ENSCO SAVINGS PLAN (As Revised and Restated Effective 1 January 2002) TABLE OF CONTENTS

THIS AGREEMENT, executed this _____ day of November, 2010, and effective 1 January 2002 unless specifically provided otherwise in this Agreement, by ENSCO International Incorporated, having its principal office in Dallas, Texas (hereinafter referred to as the "Company").

 

WHEREAS, the Company established the Energy Service Company, Inc. Profit Sharing Plan (the "Plan") effective May 15, 1991 in the form of a profit sharing plan designed to constitute a "qualified plan" within the meaning of applicable sections of the Internal Revenue Code of 1986, as amended (the "Code"), including Section 401(k) thereof;

 

WHEREAS, the Plan was amended effective May 15, 1991 by resolution of the Board of Directors of the Company (the "Board") dated February 16, 1993 to change the name of the Plan to the "ENSCO Savings Plan";

 

WHEREAS, the Company also maintained the ENSCO Profit Sharing Plan which was merged into the Plan effective July 1, 1991;

 

WHEREAS, the Company acquired Penrod Drilling Corporation ("Penrod") and the Penrod Thrift Plan maintained by Penrod was merged into the Plan effective December 31, 1993 and Penrod became a participating employer in the Plan effective as of January 1, 1994;

 

WHEREAS, the Plan was amended by Amendment No. II effective December 31, 1993 to provide (i) that all matching contributions by the Company to the Plan will be made in shares of common stock of the Company, (ii) that the vesting schedule used by the Plan shall be a six-year schedule pursuant to which a participant is 20% vested after two years of service and an additional 20% for each year thereafter, (iii) for the direct rollover rules of Section 401(a)(31) of the Code, (iv) for the new compensation limitation of Section 401(a)(17) of the Code, (v) for elimination of the requirement that a participant be employed on December 31 of a plan year to receive an allocation of a Company matching contribution made for that plan year and (vi) for such other administrative provisions as the officers of the Company deemed appropriate;

 

WHEREAS, the Company appointed T. Rowe Price Trust Company successor trustee of the Plan effective January 1, 1995;

 

WHEREAS, the Company acquired Dual Drilling Company ("Dual") effective June 12, 1996 and Dual Holding Company, a wholly-owned subsidiary of the Company, became the successor sponsor to Dual of the Dual Drilling Company Employees Tax Deferred/Thrift Savings Plan and Trust [the "Dual 401(k) Plan"];

 

WHEREAS, the eligible employees of Dual became eligible to participate in the Plan effective July 1, 1996;

 

WHEREAS, the Plan was amended by Amendment No. III effective July 1, 1996 by resolution of the Board to (i) provide all employees of Dual as of June 12, 1996 with credit for all service with Dual for purposes of the eligibility and vesting provisions of the Plan, (ii) permit participation in the Plan as of July 1, 1996 by all participants in the Dual 401(k) Plan as of June 30, 1996, (iii) provide that any participant in the Dual 401(k) Plan as of June 30, 1996 shall be fully vested in his account balance in the Plan as of the date he has both attained age 55 and received credit under the Plan for at least five years of vesting service, (iv) eliminate the $500 minimum withdrawal requirement with respect to in-service withdrawals of pre-tax contributions to the Plan, and (v) provide for the same rules in the Plan as are presently contained in the Dual 401(k) Plan with respect to in-service withdrawals of amounts attributable to after-tax contributions which are to be transferred to the trust of the Plan pursuant to the merger of the Dual 401(k) Plan into the Plan;

 

WHEREAS, the Dual 401(k) Plan was subsequently amended and restated effective as of January 1, 1989 and such restatement provided that, effective June 1, 1996, each participant in the Dual 401(k) Plan shall be fully vested in his individual account in the Dual 401(k) Plan;

 

WHEREAS, the Plan was amended by Amendment No. IV effective April 1, 1997 to change the "entry dates" for the Plan;

 

WHEREAS, (i) the Board approved the merger of the Dual 401(k) Plan into the Plan as soon as administratively practicable following the issuance by the National Office of the Internal Revenue Service of a compliance statement pursuant to the application filed by Dual Holding Company, as successor sponsor to Dual of the Dual 401(k) Plan, under the Voluntary Compliance Resolution program of the Internal Revenue Service and (ii) following receipt by Dual Holding Company of that compliance statement, the Dual 401(k) Plan was merged into the Plan effective as of January 31, 2000;

 

WHEREAS, the Company revised and restated the Plan, effective January 1, 1997 (the "1997 Restatement"), except for certain provisions for which another effective date was subsequently provided elsewhere in the terms of the 1997 Restatement, to (i) incorporate the prior amendments to the Plan, (ii) incorporate such other provisions as were necessary due to the merger of the Penrod Thrift Plan and the Dual 401(k) Plan into the Plan, (iii) clarify the definition of "annual compensation" used for nondiscrimination testing under Sections 401(k) and 401(m) of the Code, and (iv) bring the Plan into compliance with the Code, as modified by the Small Business Job Protection Act of 1996, the General Agreement on Tariffs and Trade under the Uruguay Round Agreements Act, the Uniformed Services Employment and Reemployment Ri ghts Act of 1994, the Taxpayer Relief Act of 1997, the Internal Revenue Service Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000, as well as all applicable rules, regulations and administrative pronouncements enacted, promulgated or issued since the date the Plan was last restated;

 

WHEREAS, the Company adopted Amendment No. 1 to the 1997 Restatement, effective January 1, 2002, to reflect the proposed Treasury regulations (the "Proposed Regulations") issued under Section 401(a)(9) of the Code;

 

 

WHEREAS, the Pension and Welfare Benefits Administration of the Department of Labor issued final regulations establishing new standards for processing benefit claims of participants and beneficiaries under Section 15.6 of the 1997 Restatement which have been clarified by further guidance from the Pension and Welfare Benefits Administration (collectively the "Final Claims Procedure Regulations");

 

WHEREAS, the Proposed Regulations for which the 1997 Restatement was amended by Amendment No. 1 were replaced by final Treasury regulations that were issued April 17, 2002 under Section 401(a)(9) of the Code relating to required minimum distributions under Section 15.4 of the 1997 Restatement (the "Final Required Minimum Distribution Regulations");

 

WHEREAS, the Company acquired Chiles Offshore Inc. ("Chiles"), effective August 7, 2002, pursuant to a merger agreement among the Company, Chore Acquisition, Inc. ("Chore"), a wholly-owned subsidiary of the Company, and Chiles, whereby Chiles was merged with and into Chore, with Chore being the surviving company and continuing to exist as a wholly-owned subsidiary of the Company and the successor sponsor to Chiles of the Chiles Offshore Inc. 401(k) Retirement Savings Plan (the "Chiles 401(k) Plan");

 

WHEREAS, the employees of Chiles that continued as employees of a subsidiary of the Company on and after August 7, 2002 continued to be eligible to participate in the Chiles 401(k) Plan through September 30, 2002 and then became eligible to participate in the Plan effective October 1, 2002;

 

WHEREAS, the Chiles 401(k) Plan was merged into the Plan effective October 1, 2002 and the assets of the Chiles 401(k) Plan were transferred on October 1, 2002 from the trust established pursuant to the Chiles 401(k) Plan to the trust established pursuant to the Plan;

 

WHEREAS, the Company adopted Amendment No. 3 to the 1997 Restatement, effective as of October 1, 2002, unless specifically provided otherwise in Amendment No. 3, to, among other things, (i) revise Section 15.6 of the 1997 Restatement to provide that the administrator of the Plan shall process benefit claims of participants and beneficiaries pursuant to the claims procedure specified in the summary plan description for the Plan which shall comply with the Final Claims Procedure Regulations, as may be amended from time to time, (ii) reflect the Final Required Minimum Distribution Regulations by amending Section 15.4 of the 1997 Restatement consistent with the Model Amendment provided by the Internal Revenue Service in Rev. Proc. 2002-29, (iii) permit participation in the Plan on October 1, 2002 (the "Date of Parti cipation") by all employees of Chiles who are both eligible to participate in the Chiles 401(k) Plan as of September 30, 2002 and are employed by the Company or a subsidiary of the Company on October 1, 2002, (iv) provide all employees of Chiles who begin to participate in the Plan as of the Date of Participation with credit for all actual service with Chiles for purposes of the eligibility and vesting provisions of the Plan, (v) provide that any participant in the Chiles 401(k) Plan who has credit under the Chiles 401(k) Plan for at least three years of vesting service as of the Date of Participation shall continue to vest under the Plan in his account balance in the Plan pursuant to the vesting schedule contained in the Chiles 401(k) Plan, (vi) provide that any participant in the Chiles 401(k) Plan who has credit under the Chiles 401(k) Plan for two years of vesting service as of the Date of Participation shall remain 40% vested in his account balance in the Plan but, subsequent to the Date of Participatio n, shall continue to vest in his account balance in the Plan pursuant to the vesting schedule of the Plan, (vii) provide that any participant in the Chiles 401(k) Plan who has credit under the Chiles 401(k) Plan for one year of vesting service as of the Date of Participation shall remain 20% vested in his account balance in the Plan but, subsequent to the Date of Participation, shall continue to vest in his account balance in the Plan pursuant to the vesting schedule of the Plan, (viii) provide that any participant in the Chiles 401(k) Plan as of the Date of Participation shall become fully vested in his account balance in the Plan as of the date he has both attained age 55 and received credit under the Plan for at least five years of vesting service, and (ix) provide that any participant in the Chiles 401(k) Plan as of the Date of Participation shall be eligible for an in-service withdrawal from the Plan under Section 15.5(c) of the 1997 Restatement once every six months after he has attained 59½;

 

WHEREAS, the Company adopted Amendment No. 4 to the 1997 Restatement to retroactively amend the definition of Profit Sharing Entry Date in Section 1.16 of the 1997 Restatement to conform the terms of Section 1.16 of the 1997 Restatement to the actual operation of the Plan as authorized by Section 2.07(3) of Appendix B to Rev. Proc. 2002-47;

 

WHEREAS, the Company adopted Amendment No. 5 to the 1997 Restatement to (i) reduce the service requirement to become eligible to participate in the 401(k) feature of the Plan, (ii) revise the requirements for an election to participate in the 401(k) feature of the Plan and for subsequent amendments to a salary reduction agreement, and (iii) increase the maximum deferral percentage that may be elected under a salary reduction agreement;

 

WHEREAS, EGTRRA amended Section 401(a)(31)(B) of the Code to require that mandatory distributions of more than $1,000 from the Plan be paid in a direct rollover to an individual retirement plan as defined in Sections 408(a) and (b) of the Code if the distributee does not make an affirmative election to have the amount paid in a direct rollover to an eligible retirement plan or to receive the distribution directly and I.R.S. Notice 2005-5 provides that this provision became effective to the Plan for distributions on or after March 28, 2005;

 

WHEREAS, the Company adopted Amendment No. 6 to the 1997 Restatement (i) effective as of September 1, 2005, to increase the normal retirement age under the Plan from age 60 to age 65, and (ii) effective as of March 28, 2005, to comply with the provisions of Section 401(a)(31)(B) of the Code, as amended by EGTRRA and the guidance issued in I.R.S. Notice 2005-5 relating to the application of the new rules in connection with automatic rollovers of certain mandatory distributions;

 

WHEREAS, the Katrina Emergency Tax Relief Act of 2005 ("KETRA") amended the Code to immediately authorize tax-favored withdrawals and special provisions for loans from qualified retirement plans to provide relief relating to Hurricane Katrina;

 

WHEREAS, the Company adopted Amendment No. 7 to the 1997 Restatement, effective as of October 3, 2005, to provide temporary relief to certain participants and related individuals affected by Hurricane Katrina in the form of (i) hardship withdrawals from the Plan, and (ii) modified loan provisions for certain loans from the Plan;

 

WHEREAS, the Gulf Opportunity Zone Act of 2005 amended the Code to expand the hurricane-related relief provided under KETRA to victims of Hurricane Rita and Hurricane Wilma;

 

WHEREAS, the Company adopted Amendment No. 8 to the 1997 Restatement to provide temporary relief to certain participants and related individuals affected by Hurricane Rita and/or Hurricane Wilma in the form of (i) hardship withdrawals from the Plan, and (ii) modified loan provisions for certain loans from the Plan;

 

WHEREAS, the Company adopted Amendment No. 9 to the 1997 Restatement, effective January 1, 2007, to reduce the service requirement to become eligible to participate in the profit sharing feature of the Plan with respect to employees who are employed or reemployed after December 31, 2006;

 

WHEREAS, the Department of Treasury issued final regulations under Sections 401(k) and 401(m) of the Code which generally became applicable to the Plan effective as of January 1, 2006 (collectively the "Final 401(k)/401(m) Regulations");

 

WHEREAS, the Company adopted Amendment No. 10 to the 1997 Restatement (i) effective as of January 1 2006, to reflect the Final 401(k)/401(m) Regulations and to constitute good faith compliance with the Final 401(k)/401(m) Regulations and (ii) effective as of January 1, 2007, to exclude Carl F. Thorne from further participation in the profit sharing feature of the Plan;

 

WHEREAS, the Company adopted Amendment No. 11 to the 1997 Restatement, effective January 1, 2008, to (i) clarify that certain highly compensated employees are not permitted to amend their salary reduction contribution elections for a year during the year, and (ii) amend the vesting schedule in Section 14.2 of the 1997 Restatement;

 

WHEREAS, the Pension Protection Act of 2006 requires participant-directed individual account plans to provide quarterly benefit statements to the plans’ participants providing certain specific information;

 

WHEREAS, the Department of Labor issued final regulations relating to qualified default investment alternatives in participant-directed individual account plans which may become applicable to a plan effective on or after December 24, 2007 (the "Qualified Default Investment Alternatives Regulations");

 

WHEREAS, the Company adopted Amendment No. 12 to the 1997 Restatement, to (i) amend, effective as of January 1, 2008, the investment funds specified in Section 1.24 of the 1997 Restatement available for participant direction of investment, (ii) amend, effective June 1, 2008, Section 1.24 and Section 22.8 of the 1997 Restatement to provide a limitation on the portion of a participant’s individual account that may be invested in Fund 5, (iii) amend, effective June 1, 2008, Section 3.1 of the 1997 Restatement to provide for automatic enrollments, (iv) amend, effective as of January 1, 2007, Section 10.2 and Section 22.8 of the 1997 Restatement to comply with the quarterly benefit statement requirements of the Pension Protection Act of 2006, (v) amend, effective June 1, 2008, Section 15.11 of the 1997 Restatem ent to provide for eligible rollover distributions by non-spousal beneficiaries as permitted by the Pension Protection Act of 2006, and (vi) amend, effective June 1, 2008, Section 22.8 and Section 22.10 of the 1997 Restatement to change the default investment fund and to specify related procedures in compliance with the Qualified Default Investment Alternatives Regulations governing the investment of the individual account of new participants with an employment or re-employment commencement date after May 31, 2008 who fail to affirmatively direct the investment of their individual accounts;

 

WHEREAS, the Company adopted Amendment No. 13 to the 1997 Restatement, to (i) amend, effective as of February 1, 2009, the investment funds specified in Section 1.24 of the 1997 Restatement available for participant direction of investment, (ii) amend, effective January 1, 2009, except as otherwise specifically provided therein to the contrary, Article II and Section 3.1(b)(iv) of the 1997 Restatement to provide for the exclusion from initial or continued eligibility to participate in the Plan of all employees of the Company and Affiliated Companies who become or may subsequently become eligible to participate in the Ensco Multinational Savings Plan on or after January 1, 2009, or would otherwise become or subsequently become eligible to participate in the Ensco Multinational Savings Plan on or after January 1, 2009 but for the fact that any such employee is not working outside the country of the employee’s permanent residence, (iii) amend, effective January 1, 2008, Section 3.2 of the 1997 Restatement to provide that an employer shall make additional matching contributions as of the last day of any plan year, commencing with the plan year ending December 31, 2008, to the extent the Plan administrator determines that a participant did not receive the same amount of matching contributions to which the participant was entitled for that plan year based on his salary reduction contributions and his annual compensation for that plan year, and (iv) amend, effective January 1, 2008, Section 7.4 of the 1997 Restatement to provide for the exclusion of all participants and employees of the Company and Affiliated Companies who become or may subsequently become eligible to participate in the Ensco Multinational Savings Plan on or after January 1, 2009, or would otherwise become or subsequently become eligible to particip ate in the Ensco Multinational Savings Plan on or after January 1, 2009 but for the fact that any such employee is not working outside the country of the employee’s permanent residence, from initial or continued eligibility to share in the allocation of any profit sharing contribution (as well as the forfeitures, if any, that may become allocable under Section 7.4 of the 1997 Restatement along with such profit sharing contributions) that may be made to the Plan under Section 3.3 of the 1997 Restatement for any plan year beginning on or after January 1, 2008;

 

WHEREAS, final Treasury regulations were issued under Section 415 of the Code which became effective to the Plan as of January 1, 2008 (the "Final 415 Regulations");

 

WHEREAS, the Company adopted Amendment No. 14 to the 1997 Restatement, to (i) amend, effective January 1, 2008, Article VIII of the 1997 Restatement to reflect the Final 415 Regulations, and (ii) amend, effective October 1, 2009, Section 22.8 of the 1997 Restatement to reduce the increments by which participants can select investment funds from ten percent to the lowest increment determined from time to time by the administrator of the Plan and to reduce the limitation on the portion of a participant’s individual account that may be invested in Fund 5;

 

WHEREAS, the Company adopted Amendment No. 15 to the 1997 Restatement, to (i) amend, effective January 1, 2008, Section 4.1 of the 1997 Restatement to reflect the change made to the Code by the provisions of the Worker, Retiree, and Employer Recovery Act of 2008 which provide that the correction of excess elective deferrals by distribution for taxable years beginning after December 31, 2007 shall not require the distribution of gap period income, i.e., earnings attributable to such distributed amounts after the end of the taxable year through the date prior to the date of distribution, (ii) amend Sections 4.3 and 5.2 of the 1997 Restatement, as amended, to reflect the provisions of the Pension Protection Act of 2006 which provide that the correction of excess salary reduction contributions and excess matching co ntributions by distribution for plan years beginning after December 31, 2007 shall not require the distribution of gap period income, i.e., earnings attributable to such distributed amounts after the end of the plan year through the date prior to the date of distribution, and (iii) amend, effective for distributions after December 31, 2006, Section 15.2 of the 1997 Restatement, as amended, to reflect the provisions of the Pension Protection Act of 2006 which specify the content and timing requirements for notices required to be provided to participants regarding their distribution election rights under the Plan;

 

WHEREAS, the board of directors of the Company and the stockholders of the Company approved the adoption of the Agreement and Plan of Merger and Reorganization (the "Merger Agreement") by and between the Company and ENSCO Newcastle LLC, a newly formed Delaware limited liability company ("Ensco Mergeco") and a wholly-owned subsidiary of ENSCO Global Limited, a newly formed Cayman Islands exempted company ("Ensco Cayman") and a wholly-owned subsidiary of the Company, pursuant to which Ensco Mergeco merged (the "Merger") with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Ensco Cayman;

 

WHEREAS, Ensco Cayman became, in connection with the Merger, a wholly-owned subsidiary of ENSCO International Limited, a newly formed private limited company incorporated under English law which, prior to the effective time of the Merger, re-registered as a public limited company named "Ensco International plc" ("Ensco UK");

 

WHEREAS, pursuant to the Merger Agreement, each issued and outstanding share of the common stock of the Company was converted into the right to receive one American depositary share (each an "ADS" and collectively, the "ADSs"), which represents one Class A ordinary share of Ensco UK and is evidenced by an American depositary receipt;

 

WHEREAS, the Company adopted Amendment No. 16 to the 1997 Restatement to amend, effective as of December 23, 2009 (or, if different, the effective date of the Merger), (i) Section 1.10 of the 1997 Restatement to define "Ensco ADS" instead of "Company Stock," (ii) Section 1.14 of the 1997 Restatement to prohibit any Affiliated Company that is a UK or English company from becoming an Employer under the Plan, (iii) the fund listed as Fund 5 in Section 1.24 of the 1997 Restatement to mean the Ensco ADS Fund, (iv) Section 21.6 of the 1997 Restatement to reflect the voting rights and procedures in connection with the ADSs and the underlying Shares (as defined in such section), (v) Section 21.7 of the 1997 Restatement to reflect certain concepts under English law related to offer s as described in such section, (vi) Section 22.10 of the 1997 Restatement to specifically provide that each share of Common Stock held by the Trust Fund on the effective date of the Merger was converted into one ADS, pursuant to the Merger Agreement, and (vii) to make such other conforming changes to the 1997 Restatement as determined necessary;

 

WHEREAS, the name of Ensco UK was changed to "Ensco plc" and the name of the Plan was changed to "Ensco Savings Plan";

 

WHEREAS, the Company adopted Amendment No. 17 to the 1997 Restatement, to amend (i) Sections 1.10, 21.6 and 22.10 of the 1997 Restatement to reflect the change to the name of Ensco UK to "Ensco plc," (ii) Section 1.36 of the 1997 Restatement to reflect the change to the name of the Plan to "Ensco Savings Plan," and (iii) Section 3.1(b)(vi) of the 1997 Restatement, effective January 1, 2007, to increase the default deferral percentage under the automatic enrollment feature of the Plan from three percent to five percent;

 

WHEREAS, pursuant to the guidance issued by the Internal Revenue Service in Rev. Proc. 2007-44, the Plan has been assigned a five-year remedial amendment cycle of Cycle E which requires the Plan to be amended no later than January 31, 2011 (except as may be provided otherwise by Rev. Proc. 2007-44 or other published guidance for certain interim amendments) to bring the Plan into compliance with the 2009 Cumulative List of Changes in Plan Qualification Requirements published by the Internal Revenue Service in Notice 2009-98 for Cycle E plans (the "Cycle E Cumulative List"), which identifies all changes in the qualification requirements applicable to Cycle E plans resulting from statutory, regulatory and other guidance published in the Internal Revenue Bulletin;

 

WHEREAS, the Pension Protection Act of 2006 enacted other changes to the Code, certain provisions of which become applicable to the Plan for Years beginning on or after January 1, 2007;

 

WHEREAS, the Company now desires to amend and restate the Plan, effective January 1, 2002 (the "2002 Restatement"), except for certain provisions for which another effective date is subsequently provided otherwise in the terms of the 2002 Restatement, to (i) incorporate the provisions of Amendment Nos. 1-17 to the 1997 Restatement, (ii) bring the Plan into compliance with the Code, as modified by the changes in the qualification requirements applicable to the Plan that are identified in the Cycle E Cumulative List, including, but not limited to EGTRRA, the Final Required Minimum Distribution Regulations, the Final 401(k)/401(m) Regulations, the Final 415 Regulations, and the Worker, Retiree, and Employer Recovery Act of 2008, (iii) reflect certain provisions of the Pension Protection Act of 2006 and to constitut e good faith compliance with the requirements of the Pension Protection Act of 2006, and (iv) bring the Plan into compliance with all applicable rules, regulations and administrative pronouncements enacted, promulgated or issued since the Plan was restated by the 1997 Restatement; and

 

WHEREAS, (i) the benefits payable from the Plan are independent of any benefits an Employee is or may become entitled to under any other funded pension, profit sharing or savings plan, (ii) the benefits payable to an Employee, former Employee or Beneficiary under the Plan shall be determined solely by reference to the provisions of the Plan in effect on the date of such Employee's retirement or other termination of employment, except as otherwise specifically provided herein, and (iii) except as otherwise provided in the Plan or any amendment to the Plan, the provisions of any amendment to the Plan shall apply solely to an Employee, former Employee, Participant or Former Participant whose employment with an Employer terminates on or after the effective date of the amendment;

 

NOW, THEREFORE, in consideration of the premises and the covenants herein contained, the Company hereby adopts the following as the provisions of the 2002 Restatement:

 

 

 

 

Unless by the context hereof a different meaning is clearly indicated, whenever used in the Plan, the following words shall have the meanings hereinafter set forth:

 

Sec. 1.1 Administrator for the purposes of ERISA means the Company; provided, that the Company, by action of its governing body, may designate another person or entity, including the Trustee, the Recordkeeper or a Committee, as Administrator of the Plan.  For purposes of applying the applicable provisions of ERISA to the Plan, the Company shall mean the "administrator" as described in Section 3(16)(A) of ERISA.

 

Sec. 1.2 Affiliated Company means the Company and any other entity which is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses [as defined in Section 414(b) or (c) of the Code], any entity which along with the Company is included in an affiliated service group as defined in Section 414(m) of the Code, and any other entity which is required to be aggregated with the Company pursuant to Section 414(o) of the Code.

 

Sec. 1.3 Allocation Date means the last day of each payroll period of the Year and each additional date or dates designated by the Administrator from time to time on which allocations of contributions or forfeitures are made.

 

Sec. 1.4 Alternate Payee means a person defined in Section 414(p)(8) of the Code who is entitled to benefits under the Plan pursuant to a Qualified Domestic Relations Order.

 

Sec. 1.5 Annual Compensation means with respect to an Employee, the base salary or wages, including overtime pay and, for Years ending prior to January 1, 1998, field bonuses paid to such Employee by an Employer which are includible in the Employee's gross income for the Year, plus (i) amounts deferred to the Plan pursuant to a salary reduction agreement authorized in Section 3.1, (ii) amounts applied to purchase benefits pursuant to a salary reduction agreement under a cafeteria plan as defined in Section 125 of the Code sponsored by an Employer,(iii) amounts deferred pursuant to a salary reduction agreement under any other plan descr ibed in Sections 401(k) and 408(k) of the Code sponsored by an Employer, and (iv) elective amounts that are not includible in gross income by reason of Section 132(f)(4) of the Code, but excluding all other items of compensation.  For each Year, only $200,000 of Annual Compensation shall be taken into account by the Plan with respect to any Participant [or, for each Year beginning after December 31, 2002, such other amount as may be determined under Section 401(a)(17)(B) of the Code to reflect cost-of-living-increases] (hereinafter referred to as the "Compensation Limitation"); provided, however, if a Participant's Annual Compensation for the Year exceeds the maximum amount of Annual Compensation that can be taken into account for any purpose under the Plan, the Participant may designate which portion of his total compensation shall be considered for any such purpose.

 

Sec. 1.6 Beneficiary means any person or fiduciary designated by a Participant or Former Participant in accordance with the terms hereof and Section 401(a)(9) of the Code to receive benefits hereunder following the death of such Participant or Former Participant.  Each Participant and Former Participant may, from time to time, select one or more Beneficiaries to receive benefits pursuant to Section 11.1 in the event of the death of such Participant or Former Participant.  Such selection shall be made in writing by Notice to the Administrator.  Unless the provisions of the Plan or a Qualified Domestic Relations Order provide otherwise, the last such selection filed with the Administrator prior to the date of death of the Participant or Former Participant shall determine to whom Plan benefits shall be paid.

 

If the Participant or Former Participant is married at the date of his death, the Beneficiary shall be the surviving spouse unless the spouse has consented in writing to the designation of some other Beneficiary, which designation may not be changed without spousal consent unless the voluntary consent of the spouse (i) expressly permits designations by the Participant or Former Participant without any requirement of further consent by the spouse, and (ii) acknowledges that the spouse has the right to limit the consent to a specific Beneficiary.  Such written consent must acknowledge the effect of such selection and such consent must be witnessed by a Plan representative or a notary public.  Spousal consent is not required if it is established to the satisfaction of the Plan representative tha t the consent may not be obtained (i) because the Participant or Former Participant has no spouse, (ii) because the spouse cannot be located or (iii) because of such other circumstances as the Secretary of Treasury may by regulations prescribe.  Any consent by a spouse (or establishment that the consent of the spouse is not required) shall be effective only with respect to that particular spouse.

 

If the Administrator cannot readily determine whether a Participant or Former Participant has a spouse under the laws of the state in which the Participant or Former Participant resides resulting from an individual's claim to be a "common law" spouse of a Participant or Former Participant or similar circumstances, the Administrator may request such individual to provide the Administrator with a legal opinion satisfactory to the Administrator or other evidence demonstrating the individual's status as a spouse of the Participant or Former Participant.  The Administrator has the sole and absolute authority to determine an individual's status as a spouse of a Participant or Former Participant and any such determination shall be final, binding and conclusive on all parties ever claiming an interest in the P lan.  If a Participant is divorced and the Participant's spouse was a Beneficiary named by the Participant, the spouse shall be deemed to have predeceased the Participant and such designation of the spouse shall be void and the next successive Beneficiary or Beneficiaries shall become the Beneficiary(ies) entitled to the benefits under the Plan, unless a Qualified Domestic Relations Order requires a death benefit be payable to the spouse or the Participant designates the former spouse as Beneficiary again after such divorce.

 

If a Participant's or Former Participant's selection is not made in compliance with these provisions or if all designated persons shall predecease the Participant or Former Participant, or the designation becomes void as provided in the preceding paragraph, Beneficiary means the first of the following classes of successive preference beneficiaries then surviving:  the Participant's or Former Participant's:

 

(a) surviving spouse,

 

(b) descendants, per stirpes (including adopted children),

 

(c) parents in equal shares,

 

(d) brothers and sisters in equal shares, and

 

(e) estate.

 

If more than one Beneficiary of a particular class (primary or secondary) is entitled to benefits, payments shall be made in equal shares to such Beneficiaries, unless some other specific proportions are clearly designated by the Participant or Former Participant. If more than one Beneficiary of a particular class (primary or secondary) is named, the interest of any deceased Beneficiary of that class shall pass to the surviving Beneficiary or Beneficiaries of that class except to the extent that the designation provides for payment to any secondary Beneficiary or Beneficiaries upon the death of a primary Beneficiary.  In determining whether any person named as a Beneficiary is living at the time of a Participant's or Former Participant's death, if such person and the Participant or Former Participant d ied in a common disaster and there is insufficient evidence to determine which person died first, then it shall be deemed that the Beneficiary died first.

 

Sec. 1.7 Catch-up Contribution means Salary Reduction Contributions to the Plan pursuant to an election by a Catch-up Eligible Participant that are in excess of an otherwise applicable Plan limit, other than the limit on Catch-up Contributions specified in Section 4.1.  For this purpose, an otherwise applicable Plan limit is a limit in the Plan that applies to Salary Reduction Contributions without regard to Catch-up Contributions, such as the limit for each Year under Section 415 of the Code on Annual Additions as described in Article VII, the dollar limitation for each calendar year on Salary Reduction Contributions under Section 402 (g) of the Code (not counting Catch-up Contributions) as described in Section 4.1, the Actual Deferral Percentage tests of Section 401(k) of the Code that must be satisfied each Year as described in Section 4.2, and the contribution limit for each Year applicable to Salary Reduction Contributions described in Section 3.1.

 

Sec. 1.8 Catch-up Eligible Participant means any Participant (i) who will attain age 50 by the close of a calendar year and (ii) with respect to whom no other Salary Reduction Contributions may (without regard to Section 4.1) be made to the Plan pursuant to Section 3.1 for the calendar year or the Year, whichever is applicable, by reason of an otherwise applicable Plan limit described in Section 1.7.

 

Sec. 1.9 Chiles 401(k) Plan means the Chiles Offshore Inc. 401(k) Retirement Savings Plan maintained by Chiles Offshore Inc. as of the Plan Merger Date.

 

Sec. 1.10 Code means the Internal Revenue Code of 1986, as it may be amended from time to time.  Reference to a section of the Code shall include that section, applicable Treasury regulations promulgated thereunder and any comparable section of any future legislation that amends, supplements or supersedes said section, effective as of the date such comparable section is effective with respect to the Plan.

 

Sec. 1.11 Committee means the committee appointed under Article XVII to administer the Plan, as from time to time constituted.  If no such committee is appointed, the Company shall constitute the Committee.

 

Sec. 1.12 Company means ENSCO International Incorporated, formerly Energy Service Company, Inc., a Delaware corporation, or such other organization which, pursuant to a spinoff, merger, consolidation, reorganization, or similar corporate transaction where a significant portion of the Company's employees become employees of such organization, adopts and assumes the Plan and the Trust Agreement as the sponsor with the consent of the Company and agrees to accept the duties, responsibilities and obligations of the sponsor of the Plan and the Trust Agreement.  References in the Plan to the Company shall refer to any such organization which adopts and assumes the sponsorship of the Plan and the Trust Agreement.

 

Sec. 1.13 Company Stock means the Common Stock of the Company or any other security that qualifies as a qualifying employer security under ERISA.

 

Sec. 1.14 Disability means a total and permanent disability suffered by a Participant which, in the opinion of the Administrator (which opinion shall be conclusive for purposes of the Plan), prevents such Participant from continuing his work with all Employers and Affiliated Companies.

 

Sec. 1.15 Dual 401(k) Plan means the Dual Drilling Company Employees Tax Deferred/Thrift Savings Plan and Trust formerly maintained by Dual Drilling Company.  Dual Holding Company, a wholly-owned subsidiary of the Company, became the successor sponsor of the Dual 401(k) Plan as of June 12, 1996 when the Company acquired Dual Drilling Company.  The employees of Dual Drilling Company who were eligible to participate in the Dual 401(k) Plan ceased to be eligible to participate in that plan on June 30, 1996 and became eligible to participate in the Plan on July 1, 1996.  The governing body of the Company approved the me rger of the Dual 401(k) Plan into the Plan as soon as administratively practicable following the issuance by the National Office of the Internal Revenue Service of a compliance statement pursuant to the application filed by Dual Holding Company, as successor sponsor to Dual Drilling Company of the Dual 401(k) Plan, under the Voluntary Compliance Resolution program of the Internal Revenue Service.  The effective date of the merger of the Dual 401(k) Plan into the Plan was January 31, 2000.

 

Sec. 1.16 Employee means any individual in the employ of an Employer who is on an Employer's United States dollar payroll (and who is classified as an Employee by the Employer), excluding (i) any Leased Employee that Section 414(n) of the Code treats as an Employee of an Employer, unless classification of such Leased Employee as an Employee is necessary to maintain the qualification of the Plan, and (ii) any employee included in a unit of Employees covered by a collective bargaining agreement between an Employer and employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the employ ees who are covered pursuant to that agreement are professional employees [as defined in Treas. Reg. §1.410(b)-9].  The term "Employee" shall not include any individual who by contract is not classified by the Employer as a common law employee of the Employer, regardless of whether such individual is included on the Employer's payroll for Federal income tax withholding purposes or whether such person is later classified as an employee by the Internal Revenue Service, the Department of Labor, a court, an administrative agency or an Employer.

 

Sec. 1.17 Employer means the Company and any other Affiliated Company, with respect to its Employees, provided such Affiliated Company is designated by the governing body of the Company as an Employer under the Plan and whose designation as such has become effective and has continued in effect; provided, however, that, effective as of the effective date of the Merger, no Affiliated Company that is either a UK company or an English company shall become an Employer.  The designation shall become effective only when it shall have been accepted by the governing body of the Employer and shall be effective for the Year determined by the gove rning body of the Company and the Employer.  An Employer may revoke its acceptance of such designation at any time, but until such acceptance has been revoked, all of the provisions of the Plan and amendments thereto shall apply to the Employees of the Employer.  In the event the designation of the Employer as such is revoked by the governing body of the Employer, such revocation will not be deemed a termination of the Plan.  The Company shall have the exclusive right to determine whether an Affiliated Company shall become or continue to be an Employer for purposes of the Plan.

 

Sec. 1.18 Employer Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary reflecting the monetary value of such person's individual interest in the Trust Fund attributable to an Employer's Matching Contributions under Section 3.2 and the Employer profit sharing contributions, if any, under Section 3.3.  If the Participant or Former Participant was a participant in the Penrod Thrift Plan as of December 31, 1993, his Employer Account will also reflect his individual interest in the Trust Fund attributable to the balance in his matching acco unt maintained under the Penrod Thrift Plan as of the Plan Merger Date.  If the Participant or Former Participant was a participant in the Chiles 401(k) Plan as of September 30, 2002, his Employer Account will also reflect his individual interest in the Trust Fund attributable to the balance in his matching employer contributions account maintained under the Chiles 401(k) Plan as of the Plan Merger Date.

 

Sec. 1.19 Ensco ADS means an American depository share, evidenced by an American depositary receipt, which represents a Class A ordinary share in Ensco plc (formerly named "Ensco International plc"), a company incorporated under English law which wholly owns the Company.  Pursuant to the Merger Agreement, each share of Company Stock held by the Trust Fund on the effective date of the Merger, including each such share allocated to the Individual Accounts of each Participant, was converted into one Ensco ADS.  Except with respect to Section 1.13, the first paragraph of Section 20.6, Section 20.7 and the second paragraph of Sect ion 21.10, prior to the effective date of the Merger, references (specific or otherwise) to Ensco ADSs in the Plan shall be read and considered to be references to shares of Company Stock and all references (specific or otherwise) to "holders of Ensco ADSs" shall be read and considered to be references to stockholders of the Company, and all provisions of the Plan shall be consistently interpreted and applied.

 

Sec. 1.20 Entry Date means (i) with respect to an eligible Employee’s ability to make Salary Reduction Contributions, the first business day of any calendar month occurring on or following the date the Employee satisfies the eligibility requirements of Section 2.1 for the 401(k) feature of the Plan [the "401(k) Entry Date"] and (ii) with respect to an eligible Employee’s participation in the profit sharing feature of the Plan, the first day of the calendar month coincident with or next following the date the Employee satisfies the eligibility requirements of Section 2.1 for the profit sharing feature of the Plan (the "Profit Sharing Entry Date"); provided, however, that (i) effective January 1, 2007, the Profit Sharing Entry Date for an Employee who completes his 90th day of employment during the month of December shall be the date he completes such 90th day of employment, and (ii) effective January 1, 1994 and prior to January 1, 2007, the Profit Sharing Entry Date for an Employee who completes his one-year Period of Service during the month of December shall be the date he completes such one-year Period of Service.

 

Sec. 1.21 ERISA means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time, and applicable regulations promulgated thereunder.

 

Sec. 1.22 Former Participant means any individual who has been a Participant in the Plan, who is no longer in the employ of an Employer and who has not yet received the entire benefit to which he is entitled under the Plan.

 

Sec. 1.23 401(k) Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary reflecting the monetary value of such person's individual interest in the Trust Fund attributable to Salary Reduction Contributions made on the Participant's behalf pursuant to a salary reduction agreement described in Section 3.1 and attributable to qualified non-elective contributions under Section 3.4.  If the Participant was a participant in the Penrod Thrift Plan as of December 31, 1993, the Dual 401(k) Plan as of June 30, 1996, or the Chiles 401(k) Plan as of Se ptember 30, 2002, his 401(k) Account will also reflect his individual interest in the Trust Fund attributable to (i) the balance in his accelerated retirement account maintained under the Penrod Thrift Plan as of the Plan Merger Date, (ii) the balance in his 401(k) contributions account maintained under the Dual 401(k) Plan as of the Plan Merger Date, or (iii) the balance in his deferral contributions account maintained under the Chiles 401(k) Plan as of the Plan Merger Date, whichever is applicable.

 

Sec. 1.24 Highly Compensated Employee means any Employee who is determined to be included in subsection (a) after applying the special rules in subsection (b).

 

(a) Any Employee who:

 

(i) was, at any time during the Year or the preceding Year, a more than five-percent owner of any Employer [within the meaning of Section 414(q)(2) of the Code]; or

 

(ii) during the preceding Year received Annual Compensation [as defined in Section 7.2(f)] from all Employers in excess of $85,000 [as adjusted pursuant to subsection (b)(iii)], and, if the Administrator elects by Plan amendment, was in the top 20% of the Employees for the preceding Year (when ranked on the basis of Annual Compensation for such Year).

 

(b) For purposes of determining the Employees who are to be included in subsection (a) above, the following special rules shall apply to this Section 1.24:

 

(i) In determining the top 20% of Employees pursuant to subsection (a)(ii), Employees who (A) have not completed at least six months of service at the end of the Year, (B) normally work fewer than 17½ hours per week, (C) normally work during not more than six months during any Year, (D) have not attained age 21 by the end of the Year or (E) are covered under a collective bargaining agreement (except to the extent provided in applicable Treasury regulations) shall be excluded from such determination.

 

(ii) A former Employee whose employment terminates prior to the Year of determination shall be treated as a Highly Compensated Employee for the Year of determination if such Employee was a Highly Compensated Employee when such Employee's employment with his Employer and all Affiliated Companies terminated, or such Employee was a Highly Compensated Employee at any time after attaining age 55.

 

(iii) The dollar amount in subsection (a)(ii) shall be adjusted to such other amount as the Secretary of the Treasury shall prescribe at the same time and in the same manner as provided under Section 415(d) of the Code for adjusting the dollar limitation in effect under Section 415(c)(1)(A) of the Code, except that the base period shall be the calendar quarter ending on the date determined pursuant to Section 414(q)(1) of the Code.

 

(iv) In determining the number of Employees pursuant to this Section, any Employee who is a nonresident alien and who receives no earned income [within the meaning of Section 911(d)(2) of the Code] from any Employer which constitutes income from sources within the United States [within the meaning of Section 861(a)(3) of the Code] shall be excluded from such determination.

 

Sec. 1.25 Hours of Service means each hour credited to an individual for which he is either directly or indirectly paid, or entitled to payment, by any Affiliated Company or, to the extent permitted by the governing body of the Company or the Administrator in accordance with Section 401(a)(4) of the Code, by the predecessor company.  Effective December 12, 1994, each period of qualified military service (within the meaning of Chapter 43 of Title 38, United States Code) served by an Employee who is reemployed under that chapter by an Affiliated Company following such service shall be considered service with an Affiliated Company for pur poses of determining his Hours of Service.

 

Sec. 1.26 Individual Account means an account or record to be maintained by the Trustee or the Recordkeeper reflecting the monetary value of the undivided interest in the Trust Fund of each Participant, each Former Participant and each Beneficiary and shall include the Employer Account, 401(k) Account, Prior Plan Account, Reinstatement Account, Rollover Account, if any, Transfer Account, if any, and Savings Account, if any, and such other additional account or accounts as the Administrator may establish from time to time.

 

Sec. 1.27 Interactive Electronic Communication means, to the extent available under the Plan, a communication between a Participant, Former Participant or Beneficiary and the Recordkeeper pursuant to a system maintained by the Recordkeeper and communicated to each Participant, Former Participant and Beneficiary in compliance with final Treasury regulations and final Department of Labor regulations whereby each such individual may (i) obtain financial information regarding his Individual Account and amounts available for withdrawal, and (ii) initiate investment transfer elections and exercise options as described herein with respect to his Indivi dual Account, as well as other actions approved from time to time by the Administrator, through the use of the telephone, Internet or such other system and a personal identification number assigned to the Participant, Former Participant or Beneficiary by the Recordkeeper or the Administrator.  If a Participant, Former Participant or Beneficiary (i) consents to participate in the Plan's Interactive Electronic Communication procedures adopted by the Administrator and (ii) acknowledges that actions taken by such Participant, Former Participant or Beneficiary through the use of his personal identification number constitute his signature, to the extent allowed by the Administrator, for purposes of initiating Investment Fund changes, Participant loans, Beneficiary designations, Salary Reduction Contribution election changes, Plan withdrawals and distributions, including waiver of the 30-day period described in Section 14.2, and such other actions approved from time to time by the Administrator, the Parti cipant, Former Participant or Beneficiary, as the case may be, will be deemed to have given his written consent and authorization to any action resulting from the use of the Interactive Electronic Communication system by the Participant, Former Participant or Beneficiary.

 

Sec. 1.28 Investment Fund or Funds means one or more funds designated by the Committee pursuant to Section 21.8 from time to time and maintained for the purpose of providing a vehicle for the investment of assets of the Trust Fund, in accordance with the directions of each Participant, Former Participant and, to the extent applicable, Beneficiary and Alternate Payee with respect to his Individual Account, until such Investment Fund or Funds shall be eliminated by action of the Committee.  As of February 1, 2009, the Investment Funds shall be:

 

Fund 1:

T. Rowe Price Balanced Fund;

Fund 2:

T. Rowe Price Spectrum Growth Fund;

Fund 3:

T. Rowe Price Spectrum Income Fund;

Fund 4:

T. Rowe Price Stable Value Fund (formerly

known as the T. Rowe Price Blended Stable

Value Fund prior to May 1, 2000);

Fund 5:

Ensco ADS Fund (formerly known as the Company

Stock Fund prior to the effective date of the

Merger);

Fund 6:

T. Rowe Price Equity Income Fund;

Fund 7:

Vanguard Institutional Index Fund;

Fund 8:

T. Rowe Price Blue Chip Growth Fund;

Fund 9:

T. Rowe Price Mid-Cap Growth Fund;

Fund 10:

Columbia Small Cap Value I Z Fund;

Fund 11:

Vanguard Total Bond Market Index Signal Fund;

Fund 12:

American Funds EuroPacific Growth R5 Fund;

Fund 13:

T. Rowe Price Retirement Income Fund;

Fund 14:

T. Rowe Price Retirement 2005 Fund;

Fund 15:

T. Rowe Price Retirement 2010 Fund;

Fund 16:

T. Rowe Price Retirement 2015 Fund;

Fund 17:

T. Rowe Price Retirement 2020 Fund;

Fund 18:

T. Rowe Price Retirement 2025 Fund;

Fund 19:

T. Rowe Price Retirement 2030 Fund;

Fund 20:

T. Rowe Price Retirement 2035 Fund;

Fund 21:

T. Rowe Price Retirement 2040 Fund;

Fund 22:

T. Rowe Price Retirement 2045 Fund;

Fund 23:

T. Rowe Price Retirement 2050 Fund;

Fund 24:

T. Rowe Price Retirement 2055 Fund; and

Fund 25:

Perimeter Small Cap Growth Investor Fund.

The Administrator may direct the Trustee to invest one or more of such funds with a specified insurance company or mutual fund, or appoint an investment advisor as provided in Section 21.5 to manage the same and may also direct the Trustee to establish new Investment Funds or delete existing Investment Funds from time to time.  Up to 100% of the assets of the Trust Fund may be invested in Fund 5.  Effective June 1, 2008, a Participant may direct that the assets of his Individual Account may be invested in Fund 5 only in accordance with the specific limitations of Section 21.8.

 

Sec. 1.29 Leased Employee means an individual who is not in the employ of an Employer and who, pursuant to a leasing agreement between an Employer and any other person (including such individual) (the "leasing organization"), has performed services for an Employer [or for an Employer and any other person related to an Employer determined in accordance with Section 414(n)(6) of the Code] on a substantially full-time basis for at least one year and who performs such services under the primary direction or control by the Employer.  Leased Employee shall also include any individual who is deemed to be an employee of an Employer under Secti on 414(o) of the Code.  Notwithstanding the preceding sentences, if individuals described in the preceding sentences constitute less than 20% of an Employer's non-highly compensated work force within the meaning of Section 414(n)(5)(C)(ii) of the Code, the Plan shall not treat an individual as a Leased Employee if the leasing organization covers the individual in a money purchase pension plan providing immediate participation, full and immediate vesting and a non-integrated contribution formula equal to at least ten percent of the individual's annual compensation [as defined in Section 415(c)(3) of the Code, but including amounts contributed by an Employer pursuant to a salary reduction agreement which are excludable from the individual's gross income under Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 132(f)(4) of the Code].  If any Leased Employee shall be treated as an Employee of an Employer, however, contributions or benefits provided by the leasing organization which are attribut able to services of the Leased Employee performed for an Employer shall be treated as provided by the Employer.

 

Sec. 1.30 Matching Contribution means the contribution made by an Employer pursuant to Section 3.2.

 

Sec. 1.31 Merger means the merger consummated pursuant to the Merger Agreement of Ensco Mergeco (as defined in Section 1.32) with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Ensco Cayman (as defined in Section 1.32).

 

Sec. 1.32 Merger Agreement means the Agreement and Plan of Merger and Reorganization approved and adopted by the stockholders of the Company at the Special Meeting of Stockholders on December 22, 2009, by and between the Company and ENSCO Newcastle LLC, a newly formed Delaware limited liability company ("Ensco Mergeco") and a wholly-owned subsidiary of ENSCO Global Limited, a newly formed Cayman Islands exempted company ("Ensco Cayman") and a wholly-owned subsidiary of the Company, pursuant to which the Merger occurred.  Ensco Cayman became, in connection with the Merger, a wholly-owned subsidiary of ENSCO International Limited, a newl y formed private limited company incorporated under English law which, prior to the effective time of the Merger, re-registered as a public limited company named "Ensco International plc."  The name of Ensco International plc was subsequently changed to "Ensco plc."

 

Sec. 1.33 Named Fiduciary means the Company, except to the extent the Company has delegated specific functions to the Committee, if any, appointed by the Company pursuant to Article XVII.  If no Committee is appointed, the Company will perform the functions of the Committee.

 

Sec. 1.34 Non-Highly Compensated Employee means any Employee who is not a Highly Compensated Employee.  The determination of an Employee's status as a Non-Highly Compensated Employee for a Year shall be determined based on the definition of Highly Compensated Employee in Section 1.24 that is applicable for that Year.

 

Sec. 1.35 Normal Retirement Date means a Participant's or Former Participant's 65th birthday; provided that Normal Retirement Date means a Participant’s or Former Participant’s 60th birthday with respect to any Participant or Former Participant who has completed a Period of Service of at least three years, whether or not consecutive, as of September 1, 2005.

 

Sec. 1.36 Notice means, unless otherwise provided specifically in the Plan, (i) written Notice on an appropriate form provided by the Administrator, which is properly completed and executed by the party giving such Notice and which is delivered by hand or by mail to the Administrator or to such other party designated by the terms of the Plan or by the Administrator to receive the Notice or (ii) Notice by Interactive Electronic Communication, to the extent authorized by the Administrator, to the Recordkeeper.  Notice to the Administrator, the Recordkeeper or to any other person as provided herein shall be deemed to be given when it is a ctually received (either physically or by Interactive Electronic Communication, as the case may be) by the party to whom such Notice is given.

 

Sec. 1.37 Participant means an Employee who (i) has met the eligibility requirements of the Plan as provided in Article II hereof and elected to participate in the Plan pursuant to Section 2.2 or (ii) has received an allocation of a profit sharing contribution under Section 6.4 or a qualified non-elective contribution under Section 6.5.  An Employee who elects to make a Rollover Contribution to the Plan or who has a Transfer Contribution made to the Plan on his behalf but who has not met the eligibility requirements of the Plan as provided in Article II hereof, shall, until he satisfies such requirements, be considered a Part icipant only for purposes of applying the relevant provisions of the Plan relating to the investment and distribution of his Rollover Account or Transfer Account and his rights and responsibilities under ERISA with respect to such contribution.

 

Sec. 1.38 Penrod Thrift Plan means the Penrod Thrift Plan maintained by Penrod Drilling Corporation as of the Plan Merger Date.

 

Sec. 1.39 Period of Service means the months and years of an Employee's employment with one or more Affiliated Companies, such employment commencing with the date the Employee first performs an Hour of Service (or following a Period of Severance, again performs an Hour of Service) and ending on his Severance from Service Date.

 

An Employee shall be given credit for all periods following the date he first becomes an Employee which do not constitute a Period of Severance, except that no credit shall be given (even though no Period of Severance shall occur) for absences referred to in Section 1.51(b).  If an Employee's employment with his Employer and all Affiliated Companies terminates by reason of quitting, discharge or retirement and thereafter he again completes an Hour of Service within 12 months of his Severance from Service Date, the period of absence shall be credited for purposes of eligibility and vesting.  All Periods of Service, including noncontinuous periods, shall be aggregated and fractional periods shall be determined on the basis that 365 days equal a year of service.

 

Effective December 12, 1994, each period of qualified military service (within the meaning of Chapter 43 of Title 38, United States Code) served by an Employee who is reemployed under that chapter by an Affiliated Company following such service shall be considered service with an Affiliated Company for purposes of determining his Period of Service.  In addition, an Employee shall be credited with the following periods of service, whichever are applicable:

 

(a) the service he completed with International Tool and Supply Company, Inc. or Petroleum Rental Services, as the case may be, immediately prior to the date such Employee first completed an Hour of Service;

 

(b) all service credited to such Employee under the Argosy Offshore, Ltd. Employee Savings Plan as of the date Argosy Offshore, Ltd. became an Affiliated Company;

 

(c) all service credited to such Employee under the Penrod Thrift Plan as of December 31, 1993, the Plan Merger Date for that plan into the Plan;

 

(d) all service credited to such Employee under the Dual 401(k) Plan as of July 1, 1996, the date the employees of Dual Drilling Company ceased to be eligible to participate in the Dual 401(k) Plan and became eligible to participate in the Plan;

 

(e) all service credited to such Employee under the Chiles 401(k) Plan for actual service with Chiles Offshore Inc. as of October 1, 2002, the date the employees participating in the Chiles 401(k) Plan ceased to be eligible to participate in the Chiles 401(k) Plan and became eligible to participate in the Plan; or

 

(f) the service he completed with Diamond Offshore Drilling, Inc. and its affiliates immediately prior to the date such Employee first completed an Hour of Service.

 

Sec. 1.40 Period of Severance means any period of 12 or more consecutive months beginning with an Employee's Severance from Service Date during which an Employee does not perform an Hour of Service for an Affiliated Company.

 

Sec. 1.41 Plan means the plan embodied herein, as the same may be amended from time to time, and shall be known as the "Ensco Savings Plan" (formerly named the "ENSCO Savings Plan" prior to the Merger).

 

Sec. 1.42 Plan Merger Date means the effective date of the merger of the Penrod Thrift Plan, the Dual 401(k) Plan or the Chiles 401(k) Plan into the Plan.  The Plan Merger Date is (i) December 31, 1993 for the Penrod Thrift Plan, (ii) January 31, 2000 for the Dual 401(k) Plan, a date determined by the Company following the issuance by the National Office of the Internal Revenue Service of a compliance statement pursuant to the application filed by Dual Holding Company, as successor sponsor to Dual Drilling Company of the Dual 401(k) Plan, under the Voluntary Compliance Resolution program of the Internal Revenue Service, and (iii) Octob er 1, 2002 for the Chiles 401(k) Plan.

 

Sec. 1.43 Prior Plan Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Participant who was a participant in the Dual 401(k) Plan as of June 30, 1996, reflecting the monetary value of such person's individual interest in the Trust Fund attributable to the balance in his company matching contributions account and discretionary profit sharing contributions account, if any, maintained under the Dual 401(k) Plan as of the Plan Merger Date.

 

Sec. 1.44 Qualified Domestic Relations Order means any judgment, decree or order (including approval of a property settlement agreement) which (i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child or other dependent of a Participant or Former Participant, (ii) is made pursuant to a state domestic relations law, (iii) creates or recognizes the existence of an Alternate Payee's right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to a Participant or Former Participant under the Plan, and (iv) complies with the r equirements of Section 414(p) of the Code.

 

Sec. 1.45 Recordkeeper means any person or entity appointed by the Company or the Committee to perform recordkeeping and other administrative services on behalf of the Plan.  If no Recordkeeper is appointed, the Trustee shall perform the duties of the Recordkeeper.

 

Sec. 1.46 Reinstatement Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Participant who repays a distribution to the Plan pursuant to Section 13.3 reflecting the monetary value of that Participant's individual interest in the Trust Fund attributable to his repayment.

 

Sec. 1.47 Rollover Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Employee or Participant who makes a Rollover Contribution reflecting the monetary value of such person's individual interest in the Trust Fund attributable to his Rollover Contribution.  If the Employee or Participant was a participant in (i) the Penrod Thrift Plan as of December 31, 1993, (ii) the Dual 401(k) Plan as of July 1, 1996, or (iii) the Chiles 401(k) Plan as of September 1, 2002, his Rollover Account shall also reflect his individual interest in the Trust Fund attributable to the balance in his rollov er account, if any, maintained under the Penrod Thrift Plan, the Dual 401(k) Plan or the Chiles 401(k) Plan as of the Plan Merger Date.

 

Sec. 1.48 Rollover Contribution means all or any portion of an eligible rollover distribution, as defined in Section 402(c)(4) of the Code, transferred to the Plan pursuant to a Participant's election as described in Section 401(a)(31)(A) of the Code from an eligible retirement plan, including (i) a qualified plan described in Section 401(a) or 403(a) of the Code, (ii) an annuity contract described in Section 403(b) of the Code, and (iii) an eligible plan under Section 457(b) of the Code which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; provided, t hat the amount transferred to the Plan from an eligible retirement plan described in clause (i) or (ii) may not include after-tax employee contributions to such plan.  An eligible rollover distribution shall not include any portion of a hardship withdrawal within the meaning of Section 401(k)(2)(B)(i)(IV) of the Code of amounts (and, if applicable, the earnings attributable thereto) deferred pursuant to a salary reduction agreement under any other plan described in Section 401(k) of the Code.  In addition, a Rollover Contribution means any amount transferred to the Plan which would constitute a rollover contribution within the meaning of Section 403(a)(4) or 408(d)(3) of the Code.  Any such rollover contribution (which is not a direct rollover from another plan) must consist of either (i) all or a portion of the property (in excess of employee contributions) that the Employee received in a distribution from an employee's trust described in Section 401(a) of the Code which is exe mpt from tax under Section 501(a) of the Code, an annuity plan described in Section 403(a) of the Code and any earnings thereon [whether such contribution is paid directly by the Employee, from such other trust or annuity plan, or from an individual retirement account or individual retirement 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], an annuity contract described in Section 403(b) or 408(d)(3) of the Code, or an eligible plan under Section 457(b) of the Code which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state, or (ii) all or a portion of the proceeds from the sale of property received in such a distribution pursuant to Section 402(c)(6) of the Code.

 

Sec. 1.49 Salary Reduction Contribution means contributions made by an Employer on behalf of each Participant pursuant to a salary reduction agreement described in Section 3.1.

 

Sec. 1.50 Savings Account means, with respect to any Participant who was a participant in either the Penrod Thrift Plan as of December 31, 1993 or the Dual 401(k) Plan as of July 1, 1996 and while participating in either such plan made after-tax contributions to that plan, the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each such Participant reflecting the monetary value of that Participant's individual interest in the Trust Fund attributable to (i) the balance in his savings account maintained under the Penrod Thrift Plan as of the Plan Merger Date to reflect the after-tax contributions he made to that pl an or (ii) the balance in his participant after-tax employee contributions account maintained under the Dual 401(k) Plan as of the Plan Merger Date to reflect the after-tax contributions to that plan.

 

Sec. 1.51 Severance from Service Date means the earlier of the date on which an Employee ceases to be employed by an Affiliated Company, or

 

(a) the first anniversary of the date on which the Employee begins an unpaid leave of absence (other than a military leave) authorized by his Employer in accordance with standard personnel policies of his Employer applied in a nondiscriminatory manner to all Employees similarly situated;

 

(b) the second anniversary of the date on which the Employee begins an absence from the service of an Affiliated Company by reason of (i) pregnancy of the individual, (ii) birth of a child of the individual, (iii) placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement, provided that the Employee timely furnishes the Administrator information establishing (i) that the absence from the service of an Affiliated Company was for one or more of the foregoing reasons and (ii) the number of days for which there was an absence; or

 

(c) the first date on an Employee's qualified military service ends (within the meaning of Chapter 43, Title 38, United States Code) and he is not reemployed under that chapter by an Affiliated Company.

 

Sec. 1.52 Transfer Account means the portion of the Individual Account maintained by the Trustee or the Recordkeeper for each Employee or Participant who had a Transfer Contribution made on his behalf to the Plan, reflecting the monetary value of such person's individual interest in the Trust Fund attributable to such Transfer Contribution.  If any portion of the Transfer Contribution is attributable to elective contributions made on behalf of the Employee pursuant to Section 401(k) of the Code to another plan described in Section 401(k) of the Code, the Administrator may direct the Trustee or the Recordkeeper to credit such portion of the Transfer Contribution to the Employee's 401(k) Account.  If the Employee or Participant was a participant in either the Penrod Thrift Plan as of December 31, 1993 or the Dual 401(k) Plan as of July 1, 1996, his Transfer Account will also reflect his individual interest in the Trust Fund attributable to the balance in his transfer account, if any, maintained under the Penrod Thrift Plan or the Dual 401(k) Plan as of the Plan Merger Date.

 

Sec. 1.53 Transfer Contribution means all or part of the balance to the credit of an Employee in another plan described in Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code, other than a plan described as (i) a defined benefit plan and a defined contribution plan which is subject to the funding standards of Section 412 of the Code or (ii) a defined contribution plan which is subject to the requirements of Section 401(a)(11)(B) of the Code with respect to an Employer, which was transferred directly by the trustee of such other plan to the Trustee.

 

Sec. 1.54 Trust Agreement means the T. Rowe Price Trust Company Trust Agreement entered into between the Company and the Trustee to carry out the purposes of the Plan and under which the Trust Fund is maintained; provided that if such agreement be amended or supplemented, Trust Agreement, as of a particular date, shall mean such agreement, as amended and supplemented and in force on such date.

 

Sec. 1.55 Trust Fund means all assets of whatsoever kind and nature from time to time held by the Trustee pursuant to terms and conditions of the Trust Agreement out of which benefits of the Plan are provided.  The Trust Fund shall be divided into Investment Funds as provided in Section 21.8.

 

Sec. 1.56  Trustee means T. Rowe Price Trust Company, or any successor trustee or additional trustee or trustees acting at any time as Trustee under the Trust Agreement.

 

Sec. 1.57 Valuation Date means each business day of the Year or such other date or dates as the Administrator may establish from time to time.

 

Sec. 1.58 Year means the 12-month period from January 1 of each year to the next following December 31.

 

Sec. 1.59 Gender and Number.  Except as otherwise indicated by the context, any masculine terminology used herein also includes the feminine and neuter, and vice versa, and the definition of any term herein in a singular shall also include the plural, and vice versa.

 

 

 

 

Sec. 2.1 Eligibility.  Except as provided in this Article II to the contrary, each Employee who was eligible to participate in either or both the 401(k) feature of the Plan and the profit sharing feature of the Plan on December 31, 2001 shall continue to be eligible to participate in that feature or those features of the Plan, as applicable, as of January 1, 2002.  Each other Employee (i) shall be eligible to become a Participant in the 401(k) feature of the Plan as provided in Section 2.2 on the 401(k) Entry Date which coincides with or which next follows the date upon which he shall have both attained age 18 and completed a one-month Period of Service (or, prior to January 1, 2004, a three-month Period of Service), and (ii) who is employed or is reemployed (without having previously satisfied the then-applicable service requirement of this Section 2.1 for the profit sharing feature of the Plan) by an Employer after December 31, 2001, shall be eligible to participate in the profit sharing feature of the Plan (subject to the allocation requirements of Section 6.4) on the Profit Sharing Entry Date which coincides with or which next follows the date upon which he shall have both attained age 18 and completed at least 90 days of employment with the Employer (or, prior to January 1, 2007, a one-year Period of Service); provided, in each case, the Employee is employed by an Employer on the applicable Entry Date in a class of employment eligible for participation in the Plan.  Each Employee who was eligible to participate in the Chiles 401(k) Plan on September 30, 2002 became eligible to participate in both the 401(k) featur e and the profit sharing feature of the Plan on October 1, 2002, provided he was employed by an Employer on October 1, 2002.  In connection with the purchase on 7 July 2010 of the Ensco 109, formerly Diamond Offshore Drilling, Inc.'s Ocean Shield, each Employee who was formerly employed by Diamond Offshore Drilling, Inc. or an affiliate with an assignment to that rig on that date and whose employment as an Employee commenced on 21 August 2010 with a continued assignment to the Ensco 109 became eligible to participate in both the 401(k) feature and the profit sharing feature of the Plan on 21 August 2010.

 

Sec. 2.2 Election to Participate.  An Employee who is eligible to become a Participant in the 401(k) feature of the Plan may do so by either (i) completing and timely returning the written enrollment forms provided by the Administrator for that purpose or (ii) if allowed by the Administrator, timely giving an Interactive Electronic Communication, prior to the 401(k) Entry Date as of which he becomes eligible to commence participation in the 401(k) feature of the Plan, including forms or, if permitted, Interactive Electronic Communication, which (i) designate a Salary Reduction Contribution rate and authorize an Employer to reduce his A nnual Compensation as provided in Section 3.1, (ii) designate a Beneficiary, and (iii) elect the Investment Funds to which his contributions are to be allocated pursuant to Section 21.8.  For purposes of this Article II, the enrollment forms described in clauses (i)-(iii) of the preceding sentence shall be collectively referred to as the Enrollment Forms.  If an Employee does not elect to become a Participant in the 401(k) feature of the Plan when he first becomes eligible to participate, he may thereafter elect to become a Participant in the 401(k) feature of the Plan as of any subsequent payroll period with respect to which (or, prior to August 26, 2003, as of any subsequent 401(k) Entry Date as of which) he continues to be employed by an Employer in a class of employment eligible for participation in the Plan by either (i) completing the Enrollment Forms and timely returning them to the Administrator, or (ii) if allowed by the Administrator, timely giving the Enrollment Forms by Intera ctive Electronic Communication.

 

An eligible Employee's participation in the 401(k) feature of the Plan shall commence on the 401(k) Entry Date following the date or, effective August 26, 2003, any subsequent payroll period with respect to which, the Administrator timely receives his Enrollment Forms or, if applicable, he timely gives his Interactive Electronic Communication, in accordance with the provisions of this Section 2.2 and Section 3.1 and shall continue in effect until amended or terminated.  For purposes of the Plan, an Employee's Enrollment Forms shall be considered to have been timely received by the Administrator or to have been timely given by Interactive Electronic Communication with respect to his 401(k) Entry Date or, if applicable, the subsequent payroll period if the forms are received by the Administrator, or the Interactive Electronic Communication is given by the Employee, prior to that 401(k) Entry Date or the end of that subsequent payroll period and the Administrator determines, in its sole and absolute discretion, that it is administratively practicable to process his enrollment prior to that 401(k) Entry Date or the end of that subsequent payroll period.  If the Administrator determines that it is not administratively practicable to process an Employee's enrollment prior to his 401(k) Entry Date or the end of a particular payroll period, his enrollment shall be effective as of the next succeeding payroll period (or, prior to August 26, 2003, the next succeeding 401(k) Entry Date).  The Administrator may determine from time to time to require an Employee to return the Enrollment Forms required by this Article II and any amendments to a salary reduction agreement pursuant to Article III directly to the Recordkeeper.  By signing such Enrollment Forms or, if allowed by the Administrat or, by giving the Enrollment Forms by Interactive Electronic Communication, the Employee and his Beneficiary agree to be bound by all the terms and conditions of the Plan as then in effect or as thereafter amended.

 

Sec. 2.3 Eligibility upon Reemployment.  Notwithstanding Section 2.1, each Employee who is not employed by an Employer in a class of employment eligible for participation on the Entry Date on which he would have been eligible to become a Participant in the Plan with respect to either the 401(k) feature or the profit sharing feature of the Plan, shall be eligible to become a Participant hereunder in that feature as of the first Entry Date for that feature following the date on which he resumes employment as an Employee with an Employer in a class of employment eligible for participation and either (i) timely submits his Enrollment Forms to the Administrator or (ii) if allowed by the Administrator, timely gives the Enrollment Forms by Interactive Electronic Communication.  The Administrator shall determine whether an Employee timely submitted his Enrollment Forms or, if applicable, timely gave his Enrollment Forms by Interactive Electronic Communication, in accordance with the guidelines specified in Section 2.2.

 

Sec. 2.4 Reemployment of Participant.  Except as provided in this Section, if the employment of a Participant terminates for any reason and he subsequently is reemployed as an Employee by an Employer in a class of employment eligible for participation, he shall be eligible to become a Participant as of the 401(k) Entry Date following the date he resumes employment as an Employee with an Employer and continues to be employed in a class of employment eligible for participation and either (i) timely submits his Enrollment Forms to the Administrator or (ii) if allowed by the Administrator, timely gives the Enrollment Forms by Interactive E lectronic Communication; provided that if the Participant had satisfied the eligibility requirements under Section 2.1 to participate in the 401(k) feature of the Plan but not the profit sharing feature of the Plan as of the date his employment terminated, he shall not be eligible to participate in the profit sharing feature of the Plan until he satisfies the eligibility requirements of Section 2.1 that are applicable to the profit sharing feature of the Plan.  The Administrator shall determine whether an Employee timely submitted his Enrollment Forms or, if applicable, timely gave his Enrollment Forms by Interactive Electronic Communication, in accordance with the guidelines specified in Section 2.2.

 

Sec. 2.5 Changes in Classification and Cessation of Participation.  A Participant shall immediately cease to be eligible to make any further Salary Reduction Contributions and shall immediately cease to be eligible for any further Matching Contributions to the Plan upon the occurrence of either of the following events:

 

(a) termination of his salary reduction agreement established pursuant to Section 3.1; or

 

(b) termination of his status as an Employee with all Employers for any reason.

 

If a Participant is subsequently transferred to, or is included on December 31, 2008 in, a class of employment not eligible for participation in the Plan but continues to be employed by an Affiliated Company, no further contributions to the Trust Fund shall be made by or on behalf of the Participant under the Plan with respect to periods on and after the date of subsequent transfer to or, if applicable, inclusion on December 31, 2008 in, a class of employment not eligible for participation in the Plan, or such other earlier period specified in Section 2.9.  Any Participant described in the preceding sentence may recommence his participation in the features of the Plan for which he was eligible at the time of the subsequent transfer to or, if applicable, inclusion on December 31, 2008 in, an ineligible c lass of employment if he is transferred back to an eligible class of employment and new Enrollment Forms are executed or, if allowed by the Administrator, an Interactive Electronic Communication is given, in accordance with Section 3.1.  During the period of his employment in a class of employment not eligible for participation in the Plan, the Participant shall continue to (i) vest in his Employer Account, (ii) be eligible for withdrawals (subject to the requirements of Section 14.5), (iii) be permitted to transfer his Individual Account among the Investment Funds in accordance with the provisions of Section 21.8, and (iv) be permitted to change Beneficiaries in accordance with the provisions of the Plan.

 

Sec. 2.6 Exclusion of Employees Covered by Collective Bargaining.  Notwithstanding Section 2.1, an Employee covered by a collective bargaining agreement between an Employer and a collective bargaining representative certified under the Labor Management Relations Act who is otherwise eligible to become a Participant under this Article II shall be considered to be employed in an ineligible class of employment and excluded from eligibility to participate in the Plan if retirement benefits were the subject of good faith bargaining between the Employee's representative and the Employer and if the agreement does not require the Employer to i nclude such Employee in the Plan.  An Employee who is a Participant in the Plan when he is excluded under the provisions of this Section 2.6 shall cease active participation in the Plan on the effective date of that collective bargaining agreement and shall not participate in Employer contributions while a member of the ineligible class, but shall not be considered to have terminated employment.

 

Sec. 2.7 Exclusion of Certain Employees who are Non-U.S. Taxpayers.  Notwithstanding Section 2.1, an Employee who is otherwise eligible to become or continue to be a Participant under this Article II shall be considered to be employed in an ineligible class of employment and excluded from eligibility to participate in the Plan if the Employee (i) is included on January 1, 2009 in, or subsequently transferred to, a class of employment eligible to participate on such date in the Ensco Multinational Savings Plan, or (ii) would be described in clause (i) of this sentence but for the fact that he is not employed and working outside the coun try of his permanent residence.  An Employee who is a Participant in the Plan when he is excluded under the provisions of this Section 2.7 shall cease active participation in the Plan on the effective date of his inclusion in that ineligible class of employment and shall not participate in Employer contributions while employed in that ineligible class of employment, but shall not be considered to have terminated employment.

 

Sec. 2.8 Eligibility Upon Entry or Reentry into an Eligible Class of Employees.  In the event a Participant is excluded because he is no longer a member of an eligible class of Employees as specified in this Article II, such Employee shall be eligible to become a Participant immediately upon his return to employment as an Employee of an Employer in an eligible class of Employees.  In the event that an Employee who is not a former Participant in the Plan becomes a member of the eligible class, such Employee shall be eligible to become a Participant immediately if such Employee has satisfied the eligibility requirements of Sect ion 2.1 and would have previously been eligible to become a Participant had he been in the eligible class and new Enrollment Forms are executed or, if allowed by the Administrator, new Enrollment Forms are given by Interactive Electronic Communication, in accordance with Section 3.1.

 

Sec. 2.9 Exclusion of Certain Employees from the Profit Sharing Feature of the Plan.  Notwithstanding the foregoing provisions of this Article II and any other provision of the Plan, (i) effective as of January 1, 2007, Carl F. Thorne shall be excluded from participation in the profit sharing feature of the Plan and the allocation of Employer profit sharing contributions, if any, under Section 6.4 (as well as the forfeitures, if any, that may become allocable under Section 6.4 along with such profit sharing contributions) that are made pursuant to Section 3.3 for any Year beginning on or after January 1, 2007, and (ii) effective as of January 1, 2008, all Participants and Employees of the Company and Affiliated Companies, including those Employees who are included on December 31, 2008 in, or subsequently transferred to, a class of employees not eligible for participation in the Plan and, as a result shall cease to be a Participant for purposes of certain provisions of the Plan as specified in Section 2.5, shall be excluded from participation in the profit sharing feature of the Plan and the allocation of Employer profit sharing contributions, if any, under Section 6.4 (as well as the forfeitures, if any, that may become allocable under Section 6.4 along with such profit sharing contributions) that are made pursuant to Section 3.3 for the Year beginning January 1, 2008 and for any Year beginning on or after January 1, 2009 with respect to which the Employee does not satisfy the allocation requirements of Section 6.4, including because he is employed in an ineligible class of employment on the last day of the Year.

 

 

 

Sec. 3.1 Salary Reduction Contributions.

 

(a) Amount of Contributions.  On satisfying the requirements of Article II for participation in the 401(k) feature of the Plan, an eligible Employee may elect to have the Employer make Salary Reduction Contributions to the Trust Fund on his behalf by executing an enrollment form or, if allowed by the Administrator, by giving an Interactive Electronic Communication, containing a salary reduction agreement as described in Section 3.1(b).  The terms of any such salary reduction agreement shall provide that the Employee agrees to accept a reduction in his Annual Compensation from his Employer in an amount equal to not less than one percent but up to ten percent (in whole percentages) of his Annual Compensation per payroll period, subject to the restrictions and limitations of Articles IV and VII hereof.  The maximum deferral percentage in the preceding sentence shall be (i) increased to 50% for any Year beginning after December 31, 2003 for any eligible Employee who is a Non-Highly Compensated Employee for that Year, and (ii) increased to 15% for any Year beginning after 31 December 2010 for any eligible Employee who is a Highly Compensated Employee for that Year and was not invited to participate in the Ensco 2005 Supplemental Executive Retirement Plan (the "2005 SERP") for the plan year of the 2005 SERP that coincides with that Year.  The maximum percentage that an Employee may elect to reduce his Annual Compensation shall be determined from time to time by the Administrator taking into account the restrictions and limitations imposed by Articles IV and VII hereof.

 

Effective April 1, 2002, in addition to the Salary Reduction Contributions made by a Participant in accordance with the preceding provisions of this Section 3.1(a) for a Year, a Participant who is a Catch-up Eligible Participant for that Year shall be eligible to make Catch-up Contributions in the form of Salary Reduction Contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code as described in Section 4.1.

 

(b) Salary Reduction Agreement.

 

(i) Nature of Agreement.  The salary reduction agreement referred to in Section 3.1(a) shall be a legally binding agreement (on a form prescribed by the Administrator, which may include an Interactive Electronic Communication) whereby (A) the Participant agrees that, as of the effective date of the agreement, the Annual Compensation otherwise payable to him thereafter shall be reduced by a whole percentage (as selected by the Participant) not to exceed the maximum percentage permitted under Section 3.1(a), and (B) the Employer agrees to contribute the total amount of such reduction in Annual Compensation to the Trust Fund on beha lf of the Participant as a Salary Reduction Contribution under Section 3.1(a).  If a Participant's Annual Compensation for the Year exceeds the maximum amount of Annual Compensation that can be taken into account, the Participant may designate which portion of his total compensation is subject to his salary reduction agreement as long as the total amount deferred for the Year does not exceed the maximum amount allowed by law, calculated with respect to his Annual Compensation up to the maximum compensation that may be considered for the Year.  Salary Reduction Contributions shall be made by the Employer to the Trust Fund shortly after the end of each payroll period from which they are reduced, provided that in no event shall the Employer's aggregate contribution on behalf of the Participant under Section 3.1(a) for any month occur later than the 15th Valuation Date of the month following the month to which such contribution relates or such other date prescribed by the Code or applicable Treasury or Department of Labor regulations, rulings, notices or other promulgated documents of general applicability.  Subject to the provisions of paragraph (iv) of this Section 3.1(b) and Article IV hereof, a Participant's salary reduction agreement shall remain in effect until modified or terminated in accordance with paragraphs (iii) or (iv) of this Section 3.1(b).

 

(ii) Effective Date of Agreement.  The effective date of a Participant's salary reduction agreement shall be the 401(k) Entry Date following the date, or such other subsequent payroll period as provided in Section 2.2 with respect to which, such agreement is timely received in executed form by the Administrator or, if allowed, an Interactive Electronic Communication is timely given, as required by Article II; provided that such effective date shall not be determined to be earlier than the 401(k) Entry Date the Participant first becomes eligible to participate in the Plan.  The Administrator shall determine whether an Employe e timely submitted his salary reduction agreement or, if applicable, timely gave an Interactive Electronic Communication, in accordance with the guidelines specified in Section 2.2.

 

(iii) Amendment of Salary Reduction Contribution Elections.  A Participant may amend his elections authorizing the Employer to make Salary Reduction Contributions as of any payroll period with respect to Annual Compensation not yet paid (A) to increase or to decrease the whole percentage of his Annual Compensation [within the limits of Section 3.1(a)] to be used to determine his Salary Reduction Contributions or (B) to cease entirely such contributions.  A Participant's amended Salary Reduction Contribution election shall be effective no earlier than the first day of the first payroll period during which either (i) an amende d salary reduction agreement is timely received in executed form by the Administrator or (ii) if allowed by the Administrator, an Interactive Electronic Communication is timely given, or such other date as the Administrator may prescribe from time to time.  If a Participant elects to cease making Salary Reduction Contributions, the Participant may elect to again participate in the 401(k) feature of the Plan and resume making contributions to the Trust Fund under Section 3.1(a) by executing a new salary reduction agreement or, if allowed by the Administrator, by giving an Interactive Electronic Communication; provided that the effective date of such new salary reduction agreement shall be no earlier than the first day of the first payroll period during which the new salary reduction agreement is timely received in executed form by the Administrator, or if allowed by the Administrator, the Interactive Electronic Communication is timely given.  An amendment to a salary reduction agreement, i ncluding one to cease Salary Reduction Contributions, and a new salary reduction agreement shall be considered to have been timely received if it is received by the Administrator or, if applicable, the Interactive Electronic Communication is timely given, prior to the end of the applicable payroll period and the Administrator determines, in its sole and absolute discretion, that it is administratively practicable to process that amendment or new salary reduction agreement, whichever is applicable, for that payroll period.  If the Administrator determines that it is not administratively practicable to process an amendment or new salary reduction agreement, whichever is applicable, prior to the end of a particular payroll period, that amendment or new salary reduction agreement shall be effective as of the next succeeding payroll period. Notwithstanding the preceding provisions of this Section 3.1(b)(iii) to the contrary, no Participant who (i) is considered a Highly Compensated Employee for a Year b eginning after December 31, 2007, and (ii) was invited and actually elected to participate in the 2005 SERP [as defined in Section 3.1(a)] for the plan year of the 2005 SERP that coincides with that Year by first agreeing pursuant to Section 3.1(a) to defer to the Plan the maximum Salary Reduction Contribution rate determined for that Year by the Administrator pursuant to Section 3.1(a) and Section 4.4, may subsequently amend or revoke his Salary Reduction Contribution election under this Section 3.1(b)(iii) during that Year.

 

(iv) Transfer to Ineligible Employment or Termination of Employment.  A Participant's salary reduction election shall terminate automatically if the Participant (A) is transferred to, or is included on December 31, 2008 in, a class of employment not eligible for participation in the Plan, or (B) if his employment as an Employee with all Employers terminates.  Upon return of the Participant to an eligible class of employment as an Employee with an Employer, the Participant shall be permitted to execute a new salary reduction agreement or, if allowed, give an Interactive Electronic Communication, and resume having contribution s made to the Trust Fund on his behalf under Section 3.1(a); provided that the effective date of the new salary reduction agreement shall be no earlier than the later of (A) the first day of the first payroll period during which the new salary reduction agreement is timely received in executed form by the Administrator or, if applicable, an Interactive Electronic Communication is timely given, or (B) the date the Participant resumes eligible employment as an Employee with an Employer.  Transfers of Participants to different payroll systems among the Employers shall be administered by procedures established by the Administrator.

 

(v) No Pre-Service Contributions.  In no event shall an Employer deliver (i) any Salary Reduction Contributions for any Year beginning after December 31, 2005 to the Trust Fund on behalf of any Participant prior to the date the Participant performs the services as an Employee with respect to which the Salary Reduction Contributions are being made, or (ii) any Matching Contributions for any Year beginning after December 31, 2005 to the Trust Fund on behalf of any Participant prior to the date the Participant performs the services as an Employee with respect to which the Matching Contributions are being made, unless such pre-funding is to accommodate a bond fide administrative concern and is not for the principal purpose of accelerating deductions.

 

(vi) Automatic Enrollment Effective June 1, 2008.  The Administrator shall provide a Notice described in this subsection (b)(vi) to each individual who is initially employed or re-employed as an Employee after May 31, 2008 but does not agree to a reduction in his Annual Compensation from his Employer pursuant to Section 3.1(a) by executing an enrollment form or, if allowed by the Administrator, by giving an Interactive Electronic Communication, containing a salary reduction agreement as described in Section 3.1(b).  The Administrator may determine to limit the application of this subsection (b)(vi) to Employees who are subje ct to United States federal income tax.  The Notice shall be provided to any such Employee as soon as administratively practicable after his employment or re-employment commencement date which is the date the Employee first performs an Hour of Service.  The terms of that Notice shall provide that the Administrator shall automatically enroll each such Employee in the 401(k) feature of the Plan pursuant to Sections 2.2 and 3.1(a) and that such Employee shall be deemed to have agreed to a reduction in his Annual Compensation from his Employer in an amount equal to three percent of his Annual Compensation per payroll period commencing with the payroll period which next follows the 30th day following the 401(k) Entry Date which coincides with or next follows the date upon which he satisfies the eligibility requirements specified in Section 2.1(ii) for participation in the 401(k) feature of the Plan, subject to the r estrictions and limitations of Article IV hereof, unless the Employee affirmatively elects prior to that payroll period to cancel his automatic enrollment.  The automatic enrollment percentage specified by the preceding sentence shall be five percent for each individual who is initially employed or re-employed as an Employee after September 30, 2010 but does not agree to a reduction in his Annual Compensation from his Employer pursuant to Section 3.1(a) by executing an enrollment form or, if allowed by the Administrator, by giving an Interactive Electronic Communication, containing a salary reduction agreement as described in Section 3.1(b).  If the Administrator determines that it is not administratively practicable to process the automatic enrollment of an Employee prior to the end of the payroll period specified in the preceding sentence, that automatic enrollment shall be effective as of the next succeeding payroll period.  The Notice shall also provide that the balance of e ach such Employee’s Individual Account shall be invested in the qualified default investment alternative in accordance with the provisions of Section 21.8.  In addition, that Notice shall provide that each such Employee may elect to cancel or amend his automatic enrollment for the payroll period in which his automatic enrollment shall become effective, or cancel or amend his automatic enrollment for any future payroll period, in accordance with Section 3.1(b)(iii).

 

(c) Special Rule for Qualified Military Service.  Notwith-standing the limitation of Section 3.1(a), a Participant who is in qualified military service (within the meaning of Chapter 43 of Title 38, United States Code) who is reemployed under that chapter shall be permitted to elect to have his Employer make additional Salary Reduction Contributions to the Trust Fund on his behalf in the amount provided in this Section 3.1(c) or such lesser amount as is elected by the Participant.  The Participant shall be entitled to elect to have these additional Salary Reduction Contributions made on his behalf during the period which begins on the date of his reemployment with the Employer following such period of qualified military service and continues for a period of time equal to the lesser of (i) the product of three and the period of qualified military service which resulted in such right and (ii) five years.  The amount of additional Salary Reduction Contributions that a Participant may elect to have made on his behalf under this Section 3.1(c) is equal to the excess of (i) the maximum amount of Salary Reduction Contributions that the Participant would have been permitted to have made on his behalf to the Plan in accordance with the applicable limitations of Section 4.1 and Section 7.1 during the period of qualified military service if the Participant had continued to be employed by his Employer during such period and had continued to receive Annual Compensation as determined in the manner provided in Section 6.4 during any such period of qualified military service over (ii) the actual amount of Sal ary Reduction Contributions made on behalf of that Participant pursuant to Section 3.1(a) during that same period.

 

Sec. 3.2 Employer Matching Contributions.  For each payroll period, an Employer may contribute hereunder as a Matching Contribution an amount equal to a stated dollar amount or a stated percentage of the Salary Reduction Contributions, if any, made for such payroll period on behalf of each Participant entitled to an allocation under Section 6.3; provided that the Salary Reduction Contributions made on behalf of each Participant for a payroll period for which an Employer shall make a Matching Contribution shall be considered only to the extent that it (i) does not exceed six percent of the portion of the Participant's Annual Compensatio n paid during such payroll period, unless the governing body of the Company determines otherwise, and (ii) was not initially made to the Plan under Section 3.1(a) as a Catch-up Contribution.  If, as of the last day of any Year beginning after December 31, 2007, the Administrator determines that a Participant did not receive the amount of Matching Contributions to which such Participant was entitled for the Year based on his Salary Reduction Contributions made during the Year and his Annual Compensation for the Year, his Employer shall make an additional Matching Contribution on behalf of such Participant in an amount necessary to provide the Participant with the Matching Contribution to which he is entitled for such Year.  The Matching Contributions for a Year shall be determined by the governing body of the Company in its sole and absolute discretion; provided that the Administrator reserves the right to impose limits from time to time on the Matching Contributions that can be made by an y Employer to the extent necessary to meet the limitations and restrictions of Articles V and VII.  Matching Contributions made pursuant to this Section 3.2 shall be subject to the limitations and restrictions of Articles V and VII.  The Matching Contributions, if any, made pursuant to this Section 3.2 shall be reduced by the forfeitures for such Year under Articles IV, V, XIII and XIV that are designated under Section 13.5 by the Company to be applied to reduce the Matching Contributions for the Year and such forfeitures shall be allocated as provided in Section 6.3 in lieu of such contributions.  If additional Salary Reduction Contributions are made on behalf of a Participant pursuant to Section 3.1(c), the Employer shall make the same Matching Contribution pursuant to this Section 3.2 for that Participant which would have been made with respect to such Salary Reduction Contributions if those Salary Reduction Contributions had actually been made on behalf of that Par ticipant during that period of qualified military service.

 

Sec. 3.3 Employer Profit Sharing Contributions.  In addition to the Matching Contribution under Section 3.2, if any, for any Year, an Employer may elect to make a voluntary profit sharing contribution (after taking into account the Matching Contribution, if any, under Section 3.2) on behalf of the Participants entitled to an allocation under Section 6.4 for that Year in an amount determined and authorized by the governing body of that Employer for such Year.  The Employer profit sharing contributions, if any, made pursuant to this Section 3.3 shall be allocated along with the forfeitures for such Year under Articles IV, V, XI II and XIV, if any, that are designated by the Company under Section 13.5 for allocation under Section 6.4 with the Employer profit sharing contributions.  The Administrator reserves the right to impose limits from time to time on the profit sharing contributions that can be made by any Employer to the extent necessary for the Plan to retain its qualified status under the Code.

 

Sec. 3.4 Employer Qualified Non-Elective Contributions.  To insure that the Actual Deferral Percentage tests of Section 401(k) of the Code as described in Section 4.2 hereof or the Contribution Percentage tests of Section 401(m) of the Code as described in Section 5.1 hereof are met for any Year, an Employer, under such rules and regulations as the Secretary of the Treasury may prescribe, in addition to the Salary Reduction Contributions made by the Employer pursuant to Section 3.1, the Matching Contributions under Section 3.2, if any, and any Employer profit sharing contributions under Section 3.3, may make additional contributions wh ich shall constitute "qualified non-elective contributions" within the meaning of Section 401(m)(4)(C) of the Code on behalf of any Participant selected by the Employer who is an eligible Non-Highly Compensated Employee (as defined in Section 4.2) with respect to the current Year or the preceding Year, whichever is applicable under Section 4.2 or Section 5.1.  Each Year an Employer shall designate the portion, if any, of the qualified non-elective contributions that it made for the Year that shall be considered under Section 4.2 for the Actual Deferral Percentage test and the portion, if any, that shall be considered under Section 5.1 for the Contribution Percentage test.  The qualified non-elective contributions that are made for any Year beginning after December 31, 2005 and are designated by the Employer for consideration under Section 4.2 for the Actual Deferral Percentage test for that Year must satisfy the requirements of Section 4.6 and the qualified non-elective contributions that are made for any Year beginning after December 31, 2005 and are designated by the Employer for consideration under Section 5.1 for the Contribution Percentage test for that Year must satisfy the requirements of Section 5.5.

 

Sec. 3.5 Time and Form of Contributions.  Payments of Employer contributions due with respect to any Year shall be made in cash (by check or wire transfer), Ensco ADSs, or any combination thereof, as determined by the Company, in its sole and absolute discretion.  In addition to any other requirements hereunder relating to the timing of contributions, contributions made by an Employer pursuant to Sections 3.1, 3.2, 3.3 or 3.4, if any, may be made at any time and from time to time, except, as provided in Sections 3.1(b)(i), 4.3(c) and 5.2(c), the total contribution for any Year shall be paid in full not later than the time pre scribed by law to enable the Employer to obtain a deduction therefore on its federal income tax return for said Year.  If in advance of a Year the governing body of any Employer authorizes Employer contributions pursuant to Section 3.2 or 3.3 for that Year, such governing body may provide that all or a portion of such contributions shall be allocated monthly, quarterly or on some other basis rather than by payroll period during the Year or at the end of such Year.  Contributions made after the last day of the Year but within the time for filing an Employer's federal income tax return (including extensions thereof) shall be deemed made as of the last day of that Year if so directed by the Employer, except such contributions shall not share in increases, decreases, or income to the Trust Fund prior to the date actually made.  Notwithstanding the foregoing, on an Employer's request, a contribution which was made on a mistake of fact or conditioned on deductibility of the contributi on shall be returned to the Employer within one year after payment of the contribution or disallowance of the deduction (to the extent disallowed), as the case may be; provided, however, the amount returned to an Employer shall not be increased by any earnings thereon and shall be reduced by any losses attributable to such amount.

 

Sec. 3.6 Limit on Employer Contributions.  Notwithstand­ing the foregoing provisions of Sections 3.1, 3.2, 3.3 or 3.4, the contribution of an Employer for any Year (whether made pursuant to Sections 3.1, 3.2, 3.3 or 3.4) shall be first authorized by the governing body of the Employer and shall in no event exceed an amount which will, under the law then in effect, be deductible by the Employer in computing its federal taxes based on income for that Year; provided that the Administrator reserves the right to impose limits from time to time on (i) the Matching Contributions that can be made by any Employer to the extent necessary to meet the limitations and restrictions of Article V and (ii) the profit sharing contributions that can be made by any Employer to the extent necessary for the Plan to retain its qualified status under the Code.  As permitted by Section 401(a)(27) of the Code, any Employer may make contributions to the Plan without regard to net profits, current or accumulated.

 

Sec. 3.7 Contributions May be Made with Respect to a Particular Employer.  In making its determination of Matching Contributions and Employer profit sharing contributions with respect to any Year, the governing body of the Company may make its determination separately with respect to any Employer or business or operating unit within an Employer; provided, however, that any such determination must be nondiscriminatory within the meaning of the Treasury regulations under Section 401(a)(4) of the Code and must satisfy the minimum coverage requirements of Section 410(b) of the Code.  In such case, the contribution to such Employe r or business or operating unit within an Employer shall be allocated only to Participants who are Employees of such Employer or business or operating unit within that Employer.

 

Sec. 3.8 Manner of Making Contributions.  All contributions to the Trust Fund shall be paid directly to the Trustee.  In connection with each contribution, the Employer shall provide the Recordkeeper with information that:

 

(a) identifies each Participant on whose behalf the contribution is being made and the amount thereof; and

 

(b) states whether the amount contributed on behalf of the Participant is a Salary Reduction Contribution, a Matching Contribution, an Employer profit sharing contribution, a qualified non-elective contribution, a Rollover Contribution or a Transfer Contribution.

 

The Recordkeeper shall provide the Trustee with any of the information received by it which is necessary for the Trustee to perform its duties and obligations with respect to the Trust Fund.

 

Sec. 3.9 Rollover and Transfer Contributions.  An Employee, regardless of whether he is a Participant in the Plan, may, if authorized by the Administrator and after complying with all applicable laws and filing with the Trustee the form prescribed by the Administrator or, if allowed, by giving an Interactive Electronic Communication, make or have made on his behalf a Rollover Contribution or have a Transfer Contribution made on his behalf to the Plan at any time.  The Administrator may adopt rollover and transfer procedures and, before permitting a Rollover Contribution or Transfer Contribution, may require an Employee or his prior employer to furnish such information regarding the amount proposed to be rolled over or transferred to the Plan as the Administrator determines is necessary or appropriate.  These procedures shall be designed to enable the Administrator to reasonably conclude whether a Rollover Contribution is valid and shall specify that if the Administrator later determines or is otherwise informed that the Rollover Contribution was not valid, the Administrator shall direct the Trustee to distribute the amount of the invalid Rollover Contribution, plus the earnings attributable thereto, to the Employee as soon as administratively practicable thereafter.  If the Employee is not a Participant hereunder, his Rollover Account or Transfer Account shall constitute his entire interest under the Plan and the provisions of the Plan shall be generally applicable to such Employee and the Rollover Contribution or Transfer Contribution, unless expressly provided otherwise herein.  Except as otherwis e directed by the Administrator, the Recordkeeper shall allocate and credit a Rollover Contribution or Transfer Contribution to the Employee's Rollover Account or Transfer Account as of the Valuation Date immediately following the date on which the Rollover Contribution or Transfer Contribution is made.  A Rollover Contribution and a Transfer Contribution shall be nonforfeitable and the value thereof shall be paid to the Participant in the manner the Participant (or, if applicable, the Participant’s Beneficiary) elects pursuant to Sections 14.2 and/or 14.5.  An investment election on a form prescribed by the Administrator or, if allowed by the Administrator, an Interactive Electronic Communication, shall be submitted or given with the Employee's Rollover Contribution or Transfer Contribution and shall direct that such contribution be invested in the Investment Funds in accordance with Section 21.8.  In no event shall the existence of a Rollover Contribution or Transfer Con tribution held for the benefit of an Employee be construed to entitle the Employee to any amount in the Plan to which such Employee is not otherwise entitled under the other provisions of the Plan.

 

Sec. 3.10 Contributions with Respect to Military Leave.  Notwithstanding any provision of the Plan to the contrary, contributions with respect to qualified military service (within the meaning of Chapter 43 of Title 38, United States Code) shall be permitted in accordance with Section 414(u) of the Code.

 

 

 

Sec. 4.1 Dollar Limitation and Excess Elective Deferrals.  For any taxable year of a Participant, the aggregate amount of (i) the Participant's Salary Reduction Contributions made pursuant to Section 3.1(a) for that taxable year and (ii) amounts deferred by the Participant for that taxable year pursuant to a salary reduction agreement under any other plan, contract or agreement described in Sections 401(k), 403(b), 408(k)(6) or 408(p) of the Code sponsored by an Affiliated Company shall not exceed the Annual Deferral Limitation for that taxable year.  The Annual Deferral Limitation for the taxable year beginning in 2002 is $11,000 [or, beginning January 1, 2003, such other dollar limitation prescribed by Section 402(g)(4) of the Code for that taxable year as adjusted by the Secretary of the Treasury in accordance with Section 402(g)(4) of the Code at the same time and in the same manner as provided under Section 415(d) of the Code for adjusting the dollar limitation in effect under Section 415(b)(1)(A) of the Code], plus, if applicable, the limitation on Catch-up Contributions for that taxable year as provided in the next paragraph.

 

For any taxable year of a Catch-up Eligible Participant, the aggregate amount of (i) the Catch-up Eligible Participant's Catch-up Contributions made pursuant to Section 3.1(a) for that taxable year and (ii) amounts deferred by the Catch-up Eligible Participant for that taxable year pursuant to a salary reduction agreement as a catch-up contribution within the meaning of Section 414(v) of the Code under any other plan, contract or arrangement described in Sections 401(a), 403(b), 457(b), 408(k) or 408(p) of the Code sponsored by an Affiliated Company shall not exceed the Catch-up Contribution Limitation for that taxable year.  The Catch-up Contribution Limitation for a taxable year shall mean the lesser of (i) the applicable dollar amount under Section 414(v)(2)(B) of the Code for that taxable year, or (ii) the excess (if any) of (A) the Catch-up Eligible Participant's Annual Compensation [as defined in Section 7.2(f)] for the taxable year, over (B) any other Salary Reduction Contributions made pursuant to Section 3.1(a) and any other elective deferrals described in the preceding paragraph of the Catch-up Eligible Participant for such taxable year which are made without regard to Section 414(v) of the Code.  The applicable dollar amount referred to in clause (i) of the preceding sentence is $1,000 for the taxable year beginning in 2002, $2,000 for the taxable year beginning in 2003, $3,000 for the taxable year beginning in 2004, $4,000 for the taxable year beginning in 2005, $5,000 for the taxable year beginning in 2006, $5,000 for the taxable year beginning in 2007, $5,000 for the taxable year beginning in 2008, $5,500 for the taxable year beginning in 2009, and $5,500 for the taxable year beginning in 2010.  For taxable years beginning after December 31, 2010, the Secretary of the Tre asury shall adjust annually the applicable dollar amount for increases in the cost-of-living at the same time and in the same manner as adjustments under Section 415(d) of the Code, as modified by Section 414(v)(2)(C) of the Code.

 

Catch-up Contributions shall not be subject to or taken into account in applying the limitation for each Year on Annual Additions of Section 415 of the Code as described in Article VII and are not counted in determining the minimum allocation for each Year under Section 416 of the Code as described in Article XXII (but, to the extent the Plan is subject to the top heavy provisions contained in Section 416 of the Code as described in Article XXII, Catch-up Contributions made in prior years are counted in determining whether the Plan is a Top Heavy Plan).  The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 410(b) or 416 of the Code, as applicable, by reason of the making of such Catch-up Contributions.

 

If the Salary Reduction Contributions made pursuant to Section 3.1(a) on behalf of a Participant for a taxable year exceed the Annual Deferral Limitation (including, if applicable, the Catch-up Contribution Limitation) for that year, the amount of such excess shall be referred to as "Excess Elective Deferrals."  Excess Elective Deferrals (adjusted for the income or loss attributable to such excess amount) shall be distributed to the Participant not later than the April 15 immediately following the taxable year of the Participant for which the Excess Elective Deferrals were made to the Plan.  The Administrator shall reduce the amount of the Excess Elective Deferrals for a taxable year distributable to the Participant under this Section 4.1 by the amount of Excess Salary Reduction Contributions (as determined under Section 4.3), if any, previously distributed to the Participant for the Year beginning in that taxable year.

 

For taxable years beginning after December 31, 2005, the Administrator shall determine the net income or net loss to adjust Excess Elective Deferrals up to the date of distribution in the manner described in this paragraph.  The income or loss allocable to Excess Elective Deferrals shall be equal to the sum of (i) the income or loss allocable to the Participant's 401(k) Account for the taxable year multiplied by a fraction, the numerator of which shall be the amount of the Participant's Excess Elective Deferrals for the taxable year under this Section 4.1 and the denominator of which shall be the balance of his 401(k) Account without regard to any income or loss occurring during the taxable year and (ii) ten percent of the amount determined under clause (i) multiplied by the number of whole calendar mo nths between the end of the Participant's taxable year and the date of distribution of the Excess Elective Deferrals, counting the month of distribution of the Excess Elective Deferrals if the distribution occurs after the 15th of such month.  The Administrator may, in its discretion, determine to use any other reasonable method for computing the income or loss attributable to Excess Elective Deferrals, provided that the method (i) does not violate Section 401(a)(4) of the Code, (ii) is used consistently for all Participants and for all corrective distributions under the Plan for the taxable year, and (iii) is used by the Plan for allocating income or loss to Participants' Individual Accounts.  In adjusting a Participant’s Excess Elective Deferrals for the income or loss attributable to such Excess Elective Deferrals made in taxable years after December 31, 2007, the income or loss for the "gap period" sh all not be considered.

 

For taxable years beginning before January 1, 2006, the Administrator shall determine the net income or net loss in the same manner as described in Section 4.3 for Excess Salary Reduction Contributions for Years beginning before January 1, 2006, except the numerator of the allocation fraction shall be the amount of the Participant's Excess Elective Deferrals for the taxable year under this Section 4.1 and the denominator of the allocation fraction shall be the balance of the Participant's 401(k) Account attributable to Salary Reduction Contributions as of the end of the taxable year [without regard to the net income or net loss for the taxable year on that portion of the Participant's 401(k) Account]; provided, however, if there is a loss attributable to such excess amount, the amount of the distribution adjuste d for such loss shall be limited to an amount which does not exceed the lesser of (i) the balance of the Participant's 401(k) Account or (ii) the Salary Reduction Contributions made on behalf of the Participant for that taxable year.  In adjusting a Participant's Excess Elective Deferrals for the income or loss attributable to such Excess Elective Deferrals, the income or loss attributable to such excess deferrals for the "gap period" shall not be considered.  For purposes of this Section 4.1, "gap period" shall mean the period beginning with the first day of the taxable year next following the taxable year for which the Excess Elective Deferrals were made on behalf of the Participant and ending on the date of distribution.

 

If the Participant also (i) participates in one or more other qualified cash or deferred arrangements within the meaning of Section 401(k) of the Code, including the Dual 401(k) Plan for the period beginning January 1, 1996 and ending June 30, 1996 or the Chiles 401(k) Plan for the period beginning January 1, 2002 and ending September 30, 2002, (ii) has an employer contribution made on his behalf pursuant to a salary reduction agreement under Section 408(k) of the Code, or (iii) has an employer contribution made on his behalf pursuant to a salary reduction agreement toward the purchase of an annuity contract under Section 403(b) of the Code, and the sum of the elective deferrals [as defined in Section 402(g)(3) of the Code] that are made for the Participant during a taxable year under such other arrangements and the Plan exceeds the Annual Deferral Limitation (including, if applicable, the Catch-up Contribution Limitation) for that taxable year, the Participant shall, not later than the March 1 following the close of his taxable year for which the Excess Elective Deferrals have been made, notify the Administrator in writing of the portion of the Excess Elective Deferrals that he wishes to be allocated to the Plan, if any, and request that the Salary Reduction Contributions made on his behalf pursuant to Section 3.1(a) be reduced by the allocable amount specified by the Participant.  If all plans, contracts and agreements described in Section 401(k), 403(b) and 408(k) of the Code pursuant to which the Participant is able to defer amounts for a taxable year for which Excess Elective Deferrals have been made are sponsored by an Affiliated Company, the Administrator shall determine to which plan, contract or agreement (including the Plan) the Excess Elective Deferrals shall be allocated for that taxable year and if the Excess Elective Deferrals are to be allocated to the Plan, the Administrator shall notify the Trustee and the Participant in writing not later than March 1 following the close of that taxable year.  Such notification shall be deemed to be a notification by the Participant to the Administrator.  The portion of the Excess Elective Deferrals that is allocated to the Plan, if any, shall be adjusted for income and loss in the manner provided above and shall then be distributed to the Participant no later than the immediately following April 15.  If the Salary Reduction Contributions made on behalf of a Participant pursuant to Section 3.1(a) for a taxable year do not exceed the Annual Deferral Limitation (including, if applicable, the Catch-up Contribution Limitation) for that taxable year and the Administrator has not received any written Notice from the Participant (or deemed to have received written Notice from the Participant pursuant to the provisions hereof) by the Ma rch 1 immediately following that taxable year notifying the Administrator that the Participant allocates a portion of the Excess Elective Deferrals, if any, for that taxable year to the Plan, the Administrator may assume that none of the Salary Reduction Contributions made on behalf of the Participant for that taxable year constitute Excess Elective Deferrals and that no distribution is required to be made from the Participant's 401(k) Account pursuant to this Section 4.1.  Notwithstanding the fact that Excess Elective Deferrals have been (or will be) distributed to a Highly Compensated Employee as provided above, the excess amount of such Salary Reduction Contributions or the portion of such Salary Reduction Contributions that are deemed to constitute Excess Elective Deferrals by reason of the Administrator's or Participant's written Notice of allocation hereunder shall still be treated as a Salary Reduction Contribution for purposes of applying the Actual Deferral Percentage test described in Sec tion 4.2 hereof for the Year in which such Excess Elective Deferrals were made, except to the extent provided under rules prescribed by the Secretary of the Treasury.

 

Sec. 4.2 Actual Deferral Percentage Tests.  For each Year, the Administrator shall determine whether the aggregate amount allocated to each Participant's 401(k) Account attributable to Salary Reduction Contributions (other than Catch-up Contributions) made pursuant to Section 3.1(a) and qualified non-elective contributions (that are designated under Section 3.4 for consideration under this Section 4.2) made for that Year shall satisfy one of the following tests:

 

(a) the "Actual Deferral Percentage" for the Year for the group consisting of all eligible Highly Compensated Employees (as defined below) shall not exceed the "Actual Deferral Percentage" for the preceding Year for the group consisting of all eligible Non-Highly Compensated Employees (as defined below) multiplied by 1.25; or

 

(b) the "Actual Deferral Percentage" for the Year for the group consisting of all eligible Highly Compensated Employees shall not exceed the lesser of (i) 200% of the "Actual Deferral Percentage" for the preceding Year for the group consisting of all eligible Non-Highly Compensated Employees or (ii) the "Actual Deferral Percentage" for the preceding Year for the group consisting of all eligible Non-Highly Compensated Employees plus two percentage points or such lesser amount as the Secretary of the Treasury shall prescribe.

 

Notwithstanding subsections (a) and (b) above, the Administrator may elect by Plan amendment in accordance with Treasury regulations or other Internal Revenue Service guidance promulgated under Section 401(k) of the Code to determine compliance with either of the tests under subsection (a) or (b) for a Year by reference to the Actual Deferral Percentage of the eligible Non-Highly Compensated Employees for the current Year in lieu of determining such compliance based on the Actual Deferral Percentage of the eligible Non-Highly Compensated Employees for the preceding Year.

 

For purposes of this Article IV, the following terms shall have the following meanings:

 

(a) "Actual Deferral Percentage" for a Year or a preceding Year means, with respect to the group consisting of the eligible Highly Compensated Employees and the group consisting of the eligible Non-Highly Compensated Employees, the average (expressed as a percentage) of the ratios, calculated separately for each Employee in each such group and rounded to the nearest one-hundredth of one percent, of the amount of Salary Reduction Contributions (other than Catch-up Contributions) made pursuant to Section 3.1(a) and qualified non-elective contributions (that are designated under Section 3.4 for consideration under this Section 4.2 and that satisfy the requirements of Section 4.6 for any Year beginning afte r December 31, 2005) allocated to each Employee's 401(k) Account under Section 6.2 and Section 6.5, respectively, (unreduced in the case of Highly Compensated Employees by distributions made to any such Employee pursuant to Section 4.1 hereof) for such Year or preceding Year, whichever is applicable, to such Employee's Annual Compensation [as defined in subsection (c) below] paid or accrued during the Year or preceding Year, whichever is applicable, in which the Employee was an eligible Highly Compensated Employee or an eligible Non-Highly Compensated Employee.  Notwithstanding the preceding sentence, a qualified non-elective contribution can be considered in calculating the Actual Deferral Percentage of an eligible Non-Highly Compensated Employee for a Year only if the qualified non-elective contribution is allocated as of a date within that Year and is actually contributed to the Trust Fund by an Employer no later than the last day of the Year immediately following the Year to which that qualifie d non-elective contribution relates.

 

(b) "Actual Deferral Ratio" means each separately calculated ratio under subsection (a) above.  An Employee who is considered a Highly Compensated Employee under Section 1.24 or a Non-Highly Compensated Employee under Section 1.34 shall be considered an "eligible Highly Compensated Employee" or an "eligible Non-Highly Compensated Employee" for purposes of this Section 4.2 for each Year he is employed by an Employer if he has satisfied the eligibility requirements of Article II and reached a 401(k) Entry Date or other payroll period as of which he could have become a Participant, regardless of whether (i) he has elected to have an Employer make a Salary Reduction Contribution to the Plan on his beha lf under Section 3.1(a) for that Year, or (ii) he is suspended from further contributions during the Year due to the limitations of Section 415 of the Code as described in Article VII.  Moreover, the eligible Non-Highly Compensated Employees for a preceding Year shall be determined for that Year as described in the preceding sentence and shall not be affected by any such Non-Highly Compensated Employee's status as an Employee, Highly Compensated Employee or Non-Highly Compensated Employee for the current Year.  Consequently, for purposes of this Section 4.2, the Actual Deferral Ratio for each Highly Compensated Employee and Non-Highly Compensated Employee who is eligible to, but does not elect to have an Employer make a Salary Reduction Contribution on his behalf to the Plan pursuant to Section 3.1(a) for a Year, shall be zero for that Year, unless the Employer makes a qualified non-elective contribution to the Plan pursuant to Section 4.3(c) for a Year to satisfy the Actual Deferral Percentage tests, in which case the Actual Deferral Ratio for each such Non-Highly Compensated Employee shall be the ratio of that portion of the qualified non-elective contribution attributable to contributions made by the Employer to satisfy the Actual Deferral Percentage tests which is allocated to his 401(k) Account under Section 6.5 for that Year to his Annual Compensation [as defined in subsection (c) below] paid or accrued by an Employer during that Year in which the Employee was an eligible Non-Highly Compensated Employee.

 

If any Employee who is an eligible Highly Compensated Employee is a participant for any Year beginning after December 31, 2005 in two or more cash or deferred arrangements described in Section 401(k) of the Code that are maintained by an Affiliated Company and that are not mandatorily disaggregated pursuant to Treas. Reg. §1.410(b)-7(c), as modified by Treas. Reg. §1.401(k)-1(b)(4) [without regard to the prohibition on aggregating plans with inconsistent testing methods contained in Treas. Reg. §1.401(k)-1(b)(4)(iii)(B) and the prohibition on aggregating plans with different plan years contained in Treas. Reg. §1.410(b)-7(d)(5)], for purposes of determining such Highly Compensated Employee’s Actual Deferral Ratio under this Section 4.2 for any Year, all such cash or deferred arran gements shall be treated as one cash or deferred arrangement and all elective contributions [as defined in Treas. Reg. §1.401(k)-6] and qualified non-elective contributions (taken into account in determining actual deferral percentages) to such other plans maintained by an Affiliated Company shall be treated as if all such contributions were made to the Plan; provided, however, that if any such plan has a plan year different from the Year, any such elective contributions and qualified non-elective contributions made to such Highly Compensated Employee’s accounts under that other plan during the Year shall be treated as if such contributions were made to the Plan.  For purposes of this Section 4.2, if two or more plans or arrangements described in Section 401(k) of the Code are treated as one plan for the purposes of Section 401(a)(4) or Section 410(b) of the Code (other than the average benefits percentage test), such plans or arrangements shall be treated as a single plan or arrangement , and the Administrator shall determine the Highly Compensated Employee’s Actual Deferral Ratio by aggregating his Salary Reduction Contributions, elective contributions and qualified non-elective contributions as if the Plan and such other plan or plans were a single plan; provided, however, the Plan and any such other plan or plans may be aggregated as described in this sentence only if the Plan and such other plan or plans have the same plan year and utilize the same testing method to satisfy the requirements of Section 401(k) of the Code.

 

If any Employee who is an eligible Highly Compensated Employee is a participant for any Year beginning before January 1, 2006 in two or more cash or deferred arrangements described in Section 401(k) of the Code that are maintained by an Affiliated Company, excluding any such arrangement that is part of an employee stock ownership plan [as defined in Section 4975(e)(7) of the Code] for purposes of determining his ratio under this Section 4.2 for any such Year, all such cash or deferred arrangements shall be treated as one cash or deferred arrangement to the extent required under Section 401(k) of the Code.  For purposes of this Section 4.2, if two or more plans or arrangements described in Section 401(k) of the Code are considered one plan for the purposes of Sections 401(a)(4) or 410(b) of the Co de (other than the average benefits percentage test), such plans or arrangements shall be treated as a single plan or arrangement, and if the plans use different plan years, the Administrator shall determine the combined Salary Reduction Contributions and ratios on the basis of the plan years ending in the same calendar year.

 

The Recordkeeper shall maintain records to demonstrate compliance with the tests under this Section 4.2, including the extent to which the Plan used qualified non-elective contributions made pursuant to Section 3.4 and, for any Year beginning after December 31, 2005, that satisfy the requirements of Section 4.6 to satisfy a test.

 

Notwithstanding the preceding provisions of this Section 4.2, if the Plan provides that Employees are eligible to make Salary Reduction Contributions before they have satisfied the minimum age and service requirements under Section 410(a)(1) of the Code and applies Section 410(b)(4)(B) of the Code in determining whether the cash or deferred arrangement under the Plan meets the requirements of Section 410(b)(1) of the Code for any Year beginning after December 31, 2005, the Administrator may apply the limitations on Salary Reduction Contributions of Highly Compensated Employees described in this Section 4.2 either (i) by comparing the Actual Deferral Percentage of all Employees who are eligible Highly Compensated Employees for the Year to the Actual Deferral Percentage for the Year or the preceding Year, whichev er is applicable under Section 4.2, of those Employees who are Non-Highly Compensated Employees and who have satisfied the minimum age and service requirements under Section 410(a)(1) of the Code, or (ii) separately with respect to Employees who have not satisfied the minimum age and service requirements under Section 410(a)(1) of the Code and Employees who have satisfied such minimum age and service requirements under Section 410(a)(1) of the Code.

 

(c) "Annual Compensation" means for a particular Year, the definition of compensation determined by the Administrator to be used under this Section 4.2 for that Year, provided that any such definition of compensation must satisfy Section 414(s) of the Code as determined under Treas. Reg. §1.414(s)-1(c).  In the case of a Participant who commences, resumes or ceases to be eligible to participate in the Plan during the Year, the Administrator may determine to consider only the amount of the Annual Compensation received by the Participant during the portion of the Year in which he was eligible to participate, provided that this limit is applied to all eligible Employees under the Plan.