CONFORMED COPY OF BANNER HEALTH CLINICAL PRACTICE 457(b) DEFERRED COMPENSATION PLAN (Amended and Restated Effective January 1, 2012)

Transcription

1 CONFORMED COPY OF BANNER HEALTH CLINICAL PRACTICE 457(b) DEFERRED COMPENSATION PLAN (Amended and Restated Effective January 1, 2012) Amendment Effective Signed First Amendment January 1, 2013 December 17, 2013 January 1, 2014 Second Amendment September 1, 2014 November 1, 2014 August 26, 2014 Note: This is a WORKING COPY OF THE Plan that reflects the amendments listed above. Provisions deleted by amendment are italicized, while provisions added by amendment are in bold type. A provision that was added by an amendment and subsequently deleted is in italicized and underline type. Revisions are footnoted to correspond to the effective dates indicated above.

2 TABLE OF CONTENTS Page ARTICLE 1 ESTABLISHMENT AND PURPOSE... 1 Section 1.1 Establishment... 1 Section 1.2 Purpose... 1 ARTICLE 2 DEFINITIONS... 1 Section 2.1 Definitions... 1 Section 2.2 Gender and Number... 3 ARTICLE 3 ELIGIBILITY AND PARTICIPATION... 3 Section 3.1 Eligible Employees... 3 Section 3.2 New Eligible Employees... 4 Section 3.3 Limitation on Eligible Employees... 4 Section 3.4 Removal from Participation as an Eligible Employee... 4 ARTICLE 4 DEFERRAL ELECTIONS... 4 Section 4.1 Eligible Employee Contributions... 4 Section 4.2 Election... 4 Section 4.3 Submission of Deferral Election Forms... 6 Section 4.4 Failure to Submit Deferral Elections... 6 Section 4.5 Deferral Period... 6 Section 4.6 Termination of Deferral Election... 7 Section 4.7 Nullification of Deferral Elections... 7 Section 4.8 Permissible Adjustments to Deferral Elections by Employee... 7 ARTICLE 5 FORFEITABILITY... 8 ARTICLE 6 STATUS OF DEFERRED AMOUNTS SECTION... 8 Section 6.1 Investment by the Company... 8 Section 6.2 Crediting an Eligible Employee s Account... 9 Section 6.3 Extent of Employer Liability... 9 ARTICLE 7 DISTRIBUTIONS... 9 Section 7.1 Distribution of Account... 9 Section 7.2 Designation of Beneficiary Section 7.3 Claims Procedure ARTICLE 8 PROVISIONS RELATING TO PARTICIPATION Section 8.1 Extent of Rights Under Plan Section 8.2 Funding Section 8.3 Extent to Which Other Parties Bound by Plan Section 8.4 Payment of Taxes i-

3 TABLE OF CONTENTS (continued) Page ARTICLE 9 ADMINISTRATION AND FINANCES Section 9.1 Administration Section 9.2 Powers of Committee Section 9.3 Actions of the Committee Section 9.4 Delegation Section 9.5 Indemnification Section 9.6 Reports and Records ARTICLE 10 AMENDMENTS AND TERMINATION Section 10.1 Amendments Section 10.2 Termination ARTICLE 11 PERMISSIBLE SECTION 457(B) TRANSFERS Section 11.1 Transfers from Other Plans Section 11.2 Transfers to Other Plans ARTICLE 12 MISCELLANEOUS Section 12.1 No Guaranty of Employment Section 12.2 No Implied Rights; Rights on Termination of Service Section 12.3 Non-Alienation Section 12.4 Applicable Law Section 12.5 Successors and Assigns Section 12.6 Payment with Respect to Incapacitated Persons Section 12.7 Delegation of Authority by Company Section 12.8 Military Service ii-

4 BANNER HEALTH CLINICAL PRACTICE 457(b) DEFERRED COMPENSATION PLAN ARTICLE 1 ESTABLISHMENT AND PURPOSE Section 1.1 Establishment. Banner Health (the Company ) established the Banner Health Clinical Practice Physicians 457(b) Deferred Compensation Plan (the Plan ), effective July 1, 2004, for the benefit of a select group of clinical practice physician employees of the Company. The Company hereby amends and restates the Plan, effective January 1, 2012, and renames the Plan as the Banner Health Clinical Practice 457(b) Plan. Section 1.2 Purpose. The purpose of the Plan is to enhance the ability of the Company to attract and retain clinical practice employees by providing Eligible Employees with the opportunity to defer a portion of their Compensation. The Plan is intended to satisfy the applicable provisions of Code Section 457(b) and the applicable Treasury Regulations thereunder. ARTICLE 2 DEFINITIONS Section 2.1 Definitions. Whenever used in this Plan, the following words and phrases shall have the meanings set forth below, unless the context plainly requires a different meaning. When the defined meaning is intended, the term is capitalized. (a) Account. means the bookkeeping account to which an Eligible Employee s Deferred Compensation pertaining to his or her Election is credited, as increased or decreased for any adjustments on such amounts made to reflect earnings and/or losses on such amounts in accordance with the relevant investment options used under Article 6. (b) Account Balance means the accrued balance in an Eligible Employee s Account, which has been adjusted for: (1) Additions representing such Eligible Employee s Deferred Compensation credited to such account in accordance with his or her Election; (2) Increases or decreases representing changes in market value of the investment funds (including those under any annuity contract) in which the Deferred Compensation has been invested by the Company as permitted under Section 6.1(b) of this Plan, or alternatively, credited with interest as described specifically in Section 6.1(b)(2); and (3) Decreases representing distributions, if any, from such respective account. 1

5 (c) Administrator means the Committee or the individual or entity selected by the Committee to administer this Plan, as provided herein. (d) Board of Directors means the Board of Directors of the Company. To the extent permitted by the bylaws of the Company, action may be taken by the Physician Committee of the Board of Directors. (e) events: Change in Control means the occurrence of any of the following (1) A majority of the members of the Board of Directors is replaced within a 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors in place before the date of the appointment or election; or (2) A change in ownership of a substantial portion of the Company s assets. Such change shall occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50 percent of the total gross fair market value of all assets of the Company immediately before the acquisition of such assets. The Committee shall have the authority and discretion to determine on the basis of all the facts and circumstances whether a Change in Control has occurred. (f) Code means the Internal Revenue Code of 1986, as amended. (g) Committee means that committee designated by the Board of Directors to administer this Plan, or such other person or committee as may be appointed from time to time by the Board of Directors to administer this Plan. (h) Company means Banner Health. (i) Compensation means the total income of an Eligible Employee reported on the Internal Revenue Service Form W-2 filed by the Company for a Plan Year increased by amounts not considered in the total W-2 income pursuant to Code Sections 401(k), 403(b), 125, and 132(f). The definition of Compensation shall be consistent in all respects with Code Section 415 and the final Treasury Regulations issued thereunder, which are hereby incorporated by reference and supersede any other provisions in the Plan to the contrary. Compensation shall include post-termination payments for regular compensation for the Eligible Employee s services during or outside of regular working hours, provided those amounts would have been included in Compensation and paid to the Eligible Employee prior to a severance from employment with the Company if the Eligible Employee had continued in employment with the Company; and provided further that any such payment is made by the later of 2½ months after severance from employment or the end of the 2

6 Plan Year that includes the date of severance from employment. Differential wage payments, as defined in Code Section 414(u)(12)(A), shall be treated as Compensation to the extent required by law. (j) Deferral Election means the form designated for use by Eligible Employees to make annual deferrals of Compensation under Article 4. This form may be changed at any time by the Administrator. (k) Deferred Compensation means the amount of Compensation not yet earned, as designated in the Deferral Election, which the Eligible Employee and the Company mutually agree shall be deferred in accordance with the provisions of the Plan through salary reduction. The total annual Deferred Compensation for any Eligible Employee for any given year is represented by the income deferred by the Eligible Employee under an Election and credited to such Eligible Employee s Account for such year. (l) Election means an election by the Eligible Employee and the Company to treat a portion of the Eligible Employee's Compensation as Deferred Compensation to an eligible deferred compensation plan (within the meaning of Code Section 457(b)) in accordance with Section 4.2 of the Plan. (m) Eligible Employee means those employees of the Company as determined under Section 3.1. (n) ERISA means the Employee Retirement Income Security Act of 1974, as amended. (o) Plan means this Banner Health Clinical Practice 457(b) Deferred Compensation Plan. (p) Plan Year means each twelve-month period ending December 31. Section 2.2 Gender and Number. Except as otherwise indicated by context, masculine terminology also includes the feminine, and terms used in the singular may also include the plural. ARTICLE 3 ELIGIBILITY AND PARTICIPATION Section 3.1 Eligible Employees. Any employee of the Company designated by the Committee or the Plan Administrator shall be considered an Eligible Employee under this Plan; provided that no employee of the Company has a right to be selected as an Eligible Employee under this Plan. Employees designated under this Section shall collectively comprise a select group of management or highly compensated clinical employees. 3

7 Section 3.2 New Eligible Employees. The Plan Administrator or Committee may select additional employees as Eligible Employees, and if so, they shall become Eligible Employees under this Plan on a prospective basis. Section 3.3 Limitation on Eligible Employees. The Plan Administrator or Committee, in its sole discretion, may change the definition of who qualifies as an Eligible Employee. Any such change shall be effective for the following Plan Year. Section 3.4 Removal from Participation as an Eligible Employee. The Plan Administrator or Committee may remove an Eligible Employee from participating in this Plan on a prospective basis for any reason. In addition, if the Company experiences a Change in Control, the Eligible Employees participation in the Plan shall cease on the date as of which the Change in Control occurs, unless otherwise provided in the transaction governing the Change in Control. ARTICLE 4 DEFERRAL ELECTIONS Section 4.1 Eligible Employee Contributions. Prior to the beginning of each Plan Year, each Eligible Employee employed by the Company may elect to reduce the amount of his or her Compensation that would otherwise be earned and payable in the following Plan Year. For the first year that this Plan is effective, or for the first year that an employee becomes an Eligible Employee under Article 3, the election may be made within 30 days of the adoption of this Plan or within 30 days of the date on which the employee becomes an Eligible Employee, whichever is applicable; provided, however, such election shall be effective as soon as administratively feasible thereafter, but no earlier than the first day of the month next following the acceptance and approval of such individual's properly completed Election by the Administrator and shall apply only to Compensation earned after the date the election is effective. An Eligible Employee may elect to defer Compensation payable during a month by filing with the Administrator prior to the first day of such month a Deferral Election designating the Compensation to be deferred. A new employee who is an Eligible Employee may make a Deferral Election to defer Compensation payable to the Eligible Employee during the month that he or she first becomes an employee, if the Deferral Election is entered into on or prior to the first day on which the Eligible Employee performs services for the Company. 1 Section 4.2 Election. Any election to defer Compensation made under this Section 4.2 shall constitute an election made for participation in an eligible deferred compensation plan as defined in Code Section 457(b). (a) Maximum Annual Deferral. An Eligible Employee may make an Election by filing a Deferral Election electing to defer his or her Compensation, expressed as either a whole dollar amount or in 1% increments of Compensation, up to a maximum of 100% of Compensation. An Eligible Employee may make an Election by 1 Second Amendment Effective November 1,

8 filing a Deferral Election electing to defer his or her Compensation, expressed as a whole dollar amount of Compensation, up to a maximum of 100% of Compensation. 2 The maximum amount which may be deferred by the Eligible Employee under this paragraph (a) is the lesser of: (1) $17,000 (as adjusted annually in accordance with Code Section 457(e)(15)); or (2) 100% of such Eligible Employee s Compensation. (b) Catch-Up Provision. With respect to Plan Years ending on or prior to December 31, 2012, and notwithstanding paragraph (a) immediately above, for any one or more of the Eligible Employee s last three taxable years ending before he or she attains normal retirement age (which shall be age 65 for purposes of this Plan), the annual dollar limitation set forth in paragraph (a) immediately above shall instead be the lesser of: (1) Twice the dollar limit in effect under paragraph (a)(1) immediately above; or (2) The sum of: (A) The limitation set forth in paragraph (a) immediately above; and (B) Any portion of the Code Section 457(b)(2)(A) dollar limitation that was not contributed by or on behalf of the Eligible Employee under any Code Section 457(b) eligible deferred compensation plan in all prior years (since January 1, 2002). Notwithstanding any provision of this paragraph (b) or otherwise in the Plan to the contrary, effective on and after January 1, 2013, the Catch-Up Provision described in this paragraph (b) shall not be available, and no Eligible Employee shall be entitled to defer any portion of his or her Compensation that exceeds the limits described in paragraph (a) immediately above. An Eligible Employee may amend his or her Election at any time by notifying the Administrator in writing at least 30 days prior to the effective date of the requested amendment. Any amendment made by the Eligible Employee to his or her Election by filing a new Deferral Election shall only apply to Compensation paid to the Eligible Employee on or after the effective date of the new Deferral Election and shall be effective as soon as administratively practicable thereafter, but no earlier than the first payroll period of the month next following the approval and acceptance of such election by the Administrator. An Eligible Employee may amend his or her Election on a prospective basis at any time by notifying the Administrator in writing or through such electronic means as the Administrator may prescribe. Any such amendment 2 Second Amendment Effective September 1,

9 shall be effective as soon as administratively practicable thereafter, but no earlier than the first payroll period of the month following approval and acceptance of such election by the Administrator. 3 Any Compensation deferred for an Eligible Employee under an Election shall be credited to such Eligible Employee s Account. In the event of an Excess Deferral under the Plan, the Excess Deferral and any income allocable to the Excess Deferral shall be distributed to the Eligible Employee no later than the first April 15 following the close of the calendar year of the Excess Deferral. For this purpose, the term Excess Deferral means any amount deferred for a calendar year that exceeds the Maximum Annual Deferral described in paragraph (a) above (and, for Plan Years ending on or prior to December 31, 2012, the limit for the Catch-Up Provision described in paragraph (b) above), or Treasury Regulation Section (regarding the individual limitation applicable to participants in more than one eligible deferred compensation plan described in Section 457(b) of the Code). Any Excess Deferral and income allocable to the Excess Deferral distributed shall be includible in the Eligible Employee s gross income for the calendar year of the Excess Deferral. Section 4.3 Submission of Deferral Election Forms. Except as provided in Section 4.1, each Eligible Employee who wishes to participate in the Plan must submit the appropriate Deferral Election to the Administrator within a reasonable period of time, as determined by the Administrator, prior to the month with respect to which the Eligible Employee wishes to defer amounts under Section 4.2. The Eligible Employee must make a new election for each Plan Year as to which he or she wishes to defer Compensation prior to the beginning of that year in accordance with the Administrator's procedures The Deferral Election of an Eligible Employee made on or after November 1, 2014, shall remain in effect until (i) the Eligible Employee revokes or alters the Deferral Election in accordance with the terms of the Plan, or (ii) the date the Eligible Employee incurs a severance from employment or otherwise ceases to be eligible to defer Compensation under the Plan. 4 Section 4.4 Failure to Submit Deferral Elections. If an Eligible Employee fails to submit the appropriate Deferral Election as required by Section 4.3, he or she will be deemed to have elected not to participate in the Plan for the Plan Year to which such form otherwise would apply. [RESERVED] 5 Section 4.5 Deferral Period. The deferral period with respect to any Election shall begin on the effective date of such Election and end on the date such amounts are distributed to the Eligible Employee from the Plan in accordance with Section 7.1 of the Plan. Any amount of Compensation deferred, pursuant to an Eligible Employee s Election, and any income attributable to the amounts so deferred, shall be includible in such Eligible Employee s gross income only for the taxable year in which such Compensation or other income is paid or otherwise made available to the Eligible Employee or other beneficiary. 3 Second Amendment Effective September 1, Second Amendment Effective November 1, Second Amendment Effective November 1,

10 Section 4.6 Termination of Deferral Election. An Eligible Employee may elect, at any time, to terminate a Deferral Election during the Plan Year to which the Deferral Election relates. Any such termination shall be effective as soon as administratively feasible thereafter following the date on which the written termination election is filed with, and accepted by, the Administrator, and shall apply only to Compensation earned during that Plan Year after the effective date of the termination election. An Eligible Employee may elect, at any time, to terminate a Deferral Election. Any such termination shall be effective as soon as administratively feasible thereafter following the date on which the written termination election is filed with, and accepted by, the Administrator, and shall apply only to Compensation earned after the effective date of the termination election. 6 Section 4.7 Nullification of Deferral Elections. Notwithstanding the submission of Deferral Elections pursuant to this Article, the Administrator may nullify such elections to alleviate demonstrated financial hardship or because of changes in tax laws. The Administrator shall determine, in its sole discretion and on a uniform and nondiscriminatory basis, whether a financial hardship exists. Section 4.8 Permissible Adjustments to Deferral Elections by Employee. (a) Priority of Deductions Against Compensation. Notwithstanding any Deferral Election made by an Eligible Employee under this Article 4, if an Eligible Employee has elected to defer a dollar amount or percentage of his or her Compensation, such that contribution of the gross amount of the Compensation would leave insufficient funds to satisfy all required deductions against such Compensation (including, but not limited to, any elective contributions or benefit contributions made by such Eligible Employee, wage assignments, wage garnishments, child support payments, levies or remittance of all applicable taxes to governmental authorities (collectively the Deductions )), then the applicable Deferred Compensation amount contributed to the Eligible Employee s Account shall be made net of the smallest amount of Deductions needed to satisfy all such payments which cannot be covered from the portion of Compensation not deferred. (b) Employer Legal Compliance Adjustment. Notwithstanding anything to the contrary under the Plan, the Administrator may, in its sole discretion at any time during the relevant Plan Year, limit the amount that may be deferred by an Eligible Employee herein for any Plan Year, regardless of any Deferral Election to the contrary made by such Eligible Employee for purposes of ensuring compliance with any federal, state or local laws. 6 Second Amendment Effective November 1,

11 ARTICLE 5 FORFEITABILITY Amounts in an Eligible Employee s Account Balance that reflect the Eligible Employee s Deferred Compensation in accordance with his or her Deferral Elections shall be fully vested and nonforfeitable at all times. ARTICLE 6 STATUS OF DEFERRED AMOUNTS SECTION Section 6.1 Investment by the Company. (a) Deferred Amounts. All amounts of income deferred under this Plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall remain solely the property and rights of the Company (without being restricted to the provisions of benefits under this Plan), subject only to the claims of the Company s general creditors, until such amounts are used to make payments in accordance with this Plan. The Company is not obligated to purchase any property or rights to support the promises made under this Plan to each Eligible Employee. (b) Investments. The Company may invest the amounts held under this Plan (if any) in any type of property or permissible investments, except to the extent otherwise provided by law. Consistent with its ownership of all Deferred Compensation under paragraph (a) immediately above, the Company shall direct the investment of all amounts held under this Plan to the extent permitted in applicable investment vehicles set forth by the Plan Administrator and in accordance with the procedures set forth in such investment vehicles. An Eligible Employee or his or her beneficiary shall not under any circumstances acquire any property or beneficial interest in any investment asset of the Company by virtue of an Eligible Employee s participation in this Plan. (1) Annuities. Consistent with the foregoing provisions of this paragraph (b), the Company may purchase an annuity policy to fund its obligations under this Plan. In such case, the Company shall be the applicant for, owner of and beneficiary under any such policy or policies; provided, however, the Company shall direct the investment of amounts held under the annuity policy to the extent permitted by such policy and in accordance with the procedures set forth in such policy. In so directing, the Company may (but is not required to) take into consideration the investment alternatives, if any, indicated by the Eligible Employee on the appropriate form provided by the Administrator. The Eligible Employee shall be the measuring life (i.e., annuitant, although a joint and survivor measure may be used to the extent permitted in the annuity contract). However, title to, and beneficial ownership of, such policies, and of any amounts 8

12 in any funds or accounts thereunder, shall at all times remain in the Company and shall constitute a general asset of the Company, subject to claims of the Company s general creditors. (2) Crediting of Interest as an Investment Option. If the Company elects not to invest the income deferred under an Eligible Employee s Election in any investment vehicle permitted under paragraph (b) immediately above, then such amounts (to the extent not already invested elsewhere) reflected in the Eligible Employee s Account shall be credited with interest on the account balance on dates and at rates to be determined by the Administrator. (3) Earnings and/or Losses on Investments. Any earnings, losses and changes in market value of the investment funds (including any annuity contract) in which the Company has invested the Eligible Employee s Deferred Compensation in his or her Account shall be credited to the relevant Eligible Employee s Account. Section 6.2 Crediting an Eligible Employee s Account. The Eligible Employee s Deferred Compensation shall be credited to the Account of the Eligible Employee on the date on which it would have been payable to the Eligible Employee if he or she had not made the deferral election. Section 6.3 Extent of Employer Liability. The obligation of the Company to pay to such Eligible Employee the deferred compensation provided for in this Plan shall be limited to the vested Account Balance for that Eligible Employee, as determined from time to time. The Company s obligation shall not be increased by the amount, if any, by which the Eligible Employee s Deferred Compensation exceeds the Eligible Employee s Account Balance. ARTICLE 7 DISTRIBUTIONS Section 7.1 Distribution of Account. (a) Timing of Distributions. Notwithstanding anything to the contrary in this Plan document, an Eligible Employee s Account shall not be made available to the Eligible Employee (or his or her beneficiaries) any earlier than the earliest of the following: (1) The calendar year in which the Eligible Employee attains age 70½; (2) The date on which the Eligible Employee has a severance from employment with the Company; or The date which is 60 days after the Eligible Employee has a severance from Employment with the Company, or 7 7 Second Amendment Effective September 1,

13 (3) The date on which the Eligible Employee is faced with an unforeseeable emergency under paragraph (b) immediately below. In addition, all distributions of Accounts shall satisfy the requirements of Code Section 401(a)(9) and Treasury Regulation Sections 1.401(a)(9)-1 through 1.401(a)(9)-9, including the incidental death benefit requirement in Code Section 401(a)(9)(G), and any other provisions reflecting Code Section 401(a)(9) that are prescribed by the Commissioner of Revenue in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin, which shall override any provisions in the Plan inconsistent with Code Section 401(a)(9). Under the Plan, an Eligible Employee may elect, concurrently with his or her Deferral Election for a particular Plan Year, to receive the portion of his or her Account Balance attributable to contributions made during such Plan Year (i) in one of the forms of distribution described in paragraph (d) of this Section 7.1 and (ii) at (or commencing on) one of the following three times Under the Plan, an Eligible Employee may elect, at any time prior to his or her severance from employment with the Company, to receive his or her entire Account Balance (i) in one of the forms of distribution described in paragraph (d) of this Section 7.1 and (ii) at (or commencing on) one of the following three times 8 : (A) On the date on which the Eligible Employee incurs a severance from employment with the Company; (B) On a specified fixed or determinable future date or dates chosen by the Eligible Employee, which falls after the date on which the Eligible Employee incurs a severance from employment with the Company and before April 1 of the calendar year following the year in which the Eligible Employee attains age 70½; or (C) On April 1 of the calendar year following the year in which the Eligible Employee attains age 70½. Under the Plan, an Eligible Employee may elect, at any time during the 60-day period immediately following his or her severance from employment with the Company, to receive his or her entire Account Balance (i) in one of the forms of distribution described in Section 7.1(d), and (ii) at (or commencing on) one of the following dates: 8 First Amendment Effective January 1, 2013 (A) On the first day of the month following the 60th day after the Eligible Employee incurs a severance from employment with the Company; (B) On a specified fixed or determinable future date or dates chosen by the Eligible Employee which falls after the 60th day 10

14 following the Eligible Employee s severance from employment with the Company and prior to April 1 of the calendar year following the year in which the Eligible Employee attains age 70½; or (C) On April 1 of the calendar year following the year in which the Eligible Employee attains age 70½. 9 Distributions shall be made as soon as administratively feasible following the distribution date selected above. If an Eligible Employee does not make a valid election for a Plan Year with respect to distribution form and timing as described above, the portion of his or her Account Balance attributable to contributions made in such Plan Year shall be paid as a single-sum distribution within 60 days after the date on which the Eligible Employee incurs a severance from employment with the Company If an Eligible Employee does not make a valid election with respect to distribution form and timing as described above, his or her entire Account Balance shall be paid as a single-sum distribution within 60 days after the date on which the Eligible Employee incurs a severance from employment with the Company. 10 If an Eligible Employee does not make a valid election with respect to distribution form and timing as described above, his or her entire Account Balance shall be paid as a single-sum distribution on the first business day of the month after expiration of the 60-day period immediately following the date on which the Eligible Employee incurs a severance from employment with the Company. 11 An Eligible Employee who has previously made an initial election with respect to distribution form and timing for one or more Plan Years as described above may not modify such election(s) before such Eligible Employee incurs a severance from employment with the Company. However, in accordance with Code Section 457(e)(9)(B), the Eligible Employee shall be entitled to make only one (1) additional timing election within 30 days after the date of such severance from employment (provided, however, such election must be made before benefit payments have commenced to the Eligible Employee under this Plan) (the Final Election ) to defer receipt of his or her Account Balance to a fixed or determinable future date or dates. Once made, the Final Election shall be irrevocable. 12 (b) Withdrawals for Unforeseeable Emergencies. In the case of an unforeseeable emergency, an Eligible Employee may apply to the Administrator for a withdrawal of amounts from his or her Account before his or her severance from employment. The application must be on the form approved for this purpose by the Administrator and must satisfy such other rules and procedures that are adopted by the Administrator and that are not inconsistent with this paragraph (b). If such application for withdrawal is approved by the Administrator, the withdrawal shall be effective as of the later of: 9 Second Amendment Effective September 1, First Amendment Effective January 1, Second Amendment Effective September 1, First Amendment Effective January 1,

15 (1) The date specified in the Eligible Employee s application; or (2) The date of approval by the Administrator; and (3) Shall be payable in a single payment within 60 days after such effective date. The term unforeseeable emergency shall be construed in accordance with Treasury Regulation Section (c)(2), and shall mean a severe financial hardship of the Eligible Employee or the Eligible Employee s beneficiary, as applicable, resulting from an illness or accident of the Eligible Employee or beneficiary, the Eligible Employee's or beneficiary's spouse, or the Eligible Employee's or beneficiary's dependent (as defined in Code Section 152, without regard to Code Section 152(b)(1), (b)(2), and (d)(1)(b)), loss of the Eligible Employee's or beneficiary's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner's insurance, such as damage that is the result of a natural disaster), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Eligible Employee or the beneficiary. For example, the imminent foreclosure of or eviction from the Eligible Employee's or beneficiary's primary residence may constitute an unforeseeable emergency. In addition, the need to pay for medical expenses, including non-refundable deductibles, as well as for the cost of prescription drug medication, may constitute an unforeseeable emergency. Finally, the need to pay for the funeral expenses of a spouse or a dependent (as defined in Code Section 152, without regard to Code Section 152(b)(1), (b)(2) and (d)(1)(b)) of an Eligible Employee or beneficiary may also constitute an unforeseeable emergency. Except as otherwise specifically provided in this paragraph, the purchase of a home and the payment of college tuition are not unforeseeable emergencies. The circumstances that constitute an unforeseeable emergency will depend on the facts of each situation, but in any event payment may not be made to the extent that the hardship is, or may be, relieved: (1) Through reimbursement or compensation by insurance or otherwise; (2) By liquidation of the Eligible Employee s assets, to the extent that the liquidation of the assets would not itself cause severe financial hardship; or (3) By cessation of deferrals under this Plan. Withdrawals for foreseeable expenditures normally budgetable, such as the purchase of a home or automobile or the payment of college expenses will not be permitted. This Plan incorporates by this reference the relevant Treasury Regulations under Code Section 457 that further define what constitutes an unforeseeable emergency. In the event of an unforeseeable emergency, the amount of withdrawal shall be limited to the balance in the Eligible Employee s Account, and in no event shall it exceed the amount sufficient to meet the emergency. Notwithstanding any other provision of this Plan, if an Eligible Employee makes a withdrawal hereunder, the amount of his or 12

16 her benefits under the Plan shall be appropriately reduced to reflect the withdrawal. The remainder of any payable benefits, if any, shall be payable according to the otherwise applicable provisions of the Plan. (c) Distributions at Death of Eligible Employee. If the Eligible Employee dies before benefit payments begin under paragraph (a) immediately above, the Eligible Employee s interest under the Plan shall be distributed in cash in a single sum to the Eligible Employee s beneficiary within 60 days after death as soon as administratively feasible following the date which is 60 days after the Eligible Employee s death. 13 If the Eligible Employee dies after benefit payments have begun under paragraph (a) immediately above, the remaining interest of the Eligible Employee shall be distributed to the beneficiary at least as rapidly as under the method of distribution being used as of the date of the Eligible Employee s death. (d) Form of Distribution. Except in the case of death, as described in paragraph (c) immediately above, distribution of the entire amount to which an Eligible Employee is entitled under this Plan shall be made in cash, in the form of a single-sum distribution, unless the Eligible Employee elects, on the form provided for this purpose by the Administrator in accordance with paragraph (a), to receive the alternative form of benefit payment described in this paragraph (d), if so provided by the Administrator. The alternative form of benefit is annual installments made over a 5, 10 or 15- year period, as selected by the Eligible Employee The alternative form of benefit is annual, quarterly or monthly installments made over a 5, 10 or 15-year period, as selected by the Eligible Employee 14. The payment of installments is subject to the rules of Code Section 401(a)(9) and the Treasury Regulations thereunder, which are hereby incorporated by reference and supersede any contrary provision in the Plan. (e) Changes to Payment Elections. An Eligible Employee who has previously made an election with respect to distribution timing (as described in paragraph (a) above) and/or form (as described in paragraph (d) above) may modify such election at any time before such Eligible Employee incurs a severance from employment with the Company. After severance from employment with the Company, the Eligible Employee shall be entitled to make only one (1) additional election (the Final Election ), in a manner consistent with Code Section 457(e)(9)(B), to defer the receipt of his or her Account Balance to a fixed or determinable future date or dates and/or modify the form of payment. Any such election shall be made within 30 days after the date of severance from employment from the Company, but before benefit payments have commenced to the Eligible Employee under this Plan. Once made, the Final Election shall be irrevocable Section 7.2 Designation of Beneficiary. Each Eligible Employee must designate at least one individual or other entity as a beneficiary in the event of the Eligible Employee s death. 13 Second Amendment Effective September 1, First Amendment Effective January 1, First Amendment Effective January 1, Second Amendment Effective September 1,

17 The Eligible Employee may also designate one or more contingent beneficiaries. These designations must be made on the appropriate beneficiary designation form and must be filed with the Administrator. If a designated beneficiary does not survive the Eligible Employee, then the beneficiary shall be the Eligible Employee s estate. Section 7.3 Claims Procedure. (a) Claims for benefits under the Plan shall be made in writing to the Administrator or its duly authorized delegate. If the Administrator or such delegate wholly or partially denies a claim for benefits, the Administrator or, if applicable, its delegate shall, within a reasonable period of time, but no later than ninety (90) days after receipt of the claim, notify the claimant in writing or electronically of the adverse benefit determination. Notice of an adverse benefit determination shall be written in a manner calculated to be understood by the claimant and shall contain: (1) The specific reason or reasons for the adverse benefit determination; (2) A specific reference to the pertinent Plan provisions upon which the adverse benefit determination is based; (3) A description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and (4) An explanation of the Plan s review procedure and the time limits applicable to such procedure, including a statement of the claimant s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination. If the Administrator or its delegate determines that an extension of time is necessary for processing the claim, the Administrator or its delegate shall notify the claimant in writing of such extension, the special circumstances requiring the extension, and the date by which the Administrator expects to render the benefit determination. In no event shall the extension exceed a period of ninety (90) days from the end of the initial ninety (90) day period. If notice of the denial of a claim is not furnished in accordance with this paragraph (a) within ninety (90) days after the Administrator or its duly authorized delegate receives it (or within one hundred and eighty (180) days after such receipt if the Administrator or its delegate determines an extension is necessary), the claim shall be deemed denied and the claimant shall be permitted to proceed to the review stage described in paragraph (b) below. (b) Within sixty (60) days after the claimant receives the written or electronic notice of an adverse benefit determination, or the date the claim is deemed denied pursuant to paragraph (a) above, or such later time as shall be deemed reasonable in the sole discretion of the Administrator taking into account the nature of the benefit subject to the claim and other attendant circumstances, the claimant may file a written request with the Administrator that it conduct a full and fair review of the adverse benefit 14

18 determination, including the holding of a hearing, if deemed necessary by the Administrator. In connection with the claimant s appeal of the adverse benefit determination, the claimant may review pertinent documents and may submit issues and comments in writing. The Administrator shall render a decision on the appeal promptly, but not later than sixty (60) days after the receipt of the claimant s request for review, unless special circumstances (such as the need to hold a hearing, if necessary) require an extension of time for processing, in which case the sixty (60) day period may be extended to one hundred and twenty (120) days. The Administrator shall notify the claimant in writing of any such extension, the special circumstances requiring the extension, and the date by which the Administrator expects to render the determination on review. The claimant shall be notified of the Administrator s decision in writing or electronically. In the case of an adverse determination, such notice shall: (1) Include specific reasons for the adverse determination; (2) Be written in a manner calculated to be understood by the claimant; (3) Contain specific references to the pertinent Plan provisions upon which the benefit determination is based; (4) Contain a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant s claim for benefits; and (5) Contain a statement of the claimant s right to bring an action under Section 502(a) of ERISA. ARTICLE 8 PROVISIONS RELATING TO PARTICIPATION Section 8.1 Extent of Rights Under Plan. Except as to amounts actually distributed under the Plan, no Eligible Employee and no person claiming under or through an Eligible Employee shall have any right or interest, whether vested or otherwise, in this Plan, in any annuity policy or policies purchased, in any Account or in the continuance of the Plan. Further, no current or former Eligible Employee, beneficiary or other person, individually or as a member of a group, shall have any right, title or interest in any annuity policy, any Account, any fund, any specific sum of money, any grantor trust, or in any asset which may be acquired by the Company in respect of its obligations under this Plan (other than as a general creditor of the Company with an unsecured claim against the Company s general assets). Section 8.2 Funding. No funds shall be segregated or earmarked for any current or previous Eligible Employee, beneficiary or other person. However, the Company may purchase annuity policies as described in Section 6.1 or may establish one or more grantor trusts of the type referred to as a rabbi trust in respect of its obligations under this Plan. 15

19 Section 8.3 Extent to Which Other Parties Bound by Plan. The Plan shall be binding upon, and shall inure to the benefit of the Company and its successors and assigns, and the participating Eligible Employees and their heirs, administrators, and personal representatives. Section 8.4 Payment of Taxes. The Company shall, to the extent required by law, withhold federal, state, and local taxes (including, but not limited to, income taxes and taxes under the Federal Insurance Contributions Act) with respect to any distribution from the Plan to an Eligible Employee or beneficiary. ARTICLE 9 ADMINISTRATION AND FINANCES Section 9.1 Administration. The Plan shall be administered by the Committee, unless delegated to the Administrator. Section 9.2 Powers of Committee. The Committee shall have all powers necessary to administer the Plan, including, without limitation, the discretionary authority to interpret the provisions of the Plan, to decide all questions of eligibility, to establish rules and forms for the administration of the Plan, and to appoint individuals to assist in the administration of the Plan and any other agents it deems advisable. Section 9.3 Actions of the Committee. All determinations, interpretations, rules, and decisions of the Committee shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan. Section 9.4 Delegation. The Committee shall have the power to delegate specific duties and responsibilities to officers or other employees of the Company or to other individuals or entities, including to the Administrator. Any delegation may be rescinded by the Committee at any time. Except as otherwise required by law, each person or entity to whom a duty or responsibility has been delegated shall be responsible for the exercise of such duty or responsibility and shall not be responsible for any act or failure to act of any other person or entity. Section 9.5 Indemnification. The Administrator (if an employee of the Company), the Committee, and the Board of Directors shall be indemnified by the Company from and against any and all liabilities (including any settlements) arising by reason of any act or failure to act in good faith in accordance with the provisions of the Plan. For this purpose, liabilities include expenses reasonably incurred in the defense of any claim relating to the Plan. Section 9.6 Reports and Records. The Committee and those to whom the Committee has delegated duties under the Plan shall keep records of all their proceedings and actions and shall maintain books of accounts, records, and other data as shall be necessary for the proper administration of the Plan and for compliance with applicable law. 16

20 ARTICLE 10 AMENDMENTS AND TERMINATION Section 10.1 Amendments. The Company, through action of its Board of Directors, or other party to whom such authority has been delegated, including the Chief Executive Officer of the Company and the Committee, may amend the Plan, in full or in part, at any time. Section 10.2 Termination. The Company, through action of its Board of Directors, or the Chief Executive Officer of the Company reserves the right to terminate the Plan, in whole or in part, at any time. ARTICLE 11 PERMISSIBLE SECTION 457(b) TRANSFERS Section 11.1 Transfers from Other Plans. To the extent permitted under Code Section 457, the Plan shall accept transfers of amounts deferred by an Eligible Employee under another Section 457(b) eligible deferred compensation plan sponsored by a tax-exempt employer. In no event may the Company cause such a transfer to be made, except at the request of an Eligible Employee. Any such transferred amount shall not be treated as a deferral subject to the limitations of Section 4.2, except that, for purposes of applying the limit of Section 4.2, an amount deferred during any taxable year under that other plan from which the transfer is accepted shall be treated as if it had been deferred under this Plan during such taxable year and shall be treated as if it had been paid by the Company. Section 11.2 Transfers to Other Plans. An Eligible Employee may elect to have any portion of the amount payable to him under a Section 457(b) plan transferred to another eligible deferred compensation plan sponsored by a tax-exempt employer. This election must be made before the earliest date that deferred amounts would otherwise be payable to the Eligible Employee under this Plan. The transfer of any portion of an Eligible Employee s benefit to another Code Section 457(b) eligible deferred compensation plan sponsored by a nongovernmental tax-exempt employer shall not be deemed to be a distribution of the benefit to the Eligible Employee under Article 7, and the amount so transferred shall be (i) subject to the restrictions on when distributions are permitted to be made from an eligible plan under Section 457(b) of the Code in the same manner as if the transferred amount had been originally deferred under the receiving plan if the Eligible Employee were performing services for the entity maintaining the receiving plan, and (ii) considered to be made available under such plan in accordance with Treasury Regulation Section (c)(2) in the same manner as if the elections made by the Eligible Employee or beneficiary had been made under the receiving plan. ARTICLE 12 MISCELLANEOUS Section 12.1 No Guaranty of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between the Company and any 17

21 employee. Nothing contained in the Plan shall give any employee the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any employee at any time, nor shall it give the Company the right to require any employee to remain in its employ or to interfere with the employee s right to terminate his or her employment at any time. Section 12.2 No Implied Rights; Rights on Termination of Service. Neither the establishment of the Plan, nor any amendment thereof, shall be construed as giving any Eligible Employee, beneficiary or any other person, individually or as a member of a group, any legal or equitable right, unless such right shall be specifically provided for in the Plan or conferred by specific action of the Board of Directors, the Committee or the Administrator or in accordance with the terms and provisions of the Plan. Except as expressly provided in this Plan, neither the Company nor any of its affiliates shall be required or be liable to make any payment under the Plan. Section 12.3 Non-Alienation. (a) In General. No benefit payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment or encumbrance of any kind. (b) Qualified. Domestic Relations Order. In the case of any domestic relations order received by the Plan Administrator, the Plan Administrator shall promptly notify the Eligible Employee and the spouse, former spouse, child or any other alternate payee (within the meaning of Code Section 414(p)(8)) designated in the order of the receipt of such order and the Plan s procedures for determining the qualified status of domestic relations orders. Within a reasonable period after receipt of such order, the Plan Administrator shall determine whether such order is a Qualified Domestic Relations Order as described in Code Section 414(p) and ERISA Section 206(d)(3), as determined by the Plan Administrator. It shall then notify the Eligible Employee and the alternate payee of such determination. (1) The Plan Administrator shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such Qualified Domestic Relations Orders. Such procedures shall (A) be in writing, (B) promptly notify each person specified in a domestic relations order as entitled to payment of benefits under the Plan (at the address included in the domestic relations order) of such procedures upon receipt by the Plan Administrator of the domestic relations order, and (C) permit an alternate payee to designate a representative for receipt of copies of notices that are sent to the alternate payee with respect to a domestic relations order. (2) During any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the Plan Administrator, by a court of competent jurisdiction or otherwise), the Plan Administrator may segregate in a separate bookkeeping account, or in an escrow account, the amounts that would have been payable to the alternate payee during such period if the order had been determined to be a Qualified Domestic Relations 18