Exhibit 10.4

Draft December 8, 2006

PRECISION CASTPARTS CORP.

SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM -

LEVEL TWO PLAN—ONGOING

January 1, 2005

 

Precision Castparts Corp.

an Oregon corporation

4650 SW Macadam, Suite 440

Portland, OR 97239

   Company

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TABLE OF CONTENTS

 

          Page 1.    Eligibility and Participation    1 2.    Supplemental
Benefits    4 3.    Payment of Benefits    9 4.    Death Benefits for Spouse   
12 5.    No Advance Funding    13 6.    Amendment and Termination    13 7.   
Not Contract of Employment    14 8.    Claims Procedure    15 9.    General
Provisions    15 10.    Definition of Change in Control    16 11.       
Effective Date    18

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INDEX OF TERMS

 

Term

  

Section

   Page

409A

   Preamble    1

Acquisition

   1.2-3         2

Administrator

   1.2-1         1

Affiliate

   1.1             1

Benefit Starting Date

   3.1             9

Change in Control

   10              16

Code

   Preamble    1

Committee

   1.2-1         1

Company

   Preamble    1

Compensation

   2.2-2         5

Competition

   2.5-3         9

Disability

   2.2-7         7

Early Retirement Date

   2.3-1         7

Executives

   Preamble    1

Final Average Pay

   2.2-1         4

Gross Fair Market Value

   10.4-1         17

Misconduct During Employment

   2.5-2         9

Normal Retirement Date

   2.1-1         4

Plan

   Preamble    1

Primary Social Security Benefit

   2.2-3         5

Program

   Preamble    1

PCC Retirement Plan

   2.2-4(b)    6

Retirement Plan Benefit

   2.2-4         6

SERP - Level One Plan

   Preamble    1

SERP - Level Two Plan

   Preamble    1

Separation from Service

   3.2-1         10

Specified Employee

   3.2-2         10

Statement of Participation

   1.3             3

Subsequent Lump Sum Election

   3.4             12

Year of Benefit Service

   2.2-6         7

Years of Eligibility Service

   2.2-8         7

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PRECISION CASTPARTS CORP.

SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM -

LEVEL TWO PLAN—ONGOING

January 1, 2005

 

Precision Castparts Corp.,    an Oregon corporation    4650 SW Macadam, Suite
440    Portland, OR 97239    Company

Precision Castparts Corp., an Oregon corporation (the “Company”), adopted the
Supplemental Executive Retirement Program (the “Program”) effective February 1,
1989 to provide supplemental retirement benefits for a select group of
management or highly compensated employees (“Executives”) as an incentive for
them to develop careers with the Company and to perform with a degree of
excellence that will promote the best interests of the Company. The Program has
had two components: the “SERP - Level One Plan” and the “SERP - Level Two Plan.”

The Company has restated the SERP - Level One Plan and the SERP - Level Two Plan
to provide for all then-covered participants’ December 31, 2004 vested accrued
benefits and to provide for ongoing accruals (if applicable) without changing
plan terms except as required by changes in applicable law for such then-covered
participants continuing in covered employment after that date.

This Plan is adopted in connection with the changes described above in order to
provide for accruals for qualifying Executives in Plan-covered employment under
the SERP - Level Two Plan on December 31, 2004 who were not vested under that
plan on that date and have ongoing employment after that date and for other
designated Executives, and to conform with changes in applicable law (including
requirements of Internal Revenue Code (“Code”) section 409A (“409A”) and related
guidance).

 

  1. Eligibility and Participation

1.1 Eligible Employees. Participation shall be limited to a select group of
designated Executives of the Company and of its U.S. Affiliates. “Affiliate”
means a corporation or other business that is more than 50 percent owned by the
Company.

1.2 Selection of Participants

1.2-1 Initially, participants in this Plan shall be those Executives who were in
covered employment on December 31, 2004 under the SERP - Level Two Plan but did
not have vested benefits under that plan on that date and for Executives who
have been designated for participation after that date. Other Executives may be
designated for participation in this Plan by the Compensation Committee (the
“Committee”) of the Board of Directors of the

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Company. The chief executive officer of the Company may recommend additional
participants for approval by the Committee. An Executive may be selected for
participation at any time. The Committee may also remove a participant from this
Plan on a prospective basis, with or without cause. The Committee-appointed
administrator for this Plan (the Administrator) shall notify the participant in
writing within 30 days after Committee action establishing the removal. The
effective date of removal shall be the date of adoption of the Committee action.

1.2-2 Subject to 1.4, following any removal under 1.2-1, the following shall
apply:

(a) The removal, in itself, shall not cause an immediate forfeiture of benefits.

(b) No further Years of Benefit Service shall be counted following the date of
removal.

(c) The amount described in 2.1-4(a) shall not change after removal, but the
amounts described in 2.1-6(c) may change due to further accruals or other
increases in the Retirement Plan Benefit and Primary Social Security Benefit.

(d) A removed participant who continues to be employed by the Company or an
Affiliate shall not earn additional credit for Years of Eligibility Service
needed to qualify for retirement under Section 2 unless additional credit is
authorized by the Committee.

(e) The preretirement spousal death benefit, if applicable under 4.3, shall end
30 days after notice of removal is given under 1.2-1.

(f) If the participant is married at removal, any election under 3.3-2 to
provide a spousal contingent annuity at 50 percent or 100 percent shall continue
to apply. If the participant is unmarried at removal but becomes married prior
to the benefit start date, the participant may make an election under 3.3-2
within 30 days after marriage.

1.2-3 Credit for Preacquisition Service and Pay. “Acquisition” means an asset or
stock purchase by the Company or an Affiliate of an unaffiliated business.
Preacquisition service, pay, or both may be credited under this Plan as follows:

(a) Credit may be granted by the Committee in the process of enrollment of
Executives.

(b) After enrollment, credit may be granted by the Company’s chief executive
officer, except that credit for the chief executive officer may be granted only
by the Committee.

(c) The terms on which credit is granted shall be stated in writing and
communicated to the affected Executive.

 

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1.3 Enrollment. Enrollment shall be as follows:

(a) Upon initial eligibility, each participant shall be notified of the terms of
this Plan and given a “Statement of Participation” signed by the Company.

(b) The Executive shall enroll for participation by completing the Statement of
Participation, including all relevant benefit elections as to the form of
payment, signing it and returning it to the Administrator.

(c) Except as provided in 1.4(b), an Executive may only file one Statement of
Participation.

(d) The Statement of Participation shall be provided to the Executive with
information about benefits as soon as reasonably practicable after the Committee
authorizes the Administrator to enroll the Executive for participation. The
Executive is not eligible to become a participant until the Executive has
received the Statement of Participation, and the Executive shall not become a
Participant until the Executive returns a completed, signed Statement of
Participation to the Administrator.

(e) The completed, signed Statement of Participation must be returned by the
Executive to the Administrator as soon as reasonably practicable after the date
the Executive receives the Statement of Participation from the Administrator.
The lump sum benefit payment method under 3.3 may only be selected in a
Statement of Participation if the signed Statement of Participation is returned
by the Executive to the Administrator within 30 days after receipt from the
Administrator.

1.4 Election. The Statement of Participation must specify the participant’s
election as to the form of payment from the forms of benefit available under
3.3. Such election will be irrevocable except as follows:

(a) A Subsequent Lump Sum Election may be filed as provided in 3.4.

(b) One replacement Statement of Participation may be filed by an Executive not
later than December 31, 2007 (or such other time as may be permitted under
Internal Revenue Service transition relief relating to Code section 409A), but
the replacement Statement of Participation may not cause any amounts to become
payable in the calendar year during which the replacement Statement of
Participation is filed or change the time or form of payment of any amounts
otherwise payable in the calendar year during which the replacement Statement of
Participation is filed.

 

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  2. Supplemental Benefits

2.1 Benefit on Retirement at or After Normal Retirement Date

2.1-1 Subject to 2.1-2 and 2.1-3, the basic supplemental benefit on normal
retirement with 25 Years of Benefit Service at or after Normal Retirement Date
shall be a monthly pension for life equal to 55 percent of Final Average Pay,
minus the participant’s Retirement Plan Benefit and the participant’s Primary
Social Security Benefit. The percentage adjustment on normal retirement with
more than or less than 25 Years of Benefit Service is provided in 2.1-4. The
benefit starting date for an eligible participant is the first day of the month
after the participant’s retirement. The benefit starting date is addressed in
3.1 and related provisions and the form of payment is addressed in 3.3 and
related provisions. “Normal Retirement Date” means the date the participant both
has at least 10 Years of Eligibility Service and is at least age 65.

2.1-2 Unless the participant elects a lump sum on enrollment, or pursuant to a
valid Subsequent Lump Sum Election or a valid replacement Statement of
Participation, the participant’s benefit will be paid in the form of an annuity
as provided in 3.3.

2.1-3 The benefit for a partial year at the end of a participant’s period of
service shall be prorated based on the number of months in which the participant
performs services during the year.

2.1-4 For a participant with less than 25 Years of Benefit Service at normal
retirement, the 55 percent factor in 2.1-1 shall be reduced by 1/25th for each
year less than 25. The benefit for each Year of Benefit Service over 25 shall be
one-half of one percent (.5 percent) of Final Average Pay, minus any portion of
the Retirement Plan Benefit and Primary Social Security Benefit that exceeds the
basic benefit under 2.1-1 for the first 25 Years of Benefit Service. The basic
supplemental benefit can be expressed as follows:

(a) Fifty-five percent (55%) of Final Average Pay times (Years of Benefit
Service up to 25, divided by 25)

PLUS

(b) One-half of one percent (.5%) of Final Average Pay times (Years of Benefit
Service over 25)

MINUS

(c) (Retirement Plan Benefit plus Primary Social Security Benefit).

 

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  2.2 Definitions

2.2-1 “Final Average Pay” means the participant’s average monthly compensation
in the highest three calendar years of compensation out of five consecutive
calendar years of employment during a period of eligibility service by the
Company or an Affiliate. Years separated by a period of one or more calendar
years when the participant has no such eligible employment shall be treated as
consecutive. Additional compensation paid at retirement or other Separation from
Service, such as for periods of unused vacation or sick leave, shall be
attributed to calendar years by assuming that employment continued during the
period based on which the compensation is measured. Severance pay shall be
disregarded, except severance pay in lieu of service.

2.2-2 “Compensation” shall be determined as follows:

(a) Total direct pay reportable on Form W-2 under Code section 3401(a),
disregarding limitations based on the nature or location of employment, shall be
counted, subject to the following provisions:

(1) Half of any bonuses shall be excluded.

(2) Commissions and cost-of-living allowances shall be excluded.

(3) Any reimbursements or other expense allowances, fringe benefits, moving
expenses, severance or disability pay and other deferred compensation (other
than as specified in (b)), and welfare benefits shall be excluded.

(4) Gains realized from the exercise of nonqualified stock options shall be
excluded.

(b) Total direct pay shall be determined without reduction by elective deferral
of otherwise currently taxable compensation under any qualified cash or deferred
arrangement under Code section 401(k), any elective welfare benefit arrangement
under Code section 125 or a non-qualified deferred compensation plan.

(c) During periods of ongoing Plan-covered employment (or imputed Years of
Benefit Service during disability, under 2.2-6 and 2.2-7) with reduced
compensation because of such causes as illness, disability or leave of absence,
compensation shall be imputed at the last regular rate before the start of the
period. In determining “regular rate” for a period of absence that spans a bonus
period so that the Executive does not receive a bonus that the Executive would
have received if the Executive had not been absent, the average of the
Executive’s bonuses in the three years immediately before the absence started
shall be used to include bonuses in the imputed pay period.

2.2-3 “Primary Social Security Benefit” means the primary insurance amount
estimated for the participant on retirement at or after age 65 under the federal
Social Security Act, determined as follows:

(a) The amount may be estimated from the regular pay rate under rules
established by the Administrator assuming a standard pay progression over a full
working career.

 

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(b) The amount shall not be changed by amendments to the Social Security Act or
cost-of-living index adjustments after the participant’s actual Separation from
Service date or age 65, whichever is first.

(c) If a participant retires before age 65, the Primary Social Security Benefit
shall be the amount that would be received at age 65 assuming level earnings at
the participant’s final rate of pay and no change in the Social Security Act.

2.2-4 “Retirement Plan Benefit” means the sum of all amounts payable as an age
65 retirement benefit (as applicable) for the participant under all defined
benefit and defined contribution retirement plans maintained by the Company or
by an Affiliate, determined in accordance with the following provisions:

(a) Subject to (c), the monthly benefit for the participant under any defined
benefit pension plan from service counted for benefits under this Plan as well
as any service following removal from participation, and disregarding any
benefit derived from rollovers to such plan derived from a source other than
employer contributions relating to the period of service counted for benefits
under this Plan. The benefit shall be expressed as a retirement benefit at age
65 (or actual retirement if later) in the form of a straight life annuity using
the actuarial equivalency factors applicable under that plan.

(b) Subject to (c), the monthly benefit for the participant under a defined
contribution retirement plan relating to service counted for benefits under this
Plan as well as any service following removal from participation. The amount of
the benefit shall be based on contributions to the participant’s account,
carried forward at an interest rate of 8 percent to age 65 or later,
disregarding any amounts derived from employee after-tax or pre-tax
contributions or rollovers into the plan by the participant of amounts derived
from contributions other than employer contributions for a period of service
counted under this Plan. The value of contributions and imputed interest shall
be converted to an actuarially equivalent retirement benefit starting at age 65
in the form of a straight life annuity using the actuarial equivalency factors
applicable to the Precision Castparts Corp. Retirement Plan (the “PCC Retirement
Plan”). If the defined contribution plan is a plan under which employer
contributions are made to match, wholly or partly, employee after-tax or pre-tax
contributions under the plan, then the offset for the defined contribution plan
shall be calculated assuming the employee’s account has been credited, for the
period of service covered by this Plan, with the maximum matching contributions
the employee could have had credited by making employee contributions (without
regard to any operational limitations imposed by discrimination testing),
carried forward at an interest rate of 8 percent.

 

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(c) For purposes of (a) and (b), the Prior Profit Sharing Plan benefit under the
PCC Retirement Plan, if applicable, shall be treated as a defined contribution
retirement plan benefit, and the rest of the benefit under the PCC Retirement
Plan shall be treated as a defined benefit pension plan benefit. The same
treatment shall apply to defined contribution-type features qualified under Code
section 414(k) with respect to any other relevant defined benefit pension plans.

2.2-5 Transfer of employment from one Company or Affiliate employer to another
Company or Affiliate employer is not retirement.

2.2-6 Subject to 1.2, “Year of Benefit Service” means a period of 12 months
based on the anniversary of the date the employee first performs an hour of
service as an employee of the Company or an Affiliate. No service for a business
before the date it becomes an Affiliate shall be counted as Benefit Service
except as provided in 1.2-3. Except for periods of disability as described
below, periods of employment other than as a regular full-time employee eligible
for active participation in this Plan under 1.1 shall be disregarded and service
credit shall be reduced accordingly. If a person becomes totally and permanently
disabled while in Plan-covered employment for benefit accrual purposes, and has
at least 10 Years of Eligibility Service at the outset of qualifying disability,
the participant will continue to accrue Years of Benefit Service during
disability up to the date the participant reaches age 65 or retires and starts
benefits if earlier.

2.2-7 “Disability” means a condition that makes a person eligible for disability
income benefits under Social Security for total, permanent disability.

2.2-8 “Years of Eligibility Service” means Years of Benefit Service as defined
in 2.2-6 plus Years of Service (as defined in the PCC Retirement Plan), if any,
approved by the Committee performed for a business before the date it became an
Affiliate or performed for the Company or an Affiliate after the person has been
removed from participation as provided in 1.2-1 and related provisions.

2.3 Retirement Benefit Starting Before Normal Retirement Date

2.3-1 An early retirement supplemental benefit shall be payable for a
participant who has a Separation from Service before normal retirement but after
qualifying for early retirement. The benefit shall be the normal retirement
basic supplemental benefit, as adjusted under 2.1-3 and 2.1-4, if applicable,
and reduced as described in 2.3-2. The benefit starting date for an eligible
participant is the first day of the month after the participant’s retirement on
an Early Retirement Date. “Early Retirement Date” means a date that is before
the participant’s Normal Retirement Date and on or after the later of the date
the participant has earned at least 10 Years of Eligibility Service, and the
total of the participant’s Years of Eligibility Service when combined with the
participant’s age equals at least 70. Only whole years of age and Years of
Eligibility Service are counted in determining when the total reaches 70.
Fractional years of age cannot be combined with fractional Years of Eligibility
Service to reach 70.

 

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2.3-2 The reduction referred to in 2.3-1 is 3 percent for each year by which the
Early Retirement Date precedes age 65. The reduction for partial years shall be
prorated monthly. The early retirement reduction shall be applied after
calculating the participant’s benefit as for normal retirement, based on service
and compensation to actual retirement and offsets as of age 65.

2.3-3 The benefit provided for in 2.3-1, with the reduction provided for in
2.3-2, is described as the product of (a) multiplied by (b), with (a) and (b) as
follows:

(a) The amount that is

(1) Fifty-five percent (55%) of Final Average Pay times (Years of Benefit
Service up to 25, divided by 25)

PLUS

(2) One-half of one percent (.5%) of Final Average Pay times (Years of Benefit
Service over 25)

MINUS

(3) (Retirement Plan Benefit plus Primary Social Security Benefit)

TIMES

(b) The fraction that is

(1-.03 (age at normal retirement minus age at actual retirement)).

2.3-4 Except as provided under Section 6.2 or Section 4, no benefit shall be
paid with respect to a participant who has a Separation from Service before the
participant’s first available Early Retirement Date. A participant’s benefit
becomes vested when the requirements of this provision are met, and is unvested
before that date.

2.4 Retirement After Normal Retirement Date. If a participant’s employment with
the Company or an Affiliate continues past the participant’s Normal Retirement
Date, Years of Benefit Service shall continue to accrue and Final Average Pay
shall be calculated including reference to Compensation up to the participant’s
actual retirement date. The benefit shall be based on the regular formula for
retirement under 2.1 and related provisions, and no actuarial adjustment shall
be made for starting benefits after Normal Retirement Date.

 

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2.5 Timing of Accrual; When Accrued Benefits Are Not Payable

2.5-1 Benefits become accrued for a participant only after the participant
qualifies for a normal retirement benefit under 2.1-1 or for an early retirement
benefit under 2.3-1 or for an accelerated vested benefit under 6.2, and not
before. No benefit (regardless of whether accrued) shall be payable to any
participant whose employment is terminated for misconduct during employment. No
benefit (regardless of whether benefit payments have begun) shall be payable
with respect to any participant who, after Separation from Service, engages in
competition with the Company or an Affiliate, as determined by the Committee in
accordance with 2.5-3. A participant who engages in Competition within three
years after Separation from Service or within three years after the date of
receiving a lump sum payment if later must repay to the Company any
already-received benefit as provided in 3.3-5(e).

2.5-2 “Misconduct during employment” means:

(a) Committing a fraudulent or otherwise dishonest act related to employment;

(b) Making an unauthorized disclosure of confidential information related to the
Company or any Affiliate if the information was obtained during employment; or

(c) Engaging in Competition while employed.

2.5-3 “Competition” means doing either of the following during employment or
within three years after a Separation from Service:

(a) Making an unauthorized disclosure of confidential information related to the
Company or any Affiliate if the information was obtained during employment; or

(b) Engaging either as an employee, partner, proprietor or otherwise in a
business in competition with the Company or any Affiliate in the manufacture or
sale of investment castings or any other business conducted by the Company or an
Affiliate at any time during the participant’s period of employment. No
forfeiture or absence of a forfeiture shall constitute a waiver of or bar any
other remedy that may be available to the Company or an Affiliate under
applicable law on account of the misconduct or competition.

 

  3. Payment of Benefits

3.1 Start of Benefits. Except as provided in 2, 3.4-2(c) and 6.2, benefits shall
start as of the first day of the month after Separation from Service under
3.2-1. This Plan does not provide for any election to delay the start of
benefits beyond the otherwise applicable benefit starting date, except under
3.4-2(c). In the case of a spouse’s death benefit under 4.1 through 4.3,
benefits shall start with the month that begins after the participant’s death.
Benefit payments shall be made by the end of the month to which they apply in
accordance with the Company’s regular payroll processing schedule.

 

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3.2 Separation from Service

3.2-1 “Separation from Service” shall occur upon termination of all the
Executive’s employment with the controlled group of corporations or commonly
controlled trades or businesses, as defined in Code section 414(b) and (c), of
which the Company is a member. The Executive shall not be regarded as having a
Separation from Service if:

(a) The Executive is on leave from the employer for up to six months or for
longer with reemployment rights protected by statute or contract; or

(b) The Executive provides services to the employer in a capacity other than as
an employee at a rate of 50 percent or more of the level before termination and
for remuneration at an annual rate of 50 percent or more of the Executive’s
average rate of remuneration as an employee in the last three years of
employment or all years if fewer than three.

3.2-2 If the Executive is a Specified Employee and the Company has publicly
traded stock, the Executive’s benefit shall not be paid to the Executive upon a
Separation from Service until six months following the separation date. All
amounts due during such six months shall be paid as soon as practicable after
the six months have expired. “Specified Employee” means a “key employee” as
defined in Code section 416(i), determined without regard to Code section
416(i)(5). The definition of key employee shall be applied by identifying the
highest-paid 50 employees of the Company and Affiliates that are in a controlled
group relationship under Code section 414(b) or (c) during the preceding
calendar year.

3.3 Form of Benefit

3.3-1 The normal form for payment of benefits shall be a monthly annuity for the
life of the participant.

3.3-2 A married participant may elect under 3.3-4 to receive benefits in the
form of an actuarially equivalent contingent annuity with payment continued to
the participant’s spouse in full or at one-half. Actuarial equivalency shall be
determined with reference to the otherwise payable normal benefit and shall be
based on the assumptions applicable to determining comparable benefits under the
PCC Retirement Plan.

3.3-3 Subject to 3.4, a benefit election under 3.3-2 may be made upon enrollment
in this Plan or within 30 days following the marriage of a participant that
occurs before the participant’s benefit starting date under 3.1 or at any other
time that is more than 12 months before the participant’s benefit starting date
under 3.1. The election shall be by written notice mailed or delivered to the
Administrator. An election under 3.3-2 shall no longer be effective if the
participant and spouse do not stay married throughout the period from the
election date to the benefit starting date or if the participant makes a
Subsequent Lump Sum Election under 3.4.

 

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3.3-4 A participant may elect to receive benefits in the form of an actuarially
equivalent lump sum, as follows:

(a) Selecting lump sum as the form of benefits designated in the participant’s
Statement of Participation; or

(b) Making a qualifying Subsequent Lump Sum Election under 3.4.

3.3-5 If a lump-sum payment election under 3.3-4 or 3.4-1 applies to a
participant’s benefit, the following shall apply:

(a) The amount of the lump-sum payment shall be based on the basic supplemental
benefit on retirement under 2.1 or 2.3 as applicable, using Final Average Pay
and Years of Benefit Service and other pertinent benefit formula factors as of
the benefit starting date under 3.1. For a benefit starting date before the
participant’s Normal Retirement Date, the 3 percent adjustment factor in 2.3
shall apply to the extent provided in 2.3-2. The resulting monthly retirement
benefit shall then be converted to an actuarially equivalent present value using
the interest rate and mortality table assumptions specified in 6.2.

(b) A lump-sum payment shall constitute complete satisfaction of the benefit
obligation under this Plan to the participant, and this Plan’s postretirement
death benefit provisions shall not apply. However, the payback obligation under
(e) shall remain in effect.

(c) If a participant dies before starting to receive benefits with a lump-sum
payment election in effect and a surviving spouse qualifies for preretirement
death benefits under 4.3, the surviving spouse benefit shall be the actuarially
equivalent value of the remaining portion of the benefit calculated under
4.3(b), payable in a lump sum. If the participant is unmarried on the date of
death, there is no preretirement death benefit and 4.3 shall not apply. The
actuarial equivalency shall be determined in a manner consistent with (a).

(d) A lump-sum election shall apply to the participant’s entire benefit,
regardless of whether the service to which the participant’s benefit relates is
performed before or after the election is made. Partial lump-sum payment
elections shall not be allowed.

(e) A participant’s election to receive a lump-sum payment shall constitute an
irrevocable agreement by the participant to return the amount received if the
electing participant engages in Competition under 2.5-3 within three years after
termination of employment, or within three years after receipt of the lump sum
distribution, if later. The amount to be returned shall be the full amount
distributed plus interest at 7 percent per annum minus the monthly amounts that
would have been paid to the participant in the normal benefit form up to the
date the Competition began.

 

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3.4 Subsequent Lump Sum Election

3.4-1 After enrollment, a participant may elect once to change the form of
payment of benefits to or from a lump sum payment by filing a Subsequent Lump
Sum Election, subject to 3.4-2.

3.4-2 The following requirements apply to Subsequent Lump Sum Elections under
3.4-1:

(a) The Subsequent Lump Sum Election must be in writing on a form prescribed by
the Administrator, and must be consistent with one of the forms of benefit
provided in 3.3.

(b) The Subsequent Lump Sum Election must be delivered to the Administrator not
less than 12 months before the participant’s benefit starting date under 3.1 (as
determined without regard to a five-year delay under (c)).

(c) A participant may submit one (but not more than one) Subsequent Lump Sum
Election by December 31, 2007. For a change made by a Subsequent Lump Sum
Election received after December 31, 2007, the benefit starting date for the
participant will be delayed five years from the date the benefit would have been
paid if the change had not been made. During the five year delay, there will not
be any pre-retirement death benefit payable. The early retirement reduction
under 2.3-2 will be applied as of the delayed starting date. Any delay beyond
age 65 will be actuarially adjusted to reflect the delay using actuarial
assumptions applicable to determining comparable benefits under the PCC
Retirement Plan.

 

  4. Death Benefits for Spouse

4.1 Subject to 3.4, if a participant dies after starting to receive benefits, or
dies after retiring under 2.1, 2.3 or 2.4 but before starting benefits under
3.1, a death benefit shall be paid only as elected by the participant under 1.3,
1.4 and 3.3. A spouse’s post-retirement death benefit shall only be paid to the
spouse to whom the participant was married on the participant’s benefit starting
date, even if the participant is married to another spouse on the date of death.

4.2 Except as provided in 4.3, if a participant dies before starting to receive
benefits or qualifying under 4.1, no death benefit shall be paid. The surviving
spouse benefits under 4.3 shall only be payable if the participant and spouse
are legally married on the date of death.

4.3 Subject to 1.2-2(e), 3.3-5(c) and 4.2, the surviving spouse of a participant
who dies while employed in employment qualifying the participant to earn
additional Years of Benefit Service and after the participant has earned at
least 10 Years of Eligibility Service, or whose death while so employed is
directly related to the participant’s employment, shall receive a death benefit
as follows:

(a) The benefit shall be a monthly payment for the surviving spouse’s life,
starting on the first day of the month after the participant’s death.

 

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(b) Subject to (c), the amount of the spouse’s monthly benefit shall be the
amount determined under the 50 percent contingent annuity form described in
3.3-2. In determining the amount of the benefit, the participant’s actual Years
of Benefit Service, Final Average Pay and relevant offsets shall be used. On
death of a participant before his or her Normal Retirement Date, the reduction
under 2.3 shall apply. On death of a participant before early retirement age,
the benefit reduction will be calculated with reference to the participant’s
earliest available retirement age (determined by imputing advancing age and
service after death).

(c) If a participant election under 3.3-2 to receive benefits in the form of a
contingent annuity with payments continued to the surviving spouse in full is in
effect, then the amount under (b) shall be determined using that benefit form.

 

  5. No Advance Funding

Benefits shall be paid from the general assets of the Company. The Company may,
but shall not be required to, set aside funds in advance for payment of benefits
under this Plan. Even if funds are set aside, that shall not cause this to be a
funded employee benefit plan. Participants’ rights under this Plan shall be only
as general creditors of the Company.

 

  6. Amendment and Termination

6.1 Regular Procedure. Subject to 6.3, the Board of Directors of the Company may
amend or terminate this Plan on the first day of any month by notice to the
participants subject to the restrictions in Code section 409A but may not revoke
any participant’s benefit that has a value, determined in accordance with 6.2,
as of the revocation date. No value shall be attributed to any spousal survivor
benefit for a participant who has not already retired and commenced benefits or
to the cash-out payment option for any participant regardless of retirement
status. Absent acceleration of vesting under 6.2, the value of an unvested
benefit is zero. No benefit accrues for a participant before the participant
meets the age and service requirements for vesting under 2.3-4.

6.2 Change in Control. If there is a Change in Control, there will be a total
Plan termination effective on the date of the Change in Control and all
participants will be fully vested immediately. A change in ownership of an
Affiliate of the Company that does not occur as part of a Change in Control
under Section 10 will not trigger this 6.2. Vested accrued benefits will be
immediately paid as an accelerated vested benefit. The benefit shall be a
lump-sum payment as of the first day of the month after the Change in Control.
The amount shall be the actuarially determined present value of the
participant’s basic supplemental benefit on retirement, including Final Average
Pay and Years of Benefit Service as of the date of the Change in Control and
relevant offsets calculated and applied in a manner consistent with calculating
a normal retirement benefit, using the following mortality and interest rate
assumptions:

(a) The mortality table shall be the RP2000 Healthy Annuitant mortality tables
(100 percent male for retirees and 100 percent female for spouses) projected to
2010 by scale AA.

 

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(b) The interest rate for each year shall be determined by using the 24-month
average of the Moody’s Long-Term Corporate Bond Yield composite index, ending
with the November of the preceding year, less 110 basis points. Each year’s
interest rate shall remain in effect for distributions that occur at any time
during the year.

No cash-out value shall be attributed to any spousal survivor benefit for a
participant. If a participant qualifies for payment of a benefit under this
provision, but dies before payment of the benefit, the benefit shall be paid to
the participant’s surviving spouse if the participant is married on the date of
death, or to the participant’s estate if the participant is not married on the
date of death.

6.3 Technical, Editorial or Operational Changes. The chief executive officer of
the Company may amend this Plan to make technical, editorial or operational
changes on advice of counsel to comply with applicable law or to simplify or
clarify this Plan. The Committee is also authorized to adopt changes under this
provision, and shall be the only authorized party to adopt such a change if it
affects the benefit of the chief executive officer without having the same
effect on substantially all other similarly situated participants. The chief
executive officer and the Committee may each delegate amendment authority under
this provision to one or more executive officers of the Company, except that no
officer to whom authority is delegated may adopt a change if it affects the
benefit of that officer without having the same effect on substantially all
other similarly situated participants. For example, if applicable tax laws,
regulations, revenue rulings or revenue procedures would require a participant
to report taxable income due to a benefit under this Plan before the benefit is
payable to the participant, this Plan may be amended under this provision to
prevent such premature taxation. The Company, the Committee, the chief executive
officer and their employees, officers, agents and others acting on their behalf
shall not have any liability to any Plan participant or beneficiary with respect
to such premature taxation, regardless of whether or not an amendment has been
made under this provision.

6.4 Notwithstanding any restriction in this Plan, the Company may amend this
Plan from time to time to comply with Code section 409A or with other legal
requirements that would cause material adverse consequences to participants if
violated.

 

  7. Not Contract of Employment

This Plan shall not be a contract of employment between the Company or an
Affiliate and any participant. No participant may object to termination of this
Plan under Section 6. This Plan shall not prevent the Company or an Affiliate
from discharging any participant from employment at any time.

 

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  8. Claims Procedure

8.1 Filing Procedure. Any person claiming a benefit, requesting an
interpretation or ruling under this Plan, or requesting information under this
Plan shall present the request to the Administrator, who shall respond in
writing as soon as practicable. Oral claims must be confirmed in writing by the
claimant within a reasonable time. If no written confirmation is received within
two weeks of an oral claim, the Administrator may state the claim in writing
communicated to the claimant and then proceed on that basis.

8.2 Notice of Denial. If the claim or request is denied, the written notice of
denial shall state:

(a) The reasons for the denial, with specific reference to this Plan’s
provisions on which the denial is based;

(b) A description of any additional material or information required and an
explanation of why it is necessary; and

(c) An explanation of this Plan’s claim review procedure.

8.3 Review Procedure. Any person whose claim or request is denied or who has not
received a response within 30 days may request review by notice in writing to
the Administrator, who shall inform the Committee. The original decision shall
be reviewed by the Committee, which may, but shall not be required to, grant the
claimant a hearing. On review, whether or not there is a hearing, the claimant
may have representation, examine pertinent documents and submit issues and
comments in writing.

8.4 Decision on Review. The decision on review shall ordinarily be made within
60 days. If an extension of time is required for a hearing or other special
circumstance, the claimant shall be so notified and the time shall be 120 days.
The decision shall be expressed in writing and shall state the reasons and the
relevant Plan provisions. All decisions on review shall be final and bind all
parties concerned.

 

  9. General Provisions

9.1 If suit or action is instituted to enforce any rights under this Plan, the
prevailing party may recover from the other party reasonable attorneys’ fees at
trial and on any appeal.

9.2 Any notice under this Plan shall be in writing and shall be effective when
actually delivered or, if mailed, when deposited as registered or certified mail
directed to the Company at the address stated in the Statement of Participation
or to such other address as either party may specify by notice to the other
party. Unless otherwise designated, notices to the Committee or the
Administrator shall be sent to the address specified for the Company.

9.3 The rights of a participant under this Plan are personal. Except for amounts
owing to or claimed by the Company or an Affiliate and except for the limited
provisions of 3.3, no interest of a participant or spouse or representative of a
participant may be directly or indirectly transferred, encumbered, seized by
legal process or in any other way subjected to the claims of any creditor.

 

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9.4 Following termination of employment, a participant shall not be an employee
of the Company or an Affiliate for any purpose and payments under Section 3
shall not constitute salary or wages. A participant shall receive such payments
as retirement benefits, not as compensation for performance of any substantial
services.

9.5 Except as provided in 9.3, this Plan shall be binding upon and inure to the
benefit of the parties and their successors and assigns. If the Company or an
Affiliate merges, consolidates or otherwise reorganizes, or its assets or
business are acquired by another company, this Plan shall be binding upon the
successor company and shall apply to any employment of participants by the
successor company.

9.6 This Plan shall be construed according to the laws of Oregon except as
preempted by federal law.

9.7 The Company may withhold from payments to a participant or surviving spouse
any income tax or other amounts as required by law.

 

  10. Definition of Change in Control

For purposes of determining whether a Change in Control has occurred, the
following definitions shall apply:

10.1 “Change in Control” means a change in ownership of the Company under
Section 10.2, a change in effective control of the Company under 10.3 or a
change in the ownership of a substantial portion of the Company’s assets under
10.4.

10.2 A change in ownership occurs on the date that any one person or more than
one person acting as a group acquires ownership of stock of the Company that,
together with stock already held by such person or group, constitutes more than
50 percent of the total fair market value or total voting power of the Company’s
stock.

10.2-1 A change in ownership will not be deemed to occur if, before the person
or group acquires additional Company stock, the person or group acquiring
Company stock owned, or is treated as owning, more than 50 percent of the total
fair market value or total voting power of Company stock.

10.2-2 An increase in the ownership percentage of the person or group as a
result of a transaction in which the Company redeems its stock for cash or other
property will be treated as an acquisition by the person or group.

10.2-3 Ownership of stock will be determined by applying the rules in Code
section 318(a) and by treating stock underlying a vested option as owned by the
individual who holds the vested option, unless the stock to which the option
applies is not substantially vested as defined in Treasury Regulation section
1.83-3(b) and (j).

 

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10.2-4 Persons will be considered as acting as a group to acquire or hold
Company stock or effective control of the Company to the extent provided by
applicable regulations or other written guidance published by the Internal
Revenue Service.

10.3 A change in effective control of the Company shall occur, regardless
whether a change in ownership occurs under 10.2, on the date that an event
described in 10.3-1 or 10.3-2 occurs, subject to 10.3-3.

10.3-1 A change in effective control occurs on the date that any one person or
more than one person acting as a group acquires (or has acquired during the
12-month period that ends on the date of the most recent acquisition by such
person or group) ownership of Company stock possessing more than 35 percent of
the total voting power of the Company’s stock.

10.3-2 A change in effective control also occurs on the date that a majority of
the Company’s Board of Directors is replaced during any 12-month period by
directors whose election is not endorsed by a majority of the Company’s Board
members prior to the date of election or appointment.

10.3-3 A change in effective control will not result from the acquisition of
additional control of the Company by any person or group that, immediately
before such acquisition, owned more than 35 percent of the total voting power of
the Company’s stock.

10.4 A change in ownership of a substantial portion of the Company’s assets
occurs on the date that any person or more than one person acting as a group
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or group) Company assets with a total
gross fair market value equal to 40 percent or more of the total gross fair
market value of all of the Company’s assets immediately prior to the acquisition
(or series of acquisitions).

10.4-1 “Gross fair market value” for this purpose means the value of the
Company’s assets or the value of the assets being disposed of, without regard to
any liabilities associated with such assets.

10.4-2 No Change in Control occurs solely because the Company transfers assets
to an entity controlled by the Company’s shareholders immediately after the
transfer.

10.4-3 No change in ownership of the Company’s assets is deemed to occur solely
by reason of a transfer of the Company’s assets to any of the following:

(a) A shareholder of the Company (immediately before the asset transfer) in
exchange for the Company’s stock;

(b) An entity, half or more of whose total value or voting power is owned by the
Company (directly or indirectly);

 

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(c) A person or group that owns (directly or indirectly) 50 percent or more of
the value or voting power of all of the Company’s outstanding shares; or

(d) An entity, half or more of whose total value or voting power is owned
(directly or indirectly) by a person who owns 50 percent or more of the value or
voting power of the Company’s outstanding shares.

 

  11. Effective Date

This 2005 Restatement shall be effective January 1, 2005. Procedures for changes
from provisions of the SERP—Level Two Plan shall be implemented according to a
schedule established by the Administrator.

 

COMPANY

    PRECISION CASTPARTS CORP.      

By:

  /s/ William D. Larsson      

Name:

  William D. Larsson      

Title:

 

Senior Vice President and

Chief Financial Officer

      Date signed: December 18, 2006

 

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