Document:

FannieMae2012 10K EX 10.9 Supp Pension Plan of 2003 as amended 11202007

EXHIBIT 10.9
FANNIE MAE  
SUPPLEMENTAL PENSION PLAN OF 2003 
As Amended Effective January 1, 2008

ARTICLE I. 
PURPOSE

     1.1. Establishment. Fannie Mae (the “Corporation”) establishes this Fannie Mae Supplemental Pension Plan of 2003 for the benefit of eligible employees of the Corporation and their beneficiaries. This Plan became subject to Part 1 of Subtitle B of Title I of ERISA for purposes of 29 CFR § 2520.104-23 on the date of execution (August 4, 2003) but with retroactive effect as hereinafter provided.

     1.2. Purpose. The Corporation intends by the adoption of this Plan to advance its interests by enhancing retirement benefits for a select group of the Corporation’s managerial or highly compensated employees. The Plan supplements benefits provided under the Corporation’s Retirement Plan for Employees Not Covered Under Civil Service Retirement Law and, in the case of some participants, benefits provided under other supplemental plans.

     1.3. Compliance. This Plan is intended to be unfunded for purposes of the Code and Title I of ERISA and to constitute a so-called “top hat” plan as described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and shall be construed accordingly. 

ARTICLE II. 
DEFINITIONS

     When used herein, the following terms shall have the following meanings:

     2.1. “Board” means the Board of Directors of the Corporation.

     2.2. “Code” means the Internal Revenue Code of 1986, as from time to time amended and in effect.

     2.3. “Committee” means the Benefit Plans Committee of the Corporation or any successor committee.

     2.4. “Corporation” means Fannie Mae.

     2.5. “Earnings” has the meaning provided in the Retirement Plan.

     2.6. “Effective Date” means the date specified in Section 1.1.

     2.7. “ERISA” means the Employee Retirement Income Security Act of 1974, as from time to time amended and in effect.

     2.8. “Executive” means, except as hereinafter provided, any regular employee of the Corporation who was an officer or officer equivalent (as determined by the Committee) of the Corporation prior to January 1, 2003 and is still employed by the Corporation (whether or not in an officer or officer equivalent position) on January 1, 2003 and any other regular employee of the Corporation who is or becomes an officer or officer equivalent of the Corporation (including for this purpose a Chief or Managing Director of the eBusiness division of the Corporation) on or after January 1, 2003. The Committee shall have discretion to determine “regular employee” and officer or officer equivalent status for purposes of this Plan. 

     2.8A “Grandfathered Employee” means an employee of the Corporation who, as of January 1, 2008, satisfied the requirements for being treated as a “Grandfathered Participant” under the Retirement Plan as in effect on such date. 

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If a Grandfathered Employee separates from service with the Employer after December 31, 2007 and is subsequently reemployed by the Corporation, such Executive shall not be considered a Grandfathered Employee for any period following such reemployment. 
  
     2.9. “Participant” means any Executive of the Corporation who is (or following retirement or other termination would be) entitled to receive a benefit under this Plan.

     2.10. “Plan” means this Fannie Mae Supplemental Pension Plan of 2003.

     2.11. “Qualified Plan Benefit” means the monthly normal, early, deferred, vested, disability or preretirement survivor annuity benefit, as the case may be, payable with respect to a Participant under the Retirement Plan.

     2.12. “Retirement Plan” means the Federal National Mortgage Association Retirement Plan for Employees Not Covered Under Civil Service Retirement Law, as from time to time amended and in effect.

     2.13. “Supplemental Pension Plan Benefit” means the monthly benefit payable to a Participant under the Federal National Mortgage Association Supplemental Pension Plan.

     2.14. “Unrestricted Benefit” means the monthly normal, early, deferred, vested, disability or preretirement survivor annuity benefit, as the case may be, that would be payable to a Participant under the Retirement Plan if: (a) the terms of the Retirement Plan included solely to comply with Sections 401(a)(17) and 415 of the Code were disregarded; and (b) Earnings (determined without regard to the terms of the Retirement Plan included solely to comply with Section 401(a)(17) of the Code) were increased by the amount of any bonus under the Annual Incentive Plan earned by the Participant while such Participant was an Executive, even if prior to the Effective Date, subject, however, to the following additional rules:   

		
	(i)
	The amount of the Annual Incentive Plan bonus taken into account for purposes of calculating a Participant’s Unrestricted Benefit shall not exceed 50% of the Participant’s Earnings for the calendar year for which such bonus was earned.

		
	(ii)
	The amount of the Annual Incentive Plan bonus taken into account for any calendar year (as limited pursuant to clause (i) above) shall be treated as having been earned in equal monthly installments over the course of such year (taking into account all months of employment for the Corporation, whether or not as an Executive, but disregarding periods prior to commencement of employment or following termination of employment) for purposes of determining, under Section 2.14(b) above, (A) the portion of such bonus added to Earnings for any month, and (B) whether such bonus was earned by the Participant while an Executive.

		
	(iii)
	If a Participant is not an Executive for a full calendar year, the Earnings taken into account in applying the 50% limitation under clause (i) above shall be the Participant’s Earnings for those full months during which he or she was an Executive.

  
ARTICLE III. 
ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility. Subject to the following provisions of this Section 3.1, each Executive who is a Grandfathered Employee and whose Unrestricted Benefit exceeds his or her Qualified Plan Benefit shall be eligible to participate in the Plan, and each other Executive who was a Participant as of January 1, 2008 shall continue to be a Participant after such date, unless (in either case) the Committee determines that the Executive’s eligibility or continued eligibility to participate would jeopardize the Plan’s status as a “top hat” plan for purposes of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA; provided, that any Participant who is not a Grandfathered Employee shall not accrue any further benefits under the Plan after June 30, 2008. If the Committee determines that any Executive’s eligibility or continued eligibility to participate in the Plan would jeopardize the Plan’s status as a “top hat” plan, it may 

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exclude the Executive from the Plan, including retroactively; provided, that if any such action reduces or eliminates the Executive’s then vested accrued benefit, if any, under the Plan, the Corporation shall, to the extent (and in a manner) consistent with the requirements of Section 409A of the Code, pay to the Executive the actuarial present value of the amount of such reduction, as determined by the Committee on the basis of such reasonable actuarial assumptions as it shall prescribe. As a condition of initial and continued participation in this Plan, an eligible Executive must complete and submit to the Committee such forms as may be required by the Committee, including, but not limited to, authorization to withhold from other compensation payable by the Corporation to the Executive any applicable taxes resulting from participation in this Plan. 

     3.2. Benefits. A Participant who is receiving a Qualified Plan Benefit shall receive a monthly benefit under this Plan equal to the Participant’s Unrestricted Benefit reduced (but not below zero) by the sum of (i) the Participant’s Qualified Plan Benefit; (ii) the Participant’s Supplemental Pension Plan Benefit, and (iii) the actuarial equivalent, as determined by the Committee on the basis of such reasonable actuarial assumptions as it shall prescribe, of the Participant’s monthly benefits under the Executive Pension Plan of the Federal National Mortgage Association. If there is an assignment of any portion of the Participant’s Qualified Plan Benefit pursuant to a “qualified domestic relations order” (as defined in Section 206(d)(3) of ERISA) or if there is an assignment or purported assignment of any portion of any benefit described in clauses (ii) or (iii) above, the offset described in clause (i) above and/or the offsets described in clauses (ii) and (iii) above, as applicable, shall be determined as if there had been no such assignment. All reductions described in this Section 3.2 shall be determined by the Committee in its sole discretion.

     3.3. Cost of Living Adjustments to Retirement Plan. A cost of living adjustment to Qualified Plan Benefits shall automatically adjust the amount of benefits payable under this Plan, unless the Compensation Committee of the Board or the Committee determines otherwise.

     3.4. Timing and Form of Benefit Payments. Benefits under this Plan (including any survivor benefit) shall be paid in the same annuity form, with the same commencement date and subject to the same suspensions or terminations, if any, as the Participant’s Qualified Plan Benefit, and any survivor benefit portion of a Participant’s benefit under this Plan shall be paid to the person to whom the survivor portion of the Participant’s Qualified Plan Benefit is payable; provided, that in applying the provisions of this sentence, that portion, if any, of the Qualified Plan Benefit that has been assigned to an “alternate payee” (as that term is defined in Section 206(d)(3) of ERISA) under a “qualified domestic relations order” (as therein defined) shall be disregarded. Notwithstanding the foregoing, if the Committee determines that a Participant’s or beneficiary’s election of the form or timing of his or her Qualified Plan Benefit, if applied to his or her benefit under this Plan, would result in an unintended acceleration of income recognition for income tax purposes to the Participant or beneficiary with respect to his or her benefit under this Plan, the Committee may prescribe alternative form and timing rules for the benefit payable under this Plan.

ARTICLE IV. 
ADMINISTRATION

     4.1. Administration. This Plan shall be administered by the Committee. The Committee shall have all discretionary power and authority necessary to carry out the provisions of this Plan and to make all determinations hereunder, including, without reservation, the discretionary authority to interpret the provisions of this Plan and to make determinations as to eligibility and benefits. The Committee may delegate to other persons such administrative functions under the Plan as it determines.

     4.2. No Liability of Committee Members. No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the Corporation shall indemnify and hold harmless each employee, officer or director of the Corporation to whom any duty or power relating to the administration or interpretation of this Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with this Plan unless arising out of such individual’s own fraud or bad faith; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against the Committee or any member of the Committee.

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     4.3. Claims Procedures. The Committee shall prescribe, consistent with the requirements of Section 503 of ERISA, such procedures as it deems appropriate for the processing of claims and the review of denied claims.

ARTICLE V. 
MISCELLANEOUS

     5.1. General Creditor Status. To the extent that any person acquires a right to receive payments from the Corporation under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Corporation, and such person shall have only the unsecured promise of the Corporation that such payment shall be made. All payments to be made hereunder shall be paid from the general funds of the Corporation, and no special or separate fund shall be established, and no segregation of assets shall be made, to assure payment of such amounts. Participants shall have no right, title or interest in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. All such assets shall be the property solely of the Corporation and shall be subject to the claims of the Corporation’s unsecured general creditors.

     5.2. Change in Control or other Discontinuance. The obligations of the Corporation under this Plan shall be binding upon any successor corporation.

     5.3. Non-Alienation of Benefits. No Participant or other person entitled to benefits under this Plan may alienate, anticipate, commute, sell, assign, transfer, pledge, encumber or otherwise convey the right to receive any such benefit, or any other rights under this Plan, nor shall any payments under this Plan or rights thereto be subject to attachment, garnishment or execution, nor shall they be transferable by operation of law in the event of bankruptcy or insolvency or otherwise. Any attempt, whether voluntary or involuntary, to effect any such action shall be null, void and of no effect. For the avoidance of doubt, no “alternate payee” under a “qualified domestic relations order” (as those terms are defined in Section 206(d)(3) of ERISA) shall be eligible to receive a benefit under this Plan, whether by purported assignment or otherwise.

     5.4. Payments to Individuals other than Participants. If any individual to whom any amount is payable under this Plan has been declared by a court of law incompetent and unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such individual or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative), may, if the Committee so directs the Corporation, be paid to his or her spouse, child, a relative or such other person as the Committee determines. Any such payment shall be a complete discharge of the liability of this Plan for such benefit and of the Corporation’s liability with respect thereto.

     5.5. Amendment or Termination. The Compensation Committee of the Board, with prospective or retroactive effect, may amend, suspend or terminate this Plan or any portion thereof at any time. The Compensation Committee of the Board delegates to the Committee the authority to adopt amendments that may be necessary or appropriate to facilitate the administration, management and interpretation of this Plan or to conform this Plan thereto, provided that such amendment by the Committee does not significantly affect the cost to the Corporation of maintaining the Plan. However, no amendment, suspension or termination of the Plan shall, without the consent of a Participant, impair or adversely affect the Participant’s vested benefits accrued under the Plan as of the date of such action (determined as if that Participant then employed had terminated his or her employment as of the date of such amendment, suspension or termination).

     5.6. Governing Law. This Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the District of Columbia except to the extent such laws are preempted by ERISA or other federal law.

     5.7. Taxes. All payments under this Plan shall be subject to reduction and shall be reduced by the amount of applicable tax withholdings. If any tax becomes due with respect to an accrued benefit under this Plan prior to payment, the Corporation may make such arrangements, including withholding from other compensation and/or a reduction of benefits hereunder, as the Committee deems appropriate to satisfy any withholding obligation of the Corporation with respect thereto. The Corporation does not represent or guarantee that any particular federal, state or local, income, payroll, personal property or other tax consequences will result from participation in this Plan.

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     5.8. Other Plans. Benefits payable under this Plan shall not be deemed salary or other compensation to the Participant for the purpose of computing benefits to which he or she may be entitled under any other plan or arrangement of the Corporation. Notwithstanding any provision of this Plan to the contrary, no benefit (or portion of a benefit) shall be payable as a result of participation in this Plan to the extent a benefit is payable to or on behalf of such Participant under a plan, program or agreement with purposes similar to those of this Plan and the payment of the benefit (or portion of such benefit) under this Plan would provide a benefit to or on behalf of the Participant which duplicates the benefit payable under such other plan, program or agreement.

     5.9. Captions. The captions preceding the Sections of this Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision of this Plan. 

5FannieMae2012 10K EX 10.10 Amendment to Supp Pension Plan of 2003 for IRC Section 409A effective 11.20.09

EXHIBIT 10.10
FANNIE MAE 
SUPPLEMENTAL PENSION PLAN OF 2003 
Code Section 409A Amendment  

     Pursuant to Section 5.5 of the Fannie Mae Supplemental Pension Plan of 2003 (the “Plan”), Fannie Mae hereby amends the Plan, effective January 1, 2009, as follows:

     1. A new Section 2.1A is hereby added to read in its entirety as follows:

     “2.1A. “Actuarial Equivalent” means a benefit which is of equal value to a benefit otherwise payable in a different form or commencing at a different time under the Plan, based on the applicable mortality tables and interest factors (or other reduction factors) set forth in the Retirement Plan and in effect on the date of the Participant’s Separation from Service with the Corporation.”

     2. A new Section 2.12A is hereby added to read in its entirety as follows:

     “2.12A. “Separation from Service” means and correlative terms mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations) from the Corporation and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Corporation under Section 1.409A-1(h)(3) of the Treasury Regulations). The Administrator may, but need not, elect in writing, subject to the applicable limitations under Section 409A of the Code (“Section 409A”), any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Plan.”

     3. A new Section 2.12B is hereby added to read in its entirety as follows:

     “2.12B. “Specified Employee” means an individual determined by the Administrator or its delegate to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Administrator may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of the Plan.”

     4. Section 3.2 is hereby amended in its entirety to read as follows: 

     “A Participant shall receive a benefit under this Plan calculated as of the date of his or her Separation from Service equal to the Actuarial Equivalent of the Participant’s Unrestricted Benefit reduced (but not below zero) by the sum of the Actuarial Equivalents of each of the following amounts: (i) the Participant’s Qualified Plan Benefit; (ii) the Participant’s Supplemental Pension Plan Benefit; and (iii) the Participant’s vested benefits, if any, accrued under the Executive Pension Plan of the Federal National Mortgage Association.”

     5. Section 3.4 is hereby amended in its entirety to read as follows:

     “3.4. Commencement of Benefit Payments. Except for a Participant whose benefit is payable pursuant to an effective “transition-period payment election” or a “Window Program payment election” (both as hereinafter defined), payment of benefits under the Plan shall commence within thirty (30) days of the date the Participant attains age 55 or, if later, the date of his or her Separation from Service. Payment of benefits to a Participant who, consistent with Section 409A and the transition rules thereunder, (i) was permitted during 2007 or 2008 to elect to have his or her benefit hereunder payable commence at an alternative time and who made such election in writing and in a form and manner acceptable to the Committee on or before December 31, 2008 (a “transition-period payment election”) or (ii) was permitted to elect to have his or her benefit hereunder payable commence at an alternative time under the 2007 Retirement Window Program and who made such election in writing and consistent with all the terms and conditions of the 2007 Retirement Window Program (a “Window Program payment election”) 

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shall commence to receive payment of benefits under the Plan consistent with the terms of such transition-period or Window Program payment election. For the avoidance of doubt, no Participant who is or may be eligible to receive a benefit under the Fannie Mae Executive Pension Plan shall be eligible to make a transition-period payment election under this Section 3.4. Notwithstanding the foregoing, a Participant may subsequently elect to change his or her transition-period payment election if and only if such change (i) shall not take effect for at least twelve (12) months after the date on which the subsequent election is made; (ii) is made at least twelve (12) months prior to the date on which the first payment was scheduled to be paid (“transition election payment date”) and (iii) results in a new payment date that is delayed by at least five years, as measured from the transition election payment date; provided that no such change of election shall be effective if such change would result in a form of benefit payment under the Plan that varies from, as of the date the first annuity payment is made, the form of benefit payment that applies to amounts payable to a Participant pursuant to another “nonaccount balance plan” (as defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations) with which the Plan is required to be aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations). Notwithstanding the foregoing or any provision of the Plan to the contrary, in the case of a Participant who is a Specified Employee, payment of such Participant’s benefit owing to a Separation from Service with the Corporation on or after January 1, 2009 shall not commence before the date which is six (6) months and one (1) day after the date of such Separation from Service or, if earlier than the end of such period, the date of death of such Participant (“delayed payment date”). A Participant whose benefit is subject to the six-month delay described in the immediately preceding sentence shall receive, on the delayed payment date, a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required.”

     6. A new Section 3.5 is hereby added to read in its entirety as follows:

     “3.5. Form of Benefit Payments.

     (a) Available Forms of Payment. The benefit payable under the Plan shall be the Actuarial Equivalent of the benefit determined under Sections 3.2 and 3.3 and shall be paid in one of the following forms:

     (i) Single Life Annuity (i.e., an annuity which provides an amount of monthly income for the life of the Participant, with the last payment to be made on the first day of the month in which the Participant’s death occurs);

     (ii) 50% Joint and Survivor Annuity (i.e., an annuity which is the Actuarial Equivalent of the single life annuity, which provides an amount of monthly income for the life of the Participant with a survivor annuity for the life of the person designated by the Participant to receive an annuity upon the Participant’s death (“co-annuitant”) which is equal to fifty percent (50%) of the monthly amount of benefit payable during the joint lives of the Participant and his or her co-annuitant);

     (iii) 75% Joint and Survivor Annuity (i.e., an annuity which is the Actuarial Equivalent of the single life annuity, which provides an amount of monthly income for the life of the Participant and in the event the Participant predeceases his or her co-annuitant, a monthly benefit for the life of the co-annuitant that is 75% of the monthly amount of benefit payable during the Participant’s life);

     (iv) 100% Contingent Annuity (i.e., an annuity which is the Actuarial Equivalent of the single life annuity, which provides an amount of monthly income for the life of the Participant and in the event the Participant predeceases his or her co-annuitant, a monthly benefit for the life of the co-annuitant that is 100% of the monthly amount of benefit payable during the Participant’s life); or

     (v) 10 Year Certain and Continuous Annuity (i.e., an annuity which is the Actuarial Equivalent of the single life annuity, which provides an amount of monthly income for the life of the Participant with the provision that not less than one hundred twenty (120) monthly payments shall be made in any event to the Participant and the person properly designated by the Participant to receive a benefit from the Plan upon the Participant’s death (“beneficiary”)). If the Participant’s designated beneficiary predeceases the Participant and the Participant dies before having received the entire benefit to which the Participant is entitled, the beneficiary of the lump sum Actuarial Equivalent of the remainder of such benefit shall be the estate of the Participant. If the beneficiary survives 

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the Participant but dies before having received the entire benefit to which such beneficiary is entitled, the beneficiary of the lump sum Actuarial Equivalent of the remainder of such benefit shall be the estate of the beneficiary.

     (b) Election Provisions. The form in which a Participant’s benefit under the Plan is paid shall be determined as follows:

     (i) Except as otherwise elected in accordance with this Section 3.5(b), each Participant’s benefit hereunder shall be paid in the form of a single life annuity as described in Section 3.5(a)(i) above.

     (ii) A Participant may, to the extent consistent with Section 409A, elect in writing, in a form and manner acceptable to the Committee or its delegate, to have his or her benefit hereunder payable in another such annuity form that is available under Section 3.5(a), provided that no such change of election shall be effective if made on or after the date on which the first annuity payment is made (or would have been made in the absence of a delay occasioned by the Participant’s status as a Specified Employee) and further provided that no such change of election shall be effective if such change would result in a form of benefit payment under the Plan that varies from, as of the date the first annuity payment is made, the form of benefit payment that applies to amounts payable to a Participant pursuant to another “nonaccount balance plan” (as defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations) with which the Plan is required to be aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations).”

     7. A new Section 3.6 is hereby added to read in its entirety as follows:

     “3.6. Pre-Retirement Death Benefit. In the case of a Participant who dies prior to the commencement of his or her benefits under Section 3.4 above, his or her designated surviving spouse or domestic partner who is eligible to commence receiving a benefit under the Retirement Plan will be entitled to receive a single life annuity based on the life of such surviving spouse or domestic partner, with annual payments equal to 50% of the annual payments that would have been payable to the Participant pursuant to Section 3.2 above had the Participant survived until, and commenced receiving a 50% Joint and Survivor Annuity with his or her surviving spouse or domestic partner as co-annuitant on, the spouse or domestic partner’s benefit commencement date (as determined in the following sentence). The pre-retirement death benefit payable under this Section 3.6 shall commence within thirty (30) days of the date the Participant dies or, if later, the date the Participant would have attained age 55.”
     8. A new Section 3.7 is hereby added to read in its entirety as follows:

     “3.7 Cashout of Small Amounts. If, at the time a Participant’s benefits are scheduled to commence under Section 3.4 or a spouse’s or domestic partner’s benefits are scheduled to commence under Section 3.6, the present value of his or her benefit hereunder payable (including any other amounts payable to a Participant pursuant to another “nonaccount balance plan” (as defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations) with which the Plan is required to be aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations) is less than the applicable dollar amount under Section 402(g)(1)(B) of the Code, the Participant, spouse or domestic partner shall receive such present value in the form of a single lump-sum payment as soon as administratively practicable, but in no event later than ninety (90) days after the date benefits would have otherwise been scheduled to commence under Section 3.4 or Section 3.6.”

     9. Section 5.5 is hereby amended in its entirety to read as follows:

     “5.5. Amendment or Termination. The Compensation Committee of the Board, with prospective or retroactive effect, may amend, suspend or terminate this Plan or any portion thereof at any time. The Compensation Committee of the Board delegates to the Committee the authority to adopt amendments that may be necessary or appropriate to facilitate the administration, management and interpretation of this Plan or to conform this Plan thereto, provided (i) any such amendment does not significantly affect the cost to the Corporation of maintaining the Plan and would not be inconsistent with the applicable provisions of Section 409A, and (ii) upon termination of the Plan as a whole or with respect to any Participant or group of Participants, payments will be accelerated only to the extent permitted 

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by Section 409A. However, no amendment, suspension or termination of the Plan shall, without the consent of a Participant, impair or adversely affect the Participant’s vested benefits accrued under the Plan as of the date of such action (determined as if that Participant then employed had Separated from Service as of the date of such amendment, suspension or termination).”

     10. A new paragraph is hereby added to Section 5.7 to read in its entirety as follows: 

     “If at any time the Plan fails to meet the requirements of Section 409A and the regulations thereunder, the Committee or its delegate may accelerate the payment of benefits under the Plan, in an amount not to exceed the amount required to be included in the Participants’ income as a result of such failure. For the avoidance of doubt, no Participant will have any discretion, nor have any direct or indirect election, as to whether a payment will be accelerated under this Section 5.7.”

     11. A new Section 5.10 is hereby added to read in its entirety as follows:

     “5.10. Compliance with Section 409A.

     (a) Notwithstanding any provision of the Plan to the contrary, a Participant whose benefits under the Plan were fully earned and vested prior to January 1, 2005 and not materially modified after October 3, 2004 (“grandfathered benefits”) and who has no benefits other than grandfathered benefits under the Plan shall have his or her benefits administered and distributed pursuant to the terms of the Plan that were in effect on December 31, 2004 and applicable to such benefits, subject only to such amendments, if any, as do not constitute a “material modification” for purposes of Section 1.409A-6(a)(4) of the Treasury Regulations and that are identified as applying to the grandfathered benefits. In the case of any Participant described in this Section 5.10(a), such Participant’s grandfathered benefits are intended to be grandfathered for purposes of Section 409A and therefore exempt from Section 409A. In determining what amounts were earned and vested as of December 31, 2004, the rules of Section 1.409A-6(a)(3) of the Treasury Regulations will apply.

     (b) In the case of a Participant who has any benefit earned or vested on or after January 1, 2005, no portion of such Participant’s benefits under the Plan shall be treated as a grandfathered benefit for purposes of Section 409A and the entirety of such Participant’s benefits shall be administered and distributed pursuant to the Plan as it may be amended from time to time.

     (c) To the extent that benefits are not grandfathered, the Plan is intended to comply with Section 409A and shall be construed and interpreted in accordance with such intent. For purposes of administering the payment timing and form provisions in respect of benefits that are not grandfathered, the Plan shall be construed as a “nonaccount balance plan” as defined in Section 1.409A-1(c)(2)(i)(C) of the Treasury Regulations and aggregated with such other nonaccount balance plans as are required to be aggregated under Section 1.409A-1(c)(2) of the Treasury Regulations.” 

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