in which
the

- 6 -

 

Employee is on an Authorized Leave of Absence, but only if the Employee returns to active
employment immediately upon expiration of such period.

Participant shall mean an Eligible Employee who becomes eligible to participate in the Plan
as provided in Article 3.

Plan shall mean the Retirement Savings Plan for Employees of Seacoast National Bank and any
amendments thereto. See also Section 1.01.

Plan Administrator or Administrator, within the meaning of ERISA Section 3(16),
shall mean the Company.

Plan Year shall mean the calendar year.

Port St. Lucie Participant shall mean a participant in the Port St. Lucie National Bank
Retirement Savings Plan immediately prior to the merger of such plan with this Plan.

Profit Sharing Contribution shall mean Elective Profit Sharing Contributions and
Non-Elective Profit Sharing Contributions. See Section 5.02.

Profit Sharing Contribution Account shall mean the portion of a Participant’s total Account
attributable to Profit Sharing Contributions, and the total of the Adjustments that have been
credited to or deducted from a Participant’s Account with respect to Profit Sharing Contributions.
Elective Profit Sharing Contributions and Non-elective Profit Sharing Contributions shall be
separately accounted for under the Profit Sharing Contribution Account.

Qualified Domestic Relations Order. See Section 8.06.

Qualified Non-elective Contribution. See Section 5.04.

Qualified Plan shall mean any pension, profit-sharing, stock bonus, or other plan that
meets the requirements of Section 401 of the Code that includes a trust exempt from tax under
Section 501(a) of the Code; any annuity plan described in Section 403(a) of the Code.

Retirement shall mean the Termination of Employment of a Participant on or after attaining
age 55.

Retirement Contribution shall have the meaning provided in Section 5.03.

Retirement Contribution Account shall mean the portion of a Participant’s Account
attributable to Retirement Contributions and the total of the Adjustments that have been credited
to or deducted from a Participant’s Account with respect to Retirement Contributions.

Rollover Contribution shall have the meaning defined in Section 4.05.

Rollover Contribution Account shall mean the portion of a Participant’s Account
attributable to Rollover Contributions and the total of the Adjustments attributable to such
Rollover Contributions.

Roth 401(k) Contribution shall mean contributions made to the Plan by the Employer,
pursuant to an irrevocable election of the Participant, in lieu of all or a portion of the Salary
Savings Contributions the Participant is otherwise eligible to make under the Plan. Such
contributions are nonforfeitable when

- 7 -

 

made and distributable only as specified in Article 8. For
purposes of the preceding sentence, the term “irrevocable” shall not mean that the Participant’s
Contribution Agreement may not be amended to increase or decrease the amount of Roth 401(k)
Contributions or to suspend Roth 401(k) Contributions entirely, but shall mean that a Participant
may not elect to recharacterize his Roth 401(k) Contributions as Salary Savings Contributions.

Roth 401(k) Contribution Account. The portion of a Participant’s Account attributable to
Roth 401(k) Contributions, and the total of the Adjustments attributable thereto.

Salary Savings Contribution shall mean contributions made to the Plan during the Plan Year
by the Employer, on behalf of the Participant, in lieu of cash compensation and that are made
pursuant to a Contribution Agreement under Section 4.02(a) or that were made under the automatic
enrollment provisions that were effective under the Plan during the 2008 Plan Year (as described in
the second paragraph of Section 4.02(a)). Such contributions are fully vested and nonforfeitable
when made and distributable only as specified in Article 8 below.

Salary Savings Contribution Account shall mean the portion of a Participant’s Account
attributable to Salary Savings Contributions, and the total of the Adjustments that have been
credited to or deducted from a Participant’s Account with respect to Salary Savings Contributions.

Separated Participant shall have the meaning set forth in Section 3.03.

Spouse shall mean the person of the opposite sex who is the husband or wife of the
Participant, who is married to the Participant (in a civil or religious ceremony recognized under
the laws
of the state where the marriage was contracted) immediately prior to the date on which payments to
the Participant from the Plan begin. If the Participant dies prior to the commencement of
benefits, Spouse shall mean a person who is married to a Participant (as defined in the immediately
preceding sentence) on the date of the Participant’s death. A Participant shall not be considered
married to another person as a result of any common law marriage whether or not such common law
marriage is recognized by applicable state law.

Termination of Employment shall mean that an Employee has ceased to be employed by the
Employer for any of the following reasons:

	 	(i)	 	Voluntary resignation from the service of the Employer;
	 
	 	(ii)	 	Discharge from the service of the Employer by the Employer as the result of a
reduction in force that is due to an Employer restructuring, reorganization, downsizing
or elimination of a function or department;
	 
	 	(iii)	 	Death;
	 
	 	(iv)	 	Disability; or
	 
	 	(v)	 	Retirement.

Notwithstanding the foregoing, an Employee who ceases to be actively employed by reason of (i) an
Authorized Leave of Absence or (ii) discharge from the service of the Employer by the Employer for
reasons other than those identified in subparagraph (ii) above, regardless of the Employee’s age on
his last day of employment, shall not be considered as having a Termination of Employment. If an
Employee

- 8 -

 

terminates employment and, as part of such termination, becomes a Leased Employee, he
shall not be deemed to have a Termination of Employment until he ceases to be a Leased Employee.

Transfer Contribution shall mean a non-taxable transfer of a Participant’s benefit directly
from a Qualified Plan to this Plan.

Transfer Contribution Account shall mean the portion of a Participant’s Account holding
Transfer Contributions and that are not separately allocated to an existing account under the Plan.
Sub-accounts may be established as necessary to separately account for pre-tax contributions,
after-tax contributions, etc. Any restriction or special rules applicable to the Transfer
Contribution Account (including optional forms of benefit that are protected under Section
411(d)(6) of the Code) shall be set forth in an appendix to this Plan.

Treasury Regulation means regulations pertaining to certain Sections of the Code as issued
by the Secretary of the Treasury.

Trust or Trust Agreement shall mean the separate trust agreement entered into
between the Company and the trustee that governs the creation of the Fund and all amendments
thereto that may hereafter be made.

Trust Fund or Fund shall mean the cash and other properties held and administered
by the Trustee in accordance with the Plan and Trust Agreement.

Trustee shall mean the persons, corporation, association or a combination of them acting
as Trustee under the Trust Agreement with respect to the assets held by such Trustee.

Valuation Date shall mean each business day of the Plan Year for which Plan assets are
traded on a national exchange.

Voluntary After-Tax Contributions shall mean after-tax contributions made to the Plan
during the Plan Year by an Eligible Employee prior to April 1, 2001. Such contributions were fully
vested and nonforfeitable when made and are distributable only as specified in Article 8 below.
Effective as of April 1, 2001, no further Voluntary After-Tax Contributions shall be permitted
under this Plan.

Voluntary After-Tax Contribution Account shall mean the portion of a Participant’s total
Account attributable to Voluntary After-Tax Contributions and the total of the Adjustments that
have been credited to or deducted from a Participant’s Account with respect to Voluntary After-Tax
Contributions.

Year of Eligibility Service shall have the meaning as set forth in Section 3.02.

Year of Vesting Service shall have the meaning as set forth in Section 7.05.

- 9 -

 

ARTICLE 3

PARTICIPATION

	3.01	 	Participation.

	 	(a)	 	Participants on the Effective Date An Eligible Employee who was a
Participant in the Plan on the day preceding the Effective Date shall automatically
become a Participant in this Plan on the Effective Date, provided he is employed on the
Effective Date.
	 
	 	(b)	 	New Participants/Participation on and After the Effective Date.
Subject to subparagraphs (1) — (3) below, an Eligible Employee who is not described in
subsection (a) above shall become a Participant in the Plan on the Entry Date
coinciding with or next following the later of (i) the date on which the Employee has
completed ninety (90) days of employment, or (ii) the date the Employee becomes a
member of the class of Eligible Employees.

	 	(1)	 	Employee Contributions. For purposes of becoming
eligible to make Employee Contributions, an Eligible Employee who is not
described in subsection (a) above shall become a Participant in the Plan on the
later of (i) the first Entry Date coincident with or next following the date
the Eligible Employee has completed 90 days of employment or (ii) the date the
Employee becomes a member of the class of Eligible Employees.
	 
	 	(2)	 	Employer Contributions. For purposes of becoming
eligible to receive an Employer Contribution, an Eligible Employee who is not
described in subsection (a) above shall become a Participant in the Plan on the
Entry Date coincident with or next following the later of (i) the date on which
the Eligible Employee completes one Year of Eligibility Service, or (ii) the
date on which the Eligible Employee becomes a member of the class of Eligible
Employees.
	 
	 	(3)	 	Rollover Contributions. Notwithstanding the preceding
subparagraphs (1) and (2), an Eligible Employee shall be eligible to become a
Participant solely for purposes of making a Rollover Contribution under Section
4.05 on the date the Eligible Employee first accrues an Hour of Service with
the Employer. An Eligible Employee who has not satisfied the applicable
eligibility requirements set forth in this Section 3.01(b) may not make Salary
Savings Contributions (see subparagraph (b)(1)), receive an allocation of an
Employer Contribution (see subparagraph (b)(2), or otherwise be permitted to
make any withdrawals or loans from his Account under the Plan.

	 	(c)	 	Break in Service. If an Eligible Employee either (i) is not employed
or (ii) is no longer an Eligible Employee on the earliest Entry Date on or after which
such Employee satisfied the requirements described above, but returns to work or again
becomes an Eligible Employee before incurring a Break in Service, such Eligible
Employee shall commence participation on the date such Employee returns to work or
again becomes an Eligible Employee, whichever is later. If the Employee returns to
work or again becomes
an Eligible Employee after a Break in Service, such Employee must again satisfy the
requirements of Section 3.01(b).

- 10 -

 

	 	(d)	 	Enrollment in Plan. An Eligible Employee who becomes eligible to
participate in this Plan will be asked to follow certain procedures to enroll in the
Plan, and pursuant to which he will designate Beneficiaries and may elect to make
Salary Savings Contributions. However, an Eligible Employee’s participation in the
Plan shall not be contingent upon completion of such enrollment process.

	3.02	 	Year of Eligibility Service.
	 
	 	 	A Year of Eligibility Service is determined under the 1,000 Hours of
Service method. Accordingly, an Employee shall receive one Year of
Eligibility Service upon completing a twelve (12) consecutive month
period of employment during which the Employee earns at least 1,000
Hours of Service. The initial twelve month period shall be the
twelve consecutive month period commencing on the Employee’s date of
hire or rehire. If the Employee fails to complete 1,000 Hours of
Service during this 12-month period, the Employee shall receive a
Year of Eligibility Service upon completing at least 1,000 Hours of
Service during a Plan Year (commencing with the Plan Year during
which the Employee’s first anniversary of his date of hire occurs).
	 
	3.03	 	Participation and Rehire.

	 	(a)	 	Status as a Participant. A Participant’s participation in the Plan
shall continue until the Participant’s Termination of Employment. On or after his
Termination of Employment, the Employee shall be known as a Separated Participant and
his benefits shall thereafter be governed by the provisions of Article 8. The
individual’s status as a Separated Participant shall cease as of the date the
individual ceases to have any balance in his Account.
	 
	 	(b)	 	Rehire of Person who was a Participant in this Plan. An Eligible
Employee who was a Participant in this Plan at the time of his Termination of
Employment and who is subsequently rehired by the Employer, shall be eligible to
immediately participate in this Plan on the date of his rehire (provided he is an
Eligible Employee on such date). See Section 3.01(c) to determine if an Employee was a
Participant at the time of his Termination of Employment.

	3.04	 	Acquisitions.
	 
	 	 	If a group of persons becomes employed by the Employer (or any of its
subsidiaries or divisions) as a result of an acquisition of another
employer, the Committee shall determine whether and to what extent
employment with such prior employer shall be treated as Years of
Eligibility Service, the applicable Entry Date (or special entry
date) for such acquired employees, and any other terms and conditions
that apply to eligibility to participate in this Plan. Such terms
and conditions shall be set forth in an appendix to this Plan.
Except to the extent required by law, employees of an acquired
business that is not identified in an appendix shall be treated as
having first accrued an Hour of Service as of the date of the
Employer’s acquisition of such business.
	 
	3.05	 	Not Contract for Employment.
	 
	 	 	Participation in the Plan shall not give any Employee the right to be
retained in the Employer’s employ, nor shall any Employee, upon
dismissal from or voluntary termination of his employment, have any
right or interest in the Fund, except as herein provided.

- 11 -

 

ARTICLE 4

EMPLOYEE CONTRIBUTIONS

	4.01	 	Employee Contributions.
	 
	 	 	Except during periods of suspension described in Section 4.03, a
Participant may elect to make Salary Savings Contributions and,
effective on and after September 1, 2009, Roth 401(k) Contributions
by means of payroll deduction as provided below. For purposes of
this Section 4.01, “Compensation” shall have the meaning described in
Article 2, but ignoring the second paragraph of such definition
(i.e., the Code Section 401(a)(17) limitation).

	 	(a)	 	Salary Savings Contributions. A Participant may contribute as a Salary
Savings Contribution any whole percentage from 1% to 75% (in 1% increments) of his
Compensation during any Plan Year. Because of the limitations described in Section
4.02(c), a Participant may not be allowed to contribute the maximum percentage.
	 
	 	(b)	 	Voluntary After-Tax Contributions. Effective as of April 1, 2001, no
additional Voluntary After-Tax Contributions shall be permitted under this Plan. Any
Voluntary After-Tax Contributions allocated to a Participant’s Account for payroll
periods prior to April 1, 2001 shall remain in such Participant’s Account until such
time as the Account is distributed to the Participant.
	 
	 	(c)	 	Non-elective Contributions. A Participant may contribute as a
Non-elective Contribution any amount the Participant elects to contribute to the Plan
under the Section 125 Plan maintained by the Employer. Such amounts shall be allocated
to a Participant’s Salary Savings Contributions Account under the Plan.
	 
	 	(d)	 	Catch-Up Contributions. All Employees who are eligible to make Salary
Savings Contributions under this Plan and who have attained age 50 before the close of
the calendar year shall be eligible to make Catch-Up Contributions in accordance with,
and subject to the limitations of, Section 414(v) of the Code. Such Catch-Up
Contributions shall not be taken into account for purposes of the provisions of the
Plan implementing the required limitations of Sections 402(g) and 415 of the Code. The
Plan shall not be treated as failing to satisfy the provisions of the Plan implementing
the requirements of Section 401(a)(4), 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or
416 of the Code, as applicable, by reason of the making of such Catch-Up Contributions.
Catch-Up Contributions shall be deemed to be Salary Savings Contributions and/or Roth
401(k) Contributions for purposes of the Employer Matching Contribution provided under
Section 5.01 of the Plan.
	 
	 	 	 	The Plan will mirror a Participant’s election of Salary Savings Contributions and
Roth 401(k) Contributions during the Plan Year in determining the allocation of his
Catch-Up Contributions for the Plan Year between Salary Savings Contributions and
Roth 401(k) Contributions.
	 
	 	(e)	 	Roth 401(k) Contributions. Except during periods of suspension as set
forth in Section 4.03, effective for pay periods beginning on and after September 1,
2009, a Participant may enter into a Contribution Agreement and elect to make Roth
401(k) Contributions to

- 12 -

 

	 	 	 	the Plan by means of payroll deduction. A Participant may contribute as a Roth
401(k) Contribution any whole percentage from 1% to 75% of his Compensation during
any Plan Year. The contribution limit of 1% to 75% of Compensation applies to both
Salary Savings Contributions under Section 4.01(a) and Roth 401(k) Contributions
under this Section 4.01(e). Thus, if a Participant elects to contribute 25% of
Compensation as a Roth 401(k) Contribution, the maximum Salary Savings Contribution
would be 50% of Compensation. The Plan Administrator may establish guidelines and
rules in order to effectuate the provisions of this Section 4.01(e).

	4.02	 	Elections Regarding Employee Contributions.

	 	(a)	 	Procedure for Making Elections. A Participant may enter a Contribution
Agreement with the Employer authorizing the Employer to withhold a portion of such
Participant’s Compensation as a Salary Savings Contribution during each pay period
and/or, effective on and after September 1, 2009, to withhold a portion of such
Compensation as a Roth 401(k) Contribution during each pay period. The election to
make Salary Savings Contributions and/or Roth 401(k) Contributions shall be effective
as of the first day of the Participant’s normal pay period after the Employer (or its
designee) receives the Contribution Agreement or as soon as administratively feasible
thereafter. The Committee may prescribe additional rules and regulations regarding the
manner and timing of the Participant’s election including a shorter or longer period of
required notice.
	 
	 	 	 	The automatic enrollment provisions that were effective under the Plan during the
2008 Plan Year were suspended effective as of the close of the day on December 31,
2008. However, each Participant who, on December 31, 2008, was making Salary
Savings Contributions to the Plan at the rate of two percent (2%) of his
Compensation under those automatic enrollment provisions shall continue to have
Salary Savings Contributions made to the Plan on his behalf at the rate of two
percent (2%) of his Compensation on and after January 1, 2009 until such as the
Participant elects otherwise.
	 
	 	 	 	A Participant may elect to make Non-elective Contributions and/or Catch-Up
Contributions to the Plan in accordance with the procedures prescribed by the
Committee from time to time.

	 	(b)	 	Treatment as 401(k) Contributions.

	 	(1)	 	Pre-Tax Contributions. It is expressly intended that,
to the extent allowable by law, Salary Savings Contributions, Non-elective
Contributions and Catch-Up Contributions shall not be included in the gross
income of the Employee for income tax purposes and shall be deemed
contributions under a cash or deferred arrangement pursuant to Code Section
401(k).
	 
	 	(2)	 	Roth 401(k) Contributions. It is expressly intended
that, to the extent allowable by law, Roth 401(k) Contributions shall be
included in the Participant’s gross income for income tax purposes at the time
the Participant would have received the amount of the Roth 401(k) Contribution
in cash if the Employee had not made the election described in Section 4.02(a).

	 	(c)	 	Additional Limitations of Salary Savings Contributions, Non-elective
Contributions and Roth 401(k) Contributions. Salary Savings Contributions,
Non-elective Contributions

- 13 -

 

	 	 	 	and Roth 401(k) Contributions (but not Catch-Up
Contributions) shall be subject to the limitations described in Section 12.01 (maximum
dollar contribution limit), Section 12.03 (ADP nondiscrimination test), and Article 14
(Code Section 415 limit).

	4.03	 	Changes in Employee Contribution Percentage or Suspension of Contributions.

	 	(a)	 	Change of Contribution Percentage. A Participant may increase or
decrease the percentage of his Compensation contributed as an Employee Contribution at
any time by delivery of a new written notice to the Committee (or to its designee)
using such forms and/or procedures approved by the Committee.
	 
	 	(b)	 	Suspension of Contributions. A Participant may suspend his Employee
Contributions at any time by properly completing a form using such procedures as
prescribed by the Committee. The suspension of Employee Contributions will be
effective on the first day of the Participant’s normal payroll period that begins after
the Participant submits his request to the Committee or its designee. A Participant
may resume making Salary Savings Contributions effective as of the first day of the
payroll period after the Participant submits his request to the Committee or its
designee. Employee Contributions automatically shall be suspended beginning on the
first payroll period that commences after the Participant is not in receipt of
Compensation, the Participant’s layoff, or the Participant’s Authorized Leave of
Absence without pay.
	 
	 	(c)	 	Other Rules.

	 	(1)	 	Section 9.03 describes the circumstances under which a
Participant’s Salary Savings Contributions and Roth 401(k) Contributions will
be suspended for a period of at least 6 months after the Participant receives a
hardship distribution.
	 
	 	(2)	 	In order to satisfy the provisions of Article 12 and Article
14, the Committee may from time to time either temporarily suspend the Employee
Contributions of certain Participants or reduce the maximum permissible
Employee Contribution that may be made to the Plan by those Participants.
	 
	 	(3)	 	Any reduction, increase, or suspension of Employee
Contributions described in this Section 4.03 shall be made in such manner as
the Committee may prescribe from time to time consistent with the provisions of
this Section.

	4.04	 	Deadline for Contribution and Allocation of Salary Savings Contributions.

	 	 	Employee Contributions shall be paid to the Trustee as soon as such assets can be reasonably
segregated from the Employer’s general assets at the end of each regular pay period, but in
no event later than such deadline prescribed in Department of Labor Regulation
2510.3-102(b)-1 or any successor regulations.

	4.05	 	Rollover Contributions.

	 	(a)	 	Without regard to any limitation on contributions set forth in this Article 4,
an Eligible Employee (even if such person has not yet become a Participant in the Plan)
shall be permitted, if the Committee consents (based on non-discriminatory criteria),
to transfer to

- 14 -

 

	 	 	 	the Trustee during any Plan Year additional property acceptable to the
Trustee, provided such property was received by the Eligible Employee from:

	 	(1)	 	a qualified plan described in Section 401(a) or 403(a) of the
Code, including after-tax employee contributions,
	 
	 	(2)	 	an annuity contract described in Section 403(b) of the Code,
excluding after-tax employee contributions,
	 
	 	(3)	 	an eligible plan under Section 457(b) of the Code that is
maintained by a state, political subdivision of a state or any agency or
instrumentality of a state or political subdivision of a state, or
	 
	 	(4)	 	an individual retirement account or annuity described in
Section 408(a) or 408(b) of the Code that is eligible to be rolled over and
would otherwise be includible in gross income.

	 	(b)	 	Such property described in subparagraph (a) shall be held by the Trustee in the
Eligible Employee’s Rollover Contribution Account, and the Eligible Employee’s Rollover
Account shall share in any Adjustment as provided in Section 6.02.
	 
	 	(c)	 	All such amounts so held shall at all times be fully vested and nonforfeitable.
Such amounts shall be distributed to the Eligible Employee upon Termination of
Employment in the manner provided in Article 8.
	 
	 	(d)	 	The fact that an Eligible Employee may make a Rollover Contribution pursuant to
this Section 4.05 shall not operate to make such person a Participant in this Plan for
any other purpose.

	4.06	 	Transfer Contribution.

	 	(a)	 	If the Committee consents (based on nondiscriminatory criteria), a trustee of
another Qualified Plan may transfer the account balance of a Participant held in such
other Qualified Plan to the Trustee of this Plan. After such transfer, the Trustee of
this Plan shall hold such transferred account balance in an account designated by the
Committee.
	 
	 	(b)	 	Transfers from another Qualified Plan directly to this Plan shall be permitted
only if the transferred assets are acceptable to the Trustee and only if the transfer
will not adversely affect the tax qualified status of this Plan. On a
nondiscriminatory basis, the Trustee may refuse to accept a transfer if the transfer
will increase the administrative burdens of the Plan (including the addition of new
optional forms of benefit).
	 
	 	(c)	 	Information about the transferred assets and any limitations or conditions
imposed on sub-accounts held under the Plan shall be specified in an appendix to this
Plan. The Committee may amend such appendix without the consent of the Board or the
Employer.

- 15 -

 

ARTICLE 5

EMPLOYER CONTRIBUTIONS

	5.01	 	Employer Matching Contribution.

	 	(a)	 	Eligibility to Receive Matching Contributions with respect to Salary
Savings Contributions and Roth 401(k) Contributions. Each Plan Year, the Employer
shall, or for Plan Years beginning after December 31, 2009, may make an Employer
Matching Contribution on behalf of each Participant who has completed a Year of
Eligibility Service and who made Salary Savings Contributions and/or Roth 401(k)
Contributions during the Plan Year following his Matching Contribution Eligibility
Date. A Participant’s “Matching Contribution Eligibility Date” shall mean the Entry
Date coincident with or next following the later of (i) the date on which the Eligible
Employee completes one Year of Eligibility Service, or (ii) the date on which the
Eligible Employee becomes a member of the class of Eligible Employees. A Participant
shall not receive any Employer Matching Contributions on any Salary Savings
Contributions and/or Roth 401(k) Contributions made before his Matching Contribution
Eligibility Date or on any Salary Savings Contributions and/or Roth 401(k)
Contributions attributable to Compensation earned before his Matching Contribution
Eligibility Date.
	 
	 	(b)	 	Eligibility to Receive Matching Contribution with respect to Elective
Profit Sharing Contributions. Each Plan Year, the Employer shall, or for Plan
Years beginning after December 31, 2009, may make an Employer Matching Contribution on
behalf of each Participant who has completed a Year of Eligibility Service and who
elected to contribute his Elective Profit Sharing Contribution to the Plan for the Plan
Year.
	 
	 	(c)	 	Amount of Match.

	 	(1)	 	Match on Salary Savings Contributions and Roth 401(k)
Contributions for 2009. Effective as of January 1, 2009, the rate of the
Employer Matching Contribution will be 25% of a Participant’s Salary Savings
Contributions and Roth 401(k) Contributions for the Plan Year to the extent
those Salary Savings Contributions and Roth 401(k) Contributions do not exceed
4% of the Participant’s Compensation for the Plan Year. This means that if a
Participant contributes 4% of his Compensation to the Plan during the Plan Year
as Salary Savings Contributions and Roth 401(k) Contributions, the amount of
his Employer Matching Contributions on those Salary Savings Contributions and
Roth 401(k) Contributions for the Plan Year will be 1% of his Compensation for
the Plan Year. A Participant’s Salary Savings Contributions and Roth 401(k)
Contributions for the Plan Year in excess of 4% of his Compensation for the
Plan Year will not be matched.
	 
	 	 	 	For a Participant whose Matching Contribution Eligibility Date (as defined
in Section 5.01(a) above) occurs during the Plan Year, the rate of the
Employer Matching Contribution on the Participant’s Salary Savings
Contributions and Roth 401(k) Contributions for the Plan Year will be 25% of
the Participant’s Salary Savings Contribution and Roth 401(k) Contributions
for the Plan Year
made after his Matching Contribution Eligibility Date to the extent those
Salary

- 16 -

 

	 	 	 	Savings Contributions and Roth 401(k) Contributions do not exceed 4%
of the Participant’s Compensation for the Plan Year earned after his
Matching Contribution Eligibility Date.
	 
	 	(2)	 	Discretionary Match on Salary Savings Contributions and
Roth 401(k) Contributions for Plan Years beginning after December 31, 2009.
Prior to the first day of each Plan Year beginning after December 31, 2009,
the Company may declare (but is not required to declare) a discretionary
Employer Matching Contribution for the following Plan Year. Such Employer
Matching Contribution shall be a percentage of the Salary Savings Contributions
and Roth 401(k) Contributions made by a Participant for such Plan Year, subject
to such overall limit as the Company may declare with respect to the Plan Year.
For a Participant whose Matching Contribution Eligibility Date (as defined in
Section 5.01(a) above) occurs during the Plan Year, the rate of the
discretionary Employer Matching Contribution, if any, on the Participant’s
Salary Savings Contributions and Roth 401(k) Contributions for the Plan Year
will be determined based on the Participant’s Salary Savings Contribution and
Roth 401(k) Contributions for the Plan Year made after his Matching
Contribution Eligibility Date. Such discretionary Employer Matching
Contribution, if any, shall be made in cash and allocated to the Account of
each eligible Participant during the payroll period or such other period
selected by the Company.
	 
	 	(3)	 	Match on Elective Profit Sharing Contribution. For the
2009 Plan Year, the Employer Matching Contribution made by the Employer with
respect to Elective Profit Sharing Contributions shall equal 100% of the
Participant’s Elective Profit Sharing Contributions that the Participant elects
to contribute to the Plan for such Plan Year. For Plan Years beginning after
December 31, 2009, if the Company, in its sole discretion, elects to make an
Employer Matching Contribution with respect to Elective Profit Sharing
Contribution, such Employer Matching Contribution shall be equal to a
percentage, as declared by the Company, of the Participant’s Elective Profit
Sharing Contributions that the Participant elects to contribute to the Plan for
the Plan Year. The matching contribution percentage shall be declared by the
Company if and when the Company decides to make a discretionary Profit Sharing
Contribution to the Plan. The Employer Matching Contribution shall be
allocated to the Participant’s Employer Matching Contribution Account within a
reasonable time after the end of the Plan Year or such other period determined
by the Company.

	5.02	 	Profit Sharing Contributions.

	 	(a)	 	Eligibility to Receive Profit Sharing Contributions. Each year, the
Company may elect to make a discretionary Profit Sharing Contribution to the Plan.

	 	(1)	 	A Participant shall not be eligible to receive an initial
Profit Sharing Contribution until he completes a Year of Eligibility Service
and satisfies the allocation requirements of subparagraph (2).
	 
	 	(2)	 	The Profit Sharing Contribution shall be allocated to the
Profit Sharing Account of each Participant who (A) has satisfied the
requirement of subparagraph (1) (if applicable), (B) has completed at least
1,000 Hours of Service during the Plan

- 17 -

 

	 	 	 	Year, and (C) is employed on the last
day of the Plan Year or who had a Termination of Employment during the Plan
Year on account of death, Disability or Retirement.

	 	(b)	 	Non-Elective and Elective Profit Sharing Contribution. Fifty percent
(50%) of the Profit Sharing Contribution (the “Non-Elective Profit Sharing
Contribution”) shall be allocated to each eligible Participant’s Profit Sharing
Contribution Account in the same proportion that each such Participant’s Eligible
Compensation (as defined below) for the Plan Year bears to the total Eligible
Compensation of all such Participants for the Plan Year. The remaining fifty percent
(50%) may, at the election of the Participant, be distributed immediately to the
Participant in cash or be contributed to the Plan (the “Elective Profit Sharing
Contribution”). However, as is further described in Section 9.03(b)(1) of the Plan, a
Participant who has received a hardship withdrawal from the Plan within 6 months of the
date of Profit Sharing Contribution to the Plan cannot elect an Elective Profit Sharing
Contribution but instead must receive the remaining fifty percent (50%) in a cash
distribution. See Section 5.01(c)(2) regarding a matching contribution with respect to
Elective Profit Sharing Contributions.
	 
	 	(c)	 	Eligible Compensation. For purposes of this Section 5.02, “Eligible
Compensation” shall mean a Participant’s base wages (including commissions, but
excluding overtime, bonuses and incentives) received while a Participant in the Plan.
Eligible Compensation received during a Plan Year but prior to the time an Eligible
Employee completes a Year of Eligibility Service shall be excluded.

	5.03	 	Retirement Contribution.
	 
	 	 	Each year the Company may (but shall not be required to) make an
additional contribution annually to the Plan each Plan Year on behalf
of each eligible Participant. Such contribution shall be no more
than 2% (or such other percentage or amount as determined by the
Committee) of a Participant’s Eligible Compensation (as defined in
Section 5.02(c) above). Eligible Compensation received during a Plan
Year but prior to the time an Eligible Employee completes a Year of
Eligibility Service shall be excluded for purposes of calculating the
Retirement Contribution.

	 	(1)	 	A Participant shall not be eligible to receive an initial
Retirement Contribution until he completes a Year of Eligibility Service and
satisfies the allocation requirements of subparagraph (2).
	 
	 	(2)	 	The Retirement Contribution shall be allocated to the
Retirement Contribution Account of each Participant who (A) has satisfied the
requirement of subparagraph (1) (if applicable), (B) has completed at least
1,000 Hours of Service during the Plan Year, and (C) is employed on the last
day of the Plan Year or who had a Termination of Employment during the Plan
Year on account of death, Disability or Retirement.

	5.04	 	Qualified Non-Elective Contributions.
	 
	 	 	In the sole discretion of the Employer, an additional Employer
Contribution may be made to the Plan which shall be known as a
“Qualified Non-Elective Contribution.” Such contribution shall be
made in order to satisfy the requirements of Article 12, and shall be
allocated to the Qualified

- 18 -

 

	 	 	Non-Elective Contribution Accounts of
those Non-Highly Compensated Employees selected by the Committee at
the time such Qualified Non-Elective Contribution is made, or as soon
thereafter as possible.
	 
	5.05	 	Form and Timing of Contributions.

	 	(a)	 	Employer Contributions shall be made in cash or in property acceptable to the
Trustee valued at the property’s fair market value on the date the property is
delivered to the Trustee. Employer Matching Contributions, Profit Sharing
Contributions and Retirement Contributions shall be delivered to the Trustee on or
before the date prescribed by the Code for filing the Company’s federal income tax
return, including authorized extensions.
	 
	 	(b)	 	Except as provided in this Section 5.04, all Employer Contributions shall be
irrevocable, shall never inure to the benefit of any Employer, shall be held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries (and
contingently for defraying reasonable expenses of administering the Plan), and shall be
held and distributed by the Trustees only in accordance with this Plan.
	 
	 	(c)	 	A contribution that was made by a mistake in fact or conditioned upon the
deductibility of the contribution under Section 404 of the Code shall be returned to
the Employer within one year after the payment of the contribution or the disallowance
of the deduction (to the extent disallowed) whichever is applicable. All contributions
made to this Plan are conditional upon the deductibility of such contribution under
Code Section 404.

	5.06	 	Forfeitures.

	 	(a)	 	Forfeitures shall first be applied to restore amounts previously forfeited
pursuant to Section 7.06(c). See Section 7.06 to determine when a forfeiture of a
Participant’s Account occurs.
	 
	 	(b)	 	If any forfeitures remain after the restoration of forfeitures described in
Section 5.06(a), such remaining forfeitures shall be applied to reduce Plan
administrative expenses and/or reduce Employer Contributions.

	5.07	 	Employment on Last Day of Plan Year.
	 
	 	 	To the extent necessary to comply with Code Sections 410(b),
401(a)(4) or any other applicable requirement, Employees who were not
otherwise eligible to receive an Employer Contribution shall be
deemed to be eligible. The Committee (in a nondiscriminatory manner)
shall determine which Employees may participate in the Plan, the
extent of such participation and the allocation of any Employer
Contribution.

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ARTICLE 6

ACCOUNTS AND ALLOCATIONS

	6.01	 	Participant Accounts.

	 	(a)	 	Individual Account Plan. This Plan is an “individual account plan,” as
that term is used in ERISA. A separate Account shall be maintained for each
Participant, Separated Participant or Beneficiary, so long as he has an interest in the
Trust Fund.
	 
	 	(b)	 	Sub-Accounts. Each Account shall be divided (as appropriate) into the
following parts and sub-parts:

	 	(1)	 	The Salary Savings Contribution Account;
	 
	 	(2)	 	The Roth 401(k) Contribution Account;
	 
	 	(3)	 	The Employer Matching Contribution Account (which Account shall
be divided into two subparts — one subpart tracking Employer Matching
Contributions on Salary Savings Contributions and the second subpart tracking
Matching Contributions on Elective Profit Sharing Contributions);
	 
	 	(4)	 	The Profit Sharing Contribution Account (which Account shall be
divided into two subparts — one subpart tracking Elective Profit Sharing
Contributions and the second subpart tracking Non-Elective Profit Sharing
Contributions);
	 
	 	(5)	 	The Qualified Non-Elective Contribution Account;
	 
	 	(6)	 	The Rollover Contribution Account;
	 
	 	(7)	 	The Voluntary After-Tax Contribution Account;
	 
	 	(8)	 	The Retirement Contribution Account; and
	 
	 	(9)	 	The Transfer Contribution Account.

	 	 	 	In addition, the Committee may divide such sub-accounts into such additional
sub-portions as the Committee deems to be necessary or advisable under the
circumstances or to establish other accounts or sub-accounts as needed.

	 	(c)	 	Value of Account as of Valuation Date. As of each Valuation Date, each
Participant’s Account shall equal:

	 	(1)	 	his total Account as determined on the immediately preceding
Valuation Date, plus
	 
	 	(2)	 	his Employee Contributions added to his Account since the
immediately preceding Valuation Date, plus

- 20 -

 

	 	(3)	 	his Employer Contributions added to his Account since the
immediately preceding Valuation Date, plus
	 
	 	(4)	 	his Rollover Contributions and Transfer Contributions since the
immediately preceding Valuation Date, minus
	 
	 	(5)	 	his distributions, if any, since the immediately preceding
Valuation Date, plus or minus
	 
	 	(6)	 	his allocable share of Adjustments.

	6.02	 	Allocation of Adjustments.

	 	(a)	 	The Adjustment for each Investment Fund shall be calculated as of each
Valuation Date. The Adjustment for a given Investment Fund shall be allocated to each
Account invested in such Investment Fund in the proportion that each such Account bears
to the total of all such Accounts. Such Valuation shall occur prior to the allocation
of Employer Contributions but after taking into account all distributions and all
Employee Contributions since the prior Valuation Date. Any Rollover Contribution or
Transfer Contribution made during the Plan Year shall be weighted to reflect the number
of full months such Rollover Contribution or Transfer Contribution was held in the
Plan.
	 
	 	(b)	 	The Committee may direct that expenses attributable to general Plan
administration be allocated among the Accounts of all Participants in proportion to
their Account balances.
	 
	 	(c)	 	The Adjustment that is allocable to the Participant’s directed investment of
his loan shall be the interest payments made by the Participant with respect to such
loan since the immediately preceding Valuation Date.

	6.03	 	Investment Funds and Elections.

	 	(a)	 	Election of Investment Funds. Each Participant shall direct the
investment of his Account, following such procedures as may be specified by the
Committee (or its designee), to have his Account allocated or reallocated among the
Investment Funds.
	 
	 	(b)	 	Initial Investment Direction. A Participant’s initial investment
election must allocate his entire Account, together with all subsequent contributions,
for so long as the election remains in effect. Notwithstanding the foregoing, an
Eligible Employee who fails to make a proper investment election by the deadline
established by the Committee or its designee for such purpose shall be deemed to have
elected to allocate 100% of his Account in the default fund designated by the Committee
for such purpose from time to time. Each such default fund shall comply with the
requirements to be a “qualified default investment fund” under Section 404(c)(5) of
ERISA and the applicable regulations thereunder.
	 
	 	(c)	 	Subsequent Elections. Investment elections will remain in effect until
changed by a new election. New elections may be made by a Participant at any time in
the same manner as set forth in Section 6.03(a), and shall be effective as of the
Valuation Date immediately
following delivery of the new election to the Committee (or its designee). New
elections may change future allocations to the Participant’s Account, may reallocate
between the

- 21 -

 

	 	 	 	Investment Funds any amounts previously credited to the Participant’s
Account, or may leave the allocation of such prior amounts unchanged. Trust
transactions reflecting investment elections among the Investment Funds will occur
as of the Valuation Date that immediately follows the timely receipt of such
investment election when such allocation or re-allocation can be made and all
Investment Fund values shall be determined as of such dates.
	 
	 	(d)	 	Investment Options. The Committee is authorized to select new
Investment Funds or to eliminate any Investment Fund as the Committee shall deem
appropriate from time to time. Any change in Investment Funds shall be noted in the
minutes of the Committee. The creation of an Investment Fund shall not be effective
until the Trustee has consented in writing to the creation of such new Investment Fund.
Any creation or deletion of an Investment Fund shall not be effective until such
change is communicated to Participants and new investment elections are solicited from
Participants, if appropriate.
	 
	 	(e)	 	Investment in the Company Stock Fund. Notwithstanding the other
provisions of this Section 6.03, effective as of April 1, 2007, a Participant may not
allocate more than thirty percent (30%) of any new contributions to be made by him or
on his behalf under the Plan for investment in the Company Stock Fund. In addition, at
any time, a Participant may not elect to reallocate the investment of his Account in
such a manner that after the reallocation, more than thirty percent (30%) of his
Account is invested in the Company Stock Fund. Notwithstanding the foregoing:

	 	(i)	 	If more than thirty percent (30%) of a Participant’s Account
was invested in the Company Stock Fund on March 31, 2007, such Participant will
not be able to direct any subsequent contributions into the Company Stock Fund
or reallocate any amounts previously credited to his Account into the Company
Stock Fund until the percentage of his Account invested in the Company Stock
Fund is less than thirty percent (30%).
	 
	 	(ii)	 	If more than thirty percent (30%) of a Participant’s Account
was invested in the Company Stock Fund on March 31, 2007 and the Participant
fails to change his investment elections to reallocate any subsequent
contributions into an alternative Investment Fund for payroll periods beginning
on and after April 1, 2007, until the Participant’s Account satisfies the
requirements of subparagraph (i) above, or the Participant changes his
elections, whichever occurs earlier, such amounts will be invested in the
Investment Fund that, in the opinion of the Committee, best preserves the
principal amount of the Participant’s Account.

	6.04	 	Errors.
	 
	 	 	Where an error or omission is discovered in any Participant’s
Account, the Committee shall make appropriate corrective adjustments
as of the end of the Plan Year in which the error or omission is
discovered. If it is not practical to correct the error
retroactively, then the Committee shall take such action in its sole
discretion as may be necessary to make such corrective adjustments,
provided that any such actions shall treat similarly situated
Participants alike and shall not discriminate in favor of Highly
Compensated Employees.

- 22 -

 

	6.05	 	Valuation For Purposes of Distributions.

	 	(a)	 	For the purposes of Article 8, each Participant’s Account shall be valued as of
the Valuation Date immediately preceding the distribution of the Participant’s Account.
	 
	 	(b)	 	No person entitled to a distribution shall receive interest or other earnings
on the Account from the applicable Valuation Date described in subsection (a), to the
date of actual distribution to such person.
	 
	 	(c)	 	This Section 6.05 shall not apply to the valuation of Accounts for purposes of
in-service withdrawals or loans. Instead, see Section 9.05.

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ARTICLE 7

VESTING

	7.01	 	Retirement.
	 
	 	 	A Participant who has a Termination of Employment on or after
attaining age 55 shall be 100% vested in his Account. Such Account
will be distributed on the date and in the form specified in Article
8.
	 
	7.02	 	Disability.
	 
	 	 	A Participant who has a Termination of Employment on account of
Disability shall become 100% vested in his Account as of the date of
such Disability and shall be entitled to a distribution of his
Account on the date and in the form specified in Article 8.
	 
	7.03	 	Death.
	 
	 	 	A Participant who has a Termination of Employment on account of death
shall become 100% vested in his Account. The Participant’s
Beneficiary shall receive a distribution of such Account on the date
and in the form specified in Article 8. Effective as of January 1,
2007, a Participant who dies while performing qualified military
service (as defined in Section 414(u) of the Code) shall be deemed to
have a Termination of Employment on account of death for purposes of
this Section 7.03.
	 
	7.04	 	Other Termination of Employment.

	 	(a)	 	In General. Upon a Participant’s Termination of Employment for any
reason other than Retirement, Disability or death, the Participant shall be entitled to
the vested portion of his Account, which shall be distributed on the date and in the
form specified in Article 8.
	 
	 	(b)	 	100% Vesting in Certain Sub-Accounts.

	 	(1)	 	A Participant shall always be one hundred percent (100%) vested
in his Salary Savings Contribution Account, Roth 401(k) Contribution Account,
Voluntary After-Tax Contribution Account, the Elective Profit Sharing
Contribution portion of the Participant’s Profit Sharing Contribution Account
and Rollover Contribution Account.
	 
	 	(2)	 	Effective January 1, 1999, a Participant shall always be one
hundred percent (100%) vested in any portion of his Employer Matching
Contribution Account. The special vesting rule in the preceding sentence shall
not apply to any Participant who Terminated Employment prior to January 1,
1999. If a Participant Terminated Employment prior to January 1, 1999 but
becomes a Participant again on or after January 1, 1999, this special vesting
rule shall apply to any portion of his Employer Matching Contribution Account
that has not been forfeited pursuant to Section 7.06 or that is forfeited but
restored pursuant to Section 7.06(c).

- 24 -

 

	 	(c)	 	Four Year Vesting For Certain Sub-Accounts. Any Participant who ceases
to be an Employee shall have a vested interest in his Retirement Contribution Account
and the Non-Elective Profit Sharing Contribution portion of his Profit Sharing
Contribution Account as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Years of Vesting Service as of	 	 
	 	 	Termination of Employment	 	Vested Percentage
	 
	 	Less than 1 year	 	 	0	%
	 
	 	1 year	 	 	25	%
	 
	 	2 years	 	 	50	%
	 
	 	3 years	 	 	75	%
	 
	 	4 years	 	 	100	%

	 	 	 	This vesting schedule shall also apply to the Employer Matching Contribution Account
of a Participant who Terminated Employment prior to January 1, 1999 (as discussed in
subsection (b)(2) above)
	 
	 	(d)	 	Forfeiture. That portion of the Participant’s Account that is not
vested upon such Termination of Employment shall be forfeited in accordance with
Section 7.06.
	 
	 	(e)	 	Transfer Contribution Account. See an appendix to this Plan for the
vesting schedule applicable to a Transfer Contribution Account upon a Participant’s
Termination of Employment.

	7.05	 	Year of Vesting Service.

	 	(a)	 	Vesting Credit Prior to Effective Date. An
Employee’s Vesting Service prior to the Effective
Date shall be determined under the terms of the
Plan in effect when the Participant Terminated
Employment.

	 	(b)	 	Vesting Credit After Effective Date. On or after the Effective Date,
an Employee shall receive one Year of Vesting Service for any Plan Year during which
the Employee is credited with 1,000 or more Hours of Service. An Employee shall not
receive a Year of Vesting Service for any period of employment during any Plan Year if
the Employee is credited with less than 1,000 Hours of Service during such Plan Year.
	 
	 	(c)	 	Forfeiture of Vesting Service. A Year of Vesting Service shall not
include any period of employment that precedes a Break in Service if, as of the first
day of the Break in Service, the Employee does not have a vested interest in his
Employer Contributions or Salary Savings Contributions.
	 
	 	(d)	 	Employment with Affiliates. Any period of employment with an Affiliate
shall be considered service with the Employer for purposes of determining whether the
Employee has a Year of Vesting Service.
	 
	 	(e)	 	Authorized Leave of Absence. A Year of Vesting Service shall not
include any period of Authorized Leave of Absence or service in the military except to
the extent such service is required to be credited under applicable federal law.

- 25 -

 

	 	(f)	 	Employment with Non-Affiliates or Predecessor Businesses. A
Participant shall not receive a Year of Vesting Service for any employment with an
Affiliate before it becomes an Affiliate including any period of employment with a
predecessor business prior to its acquisition by the Employer except to the extent
specifically set forth in an appendix to this Plan.

	7.06	 	Forfeitures.

	 	(a)	 	No Distribution of Account Prior to Break In Service. A Participant
who incurs a Termination of Employment but who does not receive a distribution of his
vested Account prior to incurring a Break in Service shall, upon incurring the Break in
Service, forfeit the non-vested portion of his Account. If the terminated Participant
resumes employment with the Employer prior to incurring a Break in Service, then the
Participant’s entire Account, unreduced by any forfeiture, shall become his beginning
Account on the date he resumes participation in the Plan.
	 
	 	(b)	 	Distribution of Vested Account Prior to Break in Service. A
Participant who incurs a Termination of Employment and receives a distribution of his
entire vested Account prior to incurring a Break in Service, shall, upon such
distribution, forfeit the non-vested portion of his Account. A Participant who is not
vested in any portion of his Account shall be deemed to have received a distribution of
his entire vested account upon his Termination of Employment and the Participant’s
non-vested Account shall be immediately forfeited.
	 
	 	(c)	 	Repayment of Account; Restoration of Non-Vested Account. Except as
provided below, a Participant who is re-hired by the Employer shall have the right to
repay to the Plan the portion of the Participant’s Account that was previously
distributed to him. In the event the Participant repays the entire distribution he
received from the Plan, the Employer shall restore the non-vested portion of the
Participant’s Account. A Participant’s Account shall first be restored, to the extent
possible, out of forfeitures under the Plan in the Plan Year in which the distribution
was restored. To the extent such forfeitures are insufficient to restore the
Participant’s Account, restoration shall be made from Employer Contributions. A
Participant who was deemed to have received a distribution of his vested Account (see
subsection (b) above) shall be deemed to have repaid such vested Account if such
Participant is rehired before incurring a Break in Service.
	 
	 	(d)	 	Restrictions on Repayment of Account. Notwithstanding anything to the
contrary in this Plan, a Participant shall not have the right to repay to the Plan the
portion of his Account that was previously distributed to him after any of the
following events: (i) the Participant incurs a Break in Service before returning to
employment, (ii) the Participant fails to repay the prior distribution within five (5)
years after the Participant is re-employed by the Employer, or (iii) the Participant
received a distribution of his entire Account balance at the time of such earlier
distribution.

	7.07	 	Amendment of Vesting Schedule.
	 
	 	 	If the vesting schedule of the Plan is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of any Participant’s nonforfeitable percentage, or if the
Plan is deemed amended by an automatic change to or from a Top-Heavy
vesting schedule, each Participant with at least three (3) Years of
Vesting Service with the Employer may elect, within a

- 26 -

 

	 	 	reasonable
period after the adoption of the amendment, to have his
nonforfeitable percentage computed under the Plan without regard to
such amendment. The period during which the election may be made
shall commence with the date the amendment is adopted and shall end
on the later of:

	 	(a)	 	60 days after the amendment is adopted;
	 
	 	(b)	 	60 days after the amendment becomes effective; or
	 
	 	(c)	 	60 days after the Participant is issued written notice of the amendment by the
Employer or Trustee.

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ARTICLE 8

DISTRIBUTIONS

	8.01	 	Commencement of Distribution.

	 	(a)	 	Distribution Following Termination of
Employment. A Participant’s Account shall be
distributed as soon as administratively feasible
following the Participant’s Termination of
Employment and the date the Committee receives
the Participant’s (or, if applicable, his
Beneficiary’s) written request for a
distribution. All distributions shall be made
on a pro-rata basis from a Participant’s
Account, to the extent applicable. Except as
provided in Section 8.01(b), the Participant’s
Account shall not be distributed without the
Participant’s (or, if applicable, his
Beneficiary’s) consent. This means that, unless
the rule set forth in Section 8.01(b)(i) below
applies ( in the case of a Participant whose
vested Account balance does not exceed $1,000),
a Participant who has a Termination of
Employment may elect (i) to commence
distributions from the Plan as soon as
administratively feasible following his
Termination of Employment in one of the forms
permitted under Section 8.3 of the Plan or (ii)
to defer his distributions to a date not later
than his Required Beginning Date (as defined in
Section 8.03(e)(5) of the Plan). Such a
Participant will be deemed to have elected to
defer his distributions to a date not later than
his Required Beginning Date if he does not elect
an earlier commencement of his distributions.
	 
	 	(b)	 	Consent of Participant. A Participant’s (or, if applicable, his
Beneficiary’s) consent to a distribution of the Participant’s Account shall not be
required in the circumstances described below, and the Committee shall direct the
Trustee to distribute the Participant’s Account as provided below:

	 	(i)	 	Account does not exceed $1,000. If a Participant has a
Termination of Employment and the value of his vested Account balance does not
exceed $1,000, such Account shall be distributed to the Participant (or, if
applicable, to his Beneficiary) in a lump sum no later than ninety (90) days
after the end of the Plan Year in which such Termination of Employment
occurred. Solely for purposes of determining whether the Participant’s vested
Account balance does not exceed $1,000, the value of the Participant’s vested
Account balance shall include the portion of the Account balance that is
attributable to Rollover Contributions (and earnings allocable thereto).
	 
	 	(ii)	 	Required Distributions. If a distribution is required
under Section 8.03 of the Plan (relating to required distributions under
Section 401(a)(9) of the Code), the Participant’s Account shall be distributed
as provided in Section 8.03of the Plan regardless of whether the Participant
(or, if applicable, his Beneficiary) consents to such distributions.

	 	(c)	 	Hardship Withdrawals; In-Service Distributions. A hardship withdrawal
will be paid to the Participant as soon as administratively feasible after the
Participant’s request is approved by the Committee. An in-service distribution will be
paid to the Participant as
soon as administratively feasible after the Participant’s request is approved by the
Company.

- 28 -

 

	 	(d)	 	Distribution upon Severance from Employment. A Participant’s Account
shall be distributed on account of the Participant’s severance from employment.
	 
	 	(e)	 	Direction to Trustee. The Committee shall issue directions to the
Trustee concerning the recipient and the distribution date of benefits that are to be
paid from the Trust pursuant to the Plan.
	 
	 	(f)	 	Establishment of Guidelines. The Committee may establish for
administrative purposes, uniform and nondiscriminatory guidelines concerning the
commencement of benefits.
	 
	 	(g)	 	Value of Account. See Section 6.06 for the method of determining the
value of a Participant’s Account prior to its distribution pursuant to this Article 8.

	8.02	 	Method of Distribution.
	 
	 	 	The Participant’s Account shall be distributed to the Participant in
accordance with one of the following forms of payment selected by the
Participant. If a Participant elects to receive either a lump sum
distribution or installment payments pursuant to Section 8.02(a) or
8.02(b), and if any portion of the Participant’s Account is invested
in the Company Stock Fund, then the Participant may elect to receive
any or all of such portion invested in the Company Stock Fund in
whole shares of Company Stock, with cash paid for any fractional
shares.

	 	(a)	 	Lump Sum Payment is a single lump sum payment of the Participant’s
entire vested Account. This is the normal form of payment under the Plan. If the
Participant does not elect otherwise, his Account shall be distributed in a single lump
sum.
	 
	 	(b)	 	Installment Payment is a form of distribution where equal installments
are made over the Participant’s life expectancy, the Participant’s and his
Beneficiary’s joint life expectancy, or another period that does not exceed the joint
life expectancy of the Participant and his Beneficiary. Installment payments will be
made, at the Participant’s election, in monthly, quarterly, semi-annual or annual
payments. A Participant who elects the installment form of payment will have the
following options:

	 	(i)	 	A Participant may, upon application to the Committee, request
that his entire Account be distributed in a lump sum payment subsequent to the
commencement of installment payments.
	 
	 	(ii)	 	A Participant who has elected to have installments paid over
his life expectancy or over his and his Spouse’s joint life expectancy may,
upon application to the Committee, and not more than once in any 12-month
period, request to have his and/or his and his Spouse’s joint life expectancy
re-calculated for purposes of determining the amount of his installment
payments, provided that such recalculation shall be made in a manner consistent
with Treasury Regulations Section 1.401(a)(9)-9. An election under this
paragraph shall not constitute an election to have the Participant’s life
expectancy recalculated for purposes of the minimum distribution rules in
Sections 8.03, and if the amount required to be
distributed for the year under Sections 8.03 exceeds the amount actually
paid to the Participant or his Beneficiary in installment payments under
this Section

- 29 -

 

	 	 	 	8.02(d), the difference shall be paid to the Participant or
Beneficiary in a single lump sum before the date on which such payment is
due.
	 
	 	(iii)	 	A Participant may, upon application to the Committee, request
a one-time withdrawal in a minimum of $10,000 from his Account balance.

	 	 	 	Subject to the provisions of Sections 8.03(b)(2), 8.03(d) and 8.03(f) of the Plan, a
Beneficiary shall have the same payment options as are available to the Participant
(as described above) with respect to the portion of the Participant’s vested Account
payable to the Beneficiary.

	8.03	 	Minimum Distribution Requirements.

	 	(a)	 	General Rules.

	 	(1)	 	Precedence. The requirements of this Section 8.03 will
take precedence over any inconsistent provisions of the Plan.
	 
	 	(2)	 	Requirements of Treasury Regulations Incorporated. All
distributions required under this Section 8.03 will be determined and made in
accordance with the Treasury Regulations under Section 401(a)(9) of the Code.
	 
	 	(3)	 	TEFRA Section 242(b)(2) Elections. Notwithstanding the
other provisions of this Section 8.03, distributions may be made under a
designation made before January 1, 1984, in accordance with Section 242(b)(2)
of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of
the Plan that related to Section 242(b)(2) of TEFRA.

	 	(b)	 	Time and Manner of Distribution

	 	(1)	 	Required Beginning Date. The Participant’s entire
interest will be distributed, or begin to be distributed, to the Participant no
later than the Participant’s Required Beginning Date. All distributions shall
be made on a pro-rata basis from a Participant’s Account.
	 
	 	(2)	 	Death of Participant Before Distributions Begin. If
the Participant dies before distributions begin, the Participant’s entire
interest will be distributed, or begin to be distributed, no later than as
follows:

	 	(A)	 	If the Participant’s surviving Spouse is the
Participant’s sole Designated Beneficiary, then, distributions to the
surviving Spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the participant died,
or by December 31 of the calendar year in which the Participant would
have attained age 701/2, if later.
	 
	 	(B)	 	If the Participant’s surviving Spouse is not
the Participant’s sole Designated Beneficiary, then except as provided
in Section 8.03(f),
distributions to the Designated Beneficiary will begin by December 31
of the calendar year immediately following the calendar year in which
the Participant died.

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	 	(C)	 	If there is no Designated Beneficiary as of
September 30 of the year following the year of the Participant’s death,
the Participant’s entire interest will be distributed by December 31 of
the calendar year containing the fifth anniversary of the Participant’s
death.
	 
	 	(D)	 	If the Participant’s surviving Spouse is the
Participant’s sole Designated Beneficiary and the surviving Spouse dies
after the Participant but before distributions to the surviving Spouse
begin, this Section 8.03(b), other than Section 8.03(b)(2)(A), will
apply as if the surviving Spouse were the Participant.

	 	 	 	For purposes of this Section 8.03(b)(2) and Section 8.03(d), unless Section
8.03(b)(2)(D) applies, distributions are considered to begin on the
Participant’s Required Beginning Date. If Section 8.03(b)(2)(D) applies,
distributions are considered to begin on the date distributions are required
to begin to the surviving Spouse under Section 8.03(b)(2)(A).

	 	(3)	 	Forms of Distribution. Unless the Participant’s
interest is distributed in the form of a single sum on or before the Required
Beginning Date, as of the first Distribution Calendar Year distributions will
be made in accordance with Sections 8.03(c) and 8.03(d).

	 	(c)	 	Required Minimum Distributions During Participant’s Lifetime.

	 	(1)	 	Amount of Required Minimum Distribution for Each
Distribution Calendar Year. During the Participant’s lifetime, the minimum
amount that will be distributed for each Distribution Calendar Year is the
lesser of:

	 	(A)	 	The quotient obtained by dividing the
Participant’s Account Balance by the distribution period in the Uniform
Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury
Regulations, using the Participant’s age as of the Participant’s
birthday in the Distribution Calendar Year; or
	 
	 	(B)	 	If the Participant’s sole Designated
Beneficiary for the Distribution Calendar Year is the Participant’s
Spouse, the quotient obtained by dividing the Participant’s Account
Balance by the number in the Joint and Last Survivor Table set forth in
Section 1.401(a)(9)-9 of the Treasury Regulations, using the
Participant’s and Spouse’s attained ages as of the Participant’s and
Spouse’s birthdays in the Distribution Calendar Year.

	 	(2)	 	Lifetime Required Minimum Distributions Continue Through
Year of Participant’s Death. Required minimum distributions will be
determined under this Section 8.03(c) beginning with the first Distribution
Calendar Year and up to an including the Distribution Calendar Year that
includes the Participant’s date of death.

	 	(d)	 	Required Minimum Distributions After Participant’s Death.

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	 	(1)	 	Death On or After Date Distributions Begin.

	 	(A)	 	Participant Survived by Designated
Beneficiary. If the Participant dies on or after the date
distributions begin and there is a Designated Beneficiary, the minimum
amount that will be distributed for each Distribution Calendar Year
after the year of the Participant’s death is the quotient obtained by
dividing the Participant’s Account Balance by the longer of the
remaining Life Expectancy of the Participant or the remaining Life
Expectancy of the Participant’s Designated Beneficiary, determined as
follows:

	 	(i)	 	The Participant’s remaining Life
Expectancy is calculated using the age of the Participant in the
year of death, reduced by one for each subsequent year.
	 
	 	(ii)	 	If the Participant’s surviving
Spouse is the Participant’s sole Designated Beneficiary, the
remaining Life Expectancy of the surviving Spouse is calculated
for each Distribution Calendar Year after the year of the
Participant’s death using the surviving Spouse’s age as of the
Spouse’s birthday in that year. For Distribution Calendar Years
after the year of the surviving Spouse’s death, the remaining
Life Expectancy of the surviving Spouse is calculated using the
age of the surviving Spouse as of the Spouse’s birthday in the
calendar year of the Spouse’s death, reduced by one for each
subsequent calendar year.
	 
	 	(iii)	 	If the Participant’s surviving
Spouse is not the Participant’s sole Designated Beneficiary, the
Designated Beneficiary’s remaining Life Expectancy is calculated
using the age of the Beneficiary in the year following the year
of the Participant’s death, reduced by one for each subsequent
year.

	 	(B)	 	No Designated Beneficiary. If the
Participant dies on or after the date distributions begin and there is
no Designated Beneficiary as of September 30 of the year after the year
of the Participant’s death, the minimum amount that will be distributed
for each Distribution Calendar Year after the year of the Participant’s
death is the quotient obtained by dividing the Participant’s Account
Balance by the Participant’s remaining Life Expectancy calculated using
the age of the Participant in the year of death, reduced by one for
each subsequent year.

	 	(2)	 	Death Before Date Distributions Begin.

	 	(A)	 	Participant Survived by Designated
Beneficiary. Except as provided in Section 8.03(f), if the
Participant dies before the date distributions begin and there is a
Designated Beneficiary, the minimum amount that will be distributed for
each Distribution Calendar Year after the year of the
Participant’s death is the quotient obtained by dividing the
Participant’s Account Balance by the remaining Life Expectancy of the
Participant’s Designated Beneficiary, determined as provided in
Section 8.03(a).

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	 	(B)	 	No Designated Beneficiary. If the
Participant dies before the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year following the
year of the Participant’s death, distribution of the Participant’s
entire interest will be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death.
	 
	 	(C)	 	Death of Surviving Spouse Before
Distributions to Surviving Spouse Are Required to Begin. If the
Participant dies before the date distributions begin, the Participant’s
surviving Spouse is the Participant’s sole Designated Beneficiary, and
the surviving Spouse dies before distributions are required to begin to
the surviving Spouse under Section 8.03(b)(2)(A), this Section
8.03(d)(2)will apply as if the surviving Spouse were the Participant.

	 	(e)	 	Definitions.

	 	(1)	 	Designated Beneficiary. The individual who is
designated as the Beneficiary under the Plan and is the designated beneficiary
under Section 401(a)(9) of the Code and Section 1.401(a)(9)-4, Q&A-1 of the
Treasury Regulations.
	 
	 	(2)	 	Distribution Calendar Year. A calendar year for which
a minimum distribution is required. For distributions beginning before the
Participant’s death, the first Distribution Calendar Year is the calendar year
immediately preceding the calendar year that contains the Participant’s
Required Beginning Date. For distributions beginning after the Participant’s
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin under Section 8.03(b)(2). The Required
Minimum Distribution for the Participant’s first Distribution Calendar Year
will be made on or before the Participant’s Required Beginning Date. The
required minimum distribution for other Distribution Calendar Years, including
the required minimum distribution for the Distribution Calendar Year in which
the Participant’s Required Beginning Date occurs, will be made on or before
December 31 of that Distribution Calendar Year.
	 
	 	(3)	 	Life Expectancy. Life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations.
	 
	 	(4)	 	Participant’s Account Balance. The Account balance as
of the last Valuation Date in the calendar year immediately preceding the
Distribution Calendar Year (the “Valuation Calendar Year) increased by the
amount of any contributions made and allocated or forfeitures allocated to the
account balance as of the dates in the Valuation Calendar Year after the
valuation date and decreased by distributions made in the valuation calendar
year after the valuation date. The account balance for the valuation calendar
year includes any amounts rolled over or transferred to the Plan either in the
valuation calendar year or in the
Distribution Calendar Year if distributed or transferred in the valuation
calendar year.

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	 	(5)	 	Required Beginning Date. April 1 following the later
of the calendar year in which the Participant (i) attains age 701/2 or (ii)
incurs a Termination of Employment; provided however that for a Participant who
is a 5% owner (as defined in Code Section 401(a)(9) and the Treasury
Regulations thereunder), the “Required Beginning Date” shall mean April 1
following the calendar year in which the Participant attains age 701/2.

	 	(f)	 	Election to Allow Participants or Beneficiaries to Elect 5-Year Rule.
	 
	 	 	 	Participants or Beneficiaries may elect on an individual basis whether the 5-year
rule or the Life Expectancy rule in Sections 8.03(b)(2) and 8.03(d)(1)(B) of the
Plan applies to distributions after the death of a Participant who has a Designated
Beneficiary. The election must be made no later than the earlier of September 30 of
the calendar year in which distribution would be required to begin under Section
8.03(b)(2) of the Plan or by September 30 of the calendar year that contains the
fifth anniversary of the Participant’s (or if applicable, surviving spouse’s) death.
If neither the Participant nor the Beneficiary makes an election under this
paragraph, distributions will be made in accordance with Sections 8.03(b)(2) and
8.03(d)(1)(B) of the Plan.

	8.04	 	Required Minimum Distributions for 2009.

	 	 	Notwithstanding the provisions of Section 8.03 of the Plan (or any other provisions of the
Plan), any required minimum distributions under Section 401(a)(9) of the Code payable to a
Participant or Beneficiary for the 2009 calendar year shall be treated as follows:

	 	(a)	 	If the Participant or Beneficiary is scheduled to receive an annual minimum
required distribution payment for 2009 , no payment will be made unless the
Participant or Beneficiary elects to receive such payment for 2009.
	 
	 	(b)	 	If the Participant or Beneficiary has no scheduled receive minimum required
distribution payments for 2009, but would have been required to receive a required
minimum payment for 2009, no payments will be made to the Participant or Beneficiary
with respect to these 2009 required minimum distributions unless the Participant or
Beneficiary elects to receive such payments.
	 
	 	(c)	 	If the Participant or Beneficiary is scheduled to receive minimum required
distributions for 2009 on a monthly, quarterly or semi-annual basis, such payments will
be made unless the Participant or Beneficiary elects to stop those payments for 2009.

	8.05	 	Application for Benefits.

	 	 	The Committee or its designee may require a Participant or Beneficiary to complete and file
with the Committee certain forms as a condition precedent to the payment of benefits. The
Committee may rely upon all such information given to it, including the Participant’s
current
mailing address. It is the responsibility of all persons interested in distributions from
the Trust Fund to keep the Committee informed of their current mailing addresses.

- 34 -

 

	8.06	 	Distributions Pursuant to Qualified Domestic Relations Orders.

	 	 	Notwithstanding anything to the contrary in this Plan, a “qualified domestic relations
order,” as defined in Code Section 414(p), may provide that any amount to be distributed to
an alternate payee may be distributed immediately even though the Participant is not yet
entitled to a distribution under the Plan. The intent of this Section is to provide for the
distribution of benefits to an alternate payee as permitted by Treasury Regulation
1.401(a)-13(g)(3). Notwithstanding any other provision of the Plan to the contrary, if the
total amount payable to an alternate payee under a Qualified Domestic Relations Order does
not exceed $1,000, the only payment option available to the alternate payee shall be a lump
sum payment.

	8.07	 	Direct Transfer of Account to an Eligible Retirement Plan.

	 	(a)	 	In General. If a Participant is entitled to a distribution of his
Account, the Participant may elect to have all or part of such Distribution paid
directly to an “Eligible Retirement Plan” in the form of a direct rollover.
	 
	 	(b)	 	Election. The Participant must make the election described in
paragraph (a) above within ninety (90) but no later than thirty (30) days (7 if the
Participant executes the appropriate waiver) prior to his benefit commencement date in
the manner and on the form provided by the Committee. The Participant must provide all
information requested by the Committee for the Trustee to make the transfer. Failure
to provide such information will void the Participant’s election.
	 
	 	(c)	 	Definition of Eligible Retirement Plan. The term “Eligible Retirement
Plan” shall mean:

	 	(i)	 	an eligible retirement account described in Section 408(a) of
the Code;
	 
	 	(ii)	 	an eligible retirement annuity described in Section 408(b) of
the Code (other than an endowment contract);
	 
	 	(iii)	 	an employees’ trust described in Section 401(a) of the Code
that is exempt from tax under Section 501(a) of the Code;
	 
	 	(iv)	 	an annuity plan described in Section 403(a) of the Code;
	 
	 	(v)	 	an eligible deferred compensation plan under Section 457(b) of
the Code that is maintained by a state, political subdivision or a state or any
agency or instrumentality of a state or political subdivision of a state; or
	 
	 	(vi)	 	an annuity contract described in Section 403(b) of the Code.

	 	 	 	The definition of “Eligible Retirement Plan” shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in Section
414(p) of the Code.
	 
	 	(d)	 	Exceptions. The Committee is not required to offer a direct transfer
of a Participant’s Account if:

- 35 -

 

	 	(i)	 	The distribution is a series of substantially equal periodic
payments made at least annually for the life (or life expectancy) of the
Participant or for the joint lives (or joint life expectancies) of the
Participant and his Beneficiary;
	 
	 	(ii)	 	The distribution is a series of substantially equal periodic
payments made at least annually for a period of at least ten years;
	 
	 	(iii)	 	The distribution is required under Section 409(a) of the Code
(a required minimum distribution);
	 
	 	(iv)	 	The distribution is made upon the hardship of the Employee; or
	 
	 	(v)	 	The distribution is less than $200 in a lump sum form (or any
higher amount as established by the Internal Revenue Code or other applicable
authority) and withholding is therefore not required.

	 	(e)	 	Income Tax Withholding. Under the Internal Revenue Code, the Committee
is generally required to withhold for federal income taxes on a distribution made
directly to a Participant. Federal income tax withholding is not required for any
direct transfer of a Participant’s Account to an Eligible Retirement Plan or for any
distribution described in paragraph (d) above.
	 
	 	(f)	 	Rollovers of After-Tax Employee Contributions. For purposes of the
direct rollover provisions in this Section 8.07 of the Plan, a portion of the
distribution shall not fail to be an eligible rollover distribution merely because the
portion consists of after-tax employee contributions that are not includible in gross
income. However, such portion may be transferred only to (i) an individual retirement
account or annuity described in Section 408(a) or (b) of the Code, or (ii) a qualified
defined contribution plan described in Section 401(a) of the Code or an annuity
described in Section 403(b) of the Code, and such plan or trust agrees to separately
account for amounts so transferred, including separately accounting for the portion of
such distribution that is not so includable.
	 
	 	(g)	 	Rollovers of Roth 401(k) Contributions. Notwithstanding the foregoing
provisions of this Section 8.07, a direct rollover of a distribution from a
Participant’s Roth 401(k) Contribution Account under the Plan will only be made to
another Roth elective deferral account under an applicable retirement plan described in
Section 402A(e)(1) of the Code or to a Roth IRA described in Section 408A of the Code,
and only to the extent the rollover is permitted under the rules of Section 402(c) of
the Code.

	8.08	 	Direct Trust-to-Trust Transfers by Non-Spouse Beneficiaries.

	 	 	Effective January 1, 2009, a non-spouse Beneficiary may elect, at the time and in the manner
prescribed by the Committee, to have any portion of a distribution from the Plan paid
directly to an “Individual Retirement Plan” specified by the non-spouse Beneficiary in a
direct trustee-to-trustee transfer. For this purpose, the term “Individual Retirement Plan”
shall mean an individual retirement account described in Section 408(a) of the Code or an
individual retirement annuity described in Section 408(b) of the Code (other than an
endowment contract) that is established for the purpose of receiving the distribution on
behalf of an individual who is designated as a Beneficiary and who is not the surviving
spouse of the Participant. This transfer shall be treated

- 36 -

 

	 	 	as an “eligible rollover
distribution” for purposes of Section 402(c) of the Code and, for Plan Years beginning on
and after January 1, 2010, for all purposes of the Code.

- 37 -

 

ARTICLE 9

HARDSHIP WITHDRAWALS; IN-SERVICE DISTRIBUTIONS

	9.01	 	Hardship Withdrawal of Account.

	 	(a)	 	In General. Any Participant may request the Committee to distribute to
him, on account of a financial hardship, part or all of his:

	 	(i)	 	Salary Savings Contributions Account;

	 	(ii)	 	Roth 401(k) Contribution Account

	 	(iii)	 	Elective Profit Sharing Contribution portion of his Profit
Sharing Contribution Account, provided the Participant is 100% vested in this
sub-account;

	 	(iv)	 	Non Elective Profit Sharing Contribution portion of his Profit
Sharing Contribution Account, provided the Participant is 100% vested in this
sub-account;

	 	(v)	 	Retirement Contribution Account, provided the Participant is
100% vested in this sub-account;

	 	(vi)	 	Voluntary After-Tax Contribution Account;

	 	(vii)	 	Rollover Contribution Account; and

	 	(viii)	 	Employer Matching Contributions on Elective Profit Sharing Contributions,
provided the Participant is 100% vested in this sub-account.

	 	 	 	Such Account shall be valued in accordance with Section 9.05. Distributions shall
be made on a pro-rata basis from each of the Participant’s sub-accounts listed
above.

	 	(b)	 	No Distribution of Earnings. Notwithstanding the above, income or gain
that is allocated to a Participant’s Salary Savings Contribution Account, his Roth
401(k) Contribution Account and to the Participant’s Elective Profit Sharing
Contributions held in his Profit Sharing Contribution Account may not be distributed in
a hardship withdrawal.

	9.02	 	Definition of Hardship.

	 	 	Hardship shall mean an immediate and heavy financial need experienced by reason of:

	 	(a)	 	Expenses of any accident or sickness of such Participant, his Spouse or any
individual (including non-custodial children of the Participant) claimed as a dependent
(as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2)
and (d)(1)(B) of the Code) by the Participant for federal income tax purposes;

	 	(b)	 	Purchase of a primary residence of such Participant;

- 38 -

 

	 	(c)	 	Payment of tuition and related educational fees for the next twelve months of
post-secondary education for the Participant, for the Spouse, a child of the
Participant or for an individual claimed as a dependent (as defined in Section 152 of
the Code, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B) of the Code) by
the Participant for federal income tax purposes;

	 	(d)	 	The need to prevent the eviction of the Participant from his primary residence
or foreclosure on the Participant’s primary residence;

	 	(e)	 	Payment of funeral expenses for a deceased parent, Spouse, or child of the
Participant or individual claimed as a dependent (as defined in Section 152 of the
Code, without regard to Section 152(d)(1)(B) of the Code) by the Participant for
federal income tax purposes;

	 	(f)	 	Payment of expenses for the repair of damage to the Participant’s primary
residence that would qualify for the casualty deduction under Section 165 of the Code
(determined without regard to whether the loss exceeds 10% of the Participant’s
adjusted gross income); or

	 	(g)	 	Other financial hardships as permitted by Treasury Regulations or other
regulatory or judicial authority and approved by the Committee.

	9.03	 	Maximum Hardship Distribution.

	 	 	A hardship distribution cannot exceed the amount required to meet the immediate financial
need created by the hardship (after taking into account applicable federal, state, or local
income taxes and penalties) and not reasonably available from other resources of the
Participant. In order to ensure compliance with this requirement, the Committee may require
the Participant to satisfy any or all of the provisions described below in (1), (2), or (3)
below as a condition precedent to the Participant receiving a hardship distribution:

	 	(a)	 	No Other Sources Available. Certification by the Participant on a form
provided by the Committee for such purpose that the financial need cannot be relieved
(1) through reimbursement or payment by insurance; (2) by reasonable liquidation of the
Participant’s assets; (3) by ceasing Salary Savings Contributions and Roth 40(k)
Contributions under the Plan; (4) by other in-service distributions (including loans)
under the Plan and under any other plan maintained by the Employer; or (5) by borrowing
from commercial lenders on reasonable commercial terms.

	 	(b)	 	Receipt of All Distributions Available; Suspension of Future
Contributions. Receipt by the Participant of all distributions that he is eligible
to receive under this Plan and under any other plan maintained by the Employer.
	 
	 	 	 	In addition, the Participant must agree to the following limitations and
restrictions:

	 	(1)	 	The Participant’s Salary Savings Contributions, Roth 401(k)
Contributions and Elective Profit Sharing Contributions shall automatically be
suspended beginning on the first payroll period that commences after such
Participant requests and receives a hardship distribution. Such Participant
may resume
making Salary Savings Contributions, Roth 401(k) Contributions and Elective
Profit Sharing 

- 39 -

 

	 	 	 	Contributions to the Plan at any time after 6 months have
expired since the effective date of such suspension.

	 	(2)	 	The Participant shall be prohibited under a legally enforceable
agreement from making an Employee contribution to any other plan maintained by
the Employer for at least 6 months after the receipt of the hardship
distribution. For this purpose, the phrase “any other plan” includes all
qualified and nonqualified plans of deferred compensation, stock option plans
and stock purchase plans. It does not include a health or welfare plan
including one that is part of a Section 125 cafeteria plan.

	 	(c)	 	Other. Any other condition or method approved by the Internal Revenue
Service.

	9.04	 	Procedure to Request Hardship.
	 
	 	 	The request to receive a hardship distribution shall be made in
writing to the Committee explaining the nature of the financial
hardship and stating the amount needed to meet the immediate need.
Under no circumstances shall the Committee permit a Participant to
repay to the Plan the amount of any hardship withdrawal by a
Participant under this Section.
	 
	9.05	 	Valuation for Purposes of Withdrawals.
	 
	 	 	The Participant’s Account for purposes of determining the amount of a
hardship withdrawal or in-service distribution shall be determined as
of the Valuation Date preceding (i) the date on which the Committee
approves the hardship withdrawal or (ii) the date on which the
Company approves the in-service distribution.
	 
	9.06	 	Age 591/2 In-Service Distributions.

	 	(a)	 	A Participant who has not terminated employment may, at any time after
attaining age 591/2, elect to withdraw all or part of his vested Account (including any
earnings thereon). A distribution shall be made no earlier than the month following
the calendar month in which the Participant attains age 591/2. Distributions shall be
made on a pro-rata basis from each of the Participant’s vested sub-accounts listed in
Section 6.01.
	 
	 	(b)	 	A Participant who receives an age 591/2 withdrawal shall not be suspended from
continuing or commencing to make (in accordance with the Plan) Salary Savings
contributions to the Plan.
	 
	 	(c)	 	No in-service withdrawal will be permitted unless the amount to be withdrawn is
at least $1,000 (or the entire amount available for withdrawal, if less).
	 
	 	(d)	 	In no event shall a Participant be permitted to repay the amount of his
in-service withdrawal.
	 
	 	(e)	 	The Committee may establish additional uniform and nondiscriminatory
administrative procedures concerning requests for in-service withdrawals.

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ARTICLE 10

ADMINISTRATION OF THE PLAN

	10.01	 	Named Fiduciaries.
	 
	 	 	The following parties are named as Fiduciaries of the Plan and shall
have the authority to control and manage the operation and
administration of the Plan:

	 	(a)	 	The Company;
	 
	 	(b)	 	The Board;
	 
	 	(c)	 	The Trustee; and
	 
	 	(d)	 	The Committee.

	 	 	The Fiduciaries named above shall have only the powers and duties expressly allocated to
them in the Plan and in the Trust Agreement and shall have no other powers and duties in
respect of the Plan; provided, however, that if a power or responsibility is not expressly
allocated to a specific named fiduciary, the power or responsibility shall be that of the
Company. No Fiduciary shall have any liability for, or responsibility to inquire into, the
acts and omissions of any other Fiduciary in the exercise of powers or the discharge of
responsibilities assigned to such other Fiduciary under this Plan or the Trust Agreement.

	10.02	 	Board of Directors.
	 
	 	 	The Board shall have the following powers and duties with respect to the Plan:

	 	(a)	 	The Board shall have the power to appoint and remove the Trustee and the
members of the Committee. The Board may delegate its authority to appoint or remove
the Trustee and the members of the Committee to an officer of the Company.
	 
	 	(b)	 	The Board shall have the power to amend the Plan, in whole or in part, pursuant
to Section 11.01; or to terminate the Plan, in whole or in part.

	10.03	 	Trustee.
	 
	 	 	The Trustee shall exercise all of the powers and duties assigned to
the Trustee as set forth in the Trust Agreement. The Trustee shall
have no other responsibilities with respect to the Plan.
	 
	10.04	 	Committee.

	 	(a)	 	A committee of one or more individuals may be appointed by and serve at the
discretion of the Board to administer the Plan. Any Participant, officer, or director
of the Employer shall be eligible to be appointed a member of the Committee and all
members shall serve as such without compensation. Upon termination of his employment
with the Employer, or upon ceasing to be an officer or director, if not an employee, a
member of the
Committee automatically shall cease to be a member of the Committee. The Board
shall

- 41 -

 

	 	 	 	have the right to remove any member of the Committee at any time, with or
without cause. A member may resign at any time by giving written notice to the
Committee and the Board. If a vacancy in the Committee should occur, a successor
may be appointed by the Board. The Committee shall by written notice keep the
Trustee notified of current membership of the Committee, its officers and agents.
The Committee shall furnish the Trustee a certified signature card for each member
of the Committee and for all purposes hereunder the Trustee shall be conclusively
entitled to rely upon such certified signatures. If there are no members of the
Committee, the Company shall assume the authority, powers, duties and privileges of
the Committee.

	 	(b)	 	The Board or the Chief Executive Officer shall appoint a Chairman and a
Secretary from among the members of the Committee. All resolutions, determinations and
other actions shall be by a majority vote of all members of the Committee. The
Committee may appoint such agents, who need not be members of the Committee, as it
deems necessary for the effective performance of its duties, and may delegate to such
agents such powers and duties, whether ministerial or discretionary, as the Committee
deems expedient or appropriate. The compensation of such agents shall be fixed by the
Committee; provided, however, that in no event shall compensation be paid if such
payment violates the provisions of Section 406 of ERISA and is not exempted from such
prohibitions by Section 408 of ERISA.

	 	(c)	 	The Committee shall have complete control of the administration of the Plan
with all powers necessary to enable it to properly carry out the provisions of the
Plan. In addition to all implied powers and responsibilities necessary to carry out
the objectives of the Plan and to comply with the requirements of ERISA, the Committee
shall have the following specific powers and responsibilities:

	 	(1)	 	To construe the Plan and Trust Agreement and to determine all
questions arising in the administration, interpretation and operation of the
Plan;

	 	(2)	 	To decide all questions relating to the eligibility of
Employees to participate in the benefits of the Plan and Trust Agreement;

	 	(3)	 	To determine the benefits of the Plan to which any Participant,
Beneficiary or other person may be entitled;

	 	(4)	 	To keep records of all acts and determinations of the
Committee, and to keep all such records, books of accounts, data and other
documents as may be necessary for the proper administration of the Plan;

	 	(5)	 	To prepare and distribute to all Plan Participants and
Beneficiaries information concerning the Plan and their rights under the Plan,
including, but not limited to, all information that is required to be
distributed by ERISA, the regulations thereunder, or by any other applicable
law;

	 	(6)	 	To file with the Secretary of Labor such reports and additional
documents as may be required by ERISA and regulations issued thereunder,
including, but not limited to, summary plan description, modifications and
changes, annual reports, terminal reports and supplementary reports;

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	 	(7)	 	To file with the Secretary of the Treasury all reports and
information required to be filed by the Code, ERISA and regulations issued
under each; and

	 	(8)	 	To do all things necessary to operate and administer the Plan
in accordance with its provisions and in compliance with applicable provisions
of federal law.

	 	(d)	 	To enable the Committee to perform its functions, the Employer shall supply
full and timely information of all matters relating to the compensation and length of
service of all Participants, their Retirement, death or other cause of termination of
employment, and such other pertinent facts as the Committee may require. The Committee
shall advise the Trustee of such facts and issue to the Trustee such instructions as
may be required by the Trustee in the administration of the Plan. The Committee and
the Employer shall be entitled to rely upon all certificates and reports made by a
Certified Public Accountant selected or approved by the Employer. The Committee, the
Employer and its officers shall be fully protected in respect of any action suffered by
them in good faith in reliance upon the advice or opinion of any accountant or
attorney, and all action so taken or suffered shall be conclusive upon each of them and
upon all other persons interested in the Plan.

	10.05	 	Standard of Fiduciary Duty.
	 
	 	 	Any Fiduciary, or any person designated by a Fiduciary to carry out
fiduciary responsibilities with respect to the Plan, shall discharge
his duties solely in the interests of the Participants and
Beneficiaries for the exclusive purpose of providing them with
benefits and defraying the reasonable expenses of administering the
Plan. Any Fiduciary shall discharge his duties with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar
with such matter would use in the conduct of an enterprise of a like
character and with like aims. Any Fiduciary shall discharge his
duties in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent
with the provisions of ERISA. Notwithstanding any other provisions
of the Plan, no Fiduciary shall be authorized to engage in any
transaction that is prohibited by Sections 406 and 2003(a) of ERISA
or Section 4975 of the Code in the performance of its duties
hereunder.
	 
	10.06	 	Claims Procedure.

	 	(a)	 	Claims. If a Participant has any grievance, complaint, or claim
concerning any aspect of the operation or administration of the Plan or Trust,
including but not limited to claims for benefits and complaints concerning the
performance or administration of the investments of Plan assets (collectively referred
to herein as “claim” or “claims”), the Participant shall submit the claim to the
Committee, which shall have the initial responsibility for deciding the claim. All
such claims shall be submitted in writing and shall set forth the relief requested and
the reasons the relief should be granted. All such claims must be submitted within the
“applicable limitations period.” The “applicable limitations period” shall be two
years, beginning on:

	 	(i)	 	in the case of any lump-sum payment, the date on which the
payment was made,

	 	(ii)	 	in the case of an installment payment, the date of the first in
the series of payments, or

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	 	(iii)	 	for all other claims, the date on which the action complained
or grieved of occurred.

	 	 	 	To the extent that documentary or other evidence is relevant to the relief sought,
the Participant shall submit such evidence or, if the evidence is in the possession
of the Committee, the Participant shall refer to such evidence in a manner
sufficient to allow the Committee to identify and locate such evidence.

	 	(b)	 	Denial of Claims. If a claim is denied in whole or in part, the
Committee shall give the claimant written notice of the decision within ninety (90)
days of the date the claim was submitted. Such written notice shall set forth in a
manner calculated to be understood by the claimant:

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

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

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

	 	(4)	 	appropriate information about the steps to be taken if the
claimant wishes to submit the claim for review of the denial. The ninety-day
period for review of a claim for benefits may be extended for an additional
ninety (90) days by a written notice to the claimant setting forth the reason
for the extension. If the Committee fails to respond to a claim within the
time limits set forth above, the claim shall be deemed denied and the
Participant may request review by the Committee as set forth in Section
10.06(c).

	 	(c)	 	Appeals Procedure. If a claim is denied in whole or in part or if the
claimant has no response to such claim within ninety (90) days of its submission (in
which case the claim for benefits shall be deemed to be denied), the claimant or his
duly authorized representative may appeal the denial to the Committee within sixty (60)
days of receipt of written notice of denial or within sixty (60) days of the expiration
of the ninety-day period. In pursuing his appeal, the claimant or his duly authorized
representative:

	 	(i)	 	shall request in writing that the Committee review the denial;

	 	(ii)	 	shall review pertinent documents; and

	 	(iii)	 	shall submit evidence as well as written issues, comments or
arguments.

	 	 	 	The decision on review shall be made within sixty (60) days of receipt of the
request for review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible, but not
later than 120 days after receipt of the request for review. If such an extension
of time is required, written notice of the extension shall be furnished to the
claimant before the end of the original
sixty-day period. The decision on review shall be made in writing, shall be written
in a manner calculated to be understood by the claimant, and shall include specific
references

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	 	 	 	to the provision of the plan on which the denial is based. If the
decision on review is not furnished within the time specified above, the claim shall
be deemed denied on review. The decision shall be final and conclusive and a
Participant shall not be permitted to bring suit at law or in equity on a claim
without first exhausting the remedies available hereunder. No action at law or in
equity to recover under this Plan shall be commenced later than one year from the
date of the decision on review (or if no decision is furnished within 120 days of
receipt of the request for review, the 120th day after receipt of the
request for review).

	10.07	 	Indemnification of Committee; Board.
	 
	 	 	To the extent permitted under ERISA, the Plan shall indemnify the
Board and the Committee against any cost or liability that they may
incur in the course of administering the Plan and executing the
duties assigned pursuant to the Plan. The Employer shall indemnify
the Committee against any personal liability or cost not provided
for in the preceding sentence that they may incur as a result of any
act or omission in relation to the Plan or its Participants.
Notwithstanding the foregoing, however, no person shall be
indemnified for any act or omission that results from that person’s
intentional or willful misconduct, or illegal activity. The
Employer may purchase fiduciary liability insurance to insure its
obligation under this Section. The Company shall have the right to
select counsel to defend the Board or Committee in connection with
any litigation arising from the execution of their duties under the
Plan.

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ARTICLE 11

AMENDMENT AND TERMINATION

	11.01	 	Right to Amend.
	 
	 	 	The Company intends for the Plan to be permanent so long as the
corporation exists; however, it reserves the right (through action
of the Board) to modify, alter, or amend this Plan or the Trust
Agreement, from time to time, to any extent that it may deem
advisable, including, but not limited to any amendment deemed
necessary to insure the continued qualification of the Plan under
Sections 40l(a) and 401(k) of the Code or to insure compliance with
ERISA; provided, however, that the Company shall not have the
authority to amend this Plan in any manner that will:

	 	(a)	 	Permit any part of the Fund (other than such part as is required to pay taxes
and administrative expenses) to be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries;

	 	(b)	 	Cause or permit any portion of the funds to revert to or become the property of
the Employer;

	 	(c)	 	Change the duties, liabilities, or responsibilities of the Trustee without its
prior written consent.

	11.02	 	Termination and Discontinuance of Contributions.
	 
	 	 	The Company shall have the right at any time to terminate this Plan
or to discontinue permanently its contributions hereunder
(hereinafter referred to as “Plan Termination”). Upon termination
of the Plan, the Committee shall direct the Trustee with reference
to the disposition of the Fund, after payment of any expenses
properly chargeable against the Fund. The Trustee shall distribute
all amounts held in Trust to the Participants and others entitled to
distributions in proportion to the Accounts of such Participants and
other distributees as of the date of such Plan Termination. In the
event that this Plan is partially terminated, the provisions of this
Section 11.02 shall apply solely with respect to the Employees
affected by the partial termination. If the Plan is terminated or
partially terminated, or if the Employer permanently discontinues
its contributions to the Plan, then all Participants (in the case of
complete plan termination or permanent discontinuance of
contributions) or the affected Participants (in the event of partial
Plan termination), shall become 100% vested in all of their Accounts
under the Plan immediately upon such event.
	 
	11.03	 	IRS Approval of Termination.
	 
	 	 	Notwithstanding Section 11.02, the Trustee shall not be required to
make any distribution from this Plan in the event of complete or
partial termination until the Internal Revenue Service has issued a
favorable determination with respect to the Plan’s termination.

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ARTICLE 12

SPECIAL DISCRIMINATION RULES

	12.01	 	Definitions.
	 
	 	 	Actual Contribution Percentage or ACP shall mean the ratio
(expressed as a percentage) of (i) the sum of the Employer Matching
Contributions and, for Plan Years beginning prior to April 1, 2001,
Voluntary After-Tax Contributions on behalf of the Participant for
the Plan Year and, to the extent permitted in Treasury Regulations
and elected by the Employer, the Participant’s Qualified Elective
Deferrals and Qualified Non-Elective Contributions to (ii) the
Participant’s Compensation for the Plan Year. The Employer, on an
annual basis, may elect to include or not to include Qualified
Elective Deferrals and Qualified Non-Elective Contributions in
computing the ACP for a Plan Year. If a Participant (as defined
below) does not receive an allocation of Employer Contributions for
a Plan Year, such Participant’s ACP for the Plan Year shall be zero.
	 
	 	 	Actual Deferral Percentage or ADP shall mean the ratio (expressed as
a percentage) of (i) the sum of Salary Savings Contributions, Roth
401(k) Contributions and Elective Profit Sharing Contributions
contributed to the Plan on behalf of a Participant for the Plan Year
(excluding any Excess Deferrals by a Non-Highly Compensated
Employee) and, to the extent permitted in Treasury Regulations and
elected by the Employer, the Participant’s Qualified Non-Elective
Contributions to (ii) the Participant’s Compensation for the Plan
Year. The Employer, on an annual basis, may elect to include or not
to include Qualified Non-Elective Contributions in computing the ADP
for a Plan Year. In the case of a Participant (as defined below)
who does not make a Salary Savings Contribution or Roth 401(k)
Contribution for a Plan Year and is not allocated a Qualified
Non-Elective Contribution for such Plan Year, such Participant’s ADP
for the Plan Year shall be zero.
	 
	 	 	Average Actual Contribution Percentage shall mean the average
(expressed as a percentage) of the Actual Contribution Percentages
of the Participants in a group. The percentage shall be rounded to
the nearest one-hundredth of one percent (four decimal places).
	 
	 	 	Average Actual Deferral Percentage shall mean the average (expressed
as a percentage) of the Actual Deferral Percentages of the
Participants in a group. The percentage shall be rounded to the
nearest one-hundredth of one percent (four decimal places).
	 
	 	 	Compensation for purposes of this Article 12 shall be that
definition selected by the Committee that satisfies the requirements
of Code Sections 414(s) and 401(a)(17). Such definition may change
from year to year but must apply uniformly among all Eligible
Employees being tested under the Plan for a given Plan Year and
among all Employees being tested under any other plan that is
aggregated with this Plan during the Plan Year. If the Committee
fails to select a definition of Compensation for purposes of this
Article 12, Compensation (for purposes of Article 12) shall have the
same meaning as defined in Article 2.
	 
	 	 	Employer Matching Contributions. For purposes of this Article 12,
an Employer Matching Contribution for a particular Plan Year
includes only those contributions that are (i) allocated to the
Participant’s Account under the Plan as of any date within such Plan
Year, (ii) contributed to the Trust no later than the end of the
12-month period following the close of such Plan Year, and

- 47 -

 

	 	 	(iii) made on account of such Participant’s Salary Savings Contributions and/or Roth 401(k)
Contributions for the Plan Year.

	 	 	Excess Deferrals shall have that meaning as defined in Section 12.02.

	 	 	Excess ACP Contributions shall have that meaning as defined in Section 12.08.

	 	 	Excess ADP Deferrals shall have that meaning as defined in Section 12.05.

	 	 	Highly Compensated Employee. See Article 13.

	 	 	Non-elective Contributions. For purposes of this Article 12, a Non-elective
Contribution is taken into account only if the contribution is (i) allocated to the
Participant’s Account under the terms of the Plan as of any date within the Plan Year, and
(ii) would have been received by the Participant as cash, but for the deferral election
during the Plan Year. Any Non-elective Contribution taken into account under this Article
12 shall be deemed to be a Salary Savings Contribution for purposes of the limits set forth
in Article 12.

	 	 	Non-Highly Compensated Employee. See Article 13.

	 	 	Participant. For purposes of this Article 12, a Participant shall mean any Employee
who (i) is eligible to receive an allocation of an Employer Matching Contribution, even if
no Employer Matching Contribution is allocated due to the Employee’s failure to make a
required Salary Savings Contribution, (ii) is eligible to make a Salary Savings Contribution
or Roth 401(k) Contribution, including an Employee whose right to make Salary Savings
Contributions and Roth 401(k) Contributions has been suspended because of an election not to
participate or a hardship distribution, and (iii) is unable to receive an Employer Matching
Contribution or make a Salary Savings Contribution or a Roth 401(k) Contribution because his
Compensation is less than a stated amount.

	 	 	Salary Savings Contributions or Roth 401(k) Contributions. For purposes of
this Article 12, a Salary Savings Contribution or Roth 401(k) Contribution is taken into
account only if the contribution (i) is allocated to the Participant’s Account under the
terms of the Plan as of any date within the Plan Year, and (ii) relates to Compensation that
would have been received by the Participant during the Plan Year or within 21/2 months after
the Plan Year but for the deferral election. A Salary Savings Contribution or Roth 401(k)
Contribution is considered to be allocated as of a date within a Plan Year only if the
allocation is not contingent on participation in the Plan or performance of service after
the Plan Year to which the Salary Savings Contribution or Roth 401(k) Contribution relates.
In addition, for purposes of this Article 12, unless otherwise stated, Salary Savings
Contributions or Roth 401(k) Contributions shall include Non-elective Contributions taken
into account under this Plan.

	 	 	Qualified Elective Deferral shall mean Salary Savings Contributions, Roth 401(k)
Contributions or Elective Profit Sharing Contributions designated by the Committee as
Qualified Elective Deferrals in order to meet the ACP testing requirements of Section 12.06.
In addition, the following requirements must be satisfied:

	 	(1)	 	The aggregate of all Salary Savings Contributions, Roth 401(k) Contributions
and Elective Profit Sharing Contributions for the Plan Year (including the Qualified
Elective Deferrals) must satisfy the ADP testing requirements set forth in Section
12.03(a).

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	 	(2)	 	The aggregate of all Salary Savings Contributions, Roth 401(k) Contributions
and Elective Profit Sharing Contributions for the Plan Year (excluding the Qualified
Elective Deferrals) must satisfy the ADP testing requirements set forth in Section
12.03(a).

	 	(3)	 	Qualified Elective Deferrals must satisfy all other provisions of this Plan
applicable to Salary Savings Contributions, Roth 401(k) Contributions and Elective
Profit Sharing Contributions and shall remain part of the Participant’s Salary Savings
Contribution Account, Roth 401(k) Contribution Account or the Elective Profit Sharing
Contribution portion of the Participant’s Profit Sharing Contribution Account.

	 	(4)	 	Except as provided by this definition, Qualified Elective Deferrals shall be
excluded in determining whether any other contribution or benefit satisfies the
nondiscrimination requirements of Code Sections 401(a)(4) and 401(k)(3).

	 	 	Qualified Non-Elective Contribution shall mean an Employer contribution designated
by the Committee as a Qualified Non-Elective Contribution in order to meet the ADP testing
requirements of Section 12.03 or the ACP testing requirements of Section 12.06. In
addition, the following requirements must be satisfied:

	 	(1)	 	The Qualified Non-Elective Contribution, whether or not used to satisfy the
requirements of Sections 12.03 or 12.06, must meet the requirements of Code Section
401(a)(4).

	 	(2)	 	Qualified Non-Elective Contributions which are taken into account in order to
meet the requirements of Section 12.03 or 12.06 (as applicable) shall not be counted in
determining whether the testing requirements of any of such other Sections are met.

	 	(3)	 	The Qualified Non-Elective Contributions shall be subject to all provisions of
this Plan applicable to Salary Savings Contributions and Roth 401(k) Contributions
(except that Qualified Non-Elective Contributions cannot be distributed in a hardship
distribution).

	 	(4)	 	Except as provided in this paragraph, the Qualified Non-Elective Contributions
shall be excluded in determining whether any other contribution or benefit satisfies
the nondiscrimination requirements of Code Sections 401(a)(4) and 401(k)(3).

	12.02	 	Limit on Salary Savings Contributions and Roth 401(k) Contributions.

	 	(a)	 	Notwithstanding any other provision of this Plan to the contrary, the aggregate
of a Participant’s Salary Savings Contributions, Roth 401(k) Contributions and Elective
Profit Sharing Contributions actually contributed to the Plan during a calendar year
may not exceed the dollar limitation contained in Section 402(g) of the Code in effect
for such taxable year, except to the extent permitted under Section 4.01(d) of the Plan
and Section 414(v) if applicable. Any Salary Savings Contributions, Roth 401(k)
Contributions or Elective Profit Sharing Contributions in excess of the foregoing limit
(“Excess Deferral”), plus any income and minus any loss allocable thereto, will be
distributed to the applicable Participant no later than April 15 following the calendar
year in which such contributions were made.

	 	(b)	 	Any Participant who has an Excess Deferral during a calendar year may receive a
distribution of the Excess Deferral during such calendar year plus any income or minus

- 49 -

 

	 	 	 	any loss allocable thereto, provided (1) the Participant requests (or is deemed to
request) the distribution of the Excess Deferral, (2) the distribution occurs after the
date the Excess Deferral arose, and (3) the Committee designates the distribution as a
distribution of an Excess Deferral. If a Participant who has an Excess Deferral has
made Salary Savings Contributions, Roth 401(k) Contributions and Elective Profit
Sharing Contributions during the calendar year in which the Excess Deferral arose,
the Excess Deferral shall be distributed to the Participant on a pro-rata basis from
the Participant’s Salary Savings Contributions (if any), his Elective Profit Sharing
Contributions (if any), and his Roth 401(k) Contributions (if any). The distribution
of the Excess Deferral shall be adjusted for income or loss during the Plan Year only,
and not for the period between the end of the Plan Year and the date of the
distribution. Notwithstanding the foregoing, for the 2007 Plan Year only, the income
or loss allocable to an Excess Deferral shall include income or loss during the “gap
period” (that is, the period between the end of the Plan Year and date of distribution)
to the extent required under the applicable Treasury Regulations.

	 	(c)	 	If a Participant makes a Salary Savings Contribution, Roth 401(k) Contribution or
Elective Profit Sharing Contribution under this Plan and in the same calendar year
makes a contribution to a Code Section 401(k) plan containing a cash or deferred
arrangement (other than this Plan), a Code Section 408(k) plan (simplified employee
pension plan) or a Code Section 403(b) plan (tax sheltered annuity) and, after the
return of any Excess Deferral pursuant to Section 12.02(a) and (b) the aggregate of all
such contributions exceed the limitations contained in Code Section 402(g), then such
Participant may request that the Committee return all or a portion of the Participant’s
Salary Savings Contributions, Roth 401(k) Contributions or Elective Profit Sharing
Contributions (as elected by the Participant) for the calendar year plus any income and
minus any loss allocable thereto. The amount by which such contributions exceed the
Code Section 402(g) limitations will also be known as an Excess Deferral.

	 	(d)	 	Any request for a return of Excess Deferrals arising out of contributions to a
plan described in Section 12.02(c) above which is maintained by an entity other than
the Employer must:

	 	(1)	 	be made in writing;

	 	(2)	 	be submitted to the Committee not later than the March 1
following the Plan Year in which the Excess Deferral arose;

	 	(3)	 	specify the amount of the Excess Deferral;

	 	(4)	 	contain a statement that if the Excess Deferral is not
distributed, it will, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k),or 403(b) of the Code, exceed
the limit imposed on the Participant by Section 402(g) of the Code for the year
in which the Excess Deferral occurred; and

	 	(5)	 	acknowledge that the Salary Savings Contributions (if any),
Roth 401(k) Contributions (if any) or Elective Profit Sharing Contributions (if
any) shall be returned to the Participant on a pro-rata basis from his Account.

- 50 -

 

	 	 	 	In the event an Excess Deferral arises out of contributions to a plan (including
this Plan) described in Section 12.02(c) above which is maintained by the Employer,
the Participant making the Excess Deferral shall be deemed to have requested a
return of the Excess Deferral.

	 	(e)	 	Salary Savings Contributions, Roth 401(k) Contributions and Elective Profit
Sharing Contributions may only be returned to the extent necessary to eliminate a
Participant’s Excess Deferral. Excess Deferrals shall be treated as Annual Additions
under the Plan. In no event shall the returned Excess Deferrals for a particular
calendar year exceed the Participant’s aggregate Salary Savings Contributions, Roth
401(k) Contributions and Elective Profit Sharing Contributions for such calendar year.
	 
	 	 	 	To the extent a return of Excess Deferrals represent a return of the Participant’s
Roth 401(k) Contributions, such returned Excess Deferrals shall not be includible in
the Participant’s gross income for income tax purposes. However, any income
allocable to such returned Excess Deferrals shall be includible in the Participant’s
gross income for tax purposes.

	 	(f)	 	The income or loss allocable to a Salary Savings Contribution, Roth 401(k)
Contribution or Elective Profit Sharing Contribution that is returned to a Participant
pursuant to this Section 12.02 shall be determined by multiplying the income or loss
allocable to the Participant’s Account for the calendar year in which the Excess
Deferral arose by a fraction. The numerator of the fraction is the Excess Deferral.
The denominator of the fraction is the value of the Participant’s Account balance on
the last day of the calendar year in which the Excess Deferral arose reduced by any
income allocated to the Participant’s Account for such calendar year and increased by
any loss allocated to the Participant’s Account for such calendar year. Alternatively,
the income or loss allocable to a Salary Savings Contribution, Roth 401(k) Contribution
or Elective Profit Sharing Contribution may be calculated using any reasonable method
for computing such income or loss, provided the method does not discriminate in favor
of Highly Compensated Employees, is used consistently for all participants and for all
corrective distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income to Participants’ Accounts. Notwithstanding the foregoing, for the
2007 Plan Year only, the income or loss allocable to an Excess Deferral shall include
income or loss during the “gap period” (that is, the period between the end of the Plan
Year and date of distribution) to the extent required under the applicable Treasury
Regulations.
	 
	 	(g)	 	Any Employer Matching Contribution allocable to an Excess Deferral that is returned to a
Participant pursuant to this Section 12.02 shall be forfeited notwithstanding the provisions
of Article 7 (vesting). For this purpose, however, the Salary Savings Contributions and Roth
401(k) Contributions that are returned to the Participant as an Excess Deferral shall be
deemed to be first those Salary Savings Contributions and Roth 401(k) Contributions for which
no Employer Matching Contribution was made and second those Salary Savings Contributions and
Roth 401(k) Contributions for which an Employer Matching Contribution was made. Accordingly,
if the Salary Savings Contributions or Roth 401(k) Contributions that are returned to the
Participant as Excess
Deferrals were not matched, no Employer Matching Contribution will be forfeited.
Non-elective Contributions shall be returned as an Excess Deferral before Salary
Savings Contributions, Salary Savings Contributions shall be returned as an Excess
Deferral

- 51 -

 

	 	 	 	before Roth 401(k) Contributions, and Roth 401(k) Contributions shall be
returned as an Excess Deferral before Elective Profit Sharing Contributions.

	12.03	 	Average Actual Deferral Percentage.

	 	(a)	 	The Average Actual Deferral Percentage for Highly Compensated Employees for
each Plan Year and the Average Actual Deferral Percentage for Non-Highly Compensated
Employees for the preceding Plan Year must satisfy one of the following tests:

	 	(1)	 	The Average Actual Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for the preceding Plan Year for Participants who
were Non-Highly Compensated Employees for such Plan Year multiplied by 1.25; or

	 	(2)	 	The excess of the Average Actual Deferral Percentage for
Participants who are Highly Compensated Employees for the Plan Year over the
Average Actual Deferral Percentage for the preceding Plan Year for Participants
who were Non-Highly Compensated Employees for such preceding Plan Year is not
more than two percentage points, and the Average Actual Deferral Percentage for
Participants who are Highly Compensated Employees is not more than the Average
Actual Deferral Percentage for the preceding Plan Year for Participants who
were Non-Highly Compensated Employees for such Plan Year multiplied by two.

	 	(b)	 	If at the end of the Plan Year, the Plan does not comply with the provisions
of Section 12.03(a), the Employer may do any or all of the following, except as
otherwise provided in the Code or Treasury Regulations:

	 	(1)	 	Distribute Salary Savings Contributions or Roth 401(k)
Contributions to certain Highly Compensated Employees as provided in Section
12.05; or

	 	(2)	 	Make a Qualified Non-Elective Contribution on behalf of any or
all of the Non-Highly Compensated Employees and aggregate such contributions
with the Non-Highly Compensated Employees’ Salary Savings Contributions, Roth
401(k) Contributions and Elective Profit Sharing Contributions as provided in
Section 12.01 (definition of ADP).

	12.04	 	Special Rules For Determining Average Actual Deferral Percentage.

	 	(a)	 	The Actual Deferral Percentage for any Highly Compensated Employee for the Plan
Year who is eligible to have Salary Savings Contributions and/or Roth 401(k)
Contributions allocated to his account under two or more arrangements described in
Section 401(k) of the Code that are maintained by the Employer shall be determined as
if such Salary Savings Contributions and/or Roth 401(k) Contributions were made under a
single arrangement.

	 	(b)	 	If two or more plans maintained by the Employer are treated as one plan for
purposes of the nondiscrimination requirements of Code Section 401(a)(4) or the
coverage requirements of Code Section 410(b) (other than for purposes of the average
benefits

- 52 -

 

	 	 	 	test), all Salary Savings Contributions and Roth 401(k) Contributions that are
made pursuant to those plans shall be treated as having been made pursuant to one plan.

	 	(c)	 	The determination and treatment of the Salary Savings Contributions, Roth
401(k) Contributions, Elective Profit Sharing Contribution and Actual Deferral
Percentage of any Participant shall be in accordance with such other requirements as
may be prescribed from time to time in Treasury Regulations.

	12.05	 	Distribution of Excess ADP Deferrals.

	 	(a)	 	Salary Savings Contributions, Roth 401(k) Contributions and Elective Profit
Sharing Contributions exceeding the limitations of Section 12.03(a) (“Excess ADP
Deferrals”) and any income or loss allocable to such Excess ADP Deferral shall be
designated by the Committee as Excess ADP Deferrals and shall be distributed to Highly
Compensated Employees whose Accounts were credited with Excess ADP Deferrals in the
preceding Plan Year. The Committee shall determine the amount of Excess ADP Deferrals
to be distributed to each Highly Compensated Employee by first determining the
aggregate dollar amount of the distribution as follows:

	 	(1)	 	Determine the dollar amount by which the Salary Savings
Contributions, Roth 401(k) Contributions and/or Elective Profit Sharing
Contributions of the Highly Compensated Employee(s) with the highest ADP must
be reduced to equal the second highest ADP(s) under the Plan; then

	 	(2)	 	Determine the dollar amount by which the Salary Savings
Contributions, Roth 401(k) Contributions and/or and Elective Profit Sharing
Contributions for the two (or more) Highly Compensated Employees with the
highest ADPs under the Plan must be reduced to equal the third highest ADP(s)
under the Plan; then

	 	(3)	 	Repeat the steps described in (1) and (2) above with respect to
the third and successive highest ADP levels under the Plan until the Average
Actual Deferral Percentage does not exceed the amount allowable under Section
12.03(a); then

	 	(4)	 	Add the dollar amounts determined in each of steps (1), (2) and
(3) above.

	 	 	 	The aggregate dollar amount of Excess ADP Deferrals determined under steps (1)
through (4) above shall be distributed as follows:

	 	(1)	 	First to those Highly Compensated Employees with the highest
amount of Salary Savings Contributions, Roth 401(k) Contributions and Elective
Profit Sharing Contributions until each such Employee’s Salary Savings
Contributions, Roth 401(k) Contributions and Elective Profit Sharing
Contributions equal the second highest amount of the Salary Savings
Contributions, Roth 401(k) Contributions and Elective Profit Sharing
Contributions under the Plan;

	 	(2)	 	Second, to the two (or more) Highly Compensated Employees with
the next highest dollar amount of Salary Savings Contributions, Roth 401(k)
Contributions and Elective Profit Sharing Contributions under the Plan, until
each such Employee’s Salary Savings Contributions, Roth 401(k) Contributions
and Elective Profit Sharing Contributions equal the third highest amount of

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	 	 	 	Salary Savings Contributions, Roth 401(k) Contributions and Elective Profit
Sharing Contributions under the Plan; and

	 	(3)	 	Then the steps described in (1) and (2) shall be repeated for
the third and successive Highly Compensated Employees with the highest amount
of Salary Savings Contributions, Roth 401(k) Contributions and Elective Profit
Sharing Contributions under the Plan until all Excess ADP Deferrals have been
returned.

	 	(4)	 	If a Highly Compensated Employee is eligible to make Catch-Up
Contributions under Section 4.01(d) of the Plan, any Excess ADP Deferrals
allocated to such Highly Compensated Employee in steps (1) through (3) above
must be retained by the Plan and treated as Catch-Up Contributions for the Plan
Year in which the Excess ADP Deferral was made, to the extent permitted under
Section 4.01(d) of the Plan and Section 414(v) of the Code. Any remaining
Excess ADP Deferral shall then be distributed to such Highly Compensated
Employee. Any Excess ADP Deferrals that are retained by the Plan as Catch-Up
Contributions under this paragraph shall be treated as Catch-Up Contributions
under Section 4.01(d) of the Plan. Any Employer Matching Contributions on a
Participant’s Salary Savings Contributions, Roth 401(k) Contributions or
Elective Profit Sharing Contributions that are recharacterized as Catch-Up
Contributions shall be forfeited.

	 	(b)	 	To the extent administratively possible, the Committee shall distribute all
Excess ADP Deferrals and any income or loss allocable thereto prior to 21/2 months
following the end of the Plan Year in which the Excess ADP Deferrals arose. In any
event, however, the Excess ADP Deferrals and any income or loss allocable thereto shall
be distributed prior to the end of the Plan Year following the Plan Year in which the
Excess ADP Deferrals arose. Excess ADP Deferrals shall be treated as Annual Additions
under the Plan. The distribution of the Excess ADP Deferrals shall be adjusted for
income or loss during the Plan Year only, and not for the period between the end of the
Plan Year and the date of the distribution.

	 	(c)	 	The income or loss allocable to Excess ADP Deferrals shall be determined by
multiplying the income or loss allocable to the Participant’s Account for the Plan Year
in which the Excess ADP Deferrals arose by a fraction. The numerator of the fraction
is the Excess ADP Deferral. The denominator of the fraction is the value of the
Participant’s Account balance on the last day of the Plan Year in which the Excess ADP
Deferrals arose reduced by any income allocated to the Participant’s Account for such
Plan Year and increased by any loss allocated to the Participant’s Account for the Plan
Year. Alternatively, the income or loss allocable to Excess ADP Deferrals may be
calculated using any reasonable method for computing such income or loss, provided the
method does not discriminate in favor of Highly Compensated Employees, is used
consistently for all participants and for all corrective distributions under the Plan
for the Plan Year, and is used by the Plan for allocating income to Participants’
Accounts.

	 	(d)	 	If an Excess Deferral has been distributed to the Participant pursuant to
Section 12.02 for any taxable year of a Participant, then any Excess ADP Deferral
allocable to such Participant for the same Plan Year in which such taxable year ends
shall be reduced by the amount of such Excess Deferral.

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	 	(e)	 	Any Employer Matching Contribution allocable to an Excess ADP Deferral that is
returned to the Participant pursuant to this Section 12.05 shall be forfeited
notwithstanding the provisions of Article 7 (vesting). In this regard, any
distributions made to a Highly Compensation Employee to correct Excess ADP Deferrals
for a Plan Year shall be made in the following order:

	 	(1)	 	First on a pro-rata basis from his unmatched Salary Savings
Contributions and Roth 401(k) Contributions for the Plan Year;

	 	(2)	 	Then, on a pro-rata basis from his matched Salary Savings
Contributions and Roth 401(k) Contributions for the Plan Year; and

	 	(3)	 	Then from his Elective Profit Sharing Contributions for the
Plan Year.

	12.06	 	Average Actual Contribution Percentage.

	 	(a)	 	The Average Actual Contribution Percentage for Highly Compensated Employees for
each Plan Year and the Average Actual Contribution Percentage for Non-Highly
Compensated Employees for the preceding Plan Year must satisfy one of the following
tests:

	 	(1)	 	The Average Actual Contribution Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Contribution Percentage for the preceding Plan Year for Participants who
were Non-Highly Compensated Employees for such Plan Year multiplied by 1.25; or

	 	(2)	 	The excess of the Average Actual Contribution Percentage for
Participants who are Highly Compensated Employees for the Plan Year over the
Average Actual Contribution Percentage for the preceding Plan Year for
Participants who were Non-Highly Compensated Employees for such Plan Year is
not more than two percentage points, and the Average Actual Contribution
Percentage for Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Contribution Percentage for the
preceding Plan Year for Participants who were Non-Highly Compensated Employees
for such Plan Year multiplied by two.

	 	(b)	 	If at the end of the Plan Year, the Plan does not comply with the provisions of
Section 12.06(a), the Employer may do any or all of the following in order to comply
with such provision as applicable (except as otherwise provided in the Code or in
Treasury Regulations):

	 	(1)	 	Aggregate Qualified Elective Deferrals with the Employer
Matching Contributions or, for Plan Years beginning prior to April 1, 2001,
Voluntary
After-Tax Contributions of Non-Highly Compensated Employees as provided in
Section 12.01 (definition of ACP).

	 	(2)	 	Distribute vested Employer Matching Contributions to certain
Highly Compensated Employees as provided in Section 12.08.

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	 	(3)	 	Make a Qualified Non-Elective Contribution on behalf of any or
all of the Non-Highly Compensated Employees and aggregate such contributions
with the Non-Highly Compensated Employees’ Employer Matching Contributions as
provided in Section 12.01 (definition of ACP).

	 	(4)	 	Forfeit non-vested Employer Matching Contributions of certain
Highly Compensated Employees as provided in Section 12.09.

	12.07	 	Special Rules For Determining Average Actual Contribution Percentages.

	 	(a)	 	The Actual Contribution Percentage for any Highly Compensated Employee for the
Plan Year who is eligible to have Employer Matching Contributions allocated to his
account under two or more arrangements described in Sections 401(a) or 401(m) of the
Code that are maintained by the Employer shall be determined as if such contributions
were made under a single arrangement.

	 	(b)	 	If two or more plans maintained by the Employer are treated as one plan for
purposes of the nondiscrimination requirements of Code Section 401(a)(4) or the
coverage requirements of Code Section 410(b) (other than for purposes of the average
benefits test), all Employer Matching Contributions that are made pursuant to those
plans shall be treated as having been made pursuant to one plan.

	 	(c)	 	The determination and treatment of the Actual Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.

	12.08	 	Distribution of Employer Matching Contributions.

	 	(a)	 	Employer Matching Contributions exceeding the limitations of Section 12.06(a)
(“Excess ACP Contributions”) and any income or loss allocable to such Excess ACP
Contribution may be designated by the Committee as Excess ACP Contributions and may be
distributed in the Plan Year following the Plan Year in which the Excess ACP
Contributions arose to those Highly Compensated Employees whose Accounts were credited
with the largest amounts of Employer Matching Contributions during the preceding Plan
Year. The amount of Excess ACP Contributions to be distributed to a Highly Compensated
Employee shall be determined using the procedure described in Section 12.05(a).

	 	(b)	 	To the extent administratively possible, the Committee shall distribute all
Excess ACP Contributions and any income or loss allocable thereto prior to 21/2 months
following the end of the Plan Year in which the Excess ACP Contributions arose. In any
event,
however, the Excess ACP Contributions and any income or loss allocable thereto shall
be distributed prior to the end of the Plan Year following the Plan Year in which
the Excess ACP Contributions arose. The distribution of the Excess ACP Contributions
shall be adjusted for income or loss during the Plan Year only, and not for the
period between the end of the Plan Year and the date of the distribution.

	 	(c)	 	The income or loss allocable to Excess ACP Contributions shall be determined by
multiplying the income or loss allocable to the Participant’s Account for the Plan Year
in which the Excess ACP Contribution arose by a fraction. The numerator of the
fraction is

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	 	 	 	the Excess ACP Contributions. The denominator of the fraction is the value
of the Participant’s Account on the last day of the Plan Year reduced by any income
allocated to the Participant’s Account by such Plan Year and increased by any loss
allocated to the Participant’s Account for the Plan Year. The income or loss allocable
to Excess ACP Contributions may be calculated using any reasonable method for computing
such income or loss, provided the method does not discriminate in favor of Highly
Compensated Employees, is used consistently for all participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for allocating
income to Participants’ Accounts.

	 	(d)	 	Amounts distributed to Highly Compensated Employees under this Section 12.08
shall be treated as annual additions with respect to the Employee who received such
amount.

	 	(e)	 	No unvested Employer Matching Contributions shall be distributed pursuant to
this Section 12.08. Such amounts may, however, be forfeited pursuant to Section 12.09.

	12.09	 	Forfeiture of Excess ACP Contributions.

	 	(a)	 	A nonvested Employer Matching Contribution and any income or loss allocable to
such nonvested Employer Matching Contribution for the Plan Year may be forfeited and
used to reduce an Excess ACP Contribution. Such forfeited Employer Matching
Contribution shall be allocated as a forfeiture in accordance with Section 5.06.

	 	(b)	 	The amount of any Employer Matching Contribution to be forfeited by a
particular Highly Compensated Employee shall be determined pursuant to the procedure
described in Section 12.05(a).

	 	(c)	 	The income or loss allocable to Excess ACP Contributions shall be determined
pursuant to the formula described in Section 12.08(c).

	 	(d)	 	Amounts forfeited by Highly Compensated Employees under this Section shall be
treated as Annual Additions with respect to the Participant who forfeited such amount
and with respect to any Participant to whose account the forfeiture was allocated.

	 	(e)	 	Vested Employer Matching Contributions may not be forfeited to correct an
Excess ACP Contribution.

	12.10	 	Order of Applying Certain Sections of Article.
	 
	 	 	In applying the provisions of this Article 12, the determination and
distribution of Excess Deferrals shall be made first, the
determination and elimination of Excess ADP Deferrals shall be made
second and the determination and elimination of Excess ACP
Contributions shall be made last.

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ARTICLE 13

HIGHLY COMPENSATED EMPLOYEES

	13.01	 	In General.
	 
	 	 	For the purposes of this Plan, the term “Highly Compensated
Employee” is any active Employee described in Section 13.02 below
and any Former Employee described in Section 13.03 below. Various
definitions used in this Article are contained in Section 13.04. A
“Non-Highly Compensated Employee” is an Employee who is not a Highly
Compensated Employee.
	 
	13.02	 	Highly Compensated Employees.
	 
	 	 	An Employee is a Highly Compensated Employee if the Employee:

	 	(1)	 	is a 5 Percent Owner at any time during the Determination Year
or the year preceding the Determination Year; or

	 	(2)	 	during the year preceding the Determination Year, receives
Compensation in excess of $105,000 (as adjusted for increases in the cost of
living as provided in Section 414(q)(1) of the Code).

	13.03	 	Former Highly Compensated Employee.
	 
	 	 	A Former Employee is a Highly Compensated Employee if (applying the
rules of Section 13.02) the Former Employee was a Highly Compensated
Employee during a Separation Year or during any Determination Year
ending on or after the Former Employee’s 55th birthday.
	 
	13.04	 	Definitions.
	 
	 	 	The following special definitions shall apply to this Article 13:
	 
	 	 	Determination Year shall mean the Plan Year for which an individual’s status as a Highly Compensated Employee is
determined.
	 
	 	 	5 Percent Owner shall mean any Employee who owns or is deemed to own
(within the meaning of Code Section 318), more than five percent of
the value of the outstanding stock of the Employer or stock
possessing more than five percent of the total combined voting power
of the Employer.
	 
	 	 	Former Employee shall mean an Employee (i) who has incurred a
Termination of Employment or (ii) who remains employed by the
Employer but who has not performed services for the Employer during
the Determination Year (e.g., an Employee on Authorized Leave of
Absence).
	 
	 	 	Separation Year shall mean any of the following years:

	 	(1)	 	An Employee who incurs a Termination of Employment shall have a Separation Year
in the Determination Year in which such Termination of Employment occurs;

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	 	(2)	 	An Employee who remains employed by the Employer but who temporarily ceases to
perform services for the Employer (e.g., an Employee on Authorized Leave of Absence)
shall have a Separation Year in the calendar year in which he last performs services
for the Employer;

	 	(3)	 	An Employee who remains employed by the Employer but whose Compensation for a
calendar year is less than 50% of the Employee’s average annual Compensation for the
immediately preceding three calendar years (or the Employee’s total years of
employment, if less) shall have a Separation Year in such calendar year. However, such
Separation Year shall be ignored if the Employee remains employed by the Employer and
the Employee’s Compensation returns to a level comparable to the Employee’s
Compensation immediately prior to such Separation Year.

	13.05	 	Other Methods Permissible.
	 
	 	 	To the extent permitted by the Code, judicial decisions, Treasury
Regulations and IRS pronouncements, the Committee may (without
further amendment to this Plan) take such other steps and actions or
adopt such other methods or procedures (in addition to those methods
and procedures described in this Article 13) to determine and
identify Highly Compensated Employees (including adopting
alternative definitions of Compensation that satisfy Code Section
414(q)(7) and are uniformly applied).

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ARTICLE 14

MAXIMUM BENEFITS

	14.01	 	General Rule.

	 	(a)	 	Except to the extent permitted by Section 4.01(d) of the Plan and Section
414(v) of the Code, if applicable, the Annual Addition that may be contributed or
allocated to a Participant’s Account under the Plan for any Limitation Year shall not
exceed the lesser of:

	 	(i)	 	$49,000, as adjusted for increases in the cost-of-living under
Section 415(d) of the Code, or

	 	(ii)	 	100 percent (100%) of the Participant’s Compensation for the
Limitation Year. The compensation limit referred to in this paragraph (ii)
shall not apply to any contribution for medical benefits after separation from
service (within the meaning of 401(h) or Section 419A(f)(2) of the Code that is
otherwise treated as an Annual Addition.

	 	(b)	 	The Employer hereby elects that the Limitation Year for purposes of Code
Section 415 shall be the Plan Year.

	 	(c)	 	If the amount to be allocated to a Participant’s Account exceeds the maximum
permissible amount (and for this purpose Employer Contributions shall be deemed to be
allocated after Employee Contributions), the excess will be disposed of as follows.
First, if the Participant’s Annual Additions exceed the maximum permissible amount as a
result of (i) a reasonable error in estimating the Participant’s Compensation, (ii) a
reasonable error in estimating the amount of Employee Contributions that the
Participant could make under Code Section 415, (iii) the allocation of forfeitures or
(iv) other facts and circumstances that the Internal Revenue Service finds justifiable,
the Committee may direct the Trustee to return to the Participant his Employee
Contributions (and any income allocable to such Employee Contributions) for such Plan
Year to the extent necessary to reduce the excess amount. Such returned Employee
Contributions shall be ignored in performing the discrimination tests of Article 12.
Second, any excess Annual Additions still remaining after the return of Employee
Contributions shall be reallocated as determined by the Committee among the
Participants whose accounts have not exceeded the limit in the same proportion that the
Compensation of each such Participant bears to the Compensation of all such
Participants. If such reallocation would result in an addition to another
Participant’s Account which exceeds the permitted limit, that excess shall likewise be
reallocated among the Participants whose Accounts do not exceed the limit. However, if
the allocation or reallocation of the excess amounts pursuant to these provisions
causes the limitations of Section 415 of the Code to be exceeded with respect to each
Participant for the Limitation Year, then any such excess shall be held unallocated in
a 415 Suspense Account. If the 415 Suspense Account is in existence at any time during
a Limitation Year, other than the Limitation Year described in the preceding sentence,
all amounts in the 415 Suspense Account shall be allocated and reallocated to
Participants’ Accounts (subject to the limitations of Code Section 415)
before any Contributions that would constitute Annual Additions may be made to the

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	 	 	 	Plan for that Limitation Year. Notwithstanding the foregoing, the provisions of
this Section 14.01(c) shall not apply during any Limitation Year beginning on or
after January 1, 2008.

	 	(d)	 	If the Participant is covered under another qualified defined contribution plan
maintained by the Employer during any Limitation Year, the Annual Additions that may be
credited to a Participant’s Account under this Plan for any such Limitation Year shall
not exceed the maximum permissible amount described above reduced by the Annual
Additions credited to the Participant’s accounts under all such other plans for the
same Limitation Year. If a Participant’s Annual Additions under this Plan and such
other plans would result in an excess amount for a Limitation Year, the excess amount
will be deemed to consist of the Annual Additions last allocated (and for this purpose,
Employer Contributions shall be deemed to be allocated after Employee Contributions).
If an excess amount is allocated to a Participant on an allocation date of this Plan
that coincides with an allocation date of another plan, the excess amount attributed to
this Plan will be the product of

	 	(i)	 	the total excess amount as of such date, times

	 	(ii)	 	the ratio of (A) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to (B) the
total Annual Additions allocated to the Participant for the Limitation Year as
of such date under this and all the other qualified defined contribution plans
maintained by the Employer.

	14.02	 	Definitions.
	 
	 	 	For the purposes of this Article 14, the following definitions shall apply:

	 	 	Annual Addition shall mean the sum of:

	 	(1)	 	Employer Contributions;

	 	(2)	 	Salary Savings Contributions, Roth 401(k) Contributions and
Elective Profit Sharing Contributions;

	 	(3)	 	Forfeitures; and

	 	(4)	 	Amounts described in Code Sections 415(l)(1) and 419A(d)(2).

	 	 	Annual Additions shall not include any amounts credited to the Participant’s Account
resulting from Catch-Up Contributions or Rollover Contributions.

	 	 	Affiliates shall have that meaning contained in Article 2 except that for purposes
of determining who is an Affiliate, the phrase “more than 50 percent” shall be substituted
for the phrase “at least 80 percent” each place it appears in Code Section 1563(a)(1).

	 	 	Compensation for purposes of this Article 14 shall mean the gross annual earnings
required to be reported on a Participant’s Form W-2 (box 1) under Code Sections 6041(d),
6051(a)(3) and
6052. Compensation shall also include Salary Savings Contributions, Elective Profit Sharing
Contributions, Non-elective Contributions, salary reduction contributions to any Section 125
Plan

- 61 -

 

	 	 	maintained by the Employer, and amounts applied at the election of the Participant to
purchase benefits under an arrangement described in Code Section 132(f).

	 	 	For Limitation Years beginning on or after January 1, 2008, except as otherwise provided
below, the term Compensation for purposes of this Article 14 shall not include any amounts
paid by the Company or an Affiliate to an Employee after such Employee severs employment
with the Company and the Affiliates. However, such Compensation shall include regular
compensation for services during the Employee’s regular working hours, or compensation for
services outside the Employee’s regular working hours (such as overtime or shift
differential), commissions, bonuses, or other similar payments, that are paid after the
Employee severs employment with the Company and the Affiliates, provided that (i) the
amounts are paid by the later of 21/2 months after such severance from employment or the end
of the limitation year that includes the date of the severance from employment, and (ii)
those amounts would have been included as Compensation for purposes of this Article 14 if
they were paid prior to the Employee’s severance from employment.

	 	 	Other post-severance payments (such as severance pay, parachute payments within the meaning
of Code Section 280G(b)(2), or post-severance payments under a nonqualified unfunded
deferred compensation plan that would not had been paid if the Employee had continued in
employment) are not included in this definition of Compensation even if such amounts are
paid within the time period described in the preceding paragraph.

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ARTICLE 15

TOP HEAVY RULES

	15.01	 	General.

	 	 	The provisions of this Article of the Plan shall become effective in any Plan Year in which
the Plan is determined to be Top Heavy and shall supersede any conflicting provision of this
Plan.

	15.02	 	Definitions.

	 	(a)	 	Top Heavy. The Plan shall be Top Heavy for the Plan Year if, as of the
Valuation Date that coincides with or immediately precedes the Determination Date, the
value of the Accounts of Key Employees exceeds 60% of the value of the Accounts of all
Participants.
	 
	 	 	 	If the Employer maintains more than one plan, all plans in which any Key Employee
participates and all plans that enable this Plan to satisfy the nondiscrimination
requirements of Section 401(a)(4) or 410 of the Code must be combined with this Plan
(a “Required Aggregation Group”) for the purposes of applying the 60% test described
above. Plans maintained by the Employer that are not in the Required Aggregation
Group may be combined, at the Employer’s election, with this Plan for the purposes
of determining Top Heavy status if the combined group (the “Permissive Aggregation
Group”) satisfies the requirements of Sections 401(a)(4) and 410 of the Code.
	 
	 	 	 	In determining the value of the Participants’ Accounts, all distributions made with
respect to the Employee under the Plan and any plan aggregated with the Plan under
Section 416(g)(2) of the Code during the one-year period ending on the Determination
Date shall be included and any unallocated Employer Contributions or forfeitures
attributable to the Plan Year in which the Determination Date falls shall also be
included. The preceding sentence shall also apply to distributions under a
terminated plan which, had it not been terminated, would have been aggregated with
the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution
made for a reason other than severance from employment, death or disability, this
provision shall be applied by substituting “five-year period” for “one-year period”.
The Account of (i) any Employee who at one time was a Key Employee but who is not a
Key Employee for any of the five Plan Years ending on the Determination Date, and
(ii) any Employee who has not performed services for the Employer or a related
employer maintaining a plan in the aggregation group for the one-year period ending
on the Determination Date, shall be disregarded in determining Top Heavy status.
	 
	 	 	 	If the Employer maintains a defined benefit plan during the Plan Year that is
subject to aggregation with this Plan, the 60% test shall be applied after
calculating the present value of the Participants’ accrued benefits under the
defined benefit plan in accordance with the rules set forth in that plan and
combining the present value of such accrued benefits with the Participant’s’ Account
balances under this Plan.
	 
	 	 	 	Solely for the purpose of determining if the Plan, or any other plan included in the
Required Aggregation Group, is Top-Heavy, a Non-Key Employee’s accrued benefit in a

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	 	 	 	defined benefit plan shall be determined under (i) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the Employer, or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Code Section
411(b)(1)(C).

	 	(b)	 	Key Employee. Any employee or former employee (including any deceased
employee) of the Employer who, at any time during the Plan Year that includes the
Determination Date, was an officer of the Employer having annual compensation greater
than $150,000 (as adjusted under section 416(i)(1) of the Code), a 5-percent owner or
the Employer, or a 1-percent owner of the Employer having annual compensation of more
than $150,000. For this purpose, annual compensation means compensation within the
meaning of Section 415(c)(3) of the Code. The determination of who is a Key Employee
shall be made in accordance with Section 416(i)(1) of the Code and the applicable
regulations and other guidance of general applicability issued thereunder.

	 	(c)	 	Determination Date. The last day of the Plan Year immediately
preceding the Plan Year for which Top Heavy status is determined. For the first Plan
Year, the Determination Date shall be the last day of the first Plan Year.

	 	(d)	 	Non-Key Employee. Any Employee who is not a Key Employee.

	15.03	 	Minimum Benefit.

	 	(a)	 	Except as provided below, the Employer Contributions allocated on behalf of any
Non-Key Employee who is employed by the Employer on the last day of the Top Heavy Plan
Year shall not be less than the lesser of (i) 3% of such Non-Key Employee’s
Compensation or (ii) the largest percentage of Employer Contributions, Salary Savings
Contributions and Elective Profit Sharing Contributions, as a percentage of the Key
Employee’s Compensation, allocated on behalf of any Key Employee for such Plan Year.
Salary Savings Contributions and Elective Profit Sharing Contributions allocated to the
Accounts of Non-Key Employees shall not be considered in determining whether a Non-Key
Employee has received the minimum contribution required by this Section 15.03, but
Employer Matching Contributions shall be taken into account for purposes of satisfying
the minimum contribution requirements of Code Section 416(c)(2) and the Plan.

	 	(b)	 	The minimum allocation is determined without regard to any Social Security
contribution and shall be made even though, under other Plan provisions, the Non-Key
Employee would have received a lesser allocation or no allocation for the Plan Year
because of the Non-Key Employee’s failure to complete 1,000 Hours of Service, his
failure to make mandatory employee contributions, or his earning compensation less than
a stated amount.

	 	(c)	 	If the Employer maintains a defined benefit plan in addition to this Plan, the
minimum contribution and benefit requirements for both plans in a Top Heavy Plan Year
may be satisfied by an allocation of Employer Contributions to the Account of each
Non-Key Employee in the amount of 5% of the Non-Key Employee’s compensation.

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ARTICLE 16

MISCELLANEOUS

	16.01	 	Headings.
	 
	 	 	The headings and sub-headings in this Plan have been inserted for
convenience of reference only and are to be ignored in any
construction of the provisions hereof.
	 
	16.02	 	Action by Employer.
	 
	 	 	Any action by an Employer under this Plan shall be by resolution of
its Board of Directors, or by any person or persons duly authorized
by resolution of said Board to take such action.
	 
	16.03	 	Spendthrift Clause.
	 
	 	 	Except as otherwise required by a “qualified domestic relations
order” as defined in Code Section 414(p) or by any judgment, order,
decree and/or settlement agreement (as defined in Code Section
401(a)(13)(C)) entered on or after August 5, 1997, none of the
benefits, payments, proceeds or distributions under this Plan shall
be subject to the claim of any creditor of any Participant or
Beneficiary, or to any legal process by any creditor of such
Participant or Beneficiary, and none of them shall have any right to
alienate, commute, anticipate or assign any of the benefits,
payments, proceeds or distributions under this Plan except for the
extent expressly provided herein to the contrary.
	 
	16.04	 	Distributions Upon Plan Termination.
	 
	 	 	Subject to Article 12, Salary Savings Contributions and Elective
Profit Sharing Contributions, and any income attributable thereto,
shall be distributed to the Participants or their Beneficiaries in
the form of lump sum distributions as soon as administratively
feasible after the termination of the Plan, provided that neither
the Company nor its Affiliates establish or maintain an alternative
defined contribution plan. For this purpose, the definition of the
term “alternative defined contribution plan” shall be governed by
Treasury Regulation Section 1.401(k)-1(d)(4)(i) or any successor
Treasury Regulation thereto.
	 
	16.05	 	Discrimination.
	 
	 	 	The Employer, the Committee, the Trustee and all other persons
involved in the administration and operation of the Plan shall
administer and operate the Plan and Trust in a uniform and
consistent manner with respect to all Participants similarly
situated and shall not permit discrimination in favor of Highly
Compensated Employees.
	 
	16.06	 	Release.
	 
	 	 	Any payment to a Participant or Beneficiary, or to their legal
representatives, in accordance with the provisions of this Plan,
shall to the extent thereof be in full satisfaction of all claims
hereunder against the Trustee, Committee, Committee and the
Employer, any of whom may require such Participant, Beneficiary, or
legal representative, as a condition precedent to such
payment, to

- 65 -

 

	 	 	execute a receipt and release therefor in such form as shall be determined by
the Trustee, the Committee, or the Employer, as the case may be.

	16.07	 	Compliance with Applicable Laws.
	 
	 	 	The Company, through the Committee, shall interpret and administer
the Plan in such manner that the Plan and Trust shall remain in
compliance with the Code, with ERISA, and all other applicable laws,
regulations, and rulings.
	 
	16.08	 	Merger.
	 
	 	 	In the event of any merger or consolidation of the Plan with any
other Plan, or the transfer of assets or liabilities by the Plan to
another Plan, each Participant must receive (assuming that the Plan
would terminate) the benefit immediately after the merger,
consolidation, or transfer that is equal to or greater than the
benefit such Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (assuming
that the Plan had then terminated), provided such merger,
consolidation, or transfer took place after the date of enactment of
ERISA.
	 
	16.09	 	Governing Law.
	 
	 	 	The Plan and Trust shall be governed by the laws of the State of
Florida to the extent that such laws are not preempted by Federal
law.
	 
	16.10	 	Legally Incompetent.
	 
	 	 	If any Participant, former Employee or Beneficiary is a minor or, in
the judgment of the Committee is otherwise legally incapable of
personally receiving and giving a valid receipt for any payment due
him hereunder, the Committee may, unless and until a claim shall
have been made by a duly appointed guardian or committee of such
person, direct that such payment or any part thereof be made to such
person’s Spouse, child, parent, brother, sister, or such other
person deemed by the Committee to have incurred expense for or
assumed responsibility for the expense of such person. Such payment
shall fully discharge the Trustee, Employer, Committee and Committee
from further liability on account thereof.
	 
	16.11	 	Location of Participant or Beneficiary Unknown.
	 
	 	 	In the event that all or any portion of the distribution payable to
a Participant or his Beneficiary shall remain unpaid solely by
reason of the Committee’s inability to ascertain the whereabouts of
such Participant or Beneficiary, the amount unpaid shall be
forfeited. However, such forfeiture shall not occur until five (5)
years after the amount first became payable. The Committee shall
make a diligent effort to locate the Participant or Beneficiary
including the mailing of a registered letter, return receipt
requested, to the last known address of such Participant or
Beneficiary. In the event a Participant or Beneficiary is located
subsequent to his benefit being forfeited, such benefit shall be
restored and distributed.
	 
	16.12	 	Protected Benefits.
	 
	 	 	Early retirement benefits, retirement-type subsidies, or optional
forms of benefits protected under Code Section 411(d)(6) shall not
be reduced or eliminated with respect to such benefits that have

- 66 -

 

	 	 	already accrued unless such reduction or elimination is permitted
under the Code authority issued by the Internal Revenue Service, or
judicial authority.
	 
	16.13	 	Qualified Military Service.

	 	 	Notwithstanding any provision of this Plan to the contrary, contributions, benefits, and
service credit with respect to qualified military service will be provided in accordance
with Section 414(u) of the Internal Revenue Code.

- 67 -

 

     IN WITNESS WHEREOF, the Company has caused this amendment and restatement of the Plan to be
duly executed and adopted on behalf of the Company effective as of January 1, 2009.

	 	 	 	 	 	 	 	 	 

	 	 	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	SEACOAST NATIONAL BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Dennis S. Hudson, III
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Chairman & Chief Executive Officer
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:

	 	 	 	Date:
	 	July 21, 2009	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Sharon Mehl
 

	 	 	 	 	 	 	 	 

- 68 -

 

APPENDIX A

PREDECESSOR EMPLOYERS AND PAST SERVICE CREDIT RULES

	I.	 	Employees of the Port St. Lucie National Bank and The Spirit Mortgage Corporation.

	 	 	Immediate Eligibility. Persons employed at Port St. Lucie National Bank and The
Spirit Mortgage Corporation who become Eligible Employees of the Employer on July 1, 1997
shall be eligible to participate in this Plan on July 1, 1997.

	 	 	Past Service Credit. Each Employee of Port St. Lucie National Bank and The Spirit
Mortgage Corporation shall be credited with Vesting Service and Eligibility Service under
the Plan equal to such Employee’s Years of Service under the Port St. Lucie National Bank
Retirement Savings Plan as of May 31, 1997.

	II.	 	Employees of the Walmart Branch of Bank Atlantic in Fort Pierce, Florida.

	 	 	Immediate Eligibility. Persons employed at the Walmart Branch of Bank Atlantic in
Fort Pierce, Florida (“Bank Atlantic”) who become Eligible Employees of the Employer on June
25, 2001, shall be eligible to participate in this Plan as soon as administratively feasible
on or after June 25, 2001.

	 	 	Past Service Credit for Vesting. Employment with Bank Atlantic or any other
corporation or business entity controlled by Bank Atlantic prior to June 25, 2001 shall be
considered employment with the Employer for purposes of satisfying the vesting requirements
of Section 7.04(c).

	III.	 	Employees of the Vero Beach Branch of Bank Atlantic in Vero Beach, Florida.

	 	 	Immediate Eligibility. Persons employed at the Vero Beach Branch of Bank Atlantic
in Vero Beach, Florida (“Vero Beach Branch — Bank Atlantic”) who become Eligible Employees
of the Employer on January 24, 2005, shall be eligible to participate in this Plan as soon
as administratively feasible on or after January 24, 2005.

	 	 	Past Service Credit for Vesting. Employment with Vero Beach Branch — Bank Atlantic
or any other corporation or business entity controlled by Vero Beach Branch — Bank Atlantic
prior to January 24, 2005 shall be considered employment with the Employer for purposes of
satisfying the vesting requirements of Section 7.04(c).

	IV.	 	Employees of Century National Bank.

	 	 	Immediate Eligibility. Persons employed by Century National Bank who were eligible
to participate in the Century National Bank 401(k) Retirement Plan on April 1, 2005 shall be
eligible to participate in this Plan as soon as administratively feasible on or after April
31, 2005.

	 	 	Past Service Credit for Eligibility. Employment with Century National Bank or any
other corporation of business entity controlled by Century National Bank prior to May 1,
2005 shall be
considered employment with the Employer for purposes of satisfying the eligibility
requirements of Section 3.01(b)

- 69 -

 

	 	 	Past Service Credit for Vesting. Employment with Century National Bank or any other
corporation or business entity controlled by Century National Bank prior to May 1, 2005
shall be considered employment with the Employer for purposes of satisfying the vesting
requirements of Section 7.04(c).

	 	 	Profit Sharing Contribution. Notwithstanding Section 5.02(c) of the Plan, “Eligible
Compensation” for persons employed by Century Bank on May 1, 2005 will include base wages
(including commissions, but excluding overtime, bonuses and incentives) received from
Century Bank during 2005.

	V.	 	Employees of Big Lake National Bank.

	 	 	Immediate Eligibility. Persons employed by Big Lake National Bank (“Big Lake”) on
December 31, 2005 who were eligible to participate in the 401(k) Plan maintained by Big Lake
National Bank on January 1, 2006 shall be eligible to participate in this Plan as soon as
administratively feasible on or after April 1, 2006. Notwithstanding the foregoing, persons
employed by Big Lake or any other corporation or business entity controlled by Big Lake
prior to March 31, 2006 and classified by Big Lake as temporary employees are not eligible
to participate in the Plan.

	 	 	Past Service Credit for Eligibility. Employment with Big Lake or any other
corporation or business entity controlled by Big Lake prior to March 31, 2006 shall be
considered employment with the Employer for purposes of satisfying the eligibility
requirements of Section 3.01(b).

	 	 	Past Service Credit for Vesting. Employment with Big Lake or any other corporation
or business entity controlled by Big Lake prior to March 31, 2006 shall be considered
employment with the Employer for purposes of satisfying the vesting requirements of Section
7.04(c).

- 70 -exv4w1

Exhibit 4.1

 

Huntington Ingalls Industries, Inc.

as Issuer

and

The Bank of New York Mellon

as Trustee

 

Indenture

Dated as of March 11, 2011

 

6.875% Senior Notes due 2018

7.125% Senior Notes due 2021

 

 

 

CROSS-REFERENCE TABLE1

	 	 	 	 	 
	TIA Sections	 	Indenture Sections	 
	§ 310 (a)
	 	 	7.10	 
	(b)
	 	 	7.08	 
	§ 311
	 	 	7.03	 
	§ 312
	 	 	12.02	 
	§ 313
	 	 	7.06	 
	§ 314 (a)
	 	 	4, 4.02	 
	(c)
	 	 	12.04	 
	(e)
	 	 	12.05	 
	§ 315 (a)
	 	 	7.01, 7.02	 
	(b)
	 	 	7.02, 7.05	 
	(c)
	 	 	7.01	 
	(d)
	 	 	7.02	 
	(e)
	 	 	6.12, 7.02	 
	§ 316 (a)
	 	 	2.05, 6.02, 6.03, 6.05	 
	(b)
	 	 	6.06, 6.07	 
	(c)
	 	 	12.02	 
	§ 317
(a) (1)
	 	 	6.08	 
	(a) (2)
	 	 	6.09	 
	(b)
	 	 	2.03	 
	§ 318
	 	 	12.01	 

2

 

RECITALS

	 	 	 	 	 

	ARTICLE 1

Definitions And Incorporation By Reference

	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	2	 
	Section 1.02. Rules of Construction
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 2

The Notes

	 
	 	 	 	 
	Section 2.01. Form, Dating and Denominations; Legends
	 	 	30	 
	Section 2.02. Execution and Authentication; Exchange Notes; Additional Notes
	 	 	31	 
	Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust
	 	 	33	 
	Section 2.04. Replacement Notes
	 	 	33	 
	Section 2.05. Outstanding Notes
	 	 	34	 
	Section 2.06. Temporary Notes
	 	 	34	 
	Section 2.07. Cancellation
	 	 	35	 
	Section 2.08. CUSIP and CINS Numbers
	 	 	35	 
	Section 2.09. Registration, Transfer and Exchange
	 	 	35	 
	Section 2.10. Restrictions on Transfer and Exchange
	 	 	39	 
	Section 2.11. Temporary Offshore Global Notes
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 3

Redemption; Offer to Purchase

	 
	 	 	 	 
	Section 3.01. Optional Redemption
	 	 	42	 
	Section 3.02. Redemption with Proceeds of Public Equity Offering
	 	 	43	 
	Section 3.03. Special Redemption
	 	 	43	 
	Section 3.04. Mandatory Redemption
	 	 	44	 
	Section 3.05. Method and Effect of Redemption
	 	 	44	 
	Section 3.06. Offer to Purchase
	 	 	46	 
	 
	 	 	 	 
	ARTICLE 4

Covenants

	 
	 	 	 	 
	Section 4.01. Payment Of Notes
	 	 	48	 
	Section 4.02. Maintenance Of Office Or Agency
	 	 	49	 
	Section 4.03. Existence
	 	 	49	 
	Section 4.04. [Reserved].
	 	 	49	 
	Section 4.05. [Reserved].
	 	 	49	 
	Section 4.06. Limitation on Debt
	 	 	49	 
	Section 4.07. Limitation on Restricted Payments
	 	 	53	 

3

 

	 	 	 	 	 

	Section 4.08. Limitation on Liens
	 	 	58	 
	Section 4.09. Limitation on Dividend and other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	58	 
	Section 4.10. Guaranties by Restricted Subsidiaries
	 	 	60	 
	Section 4.11. Repurchase of Notes Upon a Change of Control
	 	 	60	 
	Section 4.12. Limitation on Asset Sales
	 	 	60	 
	Section 4.13. Limitation on Transactions with Affiliates
	 	 	62	 
	Section 4.14. Line of Business
	 	 	64	 
	Section 4.15. Designation of Restricted and Unrestricted Subsidiaries
	 	 	64	 
	Section 4.16. Limitation on Actions of Current NGC
	 	 	65	 
	Section 4.17. Restrictive Covenants
	 	 	66	 
	Section 4.18. Financial Reports
	 	 	66	 
	Section 4.19. Reports to Trustee
	 	 	67	 
	Section 4.20. Suspension Of Certain Covenants
	 	 	68	 
	 
	ARTICLE 5

Consolidation, Merger or Sale of Assets

	 
	Section 5.01. Consolidation, Merger or Sale of Assets by the Company
	 	 	69	 
	Section 5.02. Consolidation, Merger or Sale of Assets by a Guarantor
	 	 	70	 
	 
	 	 	 	 
	ARTICLE 6

Default and Remedies

	 
	 	 	 	 
	Section 6.01. Events of Default
	 	 	71	 
	Section 6.02. Acceleration
	 	 	73	 
	Section 6.03. Waiver of Past Defaults
	 	 	73	 
	Section 6.04. Other Remedies
	 	 	74	 
	Section 6.05. Control by Majority
	 	 	74	 
	Section 6.06. Limitation on Suits
	 	 	74	 
	Section 6.07. Rights of Holders to Receive Payment
	 	 	75	 
	Section 6.08. Collection Suit by Trustee
	 	 	75	 
	Section 6.09. Trustee May File Proofs of Claim
	 	 	75	 
	Section 6.10. Priorities
	 	 	76	 
	Section 6.11. Restoration of Rights and Remedies
	 	 	76	 
	Section 6.12. Undertaking for Costs
	 	 	76	 
	Section 6.13. Rights and Remedies Cumulative
	 	 	76	 
	Section 6.14. Delay or Omission Not Waiver
	 	 	77	 
	Section 6.15. Waiver of Stay, Extension or Usury Laws
	 	 	77	 
	 
	 	 	 	 
	ARTICLE 7

The Trustee

	 
	 	 	 	 
	Section 7.01. General
	 	 	77	 
	Section 7.02. Certain Rights of Trustee
	 	 	78	 
	Section 7.03. Individual Rights of Trustee
	 	 	80	 

4

 

	 	 	 	 	 

	Section 7.04. Trustee’s Disclaimer
	 	 	80	 
	Section 7.05. Notice of Default
	 	 	81	 
	Section 7.06. Reports by Trustee to Holders
	 	 	81	 
	Section 7.07. Compensation and Indemnity
	 	 	81	 
	Section 7.08. Replacement of Trustee
	 	 	82	 
	Section 7.09. Successor Trustee by Merger
	 	 	83	 
	Section 7.10. Eligibility
	 	 	83	 
	Section 7.11. Money Held in Trust
	 	 	83	 
	 
	 	 	 	 
	ARTICLE 8

Defeasance and Discharge

	 
	 	 	 	 
	Section 8.01. Discharge of Company’s Obligations
	 	 	83	 
	Section 8.02. Legal Defeasance
	 	 	84	 
	Section 8.03. Covenant Defeasance
	 	 	86	 
	Section 8.04. Application of Trust Money
	 	 	86	 
	Section 8.05. Repayment to Company
	 	 	87	 
	Section 8.06. Reinstatement
	 	 	87	 
	 
	 	 	 	 
	ARTICLE 9

Amendments, Supplements and Waivers

	 
	 	 	 	 
	Section 9.01. Amendments without Consent of Holders
	 	 	87	 
	Section 9.02. Amendments with Consent of Holders
	 	 	88	 
	Section 9.03. Effect of Consent
	 	 	90	 
	Section 9.04. Trustee’s Rights and Obligations
	 	 	90	 
	Section 9.05. Conformity with Trust Indenture Act
	 	 	90	 
	Section 9.06. Payments for Consents
	 	 	90	 
	 
	 	 	 	 
	ARTICLE 10

Guaranties

	 
	 	 	 	 
	Section 10.01. The Guaranties
	 	 	90	 
	Section 10.02. Guaranty Unconditional
	 	 	91	 
	Section 10.03. Discharge; Reinstatement
	 	 	92	 
	Section 10.04. Waiver by the Guarantors
	 	 	92	 
	Section 10.05. Subrogation and Contribution
	 	 	92	 
	Section 10.06. Stay of Acceleration
	 	 	92	 
	Section 10.07. Limitation on Amount of Guaranty
	 	 	92	 
	Section 10.08. Execution and Delivery of Guaranty
	 	 	92	 
	Section 10.09. Release of Guaranty
	 	 	93	 
	 
	 	 	 	 
	ARTICLE 11

Escrow Arrangements

	 
	 	 	 	 
	Section 11.01. Escrow Account
	 	 	93	 

5

 

	 	 	 	 	 

	Section 11.02. Special Redemption
	 	 	94	 
	Section 11.03. Release of Escrow Property
	 	 	94	 
	Section 11.04. Trustee Direction to Execute Escrow Agreement
	 	 	94	 
	 
	 	 	 	 
	ARTICLE 12

Miscellaneous

	 
	 	 	 	 
	Section 12.01. Trust Indenture Act of 1939
	 	 	94	 
	Section 12.02. Noteholder Communications; Noteholder Actions
	 	 	94	 
	Section 12.03. Notices
	 	 	95	 
	Section 12.04. Certificate and Opinion as to Conditions Precedent
	 	 	96	 
	Section 12.05. Statements Required in Certificate or Opinion
	 	 	97	 
	Section 12.06. Payment Date Other Than a Business Day
	 	 	97	 
	Section 12.07. Governing Law; Waiver of Trial by Jury
	 	 	97	 
	Section 12.08. No Adverse Interpretation of Other Agreements
	 	 	97	 
	Section 12.09. Successors
	 	 	97	 
	Section 12.10. Duplicate Originals
	 	 	98	 
	Section 12.11. Separability
	 	 	98	 
	Section 12.12. Table of Contents and Headings
	 	 	98	 
	Section 12.13. No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders
	 	 	98	 

6

 

	 	 	 

	EXHIBITS
	 	 
	EXHIBIT A

	 	Form of 2018 Note
	EXHIBIT B

	 	Form of 2021 Note
	EXHIBIT C

	 	Form of Supplemental Indenture
	EXHIBIT D

	 	Restricted Legend
	EXHIBIT E

	 	DTC Legend
	EXHIBIT F

	 	Regulation S Certificate
	EXHIBIT G

	 	Rule 144A Certificate
	EXHIBIT H

	 	Institutional Accredited Investor Certificate
	EXHIBIT I

	 	Certificate of Beneficial Ownership
	EXHIBIT J

	 	Temporary Offshore Global Note Legend

7

 

     INDENTURE, dated as of March 11, 2011, between Huntington Ingalls Industries, Inc., a Delaware
corporation, as the Company, the Guarantors party hereto and The Bank of New York Mellon, as
Trustee.

RECITALS

     The Company has duly authorized the execution and delivery of the Indenture to provide for the
issuance of up to $600,000,000 aggregate principal amount of the Company’s 6.875% Senior Notes Due
2018 (together with, if and when issued, any Additional Notes of such series together with any
Exchange Notes issued in exchange therefor as provided herein, the “2018 Notes”) and up to
$600,000,000 aggregate principal amount of the Company’s 7.125% Senior Notes Due 2021 (together
with, if and when issued, any Additional Notes of such series together with any Exchange Notes
issued in exchange therefor as provided herein, the “2021 Notes”, and collectively with the 2018
Notes, the “Notes”). Each of the 2018 Notes and the 2021 Notes constitute a separate series
hereunder. All things necessary to make the Indenture a valid agreement of the Company, in
accordance with its terms, have been done, and the Company has done all things necessary to make
the Notes (in the case of the Additional Notes, when duly authorized), when executed by the Company
and authenticated and delivered by the Trustee and duly issued by the Company, the valid
obligations of the Company as hereinafter provided.

     This Indenture is subject to, and will be governed by, the provisions of the Trust Indenture
Act that are required to be a part of and govern indentures qualified under the Trust Indenture
Act.

THIS INDENTURE WITNESSETH

     For and in consideration of the premises and the purchase of the Notes by the Holders thereof,
the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as
follows:

 

 

ARTICLE 1

Definitions And Incorporation By Reference

     Section 1.01. Definitions.

     “Accrued Yield” means, an amount in respect of each $1,000 principal amount of a Note that,
together with the accrued interest to be paid in a Special Redemption or a Mandatory Redemption,
will provide the Holder thereof with the yield to maturity on such Note, calculated on the basis of
a 360 day year and payable for the actual number of days elapsed from the Issue Date. “Yield to
maturity” means the annual yield to maturity of the Notes, calculated based on market convention
and as reflected in the pricing term sheet for the offering of the Initial Notes.

     “Acquired Debt” means Debt of a Person existing at the time the Person merges with or into, or
becomes a, Restricted Subsidiary or is assumed in connection with the acquisition of assets from
such Person and not Incurred in connection with, or in contemplation of, the Person merging with or
into or becoming a Restricted Subsidiary or such acquisition.

     “Additional Interest” means additional interest owed to the Holders pursuant to a Registration
Rights Agreement.

     “Additional Notes” means any Notes issued under the Indenture in addition to the Original
Notes of a series, including any Exchange Notes issued in exchange for such Additional Notes,
having the same terms in all respects as the Original Notes of a series, or in all respects except
with respect to the initial Interest Payment Date and interest paid or payable on or prior to the
first Interest Payment Date after the issuance of such Additional Notes and such Additional Notes
may have different issuance prices, initial interest accrual dates or initial interests payment
dates and may not have the benefit of any registration rights.

     “Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, such Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”) with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

     “Agent” means any Registrar, Paying Agent or Authenticating Agent.

     “Agent Member” means a member of, or a participant in, the Depositary.

2

 

     “Applicable Premium” means, with respect to any Note on any redemption date, the greater of
(1) 1.0% of the principal amount of such Note; and (2) the excess, if any, of (a) the present value
at such redemption date of (i) the redemption price of such Note on March 15, 2015 in the case of
the 2018 Notes and March 15, 2016 in the case of the 2021 Notes each as set forth under Section
3.01 plus (ii) all required interest payments due on such Note through March 15, 2015 in the case
of the 2018 Notes and March 15, 2016 in the case of the 2021 Notes (in each case, excluding accrued
but unpaid interest, if any, to the redemption date), computed using a discount rate equal to the
applicable Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal
amount of such Note.

     “Asset Sale” means any sale, lease, transfer or other disposition of any assets by the Company
or any Restricted Subsidiary, including by means of a merger, consolidation or similar transaction
and including any sale or issuance of the Equity Interests (other than directors’ qualifying shares
or shares or interests held by foreign nationals as required by law) of any Restricted Subsidiary
(each of the above referred to as a “disposition”), provided that the following are not included in
the definition of “Asset Sale”:

     (1) a disposition to the Company or a Restricted Subsidiary, including the sale or
issuance by the Company or any Restricted Subsidiary of any Equity Interests of any
Restricted Subsidiary to the Company or any Restricted Subsidiary;

     (2) the disposition by the Company or any Restricted Subsidiary of assets in the
ordinary course of business, including inventory and other assets acquired and held for
resale or rights granted to others pursuant to leases or licenses;

     (3) the disposition of cash, Cash Equivalents and cash management investments;

     (4) the disposition of scrap, damaged, worn out, obsolete, surplus, permanently
retired assets, or property or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries;

     (5) the sale or discount of accounts receivable arising in the ordinary course of
business not in connection with a securitization or factoring transaction;

     (6) a transaction covered by Article 5;

     (7) a Restricted Payment permitted under Section 4.07 or a Permitted Investment;

3

 

     (8) the issuance of Disqualified Stock or Preferred Stock of a non-Guarantor
Restricted Subsidiary pursuant to Section 4.06

     (9) the disposition of the Company’s interest, including Equity Interests and assets
related to, the shipyard located in Avondale, Louisiana or the facilities in Waggaman,
Louisiana, or Tallulah, Louisiana;

     (10) any sale of Equity Interests in, or Debt or other securities of, an Unrestricted
Subsidiary;

     (11) dispositions of Investments in joint ventures to the extent required by, or made
pursuant to, customary buy/sell or put/call arrangements between the joint venture parties
set forth in joint venture arrangements and similar binding arrangements;

     (12) any disposition in a transaction or series of related transactions of assets
with a fair market value of less than $10.0 million; and

     (13) any disposition of assets pursuant to the Transactions or the Interim Ordinary
Course Transactions.

     “Authenticating Agent” refers to a Person engaged to authenticate the Notes in the stead of
the Trustee.

     “Average Life” means, with respect to any Debt, the quotient obtained by dividing (i) the sum
of the products of (x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Debt and (y) the amount of such principal payment by
(ii) the sum of all such principal payments.

     “bankruptcy default” has the meaning assigned to such term in Section 6.01.

     “Board of Directors” means the board of directors or comparable governing body of the Company,
or any committee thereof duly authorized to act on its behalf.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect as of the date of such certification.

     “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in New York City or in the city where the Corporate

4

 

Trust Office of the Trustee is located are authorized by law or executive order to close.

     “Capital Lease” means, with respect to any Person, any lease of any property which, in
conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

     “Capital Stock” means, with respect to any Person, any and all shares of stock of a
corporation, partnership interests or other equivalent interests (however designated, whether
voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the
profits and losses, and a distribution of assets, after liabilities, of such Person.

     “Cash Equivalents” means

     (1) United States dollars, or money in other currencies received in the ordinary
course of business,

     (2) U.S. Government Obligations or certificates representing an ownership interest in
U.S. Government Obligations with maturities not exceeding two years from the date of
acquisition ,

     (3) (i) demand deposits, (ii) time deposits and certificates of deposit with
maturities of one year or less from the date of acquisition, (iii) bankers’ acceptances
with maturities not exceeding one year from the date of acquisition, and (iv) overnight
bank deposits, in each case with any bank or trust company organized or licensed under the
laws of the United States or any state thereof having capital, surplus and undivided
profits in excess of $500 million whose short-term debt is rated “A-2” or higher by S&P or
“P-2” or higher by Moody’s,

     (4) repurchase obligations with a term of not more than 180 days for underlying
securities of the type described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3) above,

     (5) commercial paper rated at least P-1 by Moody’s or A-1 by S&P and maturing within
six months after the date of acquisition,

     (6) direct obligations issued by any state of the United States or any political
subdivision or public instrumentality thereof rated at least Investment Grade, provided
that such Investments mature within 365 days after the date of acquisition, and

     (7) money market funds at least 95% of the assets of which consist of investments of
the type described in clauses (1) through (6) above.

5

 

     “Certificate of Beneficial Ownership” means a certificate substantially in the form of Exhibit
I.

     “Certificated Note” means a Note in registered form without interest coupons and that is not a
Global Note.

     “Change of Control” means:

     (1) the merger or consolidation of the Company with or into another Person or the
merger of another Person with or into the Company or the merger of any Person with or into
a Subsidiary of the Company if Capital Stock of the Company is issued in connection
therewith, or the sale of all or substantially all the assets of the Company to another
Person, unless holders of a majority of the aggregate voting power of the Voting Stock of
the Company, immediately prior to such transaction, hold securities of the surviving or
transferee Person that represent, immediately after such transaction, at least a majority
of the aggregate voting power of the Voting Stock of the surviving Person;

     (2) any “person” or “group” (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as such term is used
in Rules 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company;

     (3) individuals who on the Issue Date constituted the board of directors of the
Company, together with any new directors whose election by the board of directors or whose
nomination for election by the stockholders of the Company was approved by a majority of
the directors then still in office who were either directors or whose election or
nomination for election was previously so approved, cease for any reason to constitute a
majority of the board of directors of the Company then in office; or

     (4) the adoption of a plan relating to the liquidation or dissolution of the Company.

     Notwithstanding anything to the contrary set forth above, the consummation of the Transactions
will be disregarded in determining the occurrence of a Change of Control.

	 	 	“Code” means the Internal Revenue Code of 1986.

     “Commission” means the United States Securities and Exchange Commission.

6

 

     “Company” means the party named as such in the first paragraph of the Indenture or any
successor obligor under the Indenture and the Notes pursuant to Article 5.

     “Completion Date” means the date on which all Escrow Conditions are satisfied and the proceeds
of the escrow account referred to in the Escrow Agreement are released.

     “Consolidated Net Income” means, for any period, the aggregate net income (or loss) of the
Company and its Restricted Subsidiaries for such period determined on a consolidated basis in
conformity with GAAP, provided that the following (without duplication) will be excluded in
computing Consolidated Net Income:

     (1) the net income (but not loss) of any Person that is not a Restricted Subsidiary
(including minority interests in unconsolidated Persons or Investments in Unrestricted
Subsidiaries), except to the extent of the dividends or other distributions actually paid
in cash (which, for the avoidance of doubt, will increase Consolidated Net Income) to the
Company or any of its Restricted Subsidiaries by such Person during such period (including
dividends and distributions from joint ventures);

     (2) solely for purposes of determining the amount available for Restricted Payments
under Section 4.07(a)(3), the net income of any Restricted Subsidiary (other than a
Guarantor) to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income would not have been
permitted for the relevant period by charter or by any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such Restricted
Subsidiary;

     (3) any net after-tax gains or losses attributable to Asset Sales or the
extinguishment or conversion of Debt, in each case net of fees and expenses relating to
the transaction giving rise thereto;

     (4) all extraordinary gains or losses (net of fees and expenses relating to the
transaction giving rise thereto), income, expenses or charges;

     (5) the cumulative effect of a change in accounting principles;

     (6) non-recurring expenses and charges related to the Spin-Off and related
financings;

     (7) non-recurring non-cash charges attributable to the closing of manufacturing
facilities or the lay-off of employees, in either case which

7

 

are recorded as “restructuring and other specific charges” in accordance with GAAP;

     (8) non-cash compensation expense incurred with any issuance of Equity Interests of
the Company to an employee of the Company or any Restricted Subsidiary;

     (9) any one-time expenses or charges (including financing, financial and other
advisory fees, accounting and consulting fees and legal fees) related to any acquisition,
Investment, Asset Sale, disposition, issuance of Equity Interests, Debt or amendment or
modification of any Debt, and including, in each case, any such transaction undertaken but
not completed, in each case whether or not successful;

     (10) any expenses, charges or losses that are covered by indemnification or other
reimbursement provisions in connection with any Investment or any sale, conveyance,
transfer or other disposition of assets permitted under the Indenture, to the extent
actually reimbursed, or, so long as the Company has made a determination that a reasonable
basis exists for indemnification or reimbursement and only to the extent that such amount
is in fact indemnified or reimbursed within 365 days of such determination (with a
deduction in the applicable future period for any amount so added back to the extent not
so indemnified or reimbursed within such 365 days);

     (11) any expenses, charges or losses with respect to liability or casualty events or
business interruption to the extent covered by insurance and actually reimbursed, or, so
long as the Company has made a determination that there exists reasonable evidence that
such amount will in fact be reimbursed by the insurer and only to the extent that such
amount is in fact reimbursed within 365 days of the date of such determination (with a
deduction in the applicable future period for any amount so added back to the extent not
so reimbursed within such 365 days);

     (12) any non-cash impairment charges or asset write-off or write-down, or from fair
value accounting required by Statement of Financial Accounting; and

     (13) cash or non-cash restructuring costs, charges or losses relating to the closing
of the shipyard in Avondale, Louisiana, the construction of the LPD-23 Anchorage or the
construction of the LPD-25 Somerset, up to an aggregate amount for all such cash costs,
charges and losses of (i) for the 2011 fiscal year, $50.0 million, (ii) for the 2012
fiscal year, $35.0 million and (iii) for any fiscal year thereafter, $25.0 million.

8

 

     “Consolidated Net Tangible Assets” of any Person means the aggregate amount of assets of such
Person and its Restricted Subsidiaries after deducting therefrom (to the extent otherwise included
therein) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all as set forth on the most recent quarterly or annual (as the case may
be) consolidated balance sheet (prior to the relevant date of determination for which internal
financial statements are available) of such Person and its Restricted Subsidiaries in accordance
with GAAP.

     “Consolidated Secured Leverage Ratio” means, on any date (the “transaction date”), the ratio
of

     (x) the aggregate amount of Debt of the Company and its Restricted Subsidiaries as of the date
of determination that is secured by a Lien on any asset of the Company or any of its Restricted
Subsidiaries (“Secured Debt”) to

     (y) the aggregate amount of EBITDA for the four fiscal quarters immediately prior to the
transaction date for which internal financial statements are available.

     Such ratio shall be calculated on a pro forma basis (in accordance with Regulation S-X) as
appropriate and consistent with the pro forma adjustments set forth in the definition of Fixed
Charge Coverage Ratio.

     “Corporate Trust Office” means the office of the Trustee at which the corporate trust business
of the Trustee is principally administered, which at the date of the Indenture is located at 101
Barclay Street, Floor 8 West, New York, New York, 10286.

     “Credit Agreement” means the credit agreement to be dated on or about the Completion Date
among the Company, the guarantors named therein, the lenders party thereto and JPMorgan Chase Bank,
N.A., as agent, together with any related documents (including any security documents and guarantee
agreements), as such agreement may be amended, modified, supplemented, restated, extended, renewed,
refinanced or replaced or substituted from time to time in one or more agreements or instruments
(in each case with the same or new lender, group of lenders, purchasers or debtholders), including
pursuant to any agreement extending the maturity thereof or otherwise restructuring all or any
portion of the Debt thereunder or increasing the amount loaned or issued thereunder.

     “Credit Facilities” means one or more (i) credit facilities (including the Credit Agreement)
with banks or other lenders providing for revolving credit loans or term loans or the issuance of
letters of credit or bankers’ acceptances or the like, (ii) note purchase agreements and indentures
providing for the sale of

9

 

debt securities, and (iii) agreements that refinance any Debt Incurred under any agreement
described in clause (i) or (ii) or this clause (iii), including in each case any successor or
replacement agreement or agreements or indentures.

     “Current NGC” means Northrop Grumman Corporation as such company is referred to as of the
Issue Date.

     “Date of Determination” has the meaning assigned to such term in Section 3.03.

     “Debt” means, with respect to any Person, without duplication,

     (1) all indebtedness of such Person for borrowed money;

     (2) all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;

     (3) all obligations of such Person in respect of letters of credit, bankers’
acceptances or other similar instruments , excluding obligations in respect of trade
letters of credit or bankers’ acceptances issued in respect of trade payables; provided
that such obligations shall not constitute Debt except to the extent drawn upon or
presented and not paid within 10 Business Days;

     (4) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services which are recorded as liabilities under GAAP, excluding trade
payables arising in the ordinary course of business;

     (5) all obligations of such Person as lessee under Capital Leases;

     (6) all Debt of other Persons Guaranteed by such Person to the extent so Guaranteed;

     (7) all Debt of other Persons secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person;

     (8) all Disqualified Stock; and

     (9) all obligations of such Person under Hedging Agreements at the time of
determination.

The amount of Debt of any Person will be deemed to be:

     (A) with respect to contingent obligations, the maximum liability upon the occurrence
of the contingency giving rise to the obligation;

10

 

     (B) with respect to Debt secured by a Lien on an asset of such Person but not
otherwise the obligation, contingent or otherwise, of such Person, the lesser of (x) the
fair market value of such asset on the date the Lien attached and (y) the amount of such
Debt;

     (C) with respect to any Debt issued with original issue discount, the face amount of
such Debt less the remaining unamortized portion of the original issue discount of such
Debt;

     (D) with respect to any Hedging Agreement, the net amount payable if such Hedging
Agreement terminated at that time due to default by such Person;

     (E) with respect to any Disqualified Equity Interests, the maximum amount that the
Company and its Restricted Subsidiaries may become obligated to pay upon the maturity of,
or pursuant to any mandatory redemption provisions of, such Disqualified Equity Interests
or portion thereof, exclusive of accrued dividends; and

     (F) otherwise, the outstanding principal amount thereof.

     “Default” means any event that is, or after notice or passage of time or both would be, an
Event of Default.

     “Depositary” means the depositary of each Global Note, which will initially be DTC.

     “Designated Non-cash Consideration” means any non-cash consideration received by the Company
or a Restricted Subsidiary in connection with an Asset Sale that is designated as Designated
Non-cash Consideration pursuant to an Officers’ Certificate executed by an officer of the Company
or such Restricted Subsidiary at the time of such Asset Sale, less the amount of cash or Cash
Equivalents received in connection with a subsequent sale of or collection on such Designated
Non-cash Consideration provided that any such amount is deemed to be Net Cash Proceeds of an Asset
Sale for purposes of Section 4.12.

     “Disqualified Equity Interests” means Equity Interests that by their terms or upon the
happening of any event prior to the Stated Maturity of the Notes are

     (1) required to be redeemed or redeemable at the option of the holder for
consideration other than Qualified Equity Interests, or

     (2) convertible at the option of the holder into Disqualified Equity Interests or
exchangeable for Debt;

11

 

provided that only the portion of such Equity Interests that is required to be redeemed, is so
redeemable or is so convertible at the option of the holder thereof before such date will be deemed
to be Disqualified Equity Interests and Equity Interests will not constitute Disqualified Equity
Interests solely because of provisions giving holders thereof the right to require repurchase or
redemption upon an “asset sale” or “change of control” occurring prior to the Stated Maturity of
the Notes if those provisions

     (A) are no more favorable to the holders than Section 4.11 and Section 4.12, and

     (B) specifically state that repurchase or redemption pursuant thereto will not be
required prior to the Company’s repurchase of the Notes as required by the Indenture.

     “Disqualified Stock” means Capital Stock constituting Disqualified Equity Interests.

     “DTC” means The Depository Trust Company, a New York corporation, and its successors.

     “DTC Legend” means the legend set forth in Exhibit E.

     “Domestic Restricted Subsidiary” means any Restricted Subsidiary formed under the laws of the
United States of America or any jurisdiction thereof.

     “EBITDA” means, for any period, the sum of

     (1) Consolidated Net Income, plus

     (2) Fixed Charges, to the extent deducted in calculating Consolidated Net Income,
plus

     (3) to the extent deducted in calculating Consolidated Net Income and as determined
on a consolidated basis for the Company and its Restricted Subsidiaries in conformity with
GAAP:

     (A) income taxes, including any penalties and interest related to such taxes
or arising from any tax examinations;

     (B) depreciation, amortization (including amortization of goodwill, other
intangibles, deferred financing fees, debt issuance costs, commissions, fees and
expenses) and all other non-cash items reducing Consolidated Net Income (not
including non-cash charges in a period which reflect cash expenses paid or to be
paid in another period), less all non-cash items increasing Consolidated Net
Income;

12

 

     (C) any costs and expenses incurred by the Company or any Restricted
Subsidiary pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement, any stock subscription or
shareholder agreement, to the extent that such costs or expenses are funded with
the cash proceeds contributed to the capital of the Company or net cash proceeds
from an issuance of Equity Interests of the Company (other than Disqualified
Equity Interests); and

     (D) all non-recurring losses (and minus all non-recurring gains).

     “Equity Interests” means all Capital Stock and all warrants or options with respect to, or
other rights to purchase, Capital Stock, but excluding Debt convertible into equity.

     “Escrow Agent” means Wells Fargo Bank, National Association.

     “Escrow Agreement” means the escrow and security agreement, dated as of March 11, 2011, among
the Company, the Trustee, the Financial Institution (as defined therein) and the Escrow Agent.

     “Escrow Conditions” means the conditions set forth in Section 1.05(b) of the Escrow Agreement
required to be satisfied to cause the release of the proceeds of the escrow account referred to
therein.

     “Event of Default” has the meaning assigned to such term in Section 6.01.

     “Excess Proceeds” has the meaning assigned to such term in Section 4.12.

     “Exchange Act” means the Securities Exchange Act of 1934.

     “Exchange Notes” means the Notes of a series of the Company issued pursuant to the Indenture
in exchange for, and up to an aggregate principal amount equal to, the Initial Notes or Initial
Additional Notes of such series in compliance with the terms of a Registration Rights Agreement and
containing terms substantially identical to the Initial Notes or Initial Additional Notes of such
series (except that (i) such Exchange Notes will be registered under the Securities Act and will
not be subject to transfer restrictions or bear the Restricted Legend, and (ii) the provisions
relating to Additional Interest will be eliminated).

     “Exchange Offer” means an offer by the Company to the Holders of the Initial Notes or Initial
Additional Notes to exchange outstanding Notes of a series for Exchange Notes of such series, as
provided for in a Registration Rights Agreement.

13

 

     “Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as
defined in a Registration Rights Agreement.

     “Fixed Charge Coverage Ratio” means, on any date (the “transaction date”), the ratio of

     (x) the aggregate amount of EBITDA for the four fiscal quarters immediately prior to
the transaction date for which internal financial statements are available (the “reference
period”) to

     (y) the aggregate Fixed Charges during such reference period.

     In making the foregoing calculation,

     (1) pro forma effect will be given to any Incurrence or repayment, defeasance or
redemption of Debt (other than pursuant to revolving credit facilities) or Preferred Stock
and the application of the proceeds thereof during the reference period or subsequent
thereto and on or prior to the date of determination as if such Incurrence, repayment or
redemption occurred on the first day of the reference period;

     (2) pro forma calculations of interest on Debt bearing a floating interest rate will
be made as if the rate in effect on the transaction date (taking into account any Hedging
Agreement applicable to the Debt) had been the applicable rate for the entire reference
period; and

     (3) Fixed Charges related to any Debt or Preferred Stock no longer outstanding or to
be repaid, defeased or redeemed on the transaction date, except for Consolidated Interest
Expense accrued during the reference period under a revolving credit to the extent of the
commitment thereunder (or under any successor revolving credit) in effect on the
transaction date, will be excluded;

     (4) pro forma effect (calculated in accordance with Regulation S-X) will be given to

     (A) the creation, designation or redesignation of Restricted and
Unrestricted Subsidiaries,

     (B) the acquisition or disposition of companies, divisions or lines of
businesses by the Company and its Restricted Subsidiaries, including any
acquisition or disposition of a company, division or line of business since the
beginning of the reference period by a Person that became a Restricted
Subsidiary after the beginning of the reference period, and

14

 

     (C) discontinued operations and the discontinuation of any discontinued
operations but, in the case of Fixed Charges, only to the extent that the
obligations giving rise to the Fixed Charges will not be obligations of the
Company or any Restricted Subsidiary following the transaction date

that have occurred since the beginning of the reference period as if such events had
occurred, and, in the case of any disposition, the proceeds thereof applied, on the first
day of the reference period. To the extent that pro forma effect is to be given to an
acquisition or disposition of a company, division or line of business, the pro forma
calculation will be based upon the most recent four full fiscal quarters for which the
relevant financial information is available.

     “Fixed Charges” means, for any period, the sum of

     (1) Interest Expense for such period; and

     (2) the product of

     (x) cash and non-cash dividends paid, declared, accrued or accumulated
during such period on any Disqualified Stock, and dividends paid during such
period on any Preferred Stock, of the Company or a Restricted Subsidiary, except
for dividends payable in the Company’s Qualified Stock or paid to the Company or
to a Restricted Subsidiary and excluding items eliminated in consolidation, and

     (y) a fraction, the numerator of which is one and the denominator of which
is one minus the sum of the currently effective combined Federal, state, local
and foreign tax rate applicable to the Company and its Restricted Subsidiaries.

     “Foreign Restricted Subsidiary” means any Restricted Subsidiary that is not a Domestic
Restricted Subsidiary.

     “GAAP” means generally accepted accounting principles in the United States of America as in
effect as of the Issue Date.

     “Global Note” means a Note in registered global form without interest coupons.

     “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt
or other

15

 

obligation of such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof, in whole or in part; provided that the term
“Guarantee” does not include endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” used as a verb has a corresponding meaning.

     “Guarantor” means (i) each Domestic Restricted Subsidiary of the Company in existence on the
Completion Date that Guarantees any Debt under the Credit Agreement at such time and (ii) each
Domestic Restricted Subsidiary that executes a supplemental indenture in the form of Exhibit C to
the Indenture providing for the guaranty of the payment of the Notes, or any successor obligor
under its Note Guaranty pursuant to Article 5, in each case unless and until such Guarantor is
released from its Note Guaranty pursuant to the Indenture.

     “Hedging Agreement” means (i) any interest rate swap agreement, interest rate cap agreement or
other agreement designed to protect against fluctuations in interest rates or (ii) any foreign
exchange forward contract, currency swap agreement or other agreement designed to protect against
fluctuations in foreign exchange rates or (iii) any commodity or raw material futures contract or
any other agreement designed to protect against fluctuations in raw material prices.

     “Holder” or “Noteholder” means the registered holder of any Note.

     “IAI Global Note” means a Global Note representing Notes resold to Institutional Accredited
Investors bearing the Restricted Legend.

     “Incur” means, with respect to any Debt, to incur, create, issue, assume or Guarantee such
Debt. If any Person becomes a Restricted Subsidiary on any date after the Issue Date (including by
redesignation of an Unrestricted Subsidiary or failure of an Unrestricted Subsidiary to meet the
qualifications necessary to remain an Unrestricted Subsidiary), the Debt of such Person outstanding
on such date will be deemed to have been Incurred by such Person on such date for purposes of
Section 4.06, but with respect to Disqualified Stock will not be considered the sale or issuance of
Equity Interests for purposes of Section 4.12. The accretion of original issue discount or payment
of interest in kind will not be considered an Incurrence of Debt.

     “Indenture” means this indenture, as amended or supplemented from time to time.

16

 

     “Initial Additional Notes” means Additional Notes issued in an offering not registered under
the Securities Act and any Notes issued in replacement thereof, but not including any Exchange
Notes issued in exchange therefor.

     “Initial Notes” means the Notes issued on the Issue Date and any Notes issued in replacement
thereof, but not including any Exchange Notes issued in exchange therefor.

     “Initial Purchasers” means the initial purchasers party to a purchase agreement with the
Company relating to the sale of the Initial Notes or Initial Additional Notes by the Company.

     “Institutional Accredited Investor” means an institutional “accredited investor” (as defined)
in Rule 501(a), (2), (3) or (7) under the Securities Act.

     “Institutional Accredited Investor Certificate” means a certificate substantially in the form
of Exhibit H hereto.

     “interest”, in respect of the Notes, unless the context otherwise requires, refers to interest
and Additional Interest, if any.

     “Interest Expense” means, for any period, the consolidated interest expense of the Company and
its Restricted Subsidiaries, plus, to the extent not included in such consolidated interest
expense, and to the extent incurred, accrued or payable by the Company or its Restricted
Subsidiaries, without duplication, (i) amortization of debt discount but excluding the amortization
or write-off of debt issuance costs, deferred financing fees, commissions, fees and expenses and
expensing of interim loan commitment and other financing fees, (ii) capitalized interest, (iii)
non-cash interest expense, (iv) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers’ acceptance financing, and (v) net costs associated with Hedging
Agreements (including the amortization of fees) in respect of interest rate protection, as
determined on a consolidated basis and in accordance with GAAP.

     “Interest Payment Date” means each March 15 and September 15 of each year, commencing
September 15, 2011.

     “Interim Ordinary Course Transactions” has the meaning assigned to such term in Section 4.17.

     “Internal Reorganization” means the internal reorganization that is conducted on the terms
described in the Offering Circular.

     “Investment” means

     (1) any direct or indirect advance, loan or other extension of credit to another
Person,

17

 

     (2) any capital contribution to another Person, by means of any transfer of cash or
other property or assets,

     (3) any purchase or acquisition of Equity Interests, bonds, notes or other Debt, or
other instruments or securities issued by another Person, including the receipt of any of
the above as consideration for the disposition of assets or rendering of services, or

     (4) any Guarantee of the Debt of another Person

     but shall exclude: (a) accounts receivable and other extensions of trade credit arising in the
ordinary course of business; (b) the acquisition or use of property and assets from suppliers and
other vendors in the ordinary course of business; (c) prepaid expenses and workers’ compensation,
utility, lease and similar deposits, in the ordinary course of business; and (d) negotiable
instruments held for collection and endorsements for deposit or collection in the ordinary course
of business.

     If the Company or any Restricted Subsidiary (x) sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary so that, after giving effect to that sale
or disposition, such Person is no longer a Subsidiary of the Company, or (y) designates any
Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 4.15 of the
Indenture, all remaining Investments of the Company and the Restricted Subsidiaries in such Person
shall be deemed to have been made at such time.

     “Investment Grade” means BBB- or higher by S&P and Baa3 or higher by Moody’s, or the
equivalent of such ratings by another Rating Agency.

     “Issue Date” means March 11, 2011, the date on which the Original Notes are originally issued
under the Indenture.

     “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or Capital Lease having
substantially the same economic effect as any of the foregoing).

     “Mandatory Redemption Price” has the meaning assigned to such term in Section 3.04.

     “Mandatory Redemption” has the meaning assigned to such term in Section 3.04.

     “Mandatory Redemption Date” has the meaning assigned to such term in Section 3.04.

     “Moody’s” means Moody’s Investors Service, Inc. and its successors.

18

 

     “Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds of such Asset Sale in
the form of cash (including (i) payments in respect of deferred payment obligations to the extent
corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds
from the conversion of other consideration received when converted to cash), net of

     (1) brokerage commissions and other fees and expenses related to such Asset Sale,
including all legal, accounting, title and recording tax expenses, commissions and other
fees and expenses incurred;

     (2) provisions for federal, state, foreign and local taxes as a result of such Asset
Sale taking into account the consolidated results of operations of the Company and its
Restricted Subsidiaries;

     (3) payments required to be made to holders of minority interests in Restricted
Subsidiaries as a result of such Asset Sale or to repay Debt outstanding at the time of
such Asset Sale that is secured by a Lien on the property or assets sold; and

     (4) amounts by contract to be held in escrow pending determination of whether a
purchase price adjustment will be made and appropriate amounts to be provided as a reserve
against liabilities associated with such Asset Sale, including pension and other
post-employment benefit liabilities, liabilities related to environmental matters and
indemnification obligations associated with such Asset Sale, with any subsequent reduction
of the reserve other than by payments made and charged against the reserved amount or
release from escrow to be deemed a receipt of cash.

     “Non-Recourse Debt” means Debt as to which neither the Company nor any Restricted Subsidiary
provides any Guarantee and no default as to which would, as such, constitute a default under any
Debt of the Company or any Restricted Subsidiary.

     “Non-U.S. Person” means a Person that is not a U.S. person, as defined in Regulation S.

     “NGC” means the company that will be renamed Northrop Grumman Corporation after the Spin-off,
together with its consolidated Subsidiaries after the Spin-off.

     “Notes” has the meaning assigned to such term in the Recitals.

     “Note Guaranty” means the guaranty of the Notes by a Guarantor pursuant to the Indenture.

19

 

     “Obligations” means, with respect to any Debt, all obligations (whether in existence on the
Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect of
principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase
pursuant to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees,
indemnification, reimbursement and other amounts payable and liabilities with respect to such Debt,
including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or
reorganization or similar case or proceeding at the contract rate (including, any contract rate
applicable upon default) specified in the relevant documentation, whether or not the claim for such
interest is allowed as a claim in such case or proceeding.

     “Offer to Purchase” has the meaning assigned to such term in Section 3.06.

     “Offering Circular” means the offering circular relating to the issuance of the Notes dated
March 4, 2011.

     “Officer” means any vice president, the chief executive officer, the chief financial officer,
the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the
Company.

     “Officers’ Certificate” means a certificate signed in the name of the Company by an Officer.

     “Offshore Global Note” means a Global Note representing Notes issued and sold pursuant to
Regulation S.

     “Opinion of Counsel” means a written opinion signed by legal counsel, who may be an employee
of or counsel to the Company, satisfactory to the Trustee.

     “Original Notes” means the Initial Notes and any Exchange Notes issued in exchange therefor.

     “Paying Agent” means any Person authorized by the Company to pay the principal of or interest
on any Notes on behalf of the Company.

     “Permanent Offshore Global Note” means an Offshore Global Note that does not bear the
Temporary Offshore Global Note Legend.

     “Permitted Bank Debt” has the meaning assigned to such term in Section 4.06.

     “Permitted Debt” has the meaning assigned to such term in Section 4.06.

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     “Permitted Business” means any of the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date and Completion Date after giving effect to the
Transactions, and any business reasonably related, incidental, complementary or ancillary thereto.

     “Permitted Investments” means:

     (1) Investments in existence on the Issue Date not otherwise permitted by clause (2)
below or required pursuant to any agreement in effect on the Issue Date;

     (2) any Investment in the Company or in a Restricted Subsidiary of the Company;

     (3) any Investment in Cash Equivalents;

     (4) any Investment by the Company or any Subsidiary of the Company in a Person, if as
a result of such Investment,

     (A) such Person becomes a Restricted Subsidiary of the Company, or

     (B) such Person is merged or consolidated with or into, or transfers or
conveys substantially all its assets to, or is liquidated into, the Company or a
Restricted Subsidiary;

     (5) Investments received as non-cash consideration in an Asset Sale made pursuant to
and in compliance with Section 4.12 or any disposition of property not constituting an
Asset Sale;

     (6) Hedging Agreements otherwise permitted under the Indenture;

     (7) (i) receivables owing to the Company or any Restricted Subsidiary and advances to
suppliers if created or acquired in the ordinary course of business, (ii) Cash
Equivalents, (iii) endorsements for collection or deposit in the ordinary course of
business, and (iv) securities, instruments or other obligations received in compromise or
settlement of debts created in the ordinary course of business, or by reason of a
composition or readjustment of debts or reorganization of another Person, or in
satisfaction of claims or judgments;

     (8) Investments in an aggregate amount, taken together with all other Investments
made in reliance on this clause, not to exceed the greater of (A) $150.0 million and (B)
4.0% of Consolidated Net Tangible Assets (net of, with respect to the Investment in any
particular Person, the cash return thereon received after the Issue Date as a result of
any sale for

21

 

cash, repayment, redemption, liquidating distribution or other cash realization (not
included in Consolidated Net Income), not to exceed the amount of Investments in such
Person made after the Issue Date in reliance on this clause);

     (9) payroll, travel and other loans or advances to, or Guarantees issued to support
the obligations of, officers and employees, in each case in the ordinary course of
business, not in excess of $10.0 million outstanding at any time;

     (10) Investments in joint ventures and Unrestricted Subsidiaries (measured on the
date each such investment is made and without giving effect to subsequent changes in
value) in an aggregate amount not to exceed the greater of (A) $150.0 million and (B) 4.0%
of Consolidated Net Tangible Assets (net of, with respect to the Investment in any
particular Person, the cash return thereon received after the Issue Date as a result of
any sale for cash, repayment, redemption, liquidating distribution or other cash
realization (not included in Consolidated Net Income), not to exceed the amount of
Investments in such Person made after the Issue Date in reliance on this clause);

     (11) extensions of credit to customers and suppliers in the ordinary course of
business; and

     (12) Investments resulting from the disposition of interests in the shipyard in
Avondale, Louisiana or the facilities in Waggaman, Louisiana, or Tallulah, Louisiana.

     “Permitted Liens” means

     (1) Liens existing on the Issue Date or arising on or prior to the Completion Date
pursuant to the Transactions and the Interim Ordinary Course Transactions, in each case
not otherwise constituting Permitted Liens;

     (2) Liens securing the Notes or any Note Guaranties;

     (3) Liens securing (A) Permitted Bank Debt plus (B) Debt Incurred under Section
4.06(a) in an aggregate principal amount not to exceed (X) an amount that does not cause
the Consolidated Secured Leverage Ratio to exceed 2.65:1 minus (Y) an amount equal to
$1,500 million less any amount of Permitted Bank Debt permanently repaid as provided under
Section 4.12, plus (C) Obligations in respect thereof and any cash management obligations
or agreements with respect to similar banking services;

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     (4) pledges or deposits under worker’s compensation laws, unemployment insurance laws
or similar legislation, or good faith deposits in connection with bids, tenders, contracts
or leases, or to secure public or statutory obligations, surety bonds, customs duties and
the like, or for the payment of rent, in each case incurred in the ordinary course of
business and not securing Debt;

     (5) Liens imposed by law, such as carriers’, vendors’, warehousemen’s and mechanics’
liens, in each case for sums not yet due or being contested in good faith and by
appropriate proceedings;

     (6) Liens in respect of taxes and other governmental assessments and charges which
are not yet due or which are being contested in good faith and by appropriate proceedings;

     (7) Liens securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and the proceeds
thereof;

     (8) minor survey exceptions, minor encumbrances, easements or reservations of, or
rights of others for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as to the use
of real property, not interfering in any material respect with the conduct of the business
of the Company and its Restricted Subsidiaries;

     (9) licenses or leases or subleases as licensor, lessor or sublessor of any of its
property, including intellectual property, in the ordinary course of business;

     (10) customary Liens in favor of trustees and escrow agents, and netting and setoff
rights, banker’s liens and the like in favor of financial institutions and counterparties
to financial obligations and instruments, including Hedging Agreements;

     (11) Liens on assets pursuant to merger agreements, stock or asset purchase
agreements and similar agreements in respect of the disposition of such assets;

     (12) judgment liens, and Liens securing appeal bonds or letters of credit issued in
support of or in lieu of appeal bonds, so long as no Event of Default then exists as a
result thereof;

     (13) Liens (including the interest of a lessor under a Capital Lease) on property
that secure Debt Incurred under clause 11 of Permitted Debt for the purpose of financing
all or any part of the purchase price or

23

 

cost of construction or improvement of such property and which attach within 180 days
after the date of such purchase or the completion of construction or improvement;

     (14) Liens on property of a Person at the time such Person becomes a Restricted
Subsidiary of the Company, provided such Liens were not created in contemplation thereof
and do not extend to any other property of the Company or any Restricted Subsidiary;

     (15) Liens on property at the time the Company or any of the Restricted Subsidiaries
acquires such property, including any acquisition by means of a merger or consolidation
with or into the Company or a Restricted Subsidiary of such Person, provided such Liens
were not created in contemplation thereof and do not extend to any other property of the
Company or any Restricted Subsidiary;

     (16) Liens securing Debt or other obligations of the Company or a Restricted
Subsidiary to the Company or a Restricted Subsidiary;

     (17) Liens securing Hedging Agreements so long as such Hedging Agreements relate to
Debt for borrowed money that is, and is permitted to be under the Indenture, secured by a
Lien on the same property securing such Hedging Agreements;

     (18) Liens in favor of customs or revenue authorities arising as a matter of law to
secure payments of customs duties in connection with the importation of goods incurred in
the ordinary course of business;

     (19) deposits in the ordinary course of business to secure liability to insurance
carriers;

     (20) any interest of title of an owner of equipment or inventory on a loan or
consignment to the Company or any of its Restricted Subsidiaries and Liens arising from
Uniform Commercial Code financing statement filings regarding operating leases entered
into by the Company or any Restricted Subsidiary in the ordinary course of business;

     (21) Liens securing obligations for third party customer financing in the ordinary
course of business;

     (22) options, put and call arrangements, rights of first refusal and similar rights
relating to Investments in joint ventures, limited liability companies, partnerships and
the like permitted to be made under the Indenture;

     (23) Liens deemed to exist in connection with Investments in repurchase agreements
that constitute Permitted Investments; provided

24

 

that such Liens do not extend to any assets other than those assets that are the
subject of such repurchase agreements;

     (24) Liens on property necessary to defease Debt that was not incurred in violation
of the Indenture;

     (25) extensions, renewals or replacements of any Liens referred to in clauses (1),
(2), (13), (14) or (15) in connection with the refinancing of the obligations secured
thereby, provided that such Lien does not extend to any other property and, except as
contemplated by the definition of “Permitted Refinancing Debt”, the amount secured by such
Lien is not increased; and

     (26) other Liens securing obligations in an aggregate amount not exceeding $210.0
million.

     “Permitted Refinancing Debt” has the meaning assigned to such term in Section 4.06.

     “Person” means an individual, a corporation, a partnership, a limited liability company, an
association, a trust or any other entity, including a government or political subdivision or an
agency or instrumentality thereof.

     “Preferred Stock” means, with respect to any Person, any and all Capital Stock which is
preferred as to the payment of dividends or distributions, upon liquidation or otherwise, over
another class of Capital Stock of such Person.

     “principal” of any Debt means the principal amount of such Debt, (or if such Debt was issued
with original issue discount, the face amount of such Debt less the remaining unamortized portion
of the original issue discount of such Debt), together with, if the context so requires, any
premium then payable on such Debt.

     “Qualified Equity Interests” means all Equity Interests of a Person other than Disqualified
Equity Interests.

     “Qualified Equity Offering” means any public or private offering, after the Issue Date, of
Qualified Stock of the Company other than pursuant to employee benefit plans or otherwise in
compensation to officers, directors or employees.

     “Qualified Stock” means all Capital Stock of a Person other than Disqualified Stock.

     “Rating Agencies” means S&P and Moody’s; provided, that if either S&P or Moody’s (or both)
shall cease issuing a rating on the Notes for reasons outside

25

 

the control of the Company, the Company may select a nationally recognized statistical rating
agency to substitute for S&P or Moody’s (or both).

     “refinance” has the meaning assigned to such term in Section 4.06.

     “Register” has the meaning assigned to such term in Section 2.09.

     “Registrar” means a Person engaged to maintain the Register.

     “Registration Rights Agreement” means (i) the Registration Rights Agreement dated on or about
the Issue Date between the Company and the Initial Purchasers party thereto with respect to the
Initial Notes , and (ii) with respect to any Additional Notes, any registration rights agreements
between the Company and the Initial Purchasers party thereto relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes or exchange them
for Notes registered under the Securities Act.

     “Regular Record Date” for the interest payable on any Interest Payment Date means the March 1
or September 1 (whether or not a Business Day) next preceding such Interest Payment Date.

     “Regulation S” means Regulation S under the Securities Act.

     “Regulation S Certificate” means a certificate substantially in the form of Exhibit F hereto.

     “Replacement Assets” means all or substantially all of the assets of a Permitted Business, or
a majority of the Voting Stock of another Person that thereupon becomes a Restricted Subsidiary
engaged in a Permitted Business or assets (other than inventory, securities or Cash Equivalents)
that are used or useful in a Permitted Business.

     “Restricted Legend” means the legend set forth in Exhibit D.

     “Restricted Payment” has the meaning assigned to such term in Section 4.07.

     “Restricted Period” means the relevant 40-day distribution compliance period as defined in
Regulation S, commencing on the Issue Date in the case of the Initial Notes.

     “Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted
Subsidiary.

     “Reversion Date” has the meaning assigned to such term in Section 4.20.

     “Rule 144A” means Rule 144A under the Securities Act.

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     “Rule 144A Certificate” means (i) a certificate substantially in the form of Exhibit G hereto
or (ii) a written certification addressed to the Company and the Trustee to the effect that the
Person making such certification (x) is acquiring such Note (or beneficial interest) for its own
account or one or more accounts with respect to which it exercises sole investment discretion and
that it and each such account is a qualified institutional buyer within the meaning of Rule 144A,
(y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the
exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z)
acknowledges that it has received such information regarding the Company as it has requested
pursuant to Rule 144A(d)(4) or has determined not to request such information.

     “S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc. and its
successors.

     “Securities Act” means the Securities Act of 1933.

     “Significant Subsidiary” means any Restricted Subsidiary , or group of Restricted
Subsidiaries, that would , taken together, be a “significant subsidiary” as defined in Article 1,
Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities Act, as such regulation
is in effect on the Issue Date.

     “Special Redemption” has the meaning assigned to such term in Section 3.03.

     “Special Redemption Date” has the meaning assigned to such term in Section 3.03.

     “Special Redemption Price” means a cash redemption price equal to 100% of the issue price of
the applicable Note (as set forth on the cover of the Offering Circular), plus the Accrued Yield on
such Note and accrued and unpaid interest on such Note from the Issue Date to the Special
Redemption Date.

     “Spin-off” means the Spin-off transaction pursuant to which the shares of the Company will be
distributed to the stockholders of Northrop Grumman Corporation as described in the Offering
Circular.

     “Spin-off Date” means the date on which the Spin-off is consummated.

     “Spin-off Determination Date” has the meaning assigned to such term in Section 3.04.

     “Stated Maturity” means (i) with respect to any Debt, the date specified as the fixed date on
which the final installment of principal of such Debt is due and payable or (ii) with respect to
any scheduled installment of principal of or interest on any Debt, the date specified as the fixed
date on which such installment is due and payable as, in each case, set forth in the documentation

27

 

governing such Debt, not including any contingent obligation to repay, redeem or repurchase
prior to the regularly scheduled date for payment.

     “Subordinated Debt” means any Debt of the Company or any Guarantor which is subordinated in
right of payment to the Notes or the Note Guaranty, as applicable, pursuant to a written agreement
to that effect.

     “Subsidiary” means with respect to any Person, any corporation, association or other business
entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by,
or, in the case of a partnership, the sole general partner or the managing partner or the only
general partners of which are, such Person and one or more Subsidiaries of such Person (or a
combination thereof). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.

     “Suspended Covenants” has the meaning assigned to such term in Section 4.20.

     “Suspension Period” has the meaning assigned to such term in Section 4.20.

     “Temporary Offshore Global Note” means an Offshore Global Note that bears the Temporary
Offshore Global Note Legend.

     “Temporary Offshore Global Note Legend” means the legend set forth in Exhibit J.

     “Transactions” means, collectively, the Internal Reorganization and the Spin-off, including
the transactions set forth in the instruments and documents relating thereto to occur in connection
therewith (including any actions necessary to effect such transactions), the offering of the Notes
and borrowings under the Credit Agreement and the application of the proceeds thereof (including
the contribution of a portion of the proceeds of the offering of the Notes and Credit Agreement
borrowings to NGC), and the payment of the fees and expenses and reimbursement of advances related
thereto (including financing, financial and other advisory fees, accounting and consulting fees and
legal fees), in each case substantially on the terms described in the Offering Circular.

     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available
at least two Business Days prior to the redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most nearly equal to the
period from the redemption date to March 15, 2015 in the case of the 2018 Notes and March 15, 2016
in the case of the 2021 Notes; provided that if the period

28

 

from the redemption date to such date is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant maturity of one year will
be used.

     “Trustee” means the party named as such in the first paragraph of the Indenture or any
successor trustee under the Indenture pursuant to Article 7.

     “Trust Indenture Act” means the Trust Indenture Act of 1939.

     “U.S. Global Note” means a Global Note that bears the Restricted Legend representing Notes
issued and sold pursuant to Rule 144A.

     “U.S. Government Obligations” means (i) obligations issued or directly and fully guaranteed or
insured by the United States of America or by any agent or instrumentality thereof, provided that
the full faith and credit of the United States of America is pledged in support thereof; (ii)
repurchase agreements with respect to debt obligations referred to in clause (i); (iii) money
market accounts that invest solely in the debt obligations referred to in clause (i) and/or
repurchase obligations referred to in clause (ii) above; and (iv) U.S. dollars.

     “Unrestricted Subsidiary” means (i) all Subsidiaries of NGC that are not intended to be the
Company or a Subsidiary of the Company following the Spin-off, (ii) Current NGC and (iii) any
Subsidiary of the Company that at the time of determination has previously been designated, and
continues to be, an Unrestricted Subsidiary in accordance with Section 4.15.

     “Voting Stock” means, with respect to any Person, Capital Stock of any class or kind
ordinarily having the power to vote for the election of directors, managers or other voting
members, as applicable, of the governing body of such Person.

     “Wholly Owned” means, with respect to any Restricted Subsidiary, a Restricted Subsidiary all
of the outstanding Capital Stock of which (other than any director’s qualifying shares) is owned by
the Company and one or more Wholly Owned Restricted Subsidiaries (or a combination thereof).

     Section 1.02. Rules of Construction. Unless the context otherwise requires or
except as otherwise expressly provided,

     (1) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     (2) “herein,” “hereof” and other words of similar import refer to the Indenture as a
whole and not to any particular Section, Article or other subdivision; and the word
“including” means “including without limitation”;

29

 

     (3) all references to Sections or Articles or Exhibits refer to Sections or Articles
or Exhibits of or to the Indenture unless otherwise indicated;

     (4) references to agreements or instruments, or to statutes or regulations, are to
such agreements or instruments, or statutes or regulations, as amended from time to time
(or to successor statutes and regulations); and

     (5) in the event that a transaction meets the criteria of more than one category of
permitted transactions or listed exceptions the Company may classify such transaction as
it, in its sole discretion, determines.

ARTICLE 2

The Notes

     Section 2.01. Form, Dating and Denominations; Legends. (a) The 2018 Notes and the Trustee’s
certificate of authentication thereon will be substantially in the form attached as Exhibit A. The
2021 Notes and the Trustee’s certificate of authentication thereon will be substantially in the
form attached as Exhibit B. The terms and provisions contained in the respective forms of the 2018
Notes annexed as Exhibit A and the 2021 Notes annexed as Exhibit B constitute, and are hereby
expressly made, a part of the Indenture. The Notes of each series may have notations, legends or
endorsements required by law, rules of or agreements with national securities exchanges to which
the Company is subject, or usage. Each Note will be dated the date of its authentication. The
Notes of each series will be issuable in denominations of $2,000 and higher integral multiples of
$1,000.

(b) (1) Except as otherwise provided in paragraph (c), Section 2.09(b)(4) or Section
2.10(b)(3), (b)(5), or (c), each Initial Note or Initial Additional Note (other than a
Permanent Offshore Note) will bear the Restricted Legend.

     (2) Each Global Note, whether or not an Initial Note or Additional Note, will bear
the DTC Legend.

     (3) Each Temporary Offshore Global Note will bear the Temporary Offshore Global Note
Legend.

     (4) Initial Notes and Initial Additional Notes offered and sold in reliance on
Regulation S will be issued as provided in Section 2.11(a).

     (5) Initial Notes and Initial Additional Notes offered and sold in reliance on Rule
144A will be in the form of one or more U.S. Global Notes.

30

 

     (6) Initial Notes and Initial Additional Notes offered and sold in reliance on any
exemption under the Securities Act other than Regulation S and Rule 144A will be issued in
the form of Certificated Notes.

     (7) Initial Notes resold to Institutional Accredited Investors will be in the form of
one or more IAI Global Notes.

     (8) Exchange Notes will be issued, subject to Section 2.09(b), in the form of one or
more Global Notes.

(c) (1) If the Company determines (upon the advice of counsel and based on such other
certifications and evidence as the Company may reasonably require) that a Note is eligible
for resale pursuant to Rule 144 under the Securities Act (or a successor provision)
without the need for current public information and that the Restricted Legend is no
longer necessary or appropriate in order to ensure that subsequent transfers of the Note
(or a beneficial interest therein) are effected in compliance with the Securities Act, or

     (2) after an Initial Note or any Initial Additional Note is

     (x) sold pursuant to an effective registration statement under the
Securities Act, pursuant to the Registration Rights Agreement or otherwise, or
(y) is validly tendered for exchange into an Exchange Note pursuant to an
Exchange Offer

the Company may instruct the Trustee to cancel the Note and issue to the Holder thereof (or to its
transferee) a new Note of the same series, of like tenor and amount, registered in the name of the
Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will
comply with such instruction.

     (d) By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in
such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the
restrictions on transfer of such Note (and any such beneficial interest) set forth in this
Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such
beneficial interest) only in accordance with the Indenture and such legend.

     Section 2.02. Execution and Authentication; Exchange Notes; Additional Notes. (a) An Officer
shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf
of the Company. If an Officer whose signature is on a Note no longer holds that office at the time
the Note is authenticated, the Note will still be valid.

     (b) A Note will not be valid until the Trustee manually signs the certificate of
authentication on the Note by an authorized signatory, with the

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signature conclusive evidence that the Note has been authenticated under the Indenture.

     (c) At any time and from time to time after the execution and delivery of the Indenture, the
Company may deliver Notes of a series executed by the Company to the Trustee for authentication.
The Trustee will authenticate and deliver

     (i) Initial Notes for original issue in the aggregate principal amount not to exceed
$600,000,000 aggregate principal amount of the 2018 Notes and $600,000,000 aggregate
principal amount of the 2021 Notes,

     (ii) Initial Additional Notes from time to time for original issue in aggregate
principal amounts specified by the Company, and

     (iii) Exchange Notes from time to time for issue in exchange for a like principal
amount of Initial Notes or Initial Additional Notes of the same series

after the following conditions have been met:

     (1) Receipt by the Trustee of an Officers’ Certificate specifying

     (A) the amount of Notes to be authenticated and the date on which the Notes
are to be authenticated,

     (B) whether the Notes are to be Initial Notes, Additional Notes or Exchange
Notes,

     (C) in the case of Initial Additional Notes, that the issuance of such Notes
does not contravene any provision of Article 4,

     (D) whether the Notes are to be issued as one or more Global Notes or
Certificated Notes, and

     (E) other information the Company may determine to include or the Trustee
may reasonably request.

     (2) In the case of Initial Additional Notes, receipt by the Trustee of an Opinion of
Counsel confirming that the Holders of the outstanding Notes will be subject to federal
income tax in the same amounts, in the same manner and at the same times as would have
been the case if such Additional Notes were not issued.

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     (3) In the case of Exchange Notes, effectiveness of an Exchange Offer Registration
Statement and consummation of the exchange offer thereunder (and receipt by the Trustee of
an Officers’ Certificate to that effect). Initial Notes or Initial Additional Notes
exchanged for Exchange Notes will be cancelled by the Trustee.

     Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in
Trust. (a) The Company may appoint one or more Registrars and one or more Paying Agents, and the
Trustee may appoint an Authenticating Agent, in which case each reference, if any, in the Indenture
to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be
deemed to be references to the Agent. The Company may act as Registrar or (except for purposes of
Article 8) Paying Agent. In each case the Company and the Trustee will enter into an appropriate
agreement with the Agent (if other than the Trustee) implementing the provisions of the Indenture
relating to the obligations to be performed by the Agent and the related rights. The Company
initially appoints the Trustee as Registrar and Paying Agent.

     (b) The Company will require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by
the Paying Agent for the payment of principal of and interest on the Notes and will promptly notify
the Trustee of any default by the Company in making any such payment. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and account for any funds
disbursed, and the Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require the Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent will have no
further liability for the money so paid over to the Trustee.

     Section 2.04. Replacement Notes. If a mutilated Note is surrendered to the Trustee or if the
Trustee receives evidence to its satisfaction that a Note has been lost, destroyed or wrongfully
taken, the Company will issue and the Trustee will authenticate a replacement Note of like series,
tenor and principal amount and bearing a number not contemporaneously outstanding. Every
replacement Note is an additional obligation of the Company and entitled to the benefits of the
Indenture. If required by the Trustee or the Company, an indemnity must be furnished that is
sufficient in the judgment of both the Trustee and the Company to protect the Company and the
Trustee from any loss they may suffer if a Note is replaced. The Company may charge the Holder for
the expenses of the Company and the Trustee in replacing a Note. In case the mutilated, lost,
destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in
its discretion may pay the Note instead of issuing a replacement Note. The provisions of this
Section 2.04 shall be exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully
taken Notes.

33

 

     Section 2.05. Outstanding Notes. (a) Notes outstanding at any time are all Notes that have
been authenticated by the Trustee except for

     (1) Notes cancelled by the Trustee or delivered to it for cancellation;

     (2) any Note which has been replaced or paid pursuant to Section 2.04 unless and
until the Trustee and the Company receive proof satisfactory to them that the replaced or
paid Note is held by a bona fide purchaser; and

     (3) on or after the maturity date or any redemption date or date for purchase of the
Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or purchased
on that date for which the Trustee (or Paying Agent, other than the Company or an
Affiliate of the Company) holds money sufficient to pay all amounts then due.

     (b) A Note does not cease to be outstanding because the Company or one of its Affiliates holds
the Note, provided that in determining whether the Holders of the requisite principal amount of the
outstanding Notes have given or taken any request, demand, authorization, direction, notice,
consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the
Company will be disregarded and deemed not to be outstanding, (it being understood that in
determining whether the Trustee is protected in relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, only Notes which the Trustee
knows to be so owned will be so disregarded). Notes so owned which have been pledged in good faith
may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company or any
Affiliate of the Company.

     Section 2.06. Temporary Notes. Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be
substantially in the form of definitive Notes of the applicable series but may have insertions,
substitutions, omissions and other variations determined to be appropriate by the Officer executing
the temporary Notes, as evidenced by the execution of the temporary Notes. If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After
the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes
of the same series upon surrender of the temporary Notes at the office or agency of the Company
designated for the purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender
for cancellation of any temporary Notes the Company will execute and the Trustee will authenticate
and deliver in exchange therefor a like principal amount of definitive Notes of the same series of
authorized denominations. Until so

34

 

exchanged, the temporary Notes will be entitled to the same benefits under the Indenture as
definitive Notes of the applicable series.

     Section 2.07. Cancellation. The Company at any time may deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes
previously authenticated hereunder which the Company has not issued and sold. Any Registrar or the
Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or
payment. The Trustee will cancel all Notes surrendered for transfer, exchange, payment or
cancellation and dispose of them in accordance with its normal procedures or the written
instructions of the Company. The Company may not issue new Notes to replace Notes it has paid in
full or delivered to the Trustee for cancellation.

     Section 2.08. CUSIP and CINS Numbers. The Company in issuing the Notes may use “CUSIP” and
“CINS” numbers, and the Trustee will use CUSIP numbers or CINS numbers in notices of redemption or
exchange or in Offers to Purchase as a convenience to Holders, the notice to state that no
representation is made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption or exchange or Offer to Purchase. The Company will promptly
notify the Trustee of any change in the CUSIP or CINS numbers.

     Section 2.09. Registration, Transfer and Exchange. (a) The Notes will be issued in
registered form only, without coupons, and the Company shall cause the Trustee to maintain a
register (the “Register”) of the Notes, for registering the record ownership of the Notes by the
Holders and transfers and exchanges of the Notes.

   (b) (1) Each Global Note will be registered in the name of the Depositary or its
nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC
Legend.

     (2) Each Global Note will be delivered to the Trustee as custodian for the
Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be
limited to transfers thereof in whole, but not in part, to the Depositary, its successors
or their respective nominees, except (1) as set forth in Section 2.09(b)(4) and (2)
transfers of portions thereof in the form of Certificated Notes of the same series may be
made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by
written notice given to the Trustee by or on behalf of the Depositary in accordance with
customary procedures of the Depositary and in compliance with this Section and Section
2.10.

35

 

     (3) Agent Members will have no rights under the Indenture with respect to any Global
Note held on their behalf by the Depositary, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
the Depositary or its nominee may grant proxies and otherwise authorize any Person
(including any Agent Member and any Person that holds a beneficial interest in a Global
Note through an Agent Member) to take any action which a Holder is entitled to take under
the Indenture or the Notes, and nothing herein will impair, as between the Depositary and
its Agent Members, the operation of customary practices governing the exercise of the
rights of a holder of any security.

     (4) If (x) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for a Global Note and a successor depositary is not appointed by
the Company within 90 days of the notice or (y) an Event of Default has occurred and is
continuing and the Trustee has received a request from the Depositary, the Trustee will
promptly exchange each beneficial interest in the Global Note for one or more Certificated
Notes in authorized denominations having an equal aggregate principal amount registered in
the name of the owner of such beneficial interest, as identified to the Trustee by the
Depositary, and thereupon the Global Note will be deemed canceled. If such Note does not
bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will
not bear the Restricted Legend. If such Note bears the Restricted Legend, then the
Certificated Notes issued in exchange therefor will bear the Restricted Legend, provided
that any Holder of any such Certificated Note issued in exchange for a beneficial interest
in a Temporary Offshore Global Note will have the right upon presentation to the Trustee
of a duly completed Certificate of Beneficial Ownership after the Restricted Period to
exchange such Certificated Note for a Certificated Note of like tenor and amount that does
not bear the Restricted Legend, registered in the name of such Holder.

     (5) None of the Company, the Trustee nor any agent of the Company or the Trustee will
have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests of a Global Note or maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.

     (c) Each Certificated Note will be registered in the name of the holder thereof or its
nominee.

     (d) A Holder may transfer a Note (or a beneficial interest therein) to another Person or
exchange a Note (or a beneficial interest therein) for another

36

 

Note or Notes of the same series of any authorized denomination by presenting to the Trustee a
written request therefor stating the name of the proposed transferee or requesting such an
exchange, accompanied by any certification, opinion or other document required by Section 2.10.
For avoidance of doubt, neither the Trustee nor the Registrar shall have any responsibilities with
respect to the transfer of beneficial interests within the same Global Note. The Trustee will
promptly register any transfer or exchange that meets the requirements of this Section by noting
the same in the register maintained by the Trustee for the purpose; provided that

     (x) no transfer or exchange will be effective until it is registered in such
register,

     (y) the Trustee will not be required (i) to issue, register the transfer of or
exchange any Note for a period of 15 days before a selection of Notes to be redeemed or
purchased pursuant to an Offer to Purchase, (ii) to register the transfer of or exchange
any Note so selected for redemption or purchase in whole or in part, except, in the case
of a partial redemption or purchase, that portion of any Note not being redeemed or
purchased, or (iii) if a redemption or a purchase pursuant to an Offer to Purchase is to
occur after a Regular Record Date but on or before the corresponding Interest Payment
Date, to register the transfer of or exchange any Note on or after the Regular Record Date
and before the date of redemption or purchase. Prior to the registration of any transfer,
the Company, the Trustee and their agents will treat the Person in whose name the Note is
registered as the owner and Holder thereof for all purposes (whether or not the Note is
overdue), and will not be affected by notice to the contrary, and

     (z) every Note presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the Registrar
duly executed, by the Holder thereof or his attorney duly authorized in writing.

     From time to time the Company will execute and the Trustee will authenticate additional Notes
as necessary in order to permit the registration of a transfer or exchange in accordance with this
Section. In order to facilitate the execution, authentication and delivery of Certificated Notes,
the Company shall deliver a supply of Certificated Notes to the Trustee in sufficient time to
permit the execution, authentication and delivery thereof on a timely basis.

     No service charge will be imposed in connection with any transfer or exchange of any Note, but
the Company may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection

37

 

therewith (other than a transfer tax or other similar governmental charge payable upon
exchange pursuant to subsection (b)(4)).

   (e) (1) Global Note to Global Note. If a beneficial interest in a Global Note is
transferred or exchanged for a beneficial interest in another Global Note, the Trustee
will (x) record a decrease in the principal amount of the Global Note being transferred or
exchanged equal to the principal amount of such transfer or exchange and (y) record a like
increase in the principal amount of the other Global Note of the same series. Any
beneficial interest in one Global Note that is transferred to a Person who takes delivery
in the form of an interest in another Global Note, or exchanged for an interest in another
Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note
and become an interest in the other Global Note and, accordingly, will thereafter be
subject to all transfer and exchange restrictions, if any, and other procedures applicable
to beneficial interests in such other Global Note for as long as it remains such an
interest.

     (2) Global Note to Certificated Note. If a beneficial interest in a Global Note is
transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease
in the principal amount of such Global Note equal to the principal amount of such transfer
or exchange and (y) deliver one or more new Certificated Notes of the same series in
authorized denominations having an equal aggregate principal amount to the transferee (in
the case of a transfer) or the owner of such beneficial interest (in the case of an
exchange), registered in the name of such transferee or owner, as applicable.

     (3) Certificated Note to Global Note. If a Certificated Note is transferred or
exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such
Certificated Note, (y) record an increase in the principal amount of such Global Note of
the same series equal to the principal amount of such transfer or exchange and (z) in the
event that such transfer or exchange involves less than the entire principal amount of the
canceled Certificated Note, deliver to the Holder thereof one or more new Certificated
Notes of the same series in authorized denominations having an aggregate principal amount
equal to the untransferred or unexchanged portion of the canceled Certificated Note,
registered in the name of the Holder thereof.

     (4) Certificated Note to Certificated Note. If a Certificated Note is transferred or
exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note
being transferred or exchanged, (y) deliver one or more new Certificated Notes of the same
series in authorized denominations having an aggregate principal amount equal to the
principal amount of such transfer or exchange to the transferee (in the case of a

38

 

transfer) or the Holder of the canceled Certificated Note (in the case of an
exchange), registered in the name of such transferee or Holder, as applicable, and (z) if
such transfer or exchange involves less than the entire principal amount of the canceled
Certificated Note, deliver to the Holder thereof one or more Certificated Notes of the
same series in authorized denominations having an aggregate principal amount equal to the
untransferred or unexchanged portion of the canceled Certificated Note, registered in the
name of the Holder thereof.

     Section 2.10. Restrictions on Transfer and Exchange. (a) The transfer or exchange of any
Note (or a beneficial interest therein) may only be made in accordance with this Section and
Section 2.09 and, in the case of a Global Note (or a beneficial interest therein), the applicable
rules and procedures of the Depositary. The Trustee shall refuse to register any requested
transfer or exchange that does not comply with the preceding sentence.

     (b) Subject to paragraph (c), the transfer or exchange of any Note (or a beneficial interest
therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of
the type set forth opposite in column B below may only be made in compliance with the certification
requirements (if any) described in the clause of this paragraph set forth opposite in column C
below.

	 	 	 	 	 	 	 
	A	 	B	 	C  
	U.S. Global Note

	 	U.S. Global Note
	 	 	(1	)
	U.S. Global Note

	 	Offshore Global Note
	 	 	(2	)
	U.S .Global Note

	 	IAI Global Note
	 	 	(6	)
	U.S. Global Note

	 	Certificated Note
	 	 	(3	)
	Offshore Global Note

	 	U.S. Global Note
	 	 	(4	)
	Offshore Global Note

	 	Offshore Global Note
	 	 	(1	)
	Offshore Global Note

	 	IAI Global Note
	 	 	(6	)
	Offshore Global Note

	 	Certificated Note
	 	 	(5	)
	IAI Global Note

	 	U.S. Global Note
	 	 	(4	)
	IAI Global Note

	 	Offshore Global Note
	 	 	(2	)
	IAI Global Note

	 	IAI Global Note
	 	 	(1	)
	IAI Global Note

	 	Certificated Note
	 	 	(3	)
	Certificated Note

	 	U.S. Global Note
	 	 	(4	)
	Certificated Note

	 	Offshore Global Note
	 	 	(2	)
	Certificated Note

	 	IAI Global Note
	 	 	(6	)
	Certificated Note

	 	Certificated Note
	 	 	(3	)

 

(1)  No certification is required.

 

(2)  The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Regulation S Certificate; provided that if the
requested transfer or exchange is made by

39

 

  the Holder of a Certificated Note that does not bear the Restricted Legend, then no
certification is required.

(3)  The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly completed
Regulation S Certificate or (z) a duly completed Institutional Accredited Investor
Certificate, and/or, in the case of clauses (x), (y) and (z), an Opinion of Counsel and
such other certifications and evidence as the Company may reasonably require in order to
determine that the proposed transfer or exchange is being made in compliance with the
Securities Act and any applicable securities laws of any state of the United States;
provided that if the requested transfer or exchange is made by the Holder of a
Certificated Note that does not bear the Restricted Legend, then no certification is
required. In the event that (i) the requested transfer or exchange takes place after the
Restricted Period and a duly completed Regulation S Certificate is delivered to the
Trustee or (ii) a Certificated Note that does not bear the Restricted Legend is
surrendered for transfer or exchange, upon transfer or exchange the Trustee will deliver a
Certificated Note that does not bear the Restricted Legend.

(4)  The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Rule 144A Certificate.

(5)  Notwithstanding anything to the contrary contained herein, no such exchange is
permitted if the requested exchange involves a beneficial interest in a Temporary Offshore
Global Note. If the requested transfer involves a beneficial interest in a Temporary
Offshore Global Note, the Person requesting the transfer must deliver or cause to be
delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y) a duly
completed Institutional Accredited Investor Certificate and/or an Opinion of Counsel and
such other certifications and evidence as the Company may reasonably require in order to
determine that the proposed transfer is being made in compliance with the Securities Act
and any applicable securities laws of any state of the United States. If the requested
transfer or exchange involves a beneficial interest in a Permanent Offshore Global Note,
no certification is required and the Trustee will deliver a Certificated Note that does
not bear the Restricted Legend.

(6)  The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Institutional Accredited Investor Certificate.

 

40

 

     (c) No certification is required in connection with any transfer or exchange of any Note (or a
beneficial interest therein)

     (1) after such Note is eligible for resale pursuant to Rule 144 under the Securities
Act (or a successor provision) without the need for current public information; provided
that the Company has provided the Trustee with an Officers’ Certificate to that effect,
and the Company may require from any Person requesting a transfer or exchange in reliance
upon this clause (1) an opinion of counsel and any other reasonable certifications and
evidence in order to support such certificate; or

     (2)(x) sold pursuant to an effective registration statement, pursuant to the
Registration Rights Agreement or otherwise or (y) which is validly tendered for exchange
into an Exchange Note pursuant to an Exchange Offer.

     Any Certificated Note delivered in reliance upon clause (c) will not bear the Restricted
Legend.

     (d) The Trustee will retain copies of all certificates, opinions and other documents received
in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the
Company will have the right to inspect and make copies thereof at any reasonable time upon written
notice to the Trustee.

     Section 2.11. Temporary Offshore Global Notes. (a) Each Note originally sold by the Initial
Purchasers in reliance upon Regulation S will be evidenced by one or more Offshore Global Notes
that bear the Temporary Offshore Global Note Legend.

     (b) An owner of a beneficial interest in a Temporary Offshore Global Note (or a Person acting
on behalf of such an owner) may provide to the Trustee (and the Trustee will accept) a duly
completed Certificate of Beneficial Ownership at any time after the Restricted Period (it being
understood that the Trustee will not accept any such certificate during the Restricted Period).
Promptly after acceptance of a Certificate of Beneficial Ownership with respect to such a
beneficial interest, the Trustee will cause such beneficial interest to be exchanged for an
equivalent beneficial interest in a Permanent Offshore Global Note, and will (x) permanently reduce
the principal amount of such Temporary Offshore Global Note by the amount of such beneficial
interest and (y) increase the principal amount of such Permanent Offshore Global Note by the amount
of such beneficial interest.

     (c) Notwithstanding paragraph (b), if after the Restricted Period any Initial Purchaser owns a
beneficial interest in a Temporary Offshore Global Note, such Initial Purchaser may, upon written
request to the Trustee accompanied by a certification as to its status as an Initial Purchaser,
exchange such beneficial

41

 

interest for an equivalent beneficial interest in a Permanent Offshore Global Note, and the
Trustee will comply with such request and will (x) permanently reduce the principal amount of such
Temporary Offshore Global Note by the amount of such beneficial interest and (y) increase the
principal amount of such Permanent Offshore Global Note by the amount of such beneficial interest.

     (d) Notwithstanding anything to the contrary contained herein, any owner of a beneficial
interest in a Temporary Offshore Global Note shall not be entitled to receive payment of principal
or interest on such beneficial interest or other amounts in respect of such beneficial interest
until such beneficial interest is exchanged for an interest in a Permanent Offshore Global Note or
transferred for an interest in another Global Note or a Certificated Note.

ARTICLE 3

Redemption; Offer to Purchase

     Section 3.01. Optional Redemption. (a) At any time and from time to time prior to March 15,
2015, the Company may redeem, in whole or in part, the 2018 Notes at a price of 100% of the
principal amount of the Notes redeemed plus the Applicable Premium, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date.

     (b) At any time and from time to time on or after March 15, 2015, the Company may redeem the
2018 Notes, in whole or in part, at a redemption price equal to the percentage of principal amount
set forth below plus accrued and unpaid interest to the redemption date.

	 	 	 	 	 
	12-month period	 	 
	commencing	 	 
	March 15	 	 
	in Year	 	Percentage

	2015
	 	 	103.438%	
	2016
	 	 	101.719%	
	2017 and thereafter
	 	 	       100%	

     (c) At any time and from time to time prior to March 15, 2016, the Company may redeem, in
whole or in part, the 2021 Notes at a price of 100% of the principal amount of the Notes redeemed
plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date.

     (d) At any time and from time to time on or after March 15, 2016, the Company may redeem the
2021 Notes, in whole or in part, at a redemption price equal to the percentage of principal amount
set forth below plus accrued and unpaid interest to the redemption date.

42

 

	 	 	 	 	 
	12-month period	 	 
	commencing	 	 
	March 15	 	 
	in Year	 	Percentage

	2016
	 	 	103.563%	
	2017
	 	 	102.375%	
	2018
	 	 	101.188%	
	2019 and thereafter
	 	 	       100%	

     The Company, and not the Trustee, shall be responsible for calculating the Applicable Premium.
Promptly after the calculation thereof, the Company shall give the Trustee notice of the amount of
the Applicable Premium.

     Section 3.02. Redemption with Proceeds of Public Equity Offering. (a) At any time and from
time to time prior to March 15, 2014, the Company may redeem the 2018 Notes with the net cash
proceeds received by the Company from any Qualified Equity Offering at a redemption price equal to
106.875% of the principal amount plus accrued and unpaid interest to the redemption date, in an
aggregate principal amount for all such redemptions not to exceed 35% of the aggregate principal
amount of the 2018 Notes, including Additional Notes, provided that

     (1) in each case the redemption takes place not later than 90 days after the closing of the
related Qualified Equity Offering, and

     (2) not less than 65% in principal amount of the 2018 Notes, including Additional Notes,
remains outstanding immediately thereafter.

     (b) At any time and from time to time prior to March 15, 2014, the Company may redeem the 2021
Notes with the net cash proceeds received by the Company from any Qualified Equity Offering at a
redemption price equal to 107.125% of the principal amount plus accrued and unpaid interest to the
redemption date, in an aggregate principal amount for all such redemptions not to exceed 35% of the
aggregate principal amount of the 2021 Notes, including Additional Notes, provided that

     (1) in each case the redemption takes place not later than 90 days after the closing of the
related Qualified Equity Offering, and

     (2) not less than 65% in principal amount of the 2021 Notes, including Additional Notes,
remains outstanding immediately thereafter.

     Section 3.03. Special Redemption. In the event that the Completion Date has not occurred on
or prior to the earlier to occur of (i) the determination by the Board of Directors in its good
faith judgment that the Completion Date will not occur by June 30, 2011, or (ii) June 30, 2011
(such earlier date, the “Date of

43

 

Determination”), the Company shall redeem each Note (the “Special Redemption”), on the date
that is five Business Days after the Date of Determination (the “Special Redemption Date”), at the
Special Redemption Price. If the Completion Date has not occurred on or prior to the Date of
Determination, upon the receipt of written instruction from the Company, which instruction shall
include a statement that the Date of Determination has occurred and a notice as to the amount of
the Special Redemption Price, and an Officers’ Certificate and Opinion of Counsel, each to the
effect that all conditions precedent provided for in the Indenture to the Special Redemption have
been complied with, which the Company is required to provide by the close of business on the Date
of Determination, the Trustee will send a notice of such Special Redemption on behalf of the
Company to the Holders of the Notes (in the form provided to it by the Company) on the next
Business Day after the Date of Determination.

     Section 3.04. Mandatory Redemption. In the event that the Spin-off is not consummated within
five Business Days after the Completion Date (the “Spin-off Determination Date”), the Company shall
redeem each Note (the “Mandatory Redemption”), on the date that is five Business Days after the
Spin-off Determination Date (the “Mandatory Redemption Date”), at a cash redemption price equal to
the issue price of such Note (as set forth on the cover page of the Offering Circular), plus the
Accrued Yield and accrued interest on such Note to the date of redemption (the “Mandatory
Redemption Price”). If the Spin-off has not occurred on or prior to the Spin-off Determination
Date, upon the receipt of written instruction from the Company, which instructions shall include a
statement that the Spin-off Determination Date has occurred and a notice as to the amount of the
Mandatory Redemption Price, and an Officers’ Certificate and Opinion of Counsel each to the effect
that all conditions precedent provided for in the Indenture to the Mandatory Redemption have been
complied with, which the Company is required to provide by the close of business on the Spin-off
Determination Date, the Trustee will send a notice of such Mandatory Redemption on behalf of the
Company to the Holders of the Notes (in the form provided to it by the Company) on the next
Business Day after the Spin-off Determination Date.

     Section 3.05. Method and Effect of Redemption. (a) If the Company elects to redeem Notes of
a series, it must notify the Trustee of the redemption date and the principal amount of Notes to be
redeemed by delivering an Officers’ Certificate at least 60 days before the redemption date (unless
a shorter period is satisfactory to the Trustee) except as set forth in Section 3.03 and Section
3.04, such Officers’ Certificate to state that all conditions precedent provided for in the
Indenture to such redemption have been complied with. If fewer than all of the Notes of a series
are being redeemed, the Trustee will select the Notes of such series to be redeemed, no later than
30 days prior to the redemption date, pro rata, by lot or by any other method the Trustee in its
sole discretion deems fair and appropriate, in denominations of $2,000 principal amount and higher
integral multiples of $1,000; provided, that the unredeemed portion of a Note must be in a

44

 

minimum principal amount of $2,000. The Trustee will notify the Company promptly of the Notes
or portions of Notes to be called for redemption. Except as provided in Section 3.03 and Section
3.04, notice of redemption must be sent by the Company to Holders whose Notes are to be redeemed at
least 30 days but not more than 60 days before the redemption date. At the Company’s request in
connection with an optional redemption, the Trustee shall give the notice of redemption in the
Company’s name and at its expense; provided, however, that the Company shall have delivered to the
Trustee, at least 45 days prior to the redemption date (or such shorter period as may be acceptable
to the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in Section 3.05(b).

     (b) The notice of redemption will identify the Notes to be redeemed and will include or state
the following:

     (1) the redemption date;

     (2) the redemption price, or if not then ascertainable, the manner of calculation
thereof, including the portion thereof representing any accrued interest;

     (3) the place or places where Notes are to be surrendered for redemption;

     (4) Notes called for redemption must be so surrendered in order to collect the
redemption price;

     (5) on the redemption date the redemption price will become due and payable on Notes
called for redemption, and interest on Notes called for redemption will cease to accrue on
and after the redemption date;

     (6) if any Note is redeemed in part, on and after the redemption date, upon surrender
of such Note, new Notes equal in principal amount to the unredeemed portion will be
issued; and

     (7) if any Note contains a CUSIP or CINS number, no representation is being made as
to the correctness of the CUSIP or CINS number either as printed on the Notes or as
contained in the notice of redemption and that the Holder should rely only on the other
identification numbers printed on the Notes.

     (c) Once notice of redemption is sent to the Holders, Notes called for redemption become due
and payable at the redemption price on the redemption date, and upon surrender of the Notes called
for redemption, the Company shall redeem such Notes at the redemption price. Commencing on the
redemption date, Notes redeemed will cease to accrue interest; provided, that the Company has not

45

 

defaulted in depositing the redemption price in accordance with the provisions hereof. Upon
surrender of any Note redeemed in part, the Holder will receive a new Note equal in principal
amount to the unredeemed portion of the surrendered Note.

     Section 3.06. Offer to Purchase. (a) An “Offer to Purchase” means an offer by the Company to
purchase Notes as required by the Indenture. An Offer to Purchase must be made by written offer
(the “offer”) sent to the Holders. The Company will notify the Trustee at least 15 days (or such
shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its
obligation to make an Offer to Purchase, and the offer will be sent by the Company or, at the
Company’s request, by the Trustee in the name and at the expense of the Company. Such request
shall be evidenced by an Officers’ Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in Section 3.06(b).

     (b) The offer must include or state the following as to the terms of the Offer to Purchase:

     (1) the provision of the Indenture pursuant to which the Offer to Purchase is being
made;

     (2) the aggregate principal amount of the outstanding Notes offered to be purchased
by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner
by which such amount has been determined pursuant to the Indenture) (the “purchase
amount”);

     (3) the purchase price, including the portion thereof representing accrued interest;

     (4) an expiration date (the “expiration date”) not less than 30 days or more than 60
days after the date of the offer, and a settlement date for purchase (the “purchase date”)
not more than five Business Days after the expiration date;

     (5) describe the transaction or transactions that constituted the requirement to make
the Offer to Purchase;

     (6) a Holder may tender all or any portion of its Notes, subject to the requirement
that any portion of a Note tendered must be equal to $2,000 principal amount or a higher
multiple of $1,000 principal amount (provided that any unpurchased portion of the Note
must be in a minimum principal amount of $2,000);

     (7) the place or places where Notes are to be surrendered for tender pursuant to the
Offer to Purchase;

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     (8) each Holder electing to tender a Note pursuant to the offer will be required to
surrender such Note at the place or places specified in the offer prior to the close of
business on the expiration date (such Note being, if the Company or the Trustee so
requires, duly endorsed or accompanied by a duly executed written instrument of transfer);

     (9) interest on any Note not tendered, or tendered but not purchased by the Company
pursuant to the Offer to Purchase, will continue to accrue;

     (10) on the purchase date the purchase price will become due and payable on each Note
accepted for purchase, and interest on Notes purchased will cease to accrue on and after
the purchase date;

     (11) Holders are entitled to withdraw Notes tendered by giving notice, which must be
received by the Company or the Trustee not later than the close of business on the
expiration date, setting forth the name of the Holder, the principal amount of the
tendered Notes, the certificate number of the tendered Notes and a statement that the
Holder is withdrawing all or a portion of the tender;

     (12) (i) if Notes in an aggregate principal amount less than or equal to the purchase
amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company
will purchase all such Notes, and (ii) if the Offer to Purchase is for less than all of
the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase
amount are tendered and not withdrawn pursuant to the offer, the Company will purchase
Notes of both series having an aggregate principal amount equal to the purchase amount on
a pro rata basis (based on the principal amount of all Notes of both series tendered),
with adjustments so that only Notes in multiples of $1,000 principal amount will be
purchased;

     (13) if any Note is purchased in part, new Notes equal in principal amount to the
unpurchased portion of the Note will be issued; and

     (14) if any Note contains a CUSIP or CINS number, no representation is being made as
to the correctness of the CUSIP or CINS number either as printed on the Notes or as
contained in the offer and that the Holder should rely only on the other identification
numbers printed on the Notes.

     (c) Prior to the purchase date, the Company will accept tendered Notes for purchase as
required by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an
Officers’ Certificate specifying which Notes have been accepted for purchase. On the purchase date
the purchase price will

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become due and payable on each Note accepted for purchase, and interest on Notes purchased
will cease to accrue on and after the purchase date; provided, that the Company has not defaulted
in depositing the purchase price in accordance with the provisions hereof. The Trustee will
promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes equal
in principal amount to any unpurchased portion of any Notes accepted for purchase in part.

     (d) The Company will comply with Rule 14e-1 under the Exchange Act and all other applicable
laws in making any Offer to Purchase, and the above procedures will be deemed modified as necessary
to permit such compliance, and the Company shall not be deemed to have breached its obligations
hereinder as a result of such compliance.

ARTICLE 4

Covenants

     Section 4.01. Payment Of Notes. (a) The Company agrees to pay the principal of and interest
on the Notes on the dates and in the manner provided in the Notes and the Indenture. Not later
than 9:00 A.M. (New York City time) on the due date of any principal of or interest on any Notes,
or any redemption or purchase price of the Notes, the Company will deposit with the Trustee (or
Paying Agent) money in immediately available funds sufficient to pay such amounts, provided that if
the Company or any Affiliate of the Company is acting as Paying Agent, it will, on or before each
due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient to pay such amounts until paid to such Holders or otherwise disposed of as provided in
the Indenture. In each case the Company will promptly notify the Trustee of its compliance with
this paragraph.

     (b) An installment of principal or interest will be considered paid on the date due if the
Trustee (or Paying Agent, other than the Company or any Affiliate of the Company) holds on that
date money designated for and sufficient to pay the installment. If the Company or any Affiliate
of the Company acts as Paying Agent, an installment of principal or interest will be considered
paid on the due date only if paid to the Holders.

     (c) The Company agrees to pay interest on overdue principal, and, to the extent lawful,
overdue installments of interest at the rate per annum specified in the Notes.

     (d) Payments in respect of the Notes represented by the Global Notes are to be made by wire
transfer of immediately available funds to DTC for transfer to the accounts of its participants.
With respect to Certificated Notes, the Company will make all payments by wire transfer of
immediately available funds to the accounts specified by the Holders thereof or, if no such account
is specified

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to the Trustee or the Paying Agent at least 15 calendar days prior to the applicable payment
date, by mailing a check to each Holder’s registered address.

     Section 4.02. Maintenance Of Office Or Agency. The Company will maintain in the United
States of America, an office or agency where Notes may be surrendered for registration of transfer
or exchange or for presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and the Indenture may be served. The Company hereby initially designates the
Corporate Trust Office of the Trustee as such agency of the Company. The Company will give prompt
written notice to the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served upon the Trustee.

     The Company may also from time to time designate one or more other offices or agencies where
the Notes may be surrendered or presented for any of such purposes and may from time to time
rescind such designations. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.

     Section 4.03. Existence. The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with their respective organizational documents, and the
material rights, licenses and franchises of the Company and each Restricted Subsidiary, provided
that the Company is not required to preserve any such right, license or franchise, or the existence
of any Restricted Subsidiary, if the maintenance or preservation thereof is no longer desirable in
the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole; and
provided further that this Section does not prohibit any transaction otherwise permitted by Section
4.12 or Article 5.

     Section 4.04. [Reserved].

     Section 4.05. [Reserved].

     Section 4.06. Limitation on Debt. (a) The Company

     (1) will not, and will not permit any of its Restricted Subsidiaries to, Incur any
Debt; and

     (2) will not permit any of its Restricted Subsidiaries that is not a Guarantor to
Incur any Preferred Stock (other than Preferred Stock of Restricted Subsidiaries held by
the Company or a Restricted Subsidiary, so long as it is so held);

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provided that the Company or any Restricted Subsidiary may Incur Debt and any Restricted Subsidiary
that is not a Guarantor may Incur Preferred Stock if, on the date of the Incurrence, after giving
effect to the Incurrence and the receipt and application of the proceeds therefrom, the Fixed
Charge Coverage Ratio is not less than 2.0:1.0.

     (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any
Restricted Subsidiary may Incur the following (“Permitted Debt”):

     (1) Debt (“Permitted Bank Debt”) of the Company or any Guarantor pursuant to Credit
Facilities; provided that the aggregate principal amount at any time outstanding does not
exceed $1,500.0 million, less any amount of such Debt permanently repaid as provided under
Section 4.12;

     (2) Debt of the Company or any Restricted Subsidiary to the Company or any Restricted
Subsidiary so long as such Debt continues to be owed to the Company or a Restricted
Subsidiary;

     (3) Debt of the Company pursuant to the Notes (other than Additional Notes, but
including Exchange Notes in respect of Notes and Additional Notes) and Debt of any
Guarantor pursuant to a Note Guaranty of the Notes (including Additional Notes and
Exchange Notes);

     (4) Debt (“Permitted Refinancing Debt”) constituting an extension or renewal of,
replacement of, or substitution for, or issued in exchange for, or the net proceeds of
which are used to repay, redeem, repurchase, refinance or refund, including by way of
defeasance (all of the above, for purposes of this clause, “refinance”) then outstanding
Debt in an amount not to exceed the principal amount of the Debt so refinanced, plus
premiums, fees and expenses; provided that

     (A) in case the Debt to be refinanced is Subordinated Debt, the new Debt, by
its terms or by the terms of any agreement or instrument pursuant to which it is
outstanding is expressly made subordinate in right of payment to the Notes at
least to the extent that the Debt to be refinanced is subordinated to the Notes,

     (B) the new Debt either does not have a Stated Maturity prior to the Stated
Maturity of the Debt to be refinanced or has a Stated Maturity at least 91 days
after the maturity of the Notes, and the Average Life of the new Debt is at least
equal to the remaining Average Life of the Debt to be refinanced,

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     (C) in no event may Debt of the Company or any Guarantor be refinanced
pursuant to this clause by means of any Debt of any Restricted Subsidiary that is
not a Guarantor, and

     (D) Debt Incurred pursuant to clauses (1), (2), (5), (6), (9), (10), (12),
(13), (14) and (15) may not be refinanced pursuant to this clause;

     (5) Hedging Agreements of the Company or any Restricted Subsidiary entered into in
the ordinary course of business for the purpose of limiting risks associated with the
business of the Company and its Restricted Subsidiaries and not for speculation;

     (6) Debt of the Company or any Restricted Subsidiary incurred in respect of workers’
compensation claims and self-insurance obligations and with respect to letters of credit
and bankers’ acceptances issued in the ordinary course of business and not supporting
Debt, including letters of credit for operating purposes or completion guarantees or
supporting indemnity, bid, warranty, performance, surety, appeal or similar bonds, or
indemnification, adjustment of purchase price or similar obligations incurred in
connection with the acquisition or disposition of any business or assets;

     (7) Debt of the Company or any Restricted Subsidiary (a) that is outstanding on the
Issue Date or will be Incurred on or prior to the Completion Date as a result of the
Transactions or (b) Incurred under the Interim Ordinary Course Transactions (and, for
purposes of clause (4)(D), not otherwise constituting Permitted Debt); provided that no
Debt for borrowed money Incurred under clause (b) shall remain outstanding following the
Spin-Off Date;

     (8) Acquired Debt; provided that, after giving effect to the incurrence thereof,

     (A) the Company could incur at least $1.00 of Debt pursuant to paragraph (a)
above or

     (B) the Fixed Charge Coverage Ratio of the Company would be greater than
such ratio immediately prior to such incurrence;

     (9) Obligations of the Company or any Restricted Subsidiary in respect of customer
advances received and held in the ordinary course of business;

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     (10) Debt of the Company and any of its Restricted Subsidiaries consisting of (i) the
financing of insurance premiums or (ii) take-or-pay obligations contained in supply
arrangements, in each case, incurred in the ordinary course of business;

     (11) Debt of the Company or any Restricted Subsidiary, which may include Capital
Leases, mortgage financings or purchase money obligations, Incurred on or after the Issue
Date no later than 180 days after the date of purchase or completion of construction or
improvement of property, plant or equipment for the purpose of financing all or any part
of the purchase price or cost of construction or improvement; provided that the aggregate
principal amount of any Debt (including the aggregate outstanding amount of Permitted
Refinancing Debt Incurred to refinance Debt Incurred pursuant to this clause) at any time
outstanding pursuant to this clause may not exceed the greater of (A) $75.0 million and
(B) 2.0% of Consolidated Net Tangible Assets of the Company;

     (12) Debt of the Company or any Restricted Subsidiary consisting of Guarantees of
Debt of the Company or any Restricted Subsidiary Incurred under any other clause of this
covenant;

     (13) Debt incurred on behalf of, or representing Guarantees of Debt of, joint
ventures not to exceed the greater of (A) $100.0 million and (B) 2.6% of Consolidated Net
Tangible Assets at any time outstanding;

     (14) Debt supported by a letter of credit Incurred under clause (1) above in the same
principal amount; and

     (15) Debt of the Company or any Restricted Subsidiary Incurred on or after the Issue
Date not otherwise permitted in an aggregate principal amount at any time outstanding not
to exceed the greater of (A) $200.0 million and (B) 5.3% of Consolidated Net Tangible
Assets.

     (c) Notwithstanding any other provision of this covenant, for purposes of determining
compliance with this covenant, increases in Debt solely due to fluctuations in the
exchange rates of currencies will not be deemed to exceed the maximum amount that the
Company or a Restricted Subsidiary may Incur under this covenant. For purposes of
determining compliance with any U.S. dollar-denominated restriction on the Incurrence of
Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in effect on the
date such Debt was Incurred; provided that if such Debt is Incurred to refinance other
Debt denominated in a foreign currency, and such refinancing would cause the applicable
U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, such U.S.

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dollar-denominated restriction shall be deemed not to have been exceeded so long as
the principal amount of such refinancing Debt does not exceed the principal amount of such
Debt being refinanced. The principal amount of any Debt Incurred to refinance other Debt,
if Incurred in a different currency from the Debt being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such respective
Debt is denominated that is in effect on the date of such refinancing. Guarantees or
Liens in respect of, or obligations in respect of letters of credit relating to, Debt
which is otherwise included in the determination of a particular amount of Debt shall not
be included in the determination of such amount of Debt; provided that the Incurrence of
the Debt represented by such guarantee, Lien or letter of credit, as the case may be, was
in compliance with this covenant.

     (d) In the event that an item, or a portion of such item, taken by itself, of Debt or
Preferred Stock meets the criteria of more than one of the categories of Permitted Debt
described in clauses (1) through (14) above or such item is (or a portion, taken by itself
(without taking into account any other Permitted Debt (other than Permitted Debt under
clause (8) above) being incurred on the same date, would be) entitled to be Incurred
pursuant to paragraph (a) of this covenant, the Company shall, in its sole discretion,
classify or reclassify, or later divide, classify or reclassify, such item of Debt in any
manner that complies with this covenant, and may change the classification of an item of
Debt (or any portion thereof) to any other type of Debt described in this covenant at any
time; provided that Debt under the Credit Agreement outstanding on the Completion Date
shall be deemed at all times to be incurred under clause (1) of Permitted Debt.

     (e) Neither the Company nor any Guarantor may Incur any Debt that is subordinated in
right of payment to other Debt of the Company or the Guarantor unless such Debt is also
subordinated in right of payment to the Notes or the relevant Note Guaranty to the same
extent. This does not apply to distinctions between categories of Debt that exist by
reason of any structural subordination, Liens or Guarantees securing or in favor of some
but not all of such Debt.

     Section 4.07. Limitation on Restricted Payments. (a) The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly (the payments and other actions
described in the following clauses being collectively “Restricted Payments”):

     (i) declare or pay any dividend or make any distribution on its Equity Interests
(other than dividends or distributions paid in the Company’s Qualified Equity Interests)
held by Persons other than the Company or any of its Restricted Subsidiaries;

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     (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests
of the Company or any direct or indirect parent of the Company held by Persons other than
the Company or any of its Restricted Subsidiaries;

     (iii) repay, redeem, repurchase, defease or otherwise acquire or retire for value, or
make any payment on or with respect to, any Subordinated Debt (except (1) a payment of
interest or principal at Stated Maturity or (2) the purchase, repurchase or other
acquisition of Subordinated Debt or payments of principal and interest in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity, in each
case, within one year of the due date thereof); or

     (iv) make any Investment other than a Permitted Investment;

unless, at the time of, and after giving effect to, the proposed Restricted Payment:

     (1) no Default has occurred and is continuing,

     (2) the Company could Incur at least $1.00 of Debt under Section 4.06(a), and

     (3) the aggregate amount expended for all Restricted Payments made on or after the
Issue Date would not, subject to paragraph (c), exceed the sum of

     (A) 50% of the aggregate amount of the Consolidated Net Income (or, if the
Consolidated Net Income is a loss, minus 100% of the amount of the loss) accrued
on a cumulative basis during the period, taken as one accounting period, from
January 1, 2011, and ending on the last day of the Company’s most recently
completed fiscal quarter for which internal financial statements are available
immediately preceding the date of such proposed Restricted Payment, plus

     (B) subject to paragraph (c), the aggregate net cash proceeds and the fair
market value (determined in the good faith of the Company) of any property other
than cash received by the Company (other than from a Subsidiary) after the Issue
Date from

     (i) the issuance and sale of its Qualified Equity Interests,
including by way of issuance of its Disqualified Equity Interests or
Debt to the extent since converted into Qualified Equity Interests of
the Company, or

     (ii) as a contribution to its common equity, plus

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     (C) an amount equal to the sum, for all Unrestricted Subsidiaries, of the
following:

     (x) the cash and the fair market value as determined in good faith
by the Company of property, after the Issue Date, received on
Investments (other than Permitted Investments) in an Unrestricted
Subsidiary made after the Issue Date as a result of any sale, repayment,
redemption, liquidating distribution or other realization other than
pursuant to clause (D) below (to the extent not included in Consolidated
Net Income), plus

     (y) the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the fair market value (as determined in good faith
by the Company) of the assets less liabilities of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary,

not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments made after the Issue Date by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary pursuant to this paragraph (a); plus

     (D) the cash and the fair market value (as determined in good faith by the
Company) of property, after the Issue Date, received on any other Investment
(other than Permitted Investments) made after the Issue Date as a result of any
payments of interest on Debt, dividends, repayments of loans or advances, or
sale, repayment, redemption, liquidating distribution or other realization (to
the extent not included in Consolidated Net Income) not to exceed the amount of
such Investment as made.

     The amount expended in any Restricted Payment, if other than in cash, will be deemed to be the
fair market value of the relevant non-cash assets, as determined in good faith by the Board of
Directors, whose determination will be conclusive and evidenced by a Board Resolution.

     (b) The foregoing will not prohibit:

     (1) the payment of any dividend within 60 days after the date of declaration thereof
if, at the date of declaration, such payment would comply with paragraph (a);

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     (2) dividends or distributions by a Restricted Subsidiary payable, on a pro rata
basis or on a basis more favorable to the Company, to all holders of its Equity Interests;

     (3) the repayment, redemption, repurchase, defeasance or other acquisition or
retirement of Subordinated Debt with the net cash proceeds of, or in exchange for, a
substantially concurrent issuance of new Subordinated Debt Incurred in accordance with the
Indenture;

     (4) the purchase, redemption or other acquisition or retirement of Equity Interests
of the Company or any direct or indirect parent in exchange for, or out of the net cash
proceeds of a substantially concurrent offering of, Qualified Equity Interests of the
Company or of a cash contribution to the common equity of the Company;

     (5) the repayment, redemption, repurchase, defeasance or other acquisition or
retirement of Subordinated Debt of the Company in exchange for, or out of the net cash
proceeds of, a substantially concurrent offering of, Qualified Equity Interests of the
Company or of a cash contribution to the common equity of the Company;

     (6) any Investment made in exchange for, or out of the net cash proceeds of a
substantially concurrent offering of Qualified Equity Interests of the Company or of a
cash contribution to the common equity of the Company;

     (7) the purchase, redemption or other acquisition or retirement for value of Equity
Interests of the Company in connection with issuances of Equity Interests pursuant to
employee benefit plans or otherwise in compensation to officers, directors or employees,
which purchase, redemption or other acquisition or retirement for value is in order to
minimize dilution; provided that the aggregate cash consideration paid therefor in any
twelve-month period after the Issue Date does not exceed an aggregate amount of $10.0
million; provided further, that any unused amounts in any calendar year may be carried
forward to one or more future periods subject to a maximum aggregate amount of repurchases
made pursuant to this clause (7) not to exceed $20.0 million in any calendar year;

     (8) the defeasance, redemption, repurchase or other acquisition of any Subordinated
Debt at a purchase price not greater than (x) 101% of the principal amount thereof in the
event of a change of control pursuant to a provision no more favorable to the holders
thereof than Section 4.11 or (y) 100% of the principal amount thereof in the event of an
Asset Sale pursuant to a provision no more favorable to the holders thereof than Section
4.12, in each case plus accrued interest, provided that, in each

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case, prior to or contemporaneously with the defeasance, redemption, repurchase or
other acquisition the Company has made an Offer to Purchase and repurchased all Notes
issued under the Indenture that were validly tendered for payment and not withdrawn in
connection with the Offer to Purchase;

     (9) the declaration and payment of dividends on Disqualified Stock of the Company or
any Restricted Subsidiary issued or Incurred in compliance with Section 4.06 to the extent
such dividends are included in Fixed Charges;

     (10) repurchases of Equity Interests deemed to occur upon the exercise of stock
options, warrants or other convertible or exchangeable securities, or cash payments, in
lieu of issuance of fractional shares, in connection with the exercise of stock options,
warrants or other securities convertible into or exchangeable for the Equity Interests of
the Company or any Restricted Subsidiary;

     (11) the declaration and payment of dividends on the Company’s Equity Interests, or
the purchase, repurchase, redemption, defeasance or other acquisition or retirement of any
Qualified Equity Interests of the Company, not to exceed an aggregate amount pursuant to
this clause (11) of $30.0 million in any calendar year provided, that any unused amounts
in any calendar year may be carried forward to one or more future periods; and

     (12) Restricted Payments not otherwise permitted hereby in an aggregate amount not to
exceed $100.0 million.

provided that, in the case of clause (11), no Event of Default has occurred and is continuing or
would occur as a result thereof.

     (c) Proceeds of the issuance of Qualified Equity Interests will be included under clause (3)
of paragraph (a) only to the extent they are not applied as described in clause (4), (5), or (6) of
paragraph (b). Restricted Payments permitted pursuant to clause (2) through (7), (9), (10) or (12)
will not be included in making the calculations under clause (3) of paragraph (a).

     (d) Notwithstanding anything to the contrary set forth above, (i) none of (x) the consummation
of the Transactions, including the Internal Reorganization, the distribution of the Equity
Interests of any Unrestricted Subsidiary by the Company or any Restricted Subsidiary to NGC or any
of its Subsidiaries (other than the Company or any of its Subsidiaries) and the contribution of a
portion of the proceeds of the offering and Credit Agreement borrowings to NGC, in each case as
described in the Offering Circular, or (y) the Interim Ordinary Course Transactions will constitute
a Restricted Payment,

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and(ii) any contribution to the Company’s equity or issuance of Equity Interests of the
Company in connection with the Transactions will be disregarded for purposes of clause (a)(3)
above.

     Section 4.08. Limitation on Liens. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, incur or permit to exist any Liens of any nature whatsoever
that secure Debt on any of its properties or assets, whether owned at the Issue Date or thereafter
acquired, other than Permitted Liens, without effectively providing that the Notes are secured
equally and ratably with (or, if the obligation to be secured by the Lien is subordinated in right
of payment to the Notes or any Note Guaranty, prior to) the obligations so secured for so long as
such obligations are so secured.

     Section 4.09. Limitation on Dividend and other Payment Restrictions Affecting Restricted
Subsidiaries. (a) Except as provided in paragraph (b), the Company will not, and will not permit
any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to

     (1) pay dividends or make any other distributions on any Equity Interests of the
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,

     (2) pay any Debt or other obligation owed to the Company or any other Restricted
Subsidiary,

     (3) make loans or advances to the Company or any other Restricted Subsidiary, or

     (4) transfer any of its property or assets to the Company or any other Restricted
Subsidiary.

     (b) The provisions of paragraph (a) do not apply to any encumbrances or restrictions

     (1) existing (a) on the Issue Date in the Indenture or any other agreements in effect
on the Issue Date, or (b) existing on the Completion Date in the Credit Agreement or any
other agreement relating to the Transactions (in each case on the terms described in the
Offering Circular), and any extensions, renewals, replacements or refinancings of any of
the foregoing; provided that the encumbrances and restrictions in the extension, renewal,
replacement or refinancing are, taken as a whole, no less favorable in any material
respect to the Noteholders than the encumbrances or restrictions being extended, renewed,
replaced or refinanced;

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     (2) existing under or by reason of applicable law, rule, regulation or order;

     (3) existing

     (A) with respect to any Person, or to the property or assets of any Person,
at the time the Person is acquired by the Company or any Restricted Subsidiary,
or

     (B) with respect to any Unrestricted Subsidiary at the time it is designated
or is deemed to become a Restricted Subsidiary,

which encumbrances or restrictions (i) are not applicable to any other Person or the
property or assets of any other Person and (ii) were not put in place in anticipation of
such event, and any extensions, renewals, replacements or refinancings of any of the
foregoing, provided the encumbrances and restrictions in the extension, renewal,
replacement or refinancing are, taken as a whole, no less favorable in any material
respect to the Noteholders than the encumbrances or restrictions being extended, renewed,
replaced or refinanced;

     (4) of the type described in clause (a)(4) arising or agreed to in the ordinary
course of business (i) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease or license, (ii) are
contained in agreements related to the license of copyrighted or patented materials or
other intellectual property or (iii) by virtue of any Lien on, or agreement to transfer,
option or similar right with respect to any property or assets of, the Company or any
Restricted Subsidiary;

     (5) with respect to a Restricted Subsidiary and imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, the Restricted Subsidiary that is permitted
by Section 4.12;

     (6) encumbrances or restrictions that are customary provisions in joint venture
agreements, asset sale agreements, stock sale agreements, sale leaseback agreements or
other similar arrangements with respect to the disposition or distribution of assets or
property subject to such agreements;

     (7) any other agreements governing Debt entered into after the Issue Date that
contains encumbrances and restrictions that are not materially more restrictive with
respect to any Restricted Subsidiary than

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those in effect on the Issue Date with respect to that Restricted Subsidiary pursuant
to agreements in effect on the Issue Date;

     (8) any restriction with respect to the Company or a Restricted Subsidiary (or any of
its property or assets) imposed by customary provisions in Hedging Agreements not entered
into for speculative purposes;

     (9) existing under, by reason of or with respect to Debt Incurred by any Guarantor
permitted to be Incurred under Section 4.06; or

     (10) required pursuant to the Indenture.

     Section 4.10. Guaranties by Restricted Subsidiaries. On the Completion Date, each Domestic
Restricted Subsidiary that Guarantees any Debt under the Credit Agreement shall guarantee the Notes
pursuant to Article 10. If any Restricted Subsidiary Guarantees Debt under the Credit Agreement
after the Completion Date, such Restricted Subsidiary shall guarantee the Notes pursuant to Article
10. A Restricted Subsidiary required to provide a Note Guaranty shall execute a supplemental
indenture in the form of Exhibit C, and deliver an Opinion of Counsel to the Trustee to the effect
that the supplemental indenture has been duly authorized, executed and delivered by the Restricted
Subsidiary and constitutes a valid and binding obligation of the Restricted Subsidiary, enforceable
against the Restricted Subsidiary in accordance with its terms (subject to customary exceptions).

     Section 4.11. Repurchase of Notes Upon a Change of Control. Not later than 30 days following
a Change of Control, the Company will make an Offer to Purchase all outstanding Notes at a purchase
price equal to 101% of the principal amount plus accrued interest to the date of purchase.

     The Company will not be required to make an Offer to Purchase upon a Change of Control if (i)
a third party makes such Offer to Purchase contemporaneously with or upon a Change of Control in
the manner, at the times and otherwise in compliance with the requirements of the Indenture and
purchases all Notes validly tendered and not withdrawn under such Offer to Purchase or (ii) a
notice of redemption to the holders of the Notes has been given pursuant to the Indenture as
described under Section 3.05.

     Section 4.12. Limitation on Asset Sales. (a) The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Sale unless the following conditions are met:

     (1) The Asset Sale is for consideration at least equal to fair market value, as
determined in good faith by the Board of Directors.

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     (2) At least 75% of the consideration consists of cash, Cash Equivalents or
Replacement Assets or a combination thereof received at closing. For purposes of this
clause (2):

     (A) the assumption by the purchaser of Debt or other obligations (other than
Subordinated Debt) of the Company or a Restricted Subsidiary pursuant to a customary
novation agreement,

     (B) instruments or securities received from the purchaser that are promptly, but in
any event within 180 days of the closing, converted by the Company to cash, to the extent
of the cash actually so received, and

     (C) any Designated Non-cash Consideration received by the Company in such Asset Sale
having an aggregate fair market value (as determined in good faith by the Company), taken
together with all other Designated Non-cash Consideration received pursuant to this clause
(C) that is at that time outstanding, not to exceed the greater of $50.0 million and 1.3%
of Consolidated Net Tangible Assets at the time of the receipt of such Designated Non-cash
Consideration (with the fair market value of each item of Designated Non-cash
Consideration being measured at the time received and without giving effect to subsequent
changes in value)

shall be considered cash received at closing.

     (3) Within 365 days after the receipt of any Net Cash Proceeds from an Asset Sale,
the Net Cash Proceeds may be used

     (A) to permanently repay secured Debt of the Company or a Guarantor or any
Debt of a Restricted Subsidiary that is not a Guarantor (and in the case of a
revolving credit facility, permanently reduce the commitment thereunder by such
amount), in each case owing to a Person other than the Company or any Subsidiary,
or

     (B) to acquire Replacement Assets or to make capital expenditures or
expenditures for maintenance, repair or improvement of existing capital assets;

provided that if during such 365-day period the Company or a Restricted Subsidiary enters
into a definitive written agreement committing it to apply such Net Cash Proceeds in
accordance with the requirements of clause (B) above, such 365-day period shall be
extended with respect to the amount of Net Cash Proceeds so committed until the earlier of
the date required to be paid in accordance with such agreement and 180 days.

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     (4) The Net Cash Proceeds of an Asset Sale not applied pursuant to clause (3) within
365 days of the Asset Sale (as may be extended as set forth above) constitute “Excess
Proceeds”. Excess Proceeds of less than $50.0 million will be carried forward and
accumulated. When accumulated Excess Proceeds equals or exceeds such amount, the Company
must, within 30 days, make an Offer to Purchase Notes of both series having a principal
amount equal to

     (A) accumulated Excess Proceeds, multiplied by

     (B) a fraction (x) the numerator of which is equal to the outstanding
principal amount of the Notes of both series and (y) the denominator of which is
equal to the outstanding principal amount of the Notes of both series and all
pari passu Debt similarly required to be repaid, redeemed or tendered for in
connection with the Asset Sale,

     rounded down to the nearest $1,000. The purchase price for the Notes will be 100% of the
principal amount plus accrued interest to the date of purchase. Upon completion of the Offer to
Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after
consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by the
Indenture.

     Section 4.13. Limitation on Transactions with Affiliates. (a) The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction or arrangement (including the purchase, sale, lease or exchange of property or assets,
or the rendering of any service) with any Affiliate of the Company or any Restricted Subsidiary,
for consideration in excess of $10.0 million (a “Related Party Transaction”), except upon fair and
reasonable terms not materially less favorable to the Company or the Restricted Subsidiary than
could be obtained in a comparable arm’s-length transaction with a Person that is not an Affiliate
of the Company.

     (b) Any Related Party Transaction or series of Related Party Transactions with an aggregate
value in excess of $20.0 million must first be approved by a majority of the Board of Directors who
are disinterested in the subject matter of the transaction pursuant to a Board Resolution delivered
to the Trustee. Prior to entering into any Related Party Transaction or series of Related Party
Transactions with an aggregate value in excess of $50.0 million, the Company must in addition
obtain and deliver to the Trustee a favorable written opinion from a nationally recognized
investment banking firm as to the fairness of the transaction to the Company and its Restricted
Subsidiaries from a financial point of view.

     (c) The foregoing paragraphs do not apply to

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     (1) any transaction between the Company and any of its Restricted Subsidiaries or
between Restricted Subsidiaries of the Company;

     (2) the payment of reasonable and customary compensation paid to, or loans made to,
and indemnities and other benefits provided to officers, directors, employees or
consultants of the Company or any Subsidiary, as determined by the Company in good faith;

     (3) any Restricted Payments and Permitted Investments (other than Permitted
Investments referred to in clause (4) thereof) if permitted by the Indenture;

     (4) any transaction with a joint venture, partnership, limited liability company or
other entity that constitutes an Affiliate solely because the Company or a Restricted
Subsidiary owns an equity interest in such joint venture, partnership, limited liability
company or other entity;

     (5) sales or leases of goods, or providing or receiving services, to or from joint
ventures and Affiliates (but excluding any officers or directors) in the ordinary course
of business for less than fair market value but not for less than cost;

     (6) transactions with customers, clients, suppliers or purchasers or sellers of goods
or services, or transactions with joint ventures, in each case on terms that are not
materially less favorable to the Company or any of its Restricted Subsidiaries, as the
case may be, as determined in good faith by the Company, than those that could be obtained
in a comparable arm’s length transaction with a Person that is not an Affiliate of the
Company;

     (7) contributions to the equity capital of the Company or a Restricted Subsidiary or
sales of Qualified Equity Interests of the Company or a Guarantor;

     (8) transactions or arrangements pursuant to (a) any agreements in effect on the
Issue Date, (b) Interim Ordinary Course Transactions at any time prior to the Spin-Off
Date, or (c) any agreements to be entered into in connection with the Transactions, and,
in the case of agreements referred to in clauses (a) and (c), as such agreements may be
amended, modified or replaced from time to time so long as the amended, modified or new
agreements, taken as a whole, are not materially less favorable to the holders of the
Notes than those in effect on the Issue Date in the case of clause (a) or those described
in the Offering Circular in the case of clause (c).

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     Section 4.14. Line of Business. The Company will not, and will not permit any of its
Restricted Subsidiaries, to engage in any business other than a Permitted Business, except to an
extent that so doing would not be material to the Company and its Restricted Subsidiaries, taken as
a whole.

     Section 4.15. Designation of Restricted and Unrestricted Subsidiaries. (a) The Board of
Directors may designate any Subsidiary, including a newly acquired or created Subsidiary, to be an
Unrestricted Subsidiary if it meets the following qualifications and the designation would not
cause a Default.

     (1) At the time of the designation, the designation would be permitted under Section
4.07.

     (2) To the extent the Debt of the Subsidiary is not Non-Recourse Debt, any Guarantee
or other credit support thereof by the Company or any Restricted Subsidiary is permitted
under Section 4.06 and Section 4.07.

     (3) The Subsidiary is not party to any transaction or arrangement with the Company or
any Restricted Subsidiary that would not be permitted under Section 4.13.

     (4) Neither the Company nor any Restricted Subsidiary has any obligation to subscribe
for additional Equity Interests of the Subsidiary or to maintain or preserve its financial
condition or cause it to achieve specified levels of operating results except to the
extent permitted by Section 4.06 and Section 4.07.

Once so designated the Subsidiary will remain an Unrestricted Subsidiary, subject to paragraph (b).

     (b) (1) A Subsidiary previously designated an Unrestricted Subsidiary pursuant to clause (iii)
of the definition thereof which fails to meet the qualifications set forth in paragraph (a) will be
deemed to become at that time a Restricted Subsidiary, subject to the consequences set forth in
paragraph (d).

     (2) The Board of Directors may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary if the designation would not cause a Default.

     (c) Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary,

     (1) all existing Investments of the Company and the Restricted Subsidiaries therein
(valued at the Company’s proportional share of the fair market value of its assets less
liabilities (as determined in good faith by the Company)) will be deemed made at that
time;

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     (2) all existing Capital Stock or Debt of the Company or a Restricted Subsidiary held
by it will be deemed Incurred at that time, and all Liens on property of the Company or a
Restricted Subsidiary held by it will be deemed incurred at that time;

     (3) all existing transactions between it and the Company or any Restricted Subsidiary
will be deemed entered into at that time;

     (4) it is released at that time from its Note Guaranty, if any; and

     (5) it will cease to be subject to the provisions of the Indenture as a Restricted
Subsidiary.

     (d) Upon an Unrestricted Subsidiary becoming, or being deemed to become, a Restricted
Subsidiary,

     (1) all of its Debt and Preferred Stock will be deemed Incurred at that time for
purposes of Section 4.06, but will not be considered the sale or issuance of Equity
Interests for purposes of Section 4.12;

     (2) Investments therein previously charged under Section 4.07 will be credited as
provided thereunder;

     (3) it may be required to issue a Note Guaranty pursuant to Section 4.10; and

     (4) it will thenceforward be subject to the provisions of the Indenture as a
Restricted Subsidiary.

     (e) Any designation by the Board of Directors of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary will be evidenced to the Trustee by promptly filing with the Trustee a copy
of the Board Resolution giving effect to the designation and an Officer’s Certificate certifying
that the designation complied with the foregoing provisions.

     (f) Notwithstanding the foregoing, each of NGC and its Subsidiaries (after giving effect to
the Transactions) and Current NGC shall be deemed an Unrestricted Subsidiary of the Company at all
times on and after and for so long as it becomes a Subsidiary of the Company (which designation
shall occur automatically and without the need to comply with clause (a) above).

     Section 4.16. Limitation on Actions of Current NGC. Following the Completion Date, the
Company shall not permit or cause Current NGC to engage at any time in any business or have any
material assets or liabilities, other than (a) its liabilities as a guarantor under debt and
certain contracts of the Company and its Restricted Subsidiaries outstanding on the Issue Date, (b)
indemnities from the Company in support of the liabilities listed in (a), (c) liabilities
reasonably

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incurred in connection with the maintenance of its corporate existence, and (d) liabilities
that may arise from its contractual obligations under the agreements to which NGC is a party
relating to the Transactions.

     Section 4.17. Restrictive Covenants. (a) Beginning on the Issue Date, all restrictive
covenants set forth in the Indenture will be applicable to each of the Persons that are intended to
be one of the Company’s Restricted Subsidiaries on the Completion Date, each of which shall be
deemed a Restricted Subsidiary of the Company beginning on the Issue Date. Each Person that is not
engaged in the shipbuilding business of Northrop Grumman Corporation and is not intended to be a
Subsidiary of the Company following the Spin-Off Date, and Current NGC, will be automatically
designated an Unrestricted Subsidiary when it becomes a Subsidiary of the Company, and such
designation will not be treated as a Restricted Payment. Such Unrestricted Subsidiaries will
accordingly not be party hereto, will not guaranty the Notes and will not be subject to the
restrictive covenants hereunder applicable to the Company and the Restricted Subsidiaries.

     (b) Notwithstanding the restrictive covenants in the Indenture, the Company and its Restricted
Subsidiaries will be permitted, prior to the Completion Date, to engage in the ordinary course of
their collective business consistent with past practice, including with Current NGC, NGC and their
respective Subsidiaries, and to consummate transactions in connection therewith (the “Interim
Ordinary Course Transactions”), and prior to the Completion Date, the Interim Ordinary Course
Transactions will be exempt from the limitations set forth under Section 4.06 to Section 4.16,
Section 4.18 and Section 4.19.

     (c) For purposes of applying the covenants under the Indenture and compliance thereunder, the
Transactions will be deemed to have occurred immediately prior to the Issue Date.

     Section 4.18. Financial Reports. (a) Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company must provide the Trustee and
Noteholders within the time periods specified in those sections with

     (1) all quarterly and annual reports that would be required to be filed with the
Commission on Forms 10-Q and 10-K if the Company were required to file such reports, and

     (2) all current reports that would be required to be filed with the Commission on
Form 8-K if the Company were required to file such reports.

     In addition, whether or not required by the Commission, the Company will, if the Commission
will accept the filing, file a copy of all of the information

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and reports referred to in clauses (1) and (2) with the Commission for public availability
within the time periods specified in the Commission’s rules and regulations. For purposes of this
covenant, the Company will be deemed to have provided all required reports referred to in this
covenant to the Trustee and the Noteholders as required by this covenant if it has timely filed
such reports with the Commission via the EDGAR filing system (or its successor system). If the
Company had any Unrestricted Subsidiaries during the relevant period, then the quarterly and annual
reports required by this covenant shall include a reasonably detailed presentation of the financial
condition and results of operations of the Company and its Restricted Subsidiaries, excluding in
all respects the Unrestricted Subsidiaries, separate from the financial condition and results of
operations of the Unrestricted Subsidiaries.

     Notwithstanding anything herein to the contrary, the Company will not be deemed to have failed
to comply with any of its obligations under this Section for purposes of Section 6.01(4) until 90
days after the date any report hereunder is due.

     (b) For so long as any of the Notes remain outstanding and constitute “restricted securities”
under Rule 144, the Company will furnish to the Holders of the Notes and prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

     (c) All obligors on the Notes will comply with Section 314(a) of the Trust Indenture Act.

     (d) Delivery of these reports and information to the Trustee is for informational purposes
only and the Trustee’s receipt of them will not constitute constructive notice of any information
contained therein or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).

     Section 4.19. Reports to Trustee. (a) The Company and each Guarantor will deliver to the
Trustee within 120 days after the end of each fiscal year a certificate from the principal
executive, financial or accounting officer of the Company and such Guarantor stating that the
officer has conducted or supervised a review of the activities of the Company and its Restricted
Subsidiaries and their performance under the Indenture and that, based upon such review, the
Company and each Guarantor has fulfilled its obligations hereunder or, if there has been a Default,
specifying the Default and its nature and status.

     (b) The Company will deliver to the Trustee, as soon as possible and in any event within 30
days after the Company becomes aware of the occurrence of a Default, an Officers’ Certificate
setting forth the details of the Default, and the action which the Company proposes to take with
respect thereto.

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     Section 4.20. Suspension Of Certain Covenants. If at any time after the Issue Date (i) the
Notes are rated Investment Grade by each of S&P and Moody’s (or, if either (or both) of S&P and
Moody’s have been substituted in accordance with the definition of “Rating Agencies”, by each of
the then applicable Rating Agencies) and (ii) no Default has occurred and is continuing hereunder,
the Company and its Restricted Subsidiaries will not be subject to the covenants in Sections 4.06,
4.07, 4.09, 4.12, 4.13, 4.14 and 5.01(a)(iii)(3) (the “Suspended Covenants”).

     At such time as the above referenced covenants are suspended (a “Suspension Period”), the
Company will no longer be permitted to designate any Restricted Subsidiary as an Unrestricted
Subsidiary unless the Company would have been permitted to designate such Subsidiary as an
Unrestricted Subsidiary if a Suspension Period had not been in effect for any period and such
designation shall be deemed to have created a Restricted Payment as set forth under Section 4.07
following the Reversion Date (as defined below).

     In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of the foregoing, and on any subsequent date (the
“Reversion Date”) the condition set forth in clause (i) of the first paragraph of this section is
no longer satisfied, then the Company and its Restricted Subsidiaries will thereafter again be
subject to the Suspended Covenant with respect to future events.

     On each Reversion Date, all Debt incurred during the Suspension Period prior to such Reversion
Date will be deemed to be Debt incurred pursuant to clause (b)(7) under Section 4.06. For purposes
of calculating the amount available to be made as Restricted Payments under Section 4.07(a)(3),
calculations under such covenant shall be made as though such covenant had been in effect during
the entire period of time after the Issue Date (including the Suspension Period). Restricted
Payments made during the Suspension Period not otherwise permitted under Section 4.07(b) will
reduce the amount available to be made as Restricted Payments under Section 4.07 (a)(3) of such
covenant. For purposes of Section 4.12, on the Reversion Date, the amount of Excess Proceeds will
be reset to zero.

     Notwithstanding that the Suspended Covenants may be reinstated, no Default or Event of Default
shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants
during a Suspension Period (or on the Reversion Date after a Suspension Period based solely on
events that occurred during the Suspension Period).

     Promptly after the commencement of a Suspension Period or the occurrence of a Reversion Date,
the Company shall furnish to the Trustee an Officers’ Certificate to the effect that such
Suspension Period has begun or that such Reversion Date has occurred, as the case may be, and
stating that all

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conditions precedent provided for in the Indenture to the commencement of the Suspension
Period or to the occurrence of such Reversion Date, as the case may be, have been complied with.

ARTICLE 5

Consolidation, Merger or Sale of Assets

     Section 5.01. Consolidation, Merger or Sale of Assets by the Company. (a) The Company will
not

     (i) consolidate with or merge with or into any Person, or

     (ii) sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its assets and the assets of its Restricted Subsidiaries, taken as a whole, as an
entirety or substantially an entirety, in one transaction or a series of related
transactions, to any Person or

     (iii) permit any Person to merge with or into the Company

     unless

     (1) either (x) the Company is the continuing Person or (y) the resulting,
surviving or transferee Person is a corporation, limited liability company or
partnership (provided that if the resulting, surviving or transferee Person is a
limited liability company or partnership, a corporate Wholly Owned Restricted
Subsidiary becomes a co-obligor at such time) organized and validly existing
under the laws of the United States of America or any jurisdiction thereof and
expressly assumes by supplemental indenture in form satisfactory to the Trustee
all of the obligations of the Company under the Indenture, the Escrow Agreement
and the Notes and the Registration Rights Agreement;

     (2) immediately after giving effect to the transaction, no Default has
occurred and is continuing;

     (3) immediately after giving effect to the transaction on a pro forma basis,
the Company or the resulting surviving or transferee Person could Incur at least
$1.00 of Debt under Section 4.06(a); and

     (4) the Company delivers to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that the consolidation, merger, sale,
conveyance, transfer, lease or other

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disposition and the supplemental indenture (if any) comply with the
Indenture;

provided, that (a) clauses (2) and (3) do not apply (i) to the consolidation or merger of the
Company with or into a Wholly Owned Restricted Subsidiary or the consolidation or merger of a
Wholly Owned Restricted Subsidiary with or into the Company, or to the sale, lease, conveyance,
transfer, or other disposition of all or substantially all of its assets and the assets of its
Restricted Subsidiaries, taken as a whole, as an entirety or substantially an entirety, to a
Wholly-Owned Restricted Subsidiary that is a Guarantor, or (ii) if the sole purpose of the
transaction is to change the jurisdiction of incorporation of the Company and (b) the foregoing
does not apply to the consummation of the Transactions.

     (b) Upon the consummation of any transaction effected in accordance with these provisions, if
the Company is not the continuing Person, the resulting, surviving or transferee Person will
succeed to, and be substituted for, and may exercise every right and power of, the Company under
the Indenture and the Notes with the same effect as if such successor Person had been named as the
Company in the Indenture. Upon such substitution, except in the case of a lease, the Company will
be released from its obligations under the Indenture, the Notes, the Escrow Agreement and the
Registration Rights Agreement.

     Section 5.02. Consolidation, Merger or Sale of Assets by a Guarantor. (a) No Guarantor may

     (i) consolidate with or merge with or into any Person, or

     (ii) sell, convey, transfer or dispose of, all or substantially all its assets as an
entirety or substantially as an entirety, in one transaction or a series of related
transactions, to any Person, or

     (iii) permit any Person to merge with or into the Guarantor

     unless

     (A) the other Person is the Company or any Restricted Subsidiary that is a
Guarantor or becomes a Guarantor concurrently with the transaction; or

     (B) (1) either (x) the Guarantor is the continuing Person or (y)
the resulting, surviving or transferee Person expressly assumes by
supplemental indenture in form satisfactory to the Trustee all of the
obligations of the Guarantor under its Note Guaranty; and

     (2) immediately after giving effect to the transaction, no Default
has occurred and is continuing; or

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     (C) the transaction constitutes a sale or other disposition (including by
way of consolidation or merger) of the Guarantor or the sale or disposition of
all or substantially all the assets of the Guarantor (in each case other than to
the Company or a Restricted Subsidiary) otherwise permitted by the Indenture, and

     (D) the Company delivers to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that the consolidation, merger, sale,
conveyance, transfer or other disposition and the supplemental indenture (if any)
comply with the Indenture.

ARTICLE 6

Default and Remedies

     Section 6.01. Events of Default. An “Event of Default” occurs with respect to Notes of a
series if

     (1) the Company defaults in the payment of the principal of any Note of such series when the
same becomes due and payable at maturity, upon acceleration or redemption, or otherwise (other than
pursuant to an Offer to Purchase);

     (2) the Company defaults in the payment of interest (including any Additional Interest) on any
Note of such series when the same becomes due and payable, and the default continues for a period
of 30 days;

     (3) the Company fails (A) after 45 days after written notice to the Company by the Trustee or
to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the
Notes of such series to make an Offer to Purchase (which notice requires that the failure be
remedied and states that it is a notice of default under the Indenture) or (B) to thereafter accept
and pay for Notes validly tendered when and as required pursuant to Section 4.11 or Section 4.12;

     (4) the Company defaults in the performance of or breaches any other covenant or agreement of
the Company in the Indenture or under the Notes of such series and the default or breach continues
for a period of 60 consecutive days after written notice to the Company by the Trustee or to the
Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes of
such series (which notice requires that the default be remedied and states that it is a notice of
default under the Indenture);

     (5) there occurs with respect to any Debt of the Company or any of its Restricted Subsidiaries
having an outstanding principal amount of $50.0 million

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or more in the aggregate for all such Debt of all such Persons (i) an event of default that
results in such Debt being due and payable prior to its scheduled maturity or (ii) a failure to
make a principal payment when due and such defaulted payment is not made, waived or extended within
the applicable grace period;

     (6) one or more final judgments or orders for the payment of money are rendered against the
Company or any of its Restricted Subsidiaries and are not paid or discharged, and there is a period
of 60 consecutive days following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or discharged against all
such Persons to exceed $50.0 million (in excess of amounts which the Company’s insurance carriers
have not challenged under applicable policies or which indemnifying parties have not challenged
under applicable third party indemnities) during which a stay of enforcement, by reason of a
pending appeal or otherwise, is not in effect;

     (7) a decree or order for relief is entered against the Company or any Significant Subsidiary
in an involuntary case or other proceeding commenced against the Company or any Significant
Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such decree or order
remains in effect and unstayed for a period of 60 days;

     (8) the Company or any of its Significant Subsidiaries (i) commences a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the
appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any of its Significant Subsidiaries or for all
or substantially all of the property and assets of the Company or any of its Significant
Subsidiaries or (iii) effects any general assignment for the benefit of creditors (an event of
default specified in clause (7) or (8) a “bankruptcy default”);

     (9) any Note Guaranty of a Significant Subsidiary ceases to be in full force and effect, other
than in accordance the terms of the Indenture, or a Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under its Note Guaranty; or

     (10) at any time prior to the Completion Date, the Company defaults in the performance of, or
breaches, any covenant or agreement of the Company in the Escrow Agreement, or the lien of the
Escrow Agreement on the Account and the U.S. Government Obligations ceases to be perfected or have
the priority intended to be provided, or the Escrow Agreement ceases to be in full force and effect
or the Company asserts the invalidity thereof.

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     Section 6.02. Acceleration. (a) If an Event of Default, other than a bankruptcy default
with respect to the Company, occurs and is continuing under the Indenture with respect to Notes of
a series, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes of
such series then outstanding, by written notice to the Company (and to the Trustee if the notice is
given by the Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of and accrued interest on the Notes of such series to be immediately due and payable.
Upon a declaration of acceleration, such principal and interest will become immediately due and
payable. If a bankruptcy default occurs with respect to the Company, the principal of and accrued
interest on the Notes of each series then outstanding will become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

     In the event of a declaration of acceleration of the Notes solely because an Event of Default
described in clause (5) above has occurred and is continuing, the declaration of acceleration of
the Notes shall be automatically rescinded and annulled if the event of default or payment default
triggering such Event of Default pursuant to clause (5) shall be remedied or cured by the Company
or a Restricted Subsidiary of the Company or waived (and the related declaration of acceleration
rescinded or annulled) by the holders of the relevant Debt within 20 Business Days after the
declaration of acceleration with respect to the Notes and if the rescission and annulment of the
acceleration of the Notes would not conflict with any judgment or decree of a court of competent
jurisdiction obtained by the Trustee for the payment of amounts due on the Notes.

     (b) The Holders of a majority in principal amount of the outstanding Notes of a series by
written notice to the Company and to the Trustee may waive all past defaults and rescind and annul
a declaration of acceleration and its consequences with respect to such Notes if

     (1) all existing Events of Default with respect to such Notes, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes of such series
that have become due solely by the declaration of acceleration, have been cured or waived,

     (2) the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction, and

     (3) all sums paid or advanced by the Trustee under the Indenture and the reasonable
fees, expenses and disbursements of the Trustee, its agents and counsel have been paid.

     Section 6.03. Waiver of Past Defaults. Except as otherwise provided in Sections 6.02, 6.07
and 9.02, the Holders of a majority in principal amount of the outstanding Notes of a series may,
by notice to the Trustee, waive an existing Default and its consequences with respect to such
series. Upon such waiver, the

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Default will cease to exist, and any Event of Default arising therefrom will be deemed to have
been cured, but no such waiver will extend to any subsequent or other Default or impair any right
consequent thereon.

     Section 6.04. Other Remedies. If an Event of Default with respect to the Notes of a series
occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express
trust, any available remedy by proceeding at law or in equity to collect the payment of principal
of and interest on the Notes of such series or to enforce the performance of any provision of the
Notes of such series or the Indenture with respect to the Notes of a series. The Trustee may
maintain a proceeding even if it does not possess any of the Notes or does not produce any of them
in the proceeding.

     Section 6.05. Control by Majority. The Holders of a majority in aggregate principal amount
of the outstanding Notes of a series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Notes of such series. However, the Trustee may refuse to follow any
direction that conflicts with law, the Indenture or the Escrow Agreement, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders of Notes of such series not joining in the giving of such
direction, and may take any other action it deems proper that is not inconsistent with any such
direction received from Holders of Notes of such series.

     Section 6.06. Limitation on Suits. A Holder of Notes of a series may not institute any
proceeding, judicial or otherwise, with respect to the Indenture or the Notes of such series, or
for the appointment of a receiver or trustee, or for any other remedy under the Indenture or the
Notes of such series, unless:

     (1) the Holder has previously given to the Trustee written notice of a continuing
Event of Default with respect to the Notes of such series;

     (2) Holders of at least 25% in aggregate principal amount of outstanding Notes of
such series have made written request to the Trustee to institute proceedings in respect
of the Event of Default in its own name as Trustee under the Indenture;

     (3) Holders have offered to the Trustee indemnity reasonably satisfactory to the
Trustee against any costs, liabilities or expenses to be incurred in compliance with such
request;

     (4) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

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     (5) during such 60-day period, the Holders of a majority in aggregate principal
amount of the outstanding Notes of such series have not given the Trustee a direction that
is inconsistent with such written request.

     Section 6.07. Rights of Holders to Receive Payment. Notwithstanding anything herein to the
contrary, the right of a Holder of a Note to receive payment of principal of or interest on its
Note on or after the Stated Maturities thereof or on or after a redemption or repurchase date
therefor, or to bring suit for the enforcement of any such payment on or after such respective
dates, may not be impaired or affected without the consent of that Holder.

     Section 6.08. Collection Suit by Trustee. If an Event of Default in payment of principal or
interest specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust for the whole amount of
principal and accrued interest remaining unpaid, together with interest on overdue principal and,
to the extent lawful, overdue installments of interest, in each case at the rate specified in the
Notes, and such further amount as is sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel and any other amounts due the Trustee hereunder.

     Section 6.09. Trustee May File Proofs of Claim. The Trustee may file proofs of claim and
other papers or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders
allowed in any judicial proceedings relating to the Company or any Guarantor or their respective
creditors or property, and is entitled and empowered to collect, receive and distribute any money,
securities or other property payable or deliverable upon conversion or exchange of the Notes or
upon any such claims. Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, if the Trustee consents to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts
due the Trustee hereunder. Nothing in the Indenture will be deemed to empower the Trustee to
authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

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     Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article or
Section 1.05(f) of the Escrow Agreement, it shall pay out the money in the following order:

     First: to the Trustee for all amounts due to it hereunder;

     Second: to Holders of Notes of the series in respect of which such money is
collected for amounts then due and unpaid for principal of and interest on the Notes,
ratably, without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal and interest; and

     Third: to the Company or as a court of competent jurisdiction may direct.

     The Trustee, upon written notice to the Company, may fix a record date and payment date for
any payment to Holders pursuant to this Section.

     Section 6.11. Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted a proceeding to enforce any right or remedy under the Indenture and the proceeding has
been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or
to the Holder, then, subject to any determination in the proceeding, the Company, any Guarantors,
the Trustee and the Holders will be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Company, any Guarantors, the Trustee and
the Holders will continue as though no such proceeding had been instituted.

     Section 6.12. Undertaking for Costs. In any suit for the enforcement of any right or remedy
under the Indenture or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court may require any party litigant in such suit (other than the Trustee) to file an
undertaking to pay the costs of the suit, and the court may assess reasonable costs, including
reasonable attorneys fees, against any party litigant (other than the Trustee) in the suit having
due regard to the merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by a Holder to enforce payment of principal of or interest on any
Note on the respective due dates, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes of a series.

     Section 6.13. Rights and Remedies Cumulative. No right or remedy conferred or reserved to
the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right
or remedy, and all such rights and remedies are, to the extent permitted by law, cumulative and in
addition to every other right and remedy hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or exercise of any right or remedy hereunder, or

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otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy.

     Section 6.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any
Holder to exercise any right or remedy accruing upon any Event of Default will impair any such
right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

     Section 6.15. Waiver of Stay, Extension or Usury Laws. The Company and each Guarantor
covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law that would prohibit or forgive the Company or the Guarantor from
paying all or any portion of the principal of, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the
performance of the Indenture. The Company and each Guarantor hereby expressly waives, to the
extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE 7

The Trustee

     Section 7.01. General. (a) The duties and responsibilities of the Trustee are as provided by
the Trust Indenture Act and as set forth herein. Whether or not expressly so provided, every
provision of the Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee is subject to this Article.

     (b) Except during the continuance of an Event of Default, the Trustee need perform only those
duties that are specifically set forth in the Indenture and no others, and no implied covenants or
obligations will be read into the Indenture against the Trustee. In case an Event of Default has
occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by the
Indenture, and use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

     (c) Except as provided in Section 315(d) of the Trust Indenture Act, no provision of the
Indenture shall be construed to relieve the Trustee from

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liability for its own negligent action, its own negligent failure to act or its own willful
misconduct.

     Section 7.02. Certain Rights of Trustee. Subject to Trust Indenture Act Sections 315(a)
through (d):

     (1) In the absence of bad faith on its part, the Trustee may rely, and will be
protected in acting or refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in any document, but, in the case of any
document which is specifically required to be furnished to the Trustee pursuant to any
provision hereof, the Trustee shall examine the document to determine whether it conforms
to the requirements of the Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein). The Trustee, in its discretion,
may make further inquiry or investigation into such facts or matters as it sees fit.

     (2) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel conforming to Section 12.05 and the Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on the
certificate or opinion.

     (3) The Trustee may act through its attorneys and agents and will not be responsible
for the misconduct or negligence of any attorney or agent appointed with due care.

     (4) The Trustee will be under no obligation to exercise any of the rights or powers
vested in it by the Indenture or in the Escrow Agreement at the request or direction of
any of the Holders, unless such Holders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.

     (5) The Trustee will not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers or for any action
it takes or omits to take in accordance with the direction of the Holders in accordance
with Section 6.05 relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under the Indenture.

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     (6) The Trustee may consult with counsel, and the written advice of such counsel or
any Opinion of Counsel will be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

     (7) No provision of the Indenture or the Escrow Agreement will require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the performance
of its duties hereunder, or in the exercise of its rights or powers, unless it receives
indemnity satisfactory to it against any loss, liability or expense.

     (8) Unless otherwise specifically provided in the Indenture or the Escrow Agreement,
any demand, instruction, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.

     (9) The Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to the Indenture or the Escrow Agreement, which Officers’
Certificate may be signed by any person authorized to sign an Officers’ Certificate,
including any person specified as so authorized in any such certificate previously
delivered and not superseded.

     (10) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss
of profit) irrespective of whether the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action.

     (11) The Trustee shall not be charged with knowledge of any Default or any Event of
Default unless either (i) an officer of the Trustee responsible for the administration of
the Indenture shall have actual knowledge of such Default or Event of Default or (ii)
written notice of such Default or Event of Default shall have been given to the Trustee by
the Company or any other obligor on the Notes, or by any Holder of the Notes.

     (12) The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder.

     (13) In no event shall the Trustee be responsible or liable for any failure or delay
in the performance of its obligations hereunder or under the Escrow Agreement arising out
of or caused by, directly or indirectly,

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forces beyond its control, including, without limitation, strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood that the
Trustee shall use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the circumstances.

     (14) The Trustee shall have no responsibility for perfecting or maintaining the
perfection of the security interest granted to it under the Escrow Agreement or for filing
any financing statement or continuation statement or other notice in any public office at
any time or times and shall not be liable for the acts or omissions of the Escrow Agent.

     Section 7.03. Individual Rights of Trustee. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and
311. For purposes of Trust Indenture Act Section 311(b)(4) and (6):

     (a) “cash transaction” means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and payable upon demand;
and

     (b) “self-liquidating paper” means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession of, or a
lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the creditor
relationship arising from the making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.

     Section 7.04. Trustee’s Disclaimer. The Trustee (i) makes no representation as to the
validity or adequacy of the Indenture, the Notes, the Escrow Agreement, the Escrow Property (as
defined in the Escrow Agreement) or the security interest granted to it under the Escrow Agreement
(ii) is not accountable for the Company’s use or application of the proceeds from the Notes or for
determining the value of the Escrow Property and (iii) is not responsible for any statement in the
Notes other than its certificate of authentication.

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     Section 7.05. Notice of Default. If any Default occurs and is continuing and is known to the
Trustee, the Trustee will send notice of the Default to each Holder within 90 days after it occurs,
unless the Default has been cured; provided that, except in the case of a default in the payment of
the principal of or interest on any Note, the Trustee may withhold the notice if and so long as the
board of directors, the executive committee or a trust committee of directors of the Trustee or of
officers of the Trustee responsible for the administration of the Indenture in good faith
determines that withholding the notice is in the interest of the Holders. Notice to Holders under
this Section will be given in the manner and to the extent provided in Trust Indenture Act Section
313(c).

     Section 7.06. Reports by Trustee to Holders. Within 60 days after each March 15, beginning
with March 15, 2012, the Trustee will mail to each Holder, as provided in Trust Indenture Act
Section 313(c), a brief report dated as of such March 15, if required by Trust Indenture Act
Section 313(a), and file such reports with each stock exchange upon which the Notes are listed and
with the Commission as required by Trust Indenture Act Section 313(d). The Company will promptly
notify the Trustee when any Notes are listed on any stock exchange.

     Section 7.07. Compensation and Indemnity. (a) The Company will pay the Trustee compensation
as agreed upon in writing for its services. The compensation of the Trustee is not limited by any
law on compensation of a Trustee of an express trust. The Company will reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by
the Trustee, including the reasonable compensation and expenses of the Trustee’s agents and
counsel.

     (b) The Company will indemnify the Trustee for, and hold it harmless against, any loss or
liability or expense (including the reasonable compensation and expenses of the Trustee’s agents
and counsel) incurred by it without negligence or bad faith on its part arising out of or in
connection with the acceptance or administration of the Indenture and the Escrow Agreement and its
duties under the Indenture, the Escrow Agreement and the Notes, including the costs and expenses of
defending itself against any claim or liability and of complying with any process served upon it or
any of its officers in connection with the exercise or performance of any of its powers or duties
under the Indenture, the Escrow Agreement and the Notes.

     (c) To secure the Company’s payment obligations in this Section, the Trustee will have a lien
prior to the Notes on all money or property held or collected by the Trustee, in its capacity as
Trustee, except money or property held in trust to pay principal of, and interest on particular
Notes.

     (d) The obligations of the Company and the Guarantors under this Section shall survive the
payment of the Notes, the satisfaction and discharge of the Indenture and the resignation or
removal of the Trustee.

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     Section 7.08. Replacement of Trustee. (a) (1) The Trustee may resign at any time by written
notice to the Company.

     (2) The Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by written notice to the Trustee.

     (3) If the Trustee is no longer eligible under Section 7.10 or in the circumstances
described in Trust Indenture Act Section 310(b), any Holder that satisfies the
requirements of Trust Indenture Act Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

     (4) The Company may remove the Trustee if: (i) the Trustee is no longer eligible
under Section 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a
receiver or other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.

A resignation or removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

     (b) If the Trustee has been removed by the Holders, Holders of a majority in principal amount
of the Notes may appoint a successor Trustee with the consent of the Company. Otherwise, if the
Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the
Company will promptly appoint a successor Trustee. If the successor Trustee does not deliver its
written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor Trustee.

     (c) Upon delivery by the successor Trustee of a written acceptance of its appointment to the
retiring Trustee and to the Company, (i) the retiring Trustee will transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07, (ii) the
resignation or removal of the retiring Trustee will become effective, and (iii) the successor
Trustee will have all the rights, powers and duties of the Trustee under the Indenture. Upon
request of any successor Trustee, the Company will execute any and all instruments for fully and
vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Company
will give notice of any resignation and any removal of the Trustee and each appointment of a
successor Trustee to all Holders, and include in the notice the name of the successor Trustee and
the address of its Corporate Trust Office.

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     (d) Notwithstanding replacement of the Trustee pursuant to this Section, the Company’s and the
Guarantors’ obligations under Section 7.07 will continue for the benefit of the retiring Trustee.

     (e) The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust
Indenture Act Section 310(b), subject to its right to seek a stay of its duty to resign in
accordance with the penultimate paragraph thereof.

     Section 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or transferee corporation or
national banking association without any further act will be the successor Trustee with the same
effect as if the successor Trustee had been named as the Trustee in the Indenture.

     Section 7.10. Eligibility. The Indenture must always have a Trustee that satisfies the
requirements of Trust Indenture Act Section 310(a) and has a combined capital and surplus of at
least $25,000,000 as set forth in its most recent published annual report of condition.

     Section 7.11. Money Held in Trust. The Trustee will not be liable for interest on any money
received by it except as it may agree with the Company. Money held in trust by the Trustee need
not be segregated from other funds except to the extent required by law and except for money held
in trust under Article 8.

ARTICLE 8

Defeasance and Discharge

     Section 8.01. Discharge of Company’s Obligations. (a) Subject to paragraph (b), the
Company’s obligations under the Notes of a series and the Indenture with respect to such Notes, and
each Guarantor’s obligations under its Note Guaranty with respect to such Notes, will terminate if:

     (1) all Notes of such series previously authenticated and delivered (other than (i)
destroyed, lost or stolen Notes that have been replaced or paid under Section 2.04 or (ii)
Notes that are paid pursuant to Section 4.01 or (iii) Notes for whose payment money or
U.S. Government Obligations have been held in trust and then repaid to the Company
pursuant to Section 8.05) have been cancelled or delivered to the Trustee for cancellation
and the Company has paid all sums payable by it hereunder; or

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     (2) (A) the Notes of such series mature within one year, or all of the Notes
of such series are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption,

     (B) the Company irrevocably deposits in trust with the Trustee, as trust
funds solely for the benefit of the Holders, money sufficient or U.S. Government
Obligations, the principal of and interest on which will be sufficient, or a
combination sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certificate delivered to
the Trustee, which opinion need be given only if U.S. Government Obligations have
been deposited, without consideration of any reinvestment, to pay principal of
and interest on the Notes of such series to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder,

     (C) the Company has paid or caused to be paid all other sums payable under
the Indenture by the Company,

     (D) the deposit will not result in a breach or violation of, or constitute a
default under, any material agreement or instrument (other than the Indenture) to
which the Company is a party or by which it is bound, and

     (E) the Company delivers to the Trustee an Officers’ Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent provided
for herein relating to the satisfaction and discharge of the Indenture have been
complied with.

     (b) After satisfying the conditions in clause (a)(1) of this Section 8.01, only the Company’s
obligations under Section 7.07 and Section 8.04 will survive in respect of such series. After
satisfying the conditions in clause (a)(2) of this Section 8.01, only the Company’s obligations in
Article 2 and Sections 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 will survive in respect of such
series. In either case, the Trustee upon request will acknowledge in writing the discharge of the
Company’s obligations under the Notes of such series and the Indenture with respect to such Notes
other than the surviving obligations.

     Section 8.02. Legal Defeasance. Following the deposit referred to in clause (1) of this
Section 8.02, the Company will be deemed to have paid and will be discharged from its obligations
in respect of the Notes of a series and the Indenture with respect to such Notes, other than its
obligations in Article 2 and Sections 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 in respect of such
series, and each Guarantor’s obligations under its Note Guaranty in respect of such series will
terminate, provided the following conditions have been satisfied:

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     (1) The Company has irrevocably deposited in trust with the Trustee, as trust funds
solely for the benefit of the Holders, money sufficient or U.S. Government Obligations,
the principal of and interest on which will be sufficient, or a combination sufficient, in
the opinion of a nationally recognized firm of independent public accountants expressed in
a written certificate thereof delivered to the Trustee, without consideration of any
reinvestment, to pay principal of and interest on the Notes of such series to maturity or
redemption, as the case may be, provided that any redemption before maturity has been
irrevocably provided for under arrangements satisfactory to the Trustee.

     (2) No Default has occurred and is continuing on the date of the deposit (other than
a Default resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowings).

     (3) The deposit will not result in a breach or violation of, or constitute a default
under, the Indenture (other than a Default resulting from the borrowing of funds to be
applied to such deposit and the grant of any Lien securing such borrowings) or any other
material agreement or instrument to which the Company is a party or by which it is bound.

     (4) The Company has delivered to the Trustee

     (A) either (x) a ruling received from the Internal Revenue Service to the
effect that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of the defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would otherwise have been the case or (y) an Opinion of Counsel, based on a
change in law after the date of the Indenture, to the same effect as the ruling
described in clause (x), and

     (B) an Opinion of Counsel to the effect that, and assuming no intervening
bankruptcy of the Company between the date of the deposit and the 91st
day following the date of deposit and that no Holder is an insider of the
Company, after the passage of 91 days following the deposit, the trust funds will
not be subject to the effect of Section 547 of the United States Bankruptcy Code.

     (5) If the Notes are listed on a national securities exchange, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the deposit and
defeasance will not cause the Notes to be delisted.

     (6) The Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, in each case stating that all

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conditions precedent provided for herein relating to the defeasance have been
complied with.

     Thereafter, the Trustee upon request will acknowledge in writing the discharge of the
Company’s obligations under the Notes of such series and the Indenture with respect to such series
except for the surviving obligations specified above.

     Section 8.03. Covenant Defeasance. Following the deposit referred to in clause (1) of this
Section 8.03, the Company’s obligations set forth in Sections 4.06 through 4.15 inclusive and
Section 5.01(a)(iii)(3) with respect to Notes of a series, and each Guarantor’s obligations under
its Note Guaranty with respect to such series, will terminate, and clauses (3), (4) (solely with
respect to the covenants being defeased), (5), (6), (9) and (10) of Section 6.01 will no longer
constitute Events of Default with respect to the Notes of such series, provided the following
conditions have been satisfied:

     (1) The Company has complied with clauses (1), (2), (3), 4(B), (5) and (6) of Section
8.02; and

     (2) the Company has delivered to the Trustee an Opinion of Counsel to the effect that
the Holders will not recognize income, gain or loss for federal income tax purposes as a
result of the defeasance and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would otherwise have been the case.

     Except as specifically stated above, none of the Company’s obligations under the Indenture
will be discharged.

     Section 8.04. Application of Trust Money. Subject to Section 8.05, the Trustee will hold in
trust the money or U.S. Government Obligations (including the proceeds thereof) deposited with it
pursuant to Section 8.01, 8.02 or 8.03, and apply the deposited money and the proceeds from
deposited U.S. Government Obligations to the payment of principal of and interest on the Notes of
the applicable series in accordance with the Notes of such series and the Indenture. Such money
and U.S. Government Obligations need not be segregated from other funds except to the extent
required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the money or U.S. Government Obligations deposited pursuant to Section 8.01,
8.02 or 8.03 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

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     Section 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02 and 8.03, the
Trustee will promptly pay to the Company upon request any money held by the Trustee at any time
under Section 8.01, 8.02 or 8.03, which in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the
Trustee (in case U.S. Government Obligations have been deposited) are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent discharge or defeasance
under such Sections and thereupon be relieved from all liability with respect to such money. The
Trustee will pay to the Company upon request any money held for payment with respect to the Notes
of a series that remains unclaimed for two years, provided that before making such payment the
Trustee may at the expense of the Company publish once in a newspaper of general circulation in New
York City, or send to each Holder entitled to such money, notice that the money remains unclaimed
and that after a date specified in the notice (at least 30 days after the date of the publication
or notice) any remaining unclaimed balance of money will be repaid to the Company. After payment
to the Company, Holders entitled to such money must look solely to the Company for payment, unless
applicable law designates another Person, and all liability of the Trustee with respect to such
money will cease.

     Section 8.06. Reinstatement. If and for so long as the Trustee is unable to apply any money
or U.S. Government Obligations held in trust pursuant to Section 8.01, 8.02 or 8.03 by reason of
any legal proceeding or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under
the Notes of the applicable series and the Indenture with respect to such Notes will be reinstated
as though no such deposit in trust had been made. If the Company makes any payment of principal of
or interest on any Notes of such series because of the reinstatement of its obligations, it will be
subrogated to the rights of the Holders of such Notes to receive such payment from the money or
U.S. Government Obligations held in trust.

     Section 8.07. U.S. Government Obligations. Any U.S. Government Obligations deposited pursuant
to this Article shall be non-callable by the issuer thereof.

ARTICLE 9

Amendments, Supplements and Waivers

     Section 9.01. Amendments without Consent of Holders. The Company and the Trustee may amend
or supplement the Indenture, the Escrow Agreement or the Notes without notice to or the consent of
any Noteholder

     (1) to cure any ambiguity, defect or inconsistency in the Indenture or the Notes;

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     (2) to comply with Article 5;

     (3) to comply with any requirements of the Commission in connection with the
qualification of the Indenture under the Trust Indenture Act;

     (4) to evidence and provide for the acceptance of an appointment hereunder by a
successor Trustee;

     (5) to provide for uncertificated Notes in addition to or in place of certificated
Notes, provided that the uncertificated Notes are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;

     (6) to provide for any Guarantee of the Notes, to secure the Notes or to confirm and
evidence the release, termination or discharge of any Guarantee of or Lien securing the
Notes when such release, termination or discharge is permitted by the Indenture;

     (7) to provide for or confirm the issuance of Additional Notes;

     (8) to make any other change that does not materially and adversely affect the rights
of any Holder;

     (9) to provide for the issuance of Exchange Notes;

     (10) to add to the covenants of the Company for the benefit of the Noteholders;

     (11) to add additional Events of Default; or

     (12) to conform any provision hereof to the “Description of Notes” section in the
Offering Circular.

     Section 9.02. Amendments with Consent of Holders. (a) Except as otherwise provided in
Sections 6.02, 6.03 and 6.07 or paragraph (b), the Company and the Trustee may amend the Indenture,
the Escrow Agreement and the Notes with respect to a series of Notes with the written consent of
the Holders of a majority in principal amount of the outstanding Notes of such series, and the
Holders of a majority in principal amount of the outstanding Notes of such series by written notice
to the Trustee may waive future compliance by the Company with any provision of the Indenture or
the Notes with respect to such series.

     (b) Notwithstanding the provisions of paragraph (a), without the consent of each Holder
affected, an amendment or waiver may not

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     (1) reduce the principal amount of or change the Stated Maturity of any installment
of principal of any Note,

     (2) reduce the rate of or change the Stated Maturity of any interest payment on any
Note,

     (3) reduce the amount payable upon the redemption of any Note or change the time of
any mandatory redemption or, in respect of an optional redemption, the times at which any
Note may be redeemed or, once notice of redemption has been given, the time at which it
must thereupon be redeemed,

     (4) after the time an Offer to Purchase is required to have been made, reduce the
purchase amount or purchase price, or extend the latest expiration date or purchase date
thereunder,

     (5) make any Note payable in money other than that stated in the Note,

     (6) impair the right of any Holder of Notes to receive any principal payment or
interest payment on such Holder’s Notes, on or after the Stated Maturity thereof or any
redemption or repurchase date therefor, or to institute suit for the enforcement of any
such payment,

     (7) make any change in the percentage of the principal amount of the Notes required
for amendments or waivers,

     (8) modify or change any provision of the Indenture affecting the ranking of the
Notes or any Note Guaranty in a manner adverse to the Holders of the Notes, or

     (9) make any change in any Note Guaranty that would adversely affect the Noteholders
in any material respect.

     (c) It is not necessary for Noteholders to approve the particular form of any proposed
amendment, supplement or waiver, but is sufficient if their consent approves the substance thereof.

     (d) An amendment, supplement or waiver under this Section will become effective on receipt by
the Company and the Trustee of written consents from the Holders of the requisite percentage in
principal amount of the outstanding Notes. After an amendment, supplement or waiver under this
Section becomes effective, the Company will send to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. The Company will send supplemental indentures to
Holders upon request. Any failure of the Company to send such notice, or any defect therein, will
not, however, in any way impair or affect the validity of any such supplemental indenture or
waiver.

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     Section 9.03. Effect of Consent. (a) After an amendment, supplement or waiver becomes
effective, it will bind every Holder unless it is of the type requiring the consent of each Holder
affected. If the amendment, supplement or waiver is of the type requiring the consent of each
Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it
and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting
Holder.

     (b) If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require
the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of
the changed terms on the Note and return it to the Holder, or exchange it for a new Note that
reflects the changed terms. The Trustee may also place an appropriate notation on any Note
thereafter authenticated. However, the effectiveness of the amendment, supplement or waiver is not
affected by any failure to annotate or exchange Notes in this fashion.

     Section 9.04. Trustee’s Rights and Obligations. The Trustee is entitled to receive, and will
be fully protected in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article is authorized or permitted by
the Indenture. If the Trustee has received such an Opinion of Counsel, it shall sign the
amendment, supplement or waiver so long as the same does not adversely affect the rights, duties or
immunities of the Trustee under the Indenture or otherwise. The Trustee may, but is not obligated
to, execute any amendment, supplement or waiver that affects the Trustee’s own rights, duties or
immunities under the Indenture or otherwise.

     Section 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed
pursuant to this Article shall comply with the Trust Indenture Act.

     Section 9.06. Payments for Consents. Neither the Company nor any of its Subsidiaries may,
directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee
or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of the Indenture, the Escrow Agreement or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent,
waive or agree to amend such term or provision within the time period set forth in the solicitation
documents relating to the consent, waiver or amendment.

ARTICLE 10

Guaranties

     Section 10.01. The Guaranties. Subject to the provisions of this Article, each Guarantor
that executes a supplemental indenture in the form of Exhibit C

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hereto hereby irrevocably and unconditionally guarantees, jointly and severally, on an
unsecured basis, the full and punctual payment (whether at Stated Maturity, upon redemption,
purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of,
premium, if any, and interest on, and all other amounts payable under, each Note, and the full and
punctual payment of all other amounts payable by the Company under the Indenture. Upon failure by
the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the
amount not so paid at the place and in the manner specified in the Indenture. The Note Guaranty of
each Guarantor shall be a guarantee of payment and not of collection.

     Section 10.02. Guaranty Unconditional. The obligations of each Guarantor hereunder are
unconditional and absolute and, without limiting the generality of the foregoing, will not be
released, discharged or otherwise affected by

     (1) any extension, renewal, settlement, compromise, waiver or release in respect of
any obligation of the Company under the Indenture or any Note, by operation of law or
otherwise;

     (2) any modification or amendment of or supplement to the Indenture or any Note;

     (3) any change in the corporate existence, structure or ownership of the Company, or
any insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Company or its assets or any resulting release or discharge of any obligation of the
Company contained in the Indenture or any Note;

     (4) the existence of any claim, set-off or other rights which the Guarantor may have
at any time against the Company, the Trustee or any other Person, whether in connection
with the Indenture or any unrelated transactions, provided that nothing herein prevents
the assertion of any such claim by separate suit or compulsory counterclaim;

     (5) any invalidity or unenforceability relating to or against the Company for any
reason of the Indenture or any Note, or any provision of applicable law or regulation
purporting to prohibit the payment by the Company of the principal of or interest on any
Note or any other amount payable by the Company under the Indenture; or

     (6) any other act or omission to act or delay of any kind by the Company, the Trustee
or any other Person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge of or defense to
such Guarantor’s obligations hereunder.

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     Section 10.03. Discharge; Reinstatement. Subject to Section 10.09, each Guarantor’s
obligations hereunder will remain in full force and effect until the principal of, premium, if any,
and interest on the Notes and all other amounts payable by the Company under the Indenture have
been paid in full. If at any time any payment of the principal of, premium, if any, or interest on
any Note or any other amount payable by the Company under the Indenture is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, each Guarantor’s obligations hereunder with respect to such payment will be reinstated
as though such payment had been due but not made at such time.

     Section 10.04. Waiver by the Guarantors. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against the Company or any other
Person.

     Section 10.05. Subrogation and Contribution. Upon making any payment with respect to any
obligation of the Company under this Article, the Guarantor making such payment will be subrogated
to the rights of the payee against the Company with respect to such obligation, provided that the
Guarantor may not enforce either any right of subrogation, or any right to receive payment in the
nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so
long as any amount payable by the Company hereunder or under the Notes remains unpaid.

     Section 10.06. Stay of Acceleration. If acceleration of the time for payment of any amount
payable by the Company under the Indenture or the Notes is stayed upon the insolvency, bankruptcy
or reorganization of the Company, all such amounts otherwise subject to acceleration under the
terms of the Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by
the Trustee or the Holders.

     Section 10.07. Limitation on Amount of Guaranty. Notwithstanding anything to the contrary in
this Article, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Note Guaranty of such Guarantor not constitute a
fraudulent conveyance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor under its Note Guaranty are limited to the maximum amount that would not render the
Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of
the United States Bankruptcy Code or any comparable provision of state law.

     Section 10.08. Execution and Delivery of Guaranty. The execution by each Guarantor of a
supplemental indenture in the form of Exhibit C evidences

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the Note Guaranty of such Guarantor, whether or not the person signing as an officer of the
Guarantor still holds that office at the time of authentication of any Note. The delivery of any
Note by the Trustee after authentication constitutes due delivery of the Note Guaranty set forth in
the Indenture on behalf of each Guarantor.

     Section 10.09. Release of Guaranty. The Note Guaranty of a Guarantor will terminate upon

     (1) a sale or other disposition (including by way of consolidation or merger) of
Capital Stock of the Guarantor if, as a result of such disposition, such Guarantor ceases
to be a Subsidiary or the sale or disposition of all or substantially all the assets of
the Guarantor (other than to the Company or a Restricted Subsidiary) otherwise permitted
by the Indenture,

     (2) the release of the Guarantee by such Guarantor of Debt under the Credit
Agreement, other than a discharge through payment thereon,

     (3) the designation in accordance with the Indenture of the Guarantor as an
Unrestricted Subsidiary, or

     (4) defeasance or discharge of the Notes, as provided in Article 8.

     Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of
Counsel to the foregoing effect, the Trustee will execute any documents reasonably required in
order to evidence the release of the Guarantor from its obligations under its Note Guaranty.

ARTICLE 11

Escrow Arrangements

     Section 11.01. Escrow Account. Notwithstanding anything in the Indenture, on the Issue Date
simultaneously with the issuance of the Notes, the Company will, pursuant to the terms of the
Escrow Agreement, deposit into an account pledged to the Trustee (the “Escrow Account”) the
proceeds of the offering of the Notes, together with an additional amount in cash (collectively
with any other property from time to time held by the Escrow Agent, the “Escrow Property”),
sufficient to redeem the Notes at the Special Redemption Price on July 8, 2011. Funds held in the
Escrow Account shall, pending release to fund the Special Redemption as set forth in Section 3.03
or as a result of the satisfaction of the Escrow Conditions as set forth in Section 11.03, be
invested at the direction of

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the Company in U.S. Government Obligations as more fully set forth in the Escrow Agreement.

     Section 11.02. Special Redemption. If the Escrow Conditions have not been satisfied on or
prior to the Date of Determination, the Company shall cause the Escrow Agent, on or before the
Business Day immediately prior to the Special Redemption Date, to cause the liquidation of all
investments of Escrow Property then held by the Escrow Agent and to cause the release of all of the
Escrow Property for application as payment to the Holders of the Special Redemption Price pursuant
to Section 3.03.

     Section 11.03. Release of Escrow Property. Upon the satisfaction of the Escrow Conditions,
including the execution and delivery by each Domestic Restricted Subsidiary of the Company of a
supplemental indenture in the form of Exhibit C hereto, the Escrow Property will be released to the
Company, in accordance with the terms of the Escrow Agreement.

     Section 11.04. Trustee Direction to Execute Escrow Agreement. The Trustee is hereby
authorized and directed to execute and deliver the Escrow Agreement.

ARTICLE 12

Miscellaneous

     Section 12.01. Trust Indenture Act of 1939. The Indenture shall incorporate and be governed
by the provisions of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act.

     Section 12.02. Noteholder Communications; Noteholder Actions. (a) The rights of Holders to
communicate with other Holders with respect to the Indenture or the Notes are as provided by the
Trust Indenture Act, and the Company and the Trustee shall comply with the requirements of Trust
Indenture Act Sections 312(a) and 312(b). Neither the Company nor the Trustee will be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

     (b) (1) Any request, demand, authorization, direction, notice, consent to amendment,
supplement or waiver or other action provided by this Indenture to be given or taken by a
Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the
Trustee. The fact and date of the execution of the instrument, or the authority of the
person executing it, may be proved in any manner that the Trustee deems sufficient.

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     (2) The Trustee may make reasonable rules for action by or at a meeting of Holders,
which will be binding on all the Holders.

     (c) Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note
that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears
on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the
Trustee receives the notice of revocation before the date the amendment or waiver or other
consequence of the act becomes effective.

     (d) The Company may, but is not obligated to, fix a record date (which need not be within the
time limits otherwise prescribed by Trust Indenture Act Section 316(c)) for the purpose of
determining the Holders entitled to act with respect to any amendment or waiver or in any other
regard, except that during the continuance of an Event of Default, only the Trustee may set a
record date as to notices of default, any declaration or acceleration or any other remedies or
other consequences of the Event of Default or related directions or waivers. If a record date is
fixed, those Persons that were Holders of the applicable Notes at such record date and only those
Persons will be entitled to act, or to revoke any previous act, whether or not those Persons
continue to be Holders after the record date. No act will be valid or effective for more than 90
days after the record date.

     Section 12.03. Notices. (a) Any notice or communication to the Company will be deemed given
if in writing (i) when delivered in person or (ii) five days after mailing when mailed by first
class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Notices or
communications to a Guarantor will be deemed given if given to the Company. Any notice to the
Trustee shall be in writing and will be effective only upon receipt. In each case the notice or
communication should be addressed as follows:

     if to the Company:

Huntington Ingalls Industries, Inc.,

4101 Washington Avenue

Newport News, Virginia 23607

(757) 380-2000

     if to the Trustee:

The Bank of New York Mellon

101 Barclay Street, Floor 8 West

New York, New York 10286

(212) 815-5707

The Company or the Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.

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     The Trustee agrees to accept and act upon instructions or directions pursuant to the Indenture
sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods;
provided, however, that (a) the party providing such electronic instructions or directions,
subsequent to the transmission thereof, shall provide the originally executed instructions or
directions to the Trustee in a timely manner and (b) such originally executed instructions or
directions shall be signed by an authorized representative of the party providing such instructions
or directions. The Trustee shall not be liable for any losses, costs or expenses arising directly
or indirectly from the Trustee’s reliance upon and compliance with such instructions or directions
notwithstanding such instructions or directions conflict or are inconsistent with a subsequent
written instruction or direction or if the subsequent written instruction or direction is never
received. The party providing instructions or directions by unsecured e-mail, facsimile
transmission or other similar unsecured electronic methods, as aforesaid, agrees to assume all
risks arising out of the use of such electronic methods to submit instructions and directions to
the Trustee, including without limitation the risk of the Trustee acting on unauthorized
instructions, and the risk of interception and misuse by third parties.

     (b) Except as otherwise expressly provided with respect to published notices, any notice or
communication to a Holder will be deemed given when mailed to the Holder at its address as it
appears on the Register by first class mail or, as to any Global Note registered in the name of DTC
or its nominee, as agreed by the Company, the Trustee and DTC. Copies of any notice or
communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time.
Defect in mailing a notice or communication to any particular Holder will not affect its
sufficiency with respect to other Holders.

     (c) Where the Indenture provides for notice, the notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and the waiver will be the
equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such
filing is not a condition precedent to the validity of any action taken in reliance upon such
waivers.

     Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Company to the Trustee to take any action under the Indenture, the Company will
furnish to the Trustee:

     (1) an Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in the Indenture relating to the proposed
action have been complied with; and

     (2) an Opinion of Counsel stating that all such conditions precedent have been
complied with.

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     Section 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion
with respect to compliance with a condition or covenant provided for in the Indenture must include:

     (1) a statement that each person signing the certificate or opinion has read the
covenant or condition and the related definitions;

     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in the certificate or opinion is based;

     (3) a statement that, in the opinion of each such person, that person has made such
examination or investigation as is necessary to enable the person to express an informed
opinion as to whether or not such covenant or condition has been complied with; and

     (4) a statement as to whether or not, in the opinion of each such person, such
condition or covenant has been complied with, provided that an Opinion of Counsel may rely
on an Officers’ Certificate or certificates of public officials with respect to matters of
fact.

     Section 12.06. Payment Date Other Than a Business Day. If any payment of principal of,
premium, if any, or interest on any Note (including any payment to be made on any date fixed for
redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment
need not be made on such date, but may be made on the next Business Day with the same force and
effect as if made on such date, and no interest will accrue on the payment so deferred for the
intervening period.

     Section 12.07. Governing Law; Waiver of Trial by Jury. The Indenture, including any Note
Guaranties, and the Notes shall be governed by, and construed in accordance with, the laws of the
State of New York, without regard to principles of conflicts of laws. Each of the Company, the
Guarantors, the Trustee and the Holders hereby irrevocably waive, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Indenture, the Note Guaranties or the Notes.

     Section 12.08. No Adverse Interpretation of Other Agreements. The Indenture may not be used
to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the
Company, and no such indenture or loan or debt agreement may be used to interpret the Indenture.

     Section 12.09. Successors. All agreements of the Company or any Guarantor in the Indenture
and the Notes will bind its successors. All agreements of the Trustee in the Indenture will bind
its successor.

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     Section 12.10. Duplicate Originals. The parties may sign any number of copies of the
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

     Section 12.11. Separability. In case any provision in the Indenture or in the Notes is
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.

     Section 12.12. Table of Contents and Headings. The Table of Contents, Cross-Reference Table
and headings of the Articles and Sections of the Indenture have been inserted for convenience of
reference only, are not to be considered a part of the Indenture and in no way modify or restrict
any of the terms and provisions of the Indenture.

     Section 12.13. No Liability of Directors, Officers, Employees, Incorporators, Members and
Stockholders. No director, officer, employee, incorporator, member, general or limited partner or
stockholder past, present and future, of the Company or any of its Subsidiaries or NGC or any of
its subsidiaries, as such, will have any liability for any obligations of the Company or any
Guarantor under the Notes, any Note Guaranty or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and
releases all such liability. The waiver and release are part of the consideration for issuance of
the Notes.

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SIGNATURES

     IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the
date first written above.

	 	 	 	 	 
	 	Huntington Ingalls Industries, Inc.

as Issuer

 	 
	 	By:  	/s/
Mark Rabinowitz	 
	 	 	Name:  	Mark Rabinowitz	 
	 	 	Title:  	Treasurer	 
	 
	 	The Bank of New York Mellon

as Trustee

 	 
	 	By:  	/s/
Laurence J. O’Brien	 
	 	 	Name:  	Laurence J. O’Brien	 
	 	 	Title:  	Vice President	 
	 

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EXHIBIT A

[FACE OF NOTE]

Huntington Ingalls Industries, Inc.

6.875% Senior Note Due 2018

			
	 	 	 
	 
	 	[CUSIP] [CINS] _______________
	 	 	 
	No.
	 	$_______________

     Huntington Ingalls Industries, Inc., a Delaware corporation (the “Company”, which term
includes any successor under the Indenture hereinafter referred to), for value received, promises
to pay to [Cede & Co.], or its registered assigns, the principal sum of ____________ DOLLARS
($______) [or such other amount as indicated on the Schedule of Exchange of Notes attached
hereto]1 on March 15, 2018.

     Initial Interest Rate: 6.875% per annum.

     Interest Payment Dates: March 15 and September 15, commencing September 15, 2011.

     Regular Record Dates: March 1 and September 1 (whether or not a Business Day).

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which will for all purposes have the same effect as if set forth at this place.

 

			
	1	 	For Global Notes

A-1

 

     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by
one of its duly authorized officers.

	 	 	 	 	 
	Date: 	Huntington Ingalls Industries, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A-2

 

	 	 	 	 	 

(Form of Trustee’s Certificate of Authentication)

     This is one of the 6.875% Senior Notes Due 2018 described in the Indenture referred to in this
Note.

	 	 	 	 	 
	 	The Bank of New York Mellon, as

     Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

A-3

 

[REVERSE SIDE OF NOTE]

Huntington Ingalls Industries, Inc.

6.875% Senior Note Due 2018

1. Principal and Interest.

     The Company promises to pay the principal of this Note on March 15, 2018.

     The Company promises to pay interest on the principal amount of this Note on each Interest
Payment Date, as set forth on the face of this Note, at the rate of 6.875% per annum [(subject to
adjustment as provided below)].2

     Interest will be payable semiannually (to the Holder of record of this Note at the close of
business on the March 1 or September 1 (whether or not a Business Day) immediately preceding the
Interest Payment Date) on each Interest Payment Date, commencing September 15, 2011.

     [The Holder of this Note is entitled to the benefits of the Registration Rights Agreement,
dated March 11, 2011, between the Company and the Initial Purchasers named therein (the
“Registration Rights Agreement”), including the right to receive Additional Interest (as defined in
the Registration Rights Agreement) as and when set forth thereon. Such Additional Interest shall
be payable at the same times, in the same manner and to the same Persons as ordinary interest on
this Note.]3

     Interest on this Note will accrue from the most recent date to which interest has been paid or
duly provided for on this Note [or the Note surrendered in exchange for this Note]4 (or,
if there is no existing default in the payment of interest and if this Note is authenticated
between a Regular Record Date and the next Interest Payment Date, from such Interest Payment Date)
or, if no interest has been paid, from [the Issue Date].5 Interest will be computed in
the basis of a 360-day year of twelve 30-day months.

 

			
	2	 	Include only for Initial Note or Initial
Additional Note.
	 
	3	 	Include only for Initial Note or Initial
Additional Note.
	 
	4	 	Include only for Exchange Note.
	 
	5	 	For Additional Notes, should be the date of
their original issue, unless otherwise provided with respect to such Notes.

A-4

 

     The Company will pay interest on overdue principal, premium, if any, and interest at the rate
per annum otherwise applicable to this Note. Interest not paid when due and any interest on
principal, premium or interest not paid when due will be paid to the Persons that are Holders on a
special record date, which will be the 15th day preceding the date fixed by the Company for the
payment of such interest, whether or not such day is a Business Day. At least 15 days before a
special record date, the Company will send to each Holder and to the Trustee a notice that sets
forth the special record date, the payment date and the amount of interest to be paid.

2. Indentures; Note Guaranty.

     This is one of the 2018 Notes (the “Notes”) issued as a series of notes under an Indenture
dated as of March 11, 2011 (as amended from time to time, the “Indenture”), between the Company and
The Bank of New York Mellon, as Trustee. Capitalized terms used herein are used as defined in the
Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act
for a statement of all such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the terms of the
Indenture will control.

     The Notes are general unsecured obligations of the Company. The Indenture limits the original
aggregate principal amount of the Notes to $600,000,000, but Additional Notes of the same tenor and
series may be issued pursuant to the Indenture, and the originally issued Notes and all such
Additional Notes vote together for all purposes as a single class. This Note is guarantied as set
forth in the Indenture.

3. Redemption and Repurchase; Discharge Prior to Redemption or Maturity.

     The Notes are subject to optional redemption, and may be the subject of an Offer to Purchase,
Special Redemption or Mandatory Redemption, as further described in the Indenture. Except for such
Special Redemption or Mandatory Redemption, there is no sinking fund or mandatory redemption
applicable to this Note.

     If the Company deposits with the Trustee money or U.S. Government Obligations or a combination
thereof sufficient to pay the then outstanding principal of, premium, if any, and accrued interest
on the Notes to redemption or maturity, the Company may in certain circumstances be discharged from
the Indenture and the Notes or may be discharged from certain of its obligations under certain
provisions of the Indenture.

4. Registered Form; Denominations; Transfer; Exchange.

A-5

 

     The Notes are in registered form without coupons in denominations of $2,000 principal amount
and higher integral multiples of $1,000. A Holder may register the transfer or exchange of Notes
in accordance with the Indenture. The Trustee may require a Holder to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. Pursuant to the Indenture, there are certain periods during which the Trustee will
not be required to issue, register the transfer of or exchange any Note or certain portions of a
Note.

5. Defaults and Remedies.

     If an Event of Default, as defined in the Indenture, with respect to the Notes occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare
all the Notes to be due and payable. If a bankruptcy or insolvency default with respect to the
Company occurs and is continuing, the Notes automatically become due and payable. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain
limitations, Holders of a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of remedies.

6. Amendment and Waiver.

     Subject to certain exceptions, the Indenture and the Notes may be amended, or default may be
waived, with respect to the Notes with the consent of the Holders of a majority in principal amount
of the outstanding Notes. Without notice to or the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or if such amendment or supplement does not materially and
adversely affect the rights of any Holders.

7. Authentication.

     This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of
authentication on the other side of this Note.

8. Governing Law.

     This Note shall be governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.

9. Abbreviations.

     Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the

A-6

 

entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

     The Company will furnish a copy of the Indenture to any Holder upon written request and
without charge.

A-7

 

[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s)
unto

Insert Taxpayer Identification No.

 

 

Please print or typewrite name and address including zip code of assignee

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

attorney to transfer said Note on the books of the Company with full power of substitution in
the premises.

A-8

 

[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATED NOTES BEARING A RESTRICTED LEGEND]

     In connection with any transfer of this Note occurring prior to ______________6,
the undersigned confirms that such transfer is made without utilizing any general solicitation or
general advertising and further as follows:

Check One

o 
 (1) This Note is being transferred to a “qualified institutional buyer” in compliance with
Rule 144A under the Securities Act of 1933, as amended and certification in the form of Exhibit G
to the Indenture is being furnished herewith.

o (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and
certification in the form of Exhibit F to the Indenture is being furnished herewith.

or

o  (3) This Note is being transferred other than in accordance with (1) or (2) above and
documents are being furnished which comply with the conditions of transfer set forth in this Note
and the Indenture.

     If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note
in the name of any Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in the Indenture have been satisfied.

	 	 	 	 	 	 	 	 	 	 	 

	Date:

	 	 
 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
 	 
	 	 	 	 	 	 	Seller	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	 

	 	 

NOTICE: The signature to this assignment must correspond

with the name as written upon the face of the

within-mentioned instrument in every particular, without

alteration or any change whatsoever.

 

			
	6	 	One year after the date of initial issuance
or a later date when purchased from an affiliate.

A-9

 

	 	 	 	 	 	 	 

	Signature Guarantee:7
	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

	 	 
	 	 	To be executed by an executive officer	 	 

 

			
	7	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Securities Transfer
Association Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you wish to have all of this Note purchased by the Company pursuant to Section 4.11 or
Section 4.12 of the Indenture, check the appropriate box below:

o   Section 4.11           o   Section 4.12

     If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.11
or Section 4.12 of the Indenture, state the amount (in original principal amount) below:

$_____________________ ($2,000 or integral multiples of $1,000 in excess thereof,
provided that any unpurchased portion of this Note must be in a minimum
denomination of $2,000).

Date:____________

Your Signature:__________________________

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:1_____________________________

 

			
	1	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Trustee, which
requirements include membership or participation in the Securities Transfer
Association Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.

A-11

 

SCHEDULE OF EXCHANGES OF NOTES1

The following exchanges of a part of this Global Note for Certificated Notes or a part of another
Global Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal amount of	 	 
	 	 	 	 	 	 	this Global Note	 	Signature of
	 	 	Amount of decrease	 	Amount of increase	 	following such	 	authorized signatory
	 	 	in principal amount	 	in principal amount	 	decrease (or	 	of
	Date of Exchange	 	of this Global Note	 	of this Global Note	 	increase)	 	Trustee
	 	 	 	 	 	 	 	 	 

 

			
	1	 	For Global Notes.

A-12

 

EXHIBIT B

[FACE OF NOTE]

Huntington Ingalls Industries, Inc.

7.125% Senior Note Due 2021

[CUSIP] [CINS] _______________

			
	 	 	 
	No.
	 	$_______________

     Huntington Ingalls Industries, Inc., a Delaware corporation (the “Company”, which term
includes any successor under the Indenture hereinafter referred to), for value received, promises
to pay to [Cede & Co.], or its registered assigns, the principal sum of ____________ DOLLARS
($______) [or such other amount as indicated on the Schedule of Exchange of Notes attached hereto]
on [•], 2021.

     Initial Interest Rate: 7.125% per annum.

     Interest Payment Dates: March 15 and September 15, commencing September 15, 2011.

     Regular Record Dates: March 1 and September 1 (whether or not a Business Day).

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which will for all purposes have the same effect as if set forth at this place.

B-1

 

     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by
one of its duly authorized officers.

	 	 	 	 	 
	Date: 	Huntington Ingalls Industries, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2

 

	 	 	 	 	 

(Form of Trustee’s Certificate of Authentication)

     This is one of the 7.125% Senior Notes Due 2021 described in the Indenture referred to in this
Note.

	 	 	 	 	 
	 	The Bank of New York Mellon, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

B-3

 

	 	 	 	 	 

[REVERSE SIDE OF NOTE]

Huntington Ingalls Industries, Inc.

7.125% Senior Note Due 2021

1. Principal and Interest.

     The Company promises to pay the principal of this Note on March 15, 2021.

     The Company promises to pay interest on the principal amount of this Note on each Interest
Payment Date, as set forth on the face of this Note, at the rate of 7.125% per annum [(subject to
adjustment as provided below)].8

     Interest will be payable semiannually (to the Holder of Record of this Note at the close of
business on the March 1 or September 1 (whether or not a Business Day) immediately preceding the
Interest Payment Date) on each Interest Payment Date, commencing September 15, 2011.

     [The Holder of this Note is entitled to the benefits of the Registration Rights Agreement,
dated March 11, 2011, between the Company and the Initial Purchasers named therein (the
“Registration Rights Agreement”), including the right to receive Additional Interest (as defined in
the Registration Rights Agreement) as and when set forth thereon. Such Additional Interest shall
be payable at the same times, in the same manner and to the same Persons as ordinary interest on
this Note.]9

     Interest on this Note will accrue from the most recent date to which interest has been paid or
duly provided for on this Note [or the Note surrendered in exchange for this Note]10 (or,
if there is no existing default in the payment of interest and if this Note is authenticated
between a Regular Record Date and the next Interest Payment Date, from such Interest Payment Date)
or, if no interest has been paid, from [the Issue Date].11 Interest will be computed in
the basis of a 360-day year of twelve 30-day months.

 

			
	8	 	Include only for Initial Note or Initial
Additional Note.
	 
	9	 	Include only for Initial Note or Initial
Additional Note.
	 
	10	 	Include only for Exchange Note.
	 
	11	 	For Additional Notes, should be the date of
their original issue, unless otherwise provided with respect to such Notes.

B-4

 

     The Company will pay interest on overdue principal, premium, if any, and interest at the rate
per annum otherwise applicable to this Note. Interest not paid when due and any interest on
principal, premium or interest not paid when due will be paid to the Persons that are Holders on a
special record date, which will be the 15th day preceding the date fixed by the Company for the
payment of such interest, whether or not such day is a Business Day. At least 15 days before a
special record date, the Company will send to each Holder and to the Trustee a notice that sets
forth the special record date, the payment date and the amount of interest to be paid.

2. Indentures; Note Guaranty.

     This is one of the 2021 Notes (the “Notes”) issued as a series of notes under an Indenture
dated as of March 11, 2011 (as amended from time to time, the “Indenture”), between the Company and
The Bank of New York Mellon, as Trustee. Capitalized terms used herein are used as defined in the
Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act
for a statement of all such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the terms of the
Indenture will control.

     The Notes are general unsecured obligations of the Company. The Indenture limits the original
aggregate principal amount of the Notes to $600,000,000, but Additional Notes of the same tenor and
series may be issued pursuant to the Indenture, and the originally issued Notes and all such
Additional Notes vote together for all purposes as a single class. This Note is guarantied as set
forth in the Indenture.

3. Redemption and Repurchase; Discharge Prior to Redemption or Maturity.

     The Notes are subject to optional redemption, and may be the subject of an Offer to Purchase,
Special Redemption or Mandatory Redemption, as further described in the Indenture. Except for such
Special Redemption or Mandatory Redemption, there is no sinking fund or mandatory redemption
applicable to this Note.

     If the Company deposits with the Trustee money or U.S. Government Obligations or a combination
thereof sufficient to pay the then outstanding principal of, premium, if any, and accrued interest
on the Notes to redemption or maturity, the Company may in certain circumstances be discharged from
the Indenture and the Notes or may be discharged from certain of its obligations under certain
provisions of the Indenture.

4. Registered Form; Denominations; Transfer; Exchange.

B-5

 

     The Notes are in registered form without coupons in denominations of $2,000 principal amount
and higher integral multiples of $1,000. A Holder may register the transfer or exchange of Notes
in accordance with the Indenture. The Trustee may require a Holder to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. Pursuant to the Indenture, there are certain periods during which the Trustee will
not be required to issue, register the transfer of or exchange any Note or certain portions of a
Note.

5. Defaults and Remedies.

     If an Event of Default, as defined in the Indenture, with respect to the Notes occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare
all the Notes to be due and payable. If a bankruptcy or insolvency default with respect to the
Company occurs and is continuing, the Notes automatically become due and payable. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain
limitations, Holders of a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of remedies.

6. Amendment and Waiver.

     Subject to certain exceptions, the Indenture and the Notes may be amended, or default may be
waived, with respect to the Notes with the consent of the Holders of a majority in principal amount
of the outstanding Notes. Without notice to or the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or if such amendment or supplement does not materially and
adversely affect the rights of any Holders.

7. Authentication.

     This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of
authentication on the other side of this Note.

8. Governing Law.

     This Note shall be governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.

9. Abbreviations.

     Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the

B-6

 

entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

     The Company will furnish a copy of the Indenture to any Holder upon written request and
without charge.

B-7

 

[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s)
unto

Insert Taxpayer Identification No.

 

 

Please print or typewrite name and address including zip code of assignee

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

attorney to transfer said Note on the books of the Company with full power of substitution in
the premises.

B-8

 

[THE
FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATED NOTES BEARING A RESTRICTED LEGEND]

     In connection with any transfer of this Note occurring prior to
______________12,
the undersigned confirms that such transfer is made without utilizing any general solicitation or
general advertising and further as follows:

Check One

o (1) This Note is being transferred to a “qualified institutional buyer” in compliance with
Rule 144A under the Securities Act of 1933, as amended and certification in the form of Exhibit G
to the Indenture is being furnished herewith.

o (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and
certification in the form of Exhibit F to the Indenture is being furnished herewith.

or

o (3) This Note is being transferred other than in accordance with (1) or (2) above and
documents are being furnished which comply with the conditions of transfer set forth in this Note
and the Indenture.

     If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note
in the name of any Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in the Indenture have been satisfied.

	 	 	 	 	 

	Date:                                         
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Seller
	 

	 	By	 	 
	 

	 	 	 	 

NOTICE: The signature to this assignment must correspond

with the name as written upon the face of the

within-mentioned instrument in every particular, without

alteration or any change whatsoever.

 

			
	12	 	One year after date of initial issuance or a
later date when purchased from an affiliate.

B-9

 

	 	 	 	 	 

	Signature
	 	 	 	 
	Guarantee:13
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By
	 	 
	 

	 	 	 	 
	 	 	To be executed by an executive officer

 

			
	13	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Securities Transfer
Association Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

B-10

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you wish to have all of this Note purchased by the Company pursuant to Section 4.11 or
Section 4.12 of the Indenture, check the appropriate box below: 9

o   Section 4.11            o   Section 4.12

     If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.11
or Section 4.12 of the Indenture, state the amount (in original principal amount) below:

$_____________________ ($2,000 or integral multiples of $1,000 in excess thereof,
provided that any unpurchased portion of this Note must be in a minimum
denomination of $2,000).

Date:____________

Your Signature:__________________________

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:1_____________________________

 

			
	1	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Trustee, which
requirements include membership or participation in the Securities Transfer
Association Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.

B-11

 

SCHEDULE OF EXCHANGES OF NOTES1

The following exchanges of a part of this Global Note for Certificated Notes or a part of another
Global Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal amount of	 	 
	 	 	 	 	 	 	this Global Note	 	Signature of
	 	 	Amount of decrease	 	Amount of increase	 	following such	 	authorized signatory
	 	 	in principal amount	 	in principal amount	 	decrease (or	 	of
	Date of Exchange	 	of this Global Note	 	of this Global Note	 	increase)	 	Trustee
	 	 	 	 	 	 	 	 	 

 

			
	1	 	For Global Notes

B-12

 

EXHIBIT C

SUPPLEMENTAL INDENTURE

dated as of [•], 2011

among

Huntington Ingalls Industries, Inc.,

The Guarantor(s) Party Hereto

and

The Bank of New York Mellon,

as Trustee

 

6.875% Senior Notes due 2018

7.125% Senior Notes due 2021

C-1

 

     THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), entered into as of [•], 2011,
among Huntington Ingalls Industries, Inc., a Delaware corporation (the “Company”), [insert each
Guarantor executing this Supplemental Indenture and its jurisdiction of incorporation] (each an
“Undersigned”) and The Bank of New York Mellon, as trustee (the “Trustee”).

RECITALS

     WHEREAS, the Company and the Trustee entered into the Indenture, dated as of March 11, 2011
(the “Indenture”), relating to the Company’s 6.875% Senior Notes due 2018 (the “2018 Notes”) and
7.125% Senior Notes due 2021 (the “2021 Notes” and together with the 2018 Notes, the “Notes”);

     WHEREAS, as a condition to the Trustee entering into the Indenture and the purchase of the
Notes by the Holders, the Company agreed pursuant to the Indenture to cause Domestic Restricted
Subsidiaries that Guarantee any Debt under the Credit Agreement to enter into this Supplemental
Indenture to provide Guaranties.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and
intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

     Section 1. Capitalized terms used herein and not otherwise defined herein are used as defined
in the Indenture.

     Section 2. Each Undersigned, by its execution of this Supplemental Indenture, agrees to be a
Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to
Guarantors, including, but not limited to, Article 10 thereof.

     Section 3. This Supplemental Indenture shall be governed by and construed in accordance with
the laws of the State of New York.

     Section 4. This Supplemental Indenture may be signed in various counterparts which together
will constitute one and the same instrument.

     Section 5. This Supplemental Indenture is an amendment supplemental to the Indenture and the
Indenture and this Supplemental Indenture will henceforth be read together.

     Section 6. The Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the other parties hereto.

C-2

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

	 	 	 	 	 
	 	Huntington Ingalls Industries, Inc., as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The Bank of New York Mellon, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

C-3

 

EXHIBIT D

RESTRICTED LEGEND

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER

     (1) REPRESENTS THAT

     (A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER”
(WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,

     (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR

     (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT) AND

     (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT
AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

     (A) TO THE COMPANY,

     (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT,

     (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT,

     (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT,

D-1

 

     (E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $250,000 TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED
CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE, OR

     (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR (2)(D) ABOVE, A DULY
COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE
DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR
(F) ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

D-2

 

EXHIBIT E

DTC LEGEND

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE
INDENTURE.

E-1

 

EXHIBIT F

Regulation S Certificate

_________, ____

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, NY 10286

Attention: Corporate Trust Administration

	 	 	 

	     Re:

	 	Huntington Ingalls Industries, Inc. (the “Company”)

[6.875% Senior Notes due 2018]

[7.125% Senior Notes due 2021] (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of March 11, 2011 relating to the Notes                    

Ladies and Gentlemen:

     Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the
Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

     [CHECK A OR B AS APPLICABLE.]

	 	o A.	 	This Certificate relates to our proposed transfer of $____ principal amount of
Notes issued under the Indenture. We hereby certify as follows:

	 	1.	 	The offer and sale of the Notes was not and will not
be made to a person in the United States (unless such person is excluded
from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the
account held by it for which it is acting is excluded from the definition
of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances
described in Rule 902(h)(3)) and such offer and sale was not and will not
be specifically targeted at an identifiable group of U.S. citizens abroad.
	 
	 	2.	 	Unless the circumstances described in the
parenthetical in paragraph 1 above are applicable, either (a) at the time
the buy order was originated, the buyer was outside the United States or
we and any person acting on our behalf reasonably believed that the buyer
was outside the United States or (b) the transaction was executed in, on
or through the facilities

F-1

 

	 	 	 	of a designated offshore securities market, and neither we nor any person
acting on our behalf knows that the transaction was pre-arranged with a
buyer in the United States.
	 
	 	3.	 	Neither we, any of our affiliates, nor any person
acting on our or their behalf has made any directed selling efforts in the
United States with respect to the Notes.
	 
	 	4.	 	The proposed transfer of Notes is not part of a plan
or scheme to evade the registration requirements of the Securities Act.
	 
	 	5.	 	If we are a dealer or a person receiving a selling
concession, fee or other remuneration in respect of the Notes, and the
proposed transfer takes place during the Restricted Period (as defined in
the Indenture), or we are an officer or director of the Company or an
Initial Purchaser (as defined in the Indenture), we certify that the
proposed transfer is being made in accordance with the provisions of Rule
904(b) of Regulation S.

	 	o B.	 	This Certificate relates to our proposed exchange of $____ principal amount of
Notes issued under the Indenture for an equal principal amount of Notes to be held by
us. We hereby certify as follows:

	 	1.	 	At the time the offer and sale of the Notes was made
to us, either (i) we were not in the United States or (ii) we were
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(vi) or the account held by us for which we were acting was
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we
were not a member of an identifiable group of U.S. citizens abroad.
	 
	 	2.	 	Unless the circumstances described in paragraph 1(ii)
above are applicable, either (a) at the time our buy order was originated,
we were outside the United States or (b) the transaction was executed in,
on or through the facilities of a designated offshore securities market
and we did not pre-arrange the transaction in the United States.
	 
	 	3.	 	The proposed exchange of Notes is not part of a plan
or scheme to evade the registration requirements of the Securities Act.

F-2

 

     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF SELLER (FOR TRANSFERS) 

     OR OWNER (FOR EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  
Address: 	 	 
	 

Date: _________________

F-3

 

EXHIBIT G

Rule 144A Certificate

_________, ____

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, NY 10286

Attention: Corporate Trust Administration

	 	 	 

	     Re:

	 	Huntington Ingalls Industries, Inc. (the “Company”)
	 

	 	[6.875% Senior Notes due 2018]
	 

	 	[7.125% Senior Notes due 2021] (the “Notes”)
	 

	 	Issued under the Indenture (the “Indenture”) dated
	 

	 	as of March 11, 2011 relating to the Notes                    

Ladies and Gentlemen:

     This Certificate relates to:

     [CHECK A OR B AS APPLICABLE.]

	 	o A.	 	Our proposed purchase of $____ principal amount of Notes issued under the
Indenture.
	 
	 	o B.	 	Our proposed exchange of $____ principal amount of Notes issued under the
Indenture for an equal principal amount of Notes to be held by us.

     We and, if applicable, each account for which we are acting in the aggregate owned and
invested more than $100,000,000 in securities of issuers that are not affiliated with us (or such
accounts, if applicable), as of _________, 20__, which is a date on or since close of our most
recent fiscal year. We and, if applicable, each account for which we are acting, are a qualified
institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933,
as amended (the “Securities Act”). If we are acting on behalf of an account, we exercise sole
investment discretion with respect to such account. We are aware that the transfer of Notes to us,
or such exchange, as applicable, is being made in reliance upon the exemption from the provisions
of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we
have received such information regarding the Company as we have requested pursuant to Rule
144A(d)(4) or have determined not to request such information.

G-1

 

     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF PURCHASER (FOR 

   TRANSFERS) OR OWNER (FOR

   EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  
Address: 	 	 
	 

Date: _________________

G-2

 

EXHIBIT H

Institutional Accredited Investor Certificate

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, NY 10286

Attention: Corporate Trust Administration

	 	 	 

	     Re:

	 	Huntington Ingalls Industries, Inc. (the “Company”)
	 

	 	[6.875% Senior Notes due 2018]
	 

	 	[7.125% Senior Notes due 2021] (the “Notes”)
	 

	 	Issued under the Indenture (the “Indenture”) dated
	 

	 	as of March 11, 2011 relating to the Notes                    

Ladies and Gentlemen:

     This Certificate relates to:

     [CHECK A OR B AS APPLICABLE.]

	 	o A.	 	Our proposed purchase of $____ principal amount of Notes issued under the
Indenture.
	 
	 	o B.	 	Our proposed exchange of $____ principal amount of Notes issued under the
Indenture for an equal principal amount of Notes to be held by us.

     We hereby confirm that:

	 	1.	 	We are an institutional “accredited investor” within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
“Securities Act”) (an “Institutional Accredited Investor”).
	 
	 	2.	 	Any acquisition of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors as to which we
exercise sole investment discretion.
	 
	 	3.	 	We have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of an investment in the
Notes and we and any accounts for which we are acting are able to bear the economic
risks of and an entire loss of our or their investment in the Notes.

H-1

 

	 	4.	 	We are not acquiring the Notes with a view to any distribution thereof
in a transaction that would violate the Securities Act or the securities laws of
any State of the United States or any other applicable jurisdiction; provided that
the disposition of our property and the property of any accounts for which we are
acting as fiduciary will remain at all times within our and their control.
	 
	 	5.	 	We acknowledge that the Notes have not been registered under the
Securities Act and that the Notes may not be offered or sold within the United
States or to or for the benefit of U.S. persons except as set forth below.
	 
	 	6.	 	The principal amount of Notes to which this Certificate relates is at
least equal to $250,000.

     We agree for the benefit of the Company, on our own behalf and on behalf of each account for
which we are acting, that such Notes may be offered, sold, pledged or otherwise transferred only in
accordance with the Securities Act and any applicable securities laws of any State of the United
States and only (a) to the Company, (b) pursuant to a registration statement which has become
effective under the Securities Act, (c) to a qualified institutional buyer in compliance with Rule
144A under the Securities Act, (d) in an offshore transaction in compliance with Rule 904 of
Regulation S under the Securities Act, (e) in a principal amount of not less than $250,000, to an
Institutional Accredited Investor that, prior to such transfer, delivers to the Trustee a duly
completed and signed certificate (the form of which may be obtained from the Trustee) relating to
the restrictions on transfer of the Notes or (f) pursuant to an exemption from registration
provided by Rule 144 under the Securities Act or any other available exemption from the
registration requirements of the Securities Act.

     Prior to the registration of any transfer in accordance with (c) or (d) above, we acknowledge
that a duly completed and signed certificate (the form of which may be obtained from the Trustee)
must be delivered to the Trustee. Prior to the registration of any transfer in accordance with (e)
or (f) above, we acknowledge that the Company reserves the right to require the delivery of such
legal opinions, certifications or other evidence as may reasonably be required in order to
determine that the proposed transfer is being made in compliance with the Securities Act and
applicable state securities laws. We acknowledge that no representation is made as to the
availability of any Rule 144 exemption from the registration requirements of the Securities Act.

     We understand that the Trustee will not be required to accept for registration of transfer any
Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the
Trustee that the foregoing restrictions on transfer have been complied with. We further agree to
provide to any person acquiring any of the Notes from us a notice advising such person that

H-2

 

resales of the Notes are restricted as stated herein and that certificates representing the
Notes will bear a legend to that effect.

     We agree to notify you promptly in writing if any of our acknowledgments, representations or
agreements herein ceases to be accurate and complete.

     We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any account for which we are
acting.

     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF PURCHASER (FOR

   TRANSFERS) OR OWNER (FOR

   EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  
Address: 	 	 
	 

Date: _________________

H-3

 

     Upon transfer, the Notes would be registered in the name of the new beneficial owner as
follows:

	 	 	 	 

	By:
	 	 	 
	 

	 	 	 

	 	 	 	 

	Date:
	 	 	 
	 

	 	 	 

	 	 	 	 

	Taxpayer ID number:
	 	 	 
	 

	 	 	 

H-4

 

EXHIBIT I

[COMPLETE FORM I OR FORM II AS APPLICABLE.]

[FORM I]

Certificate of Beneficial Ownership

	 	 	 

	To:

	 	The Bank of New York Mellon
	 

	 	101 Barclay Street, Floor 8W
	 

	 	New York, NY 10286
	 

	 	Attention: Corporate Trust Administration OR
	 
	 	 
	 

	 	[Name of DTC Participant]]

	 	 	 

	     Re:

	 	Huntington Ingalls Industries, Inc. (the “Company”)
	 

	 	[6.875% Senior Notes due 2018]
	 

	 	[7.125% Senior Notes due 2021] (the “Notes”)
	 

	 	Issued under the Indenture (the “Indenture”) dated
	 

	 	as of March 11, 2011 relating to the Notes                    

Ladies and Gentlemen:

     We are the beneficial owner of $____ principal amount of Notes issued under the Indenture and
represented by a Temporary Offshore Global Note (as defined in the Indenture).

     We hereby certify as follows:

     [CHECK A OR B AS APPLICABLE.]

	 	o A.	 	We are a non-U.S. person (within the meaning of Regulation S under the
Securities Act of 1933, as amended).
	 
	 	o B.	 	We are a U.S. person (within the meaning of Regulation S under the Securities
Act of 1933, as amended) that purchased the Notes in a transaction that did not require
registration under the Securities Act of 1933, as amended.

     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

I-1

 

	 	 	 	 	 
	 	Very truly yours,

[NAME OF BENEFICIAL OWNER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  
Address: 	 	 
	 

Date: _________________

[FORM II]

Certificate of Beneficial Ownership

	 	 	 

	To:

	 	The Bank of New York Mellon
	 

	 	101 Barclay Street, Floor 8W
	 

	 	New York, NY 10286
	 

	 	Attention: Corporate Trust Administration
	 
	 	 
	Re:

	 	Huntington Ingalls Industries, Inc. (the “Company”)
	 

	 	[6.875% Senior Notes due 2018]
	 

	 	[7.125% Senior Notes due 2021] (the “Notes”)
	 

	 	Issued under the Indenture (the “Indenture”) dated
	 

	 	as of March 11, 2011 relating to the Notes

Ladies and Gentlemen:

     This is to certify that based solely on certifications we have received in writing, by tested
telex or by electronic transmission from Institutions appearing in our records as persons being
entitled to a portion of the principal amount of Notes represented by a Temporary Offshore Global
Note issued under the above-referenced Indenture, that as of the date hereof, $____ principal
amount of Notes represented by the Temporary Offshore Global Note being submitted herewith for
exchange is beneficially owned by persons that are either (i) non-U.S. persons (within the meaning
of Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons that purchased
the Notes in a transaction that did not require registration under the Securities Act of 1933, as
amended.

     We further certify that (i) we are not submitting herewith for exchange any portion of such
Temporary Offshore Global Note excepted in such certifications and (ii) as of the date hereof we
have not received any notification from any Institution to the effect that the statements made by
such Institution with respect

I-2

 

to any portion of such Temporary Offshore Global Note submitted herewith for exchange are no
longer true and cannot be relied upon as of the date hereof.

     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

	 	 	 	 	 
	 	Yours faithfully,

[Name of DTC Participant]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  
Address: 	 	 
	 

Date: _________________

I-3

 

     EXHIBIT J

THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE
HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON
OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN
ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE
TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES
ACT.

NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNTIL SUCH BENEFICIAL INTEREST IS EXCHANGED OR TRANSFERRED FOR AN
INTEREST IN ANOTHER NOTE.

J-1

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