Exhibit 10.4

  

 

 

 

 

EDS EXECUTIVE DEFERRAL PLAN

(As Amended and Restated Effective January 1, 2008)

 

 

 

 

 

 

 

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EDS EXECUTIVE DEFERRAL PLAN

(As Amended and Restated Effective January 1, 2008)
 

ARTICLE I

INTRODUCTION

1.1       Restatement.  The EDS Executive Deferral Plan (the "Plan") was
originally established as of January 1, 2000 and was previously restated
effective January 1, 2002. The Compensation and Benefits Committee of the Board
of Directors of Electronic Data Systems Corporation, hereby amends and restates
the Plan in its entirety, effective January 1, 2008, except where specifically
provided otherwise.

1.2      Purpose.  The objective and purpose of the Plan is to attract and
retain competent officers, key executives and highly compensated employees by
offering flexible compensation opportunities to officers, key executives and
highly compensated employees of the Company and to offer them an opportunity to
defer income to be paid at a later date.  The Plan shall not constitute a
"qualified plan" subject to the limitations of Section 401(a) of the Code, nor
shall it constitute a "funded plan," for purposes of such requirements.  The
Plan shall be exempt from the participation and vesting requirements of Part 2
of Title I of ERISA, the funding requirements of Part 3 of Title I of ERISA, and
the fiduciary requirements of Part 4 of Title I of ERISA by reason of the
exclusions afforded plans which are unfunded and maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

2.1       Definitions.  The following words and phrases shall have the meaning
set forth below, unless a different meaning is required by the context in which
the word or phrase is used.

(a)       Account shall mean the bookkeeping account to which a Participant's
deferred Compensation is credited, together with any earnings thereon.  A
Participant's Account shall be segregated into a Pre-2005 Account and a
Post-2004 Account.

(b)       Additional Credits shall mean amounts credited to a Participant's
Account pursuant to Section 4.3, and any earnings thereon.

(c)       Affiliate shall mean (i) a corporation that is a member of a
controlled group of corporations (as determined pursuant to Section 414(b) of
the Code) which includes the Company, and (ii) a trade or business (whether or
not incorporated) which is under common control (as determined pursuant to
Section 414(c) of the Code) of the Company.  For purposes of a Participant's
Post-2004 Account, the Plan shall use the fifty percent (50%) or greater
ownership threshold provided under Treasury Regulation Section 1.409A-1(h)(3) in
applying this Section 2.1(c) to the provisions of Article V.

 

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(d)       Beneficiary shall mean the person or persons, or a trust created for
the benefit of such person or persons, or the Participant's estate, designated
by the Participant in a writing filed with the Plan Administrator to receive
payment of the Participant's Account upon the death of the Participant.

(e)        Board shall mean the Board of Directors of the Company.

(f)        Bonus shall mean (i) any portion of an Eligible Employee's
Compensation payable under the EDS Corporate Bonus Plan (the "Corporate Bonus"),
(ii) any portion of an Eligible Employee's Compensation payable under the
Company's Project Performance Bonus Plan (the "Performance Bonus") and/or (iii)
any portion of an Eligible Employee's Compensation payable as a bonus under the
Company's Bonus Plan for Selling (the "Sales Bonus"), as applicable.  Prior to
January 1, 2005, Bonus meant any portion of an Eligible Employee's Compensation
payable under the Company's executive bonus program as in effect from time to
time ("EBP Bonus"), or designated and payable by the Company or Participating
Employer as a bonus.

(g)        Cash Dividend Equivalent shall mean, with respect to any dividend
declared on Common Stock, an amount of cash equal to the per-share value of such
dividend (whether payable in cash or property).

(h)        Cause shall mean a Participant has:

(i)         engaged in material misconduct in association with his/her position
with the Employer;

(ii)        materially failed to follow and/or violated the Employer's policies
(including without limitation the Employer's Code of Business Conduct, as
amended from time to time), directives or orders applicable to employees holding
comparable positions;

(iii)       intentionally destroyed or stolen Employer property or falsified
Employer documents;

(iv)       been convicted of a felony or any crime involving moral turpitude;

(v)       without the express, prior written consent of the Employer's General
Counsel, engaged in any of the conduct described in subparagraphs (a) through
(d) below, either directly or indirectly, individually or as an employee,
contractor, consultant, partner, officer, director or stockholder (other than as
a stockholder of less than 5% of the equities of a publicly trade corporation)
or in any other capacity for any person, firm, partnership or corporation:

 

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(a)       during the Participant's employment with the Employer or during the
6-month time period thereafter, the Participant performed duties as or for a
direct competitor of the Employer in the geographic region in which the
Participant provided services to the Employer during the 6-month period
preceding the Participant's termination (i) which are the same or similar to the
duties performed by the Participant at any time during the 12-month period
preceding the Participant's termination; or (ii) which involved the use or
disclosure of any confidential information which the Participant received,
obtained or acquired during, or as a consequence of, his/her employment with the
Employer;

(b)       during the time of the Participant's employment with the Employer or
during the 12-month time period thereafter, the Participant performed duties for
any current client or prospective client of the Employer with whom the
Participant interacted during the 6-month period preceding his/her termination
(i) which are the same or similar to the duties performed by the Participant at
any time during the 12-month period preceding the Participant's termination; or
(ii) which involve the use or disclosure of any confidential information which
the Participant received, obtained or acquired during, or as a consequence of,
his/her employment with the Employer;

(c)       during the time of the Participant's employment with the Employer or
during the 12-month time period thereafter, the Participant was involved in the
inducement of or otherwise encouraged the Employer's employees, clients, or
vendors to currently and/or prospectively breach, modify, or terminate any
agreement or relationship they have or had with the Employer within the 12‑month
period prior to the Participant's termination; or

(d)       during the time of the Participant's employment with the Employer or
during the 12-month time period thereafter, the Participant participated
voluntarily with or provided assistance or information to any person or entity
with regard to (i) negotiations with the Employer involving a contract or
services to be rendered by the Employer, regarding such contract or services; or
(ii) a potential or existing business or legal dispute with the Employer,
including, but not limited to, litigation, except as may be required by law; or

 

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(vi)      during the time of his/her employment or during the 12-month time
period thereafter, without the express, prior written consent of a Company
officer, engaged in any of the conduct described in subparagraphs (a) and (b)
below, either directly or indirectly, individually or as an employee,
contractor, consultant, partner, officer, director or stockholder (other than as
a stockholder of less than 5% of the equities of a publicly held corporation) or
in any other capacity for any person, firm, partnership or corporation:

(a)       hired, attempted to hire or assisted any other person or entity in
hiring or attempting to hire any current employee of the Employer or any person
who was an employee of the Employer within the 12-month period prior to the
termination of the Participant's employment; or

(b)       solicited, diverted, or took away, in competition with the Employer,
the business or patronage of any current Employer client or any prospective
client with whom the Participant had involvement on behalf of the Employer
during the 6-month period preceding the Participant's termination. 
Notwithstanding the foregoing, this prohibition does not apply to any person or
entity who is no longer a client or prospective client at the time of any such
solicitation by the Participant.

(i)        Change of Control shall, with respect to a Participant's Pre-2005
Account, mean a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or in response to any similar item on any similar schedule or form) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or
not the Company is then subject to such reporting requirement; provided,
however, that, without limiting the generality of the foregoing, a Change of
Control shall be deemed to have occurred (irrespective of the applicability of
the initial clause of this provision) if at any time (a) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding (i)
any employee benefit plan of the Company or any Affiliate, and (ii) any entity
organized, appointed or established by the Company pursuant to the terms of any
such plan) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two‑thirds of the
members of the Board in office immediately prior to such person's attaining such
percentage interest; (b) the Company is a party to a merger, consolidation,
share exchange, sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board in office immediately prior to such
transaction or event constitute less than a majority of the whole Board
thereafter; or (c) during any period of two consecutive years,

 

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individuals who at the beginning of such period constituted members of the Board
(including for this purpose any new member whose election or nomination for
election by the Company's stockholders was approved by at least two-thirds of
the members of the whole Board then still in office who were members of the
Board at the beginning of such period) cease for any reason to constitute a
majority of the whole Board.

Change of Control shall, effective January 1, 2005 with respect to a
Participant's Post-2004 Account, mean a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the
assets of the Company, as defined and determined under Section 409A except as
modified by the following sentence.  In accordance with Section 409A, a Change
of Control shall be deemed to occur on the date upon which one of the following
events occurs:

(i)        any one person, or more than one person acting as a group, acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50% of either the total fair market value or
total voting power of the stock of the Company; or

(ii)        any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the Company
possessing 30% or more of the total voting power of the stock of the Company; or

(iii)       a majority of members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election; or

(iv)       any one person, or more than one person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have
a total gross fair market value equal to 40% or more of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions.

(j)        CIC Event shall mean such term as defined in Section 6.2.

(k)       Code shall mean the Internal Revenue Code of 1986, as amended.

(l)        Commissions shall, effective January 1, 2006, mean that portion of an
Eligible Employee's Compensation payable in the form of a commission under the
Company's Bonus Plan for Selling.  Prior to January 1, 2006, "Commissions" meant
that portion of an Eligible Employee's Compensation designated as, and payable
by the Company or a Participating Employer in the form of, a commission.

 

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(m)      Committee shall mean the Compensation and Benefits Committee of the
Board, or any successor thereto.

(n)       Common Stock shall mean the common stock, par value $.01 per share, of
the Company.

(o)       Company shall mean Electronic Data Systems Corporation, a Delaware
corporation.

(p)       Compensation shall mean the total earnings prior to withholding
(excluding any imputed income items) payable to any Employee by an Employer for
a Plan Year, disregarding any Deferral Election under the Plan, and increased by
amounts not included in income through a salary reduction election made pursuant
to a cafeteria plan described in Code Section 125 or the EDS 401(k) Plan.  The
term "Compensation" shall exclude (i) compensation from awards under any stock
option, stock or restricted stock award plan of an Employer, and the exercise of
any grant, option or right thereunder, (ii) extraordinary expenses such as
moving expenses, overseas living allowances, car allowance or imputed value of
group life insurance; (iii) benefit dollars provided to purchase certain health
and welfare benefits in the EDS Flexible Benefit Program and (iv) any other
payments or benefits under any other employee benefit plan of an Employer.

(q)       Current Year Election shall mean an irrevocable Deferral Election made
by an individual described in Section 4.1(b) after such individual's date of
hire or salary increase, which is applicable to base salary only that is payable
for services to be performed starting on the first day of the calendar month
after such Deferral Election is made, but in the same Plan Year in which such
Deferral Election is made.  An individual who is eligible to make a Current Year
Election pursuant to Section 4.1(b) must make such Current Year Election during
the twenty- five (25) day period commencing on the individual's Eligibility
Date.

(r)        Deferral Election shall mean the agreement between the Company or
Participating Employer and an Eligible Employee pursuant to which the Eligible
Employee consents to participation and the deferral of Compensation hereunder,
and designates the amount of Compensation to be deferred.

(s)       Deferral Election Deadline shall mean the following for the respective
deferrable items of Compensation:  (i) the Deferral Election Deadline for
Corporate Bonuses for a Plan Year is June 30 of that Plan Year; (ii) the
Deferral Election Deadline for base salary for a Plan Year is December 15 (or,
if December 15 falls on a Saturday or Sunday or on a legal holiday, the next
business day immediately following December 15) of the preceding Plan Year; and
(iii) the Deferral Election Deadline for Commissions, Performance Bonuses and
Sales Bonus for a Sales and Performance Compensation Deferral Period (as defined
in Section 4.1(a)) is December 15 (or, if December 15 falls on a Saturday or
Sunday or on a legal holiday, the next business day immediately following
December 15) of the preceding Plan Year.  Notwithstanding the above, however,
the following rules shall apply:

 

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(1)       The Deferral Election Deadline for an Employee who becomes a Springing
Eligible Employee (as such term is defined in Section 2.1(x)(3)), who is newly
hired (and otherwise eligible to defer by reason of Section 2.1(x)(2)) or who
becomes a Transitioned Employee (and otherwise eligible to defer by reason of
Section 2.1(x)(4)) on or after November 1, but on or before December 31, shall
be the twenty-fifth (25th) day after the Employee's Eligibility Date; provided,
however, that any Deferral Election made pursuant to this Section 2.1(s)(1)
shall be applicable only with respect to (i) base salary that is payable for
services to be performed starting on the first day of the calendar month after
the Deferral Election is made and (ii) Commissions, Performance Bonuses and
Sales Bonuses, as applicable, for the following Sales and Performance
Compensation Deferral Period.  Notwithstanding the October 1, 2005 Eligibility
Date in Section 2.1(w) or any other provision to the contrary, an Employee who
is described in this Section 2.1(s)(1) and who satisfies the requirements in
Section 2.1(s)(2) for a Corporate Bonus Deferral Election in the following Plan
Year shall be eligible to make such Corporate Bonus Deferral Election.

(2)       A Corporate Bonus Deferral Election shall only be available for a Plan
Year if (i) the Corporate Bonus for that Plan Year satisfies the definition of
"performance-based compensation" set forth in Treasury Regulation Section
1.409A-1(e) and (ii) as of the date of the Corporate Bonus Deferral Election
Deadline, the Corporate Bonus is not both substantially certain to be paid and
readily ascertainable.  If a Corporate Bonus does not satisfy both (i) and (ii)
for a Plan Year, then no Bonus Deferral Election may be made for that Plan
Year.  Further, notwithstanding anything herein to the contrary, only those
Participants who perform services continuously from the date upon which the
Corporate Bonus performance criteria for a Plan Year are established through the
date the Participant makes a Corporate Bonus Deferral Election for that Plan
Year shall be eligible to make a Corporate Bonus Deferral Election for that Plan
Year.  In no event shall a Corporate Bonus be subject to a Current Year
Election.

(3)       In the case of those Eligible Employees who were inadvertently
excluded from the base salary and Commission Deferral Election process for the
2005 Plan Year due to an administrative error in calculating their Earnings as
of the 2005 Plan Year's Eligibility Date, the Deferral Election Deadline for
such Eligible Employees is March 15, 2005 and the Deferral Election shall only
apply to deferrable items of Compensation for the 2005 Plan Year that are
payable for services to be performed after such Deferral Election is made. 
Eligible Employees who are entitled to make the Deferral Elections described in
the immediately preceding sentence may make such elections during the period
March 1, 2005 through March 15, 2005. 

 

 

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(t)        Disabled shall mean, with respect to a Participant's Pre-2005
Account, when the Participant begins to receive payments under the Employer's
long-term disability plan and with respect to a Participant's Post-2004 Account,
Disabled shall mean that the Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months; or (ii) is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than 3 months under an accident and health plan covering employees of the
Participant's Employer.

(u)       Dividend Equivalent shall mean, with respect to any dividend declared
on Common Stock, a number of stock units (including fractional stock units)
determined by dividing (i) the product of the per-share dividend multiplied by
the number of stock units credited to the Stock Equivalent Portion of a
Participant's Account as of the applicable record date for such dividend by
(ii) the Fair Market Value of a share of Common Stock on such record date.

(v)       EDS 401(k) Plan shall mean the employee retirement plan intended to
qualify under Code Sections 401(a) and 401(k) as established by the Company
effective July 1, 1983, as amended from time-to-time, any successor to such
plan, and any other plan of the Company or an Affiliate intended to qualify
under Code Sections 401(a) and 401(k) as may be designated by the Committee.

(w)      Eligibility Date means October 1, 2005, and each succeeding October 1
thereafter provided that for purposes of Corporate Bonus Deferral Elections made
during June 2005 the Eligibility Date means May 1, 2005.  In the case of an
Eligible Employee described in 2.1(x)(2), "Eligibility Date" means the first day
of the calendar month following the calendar month in which the Employee is
newly hired while in the case of an Eligible Employee described in 2.1(x)(3) or
(4), "Eligibility Date" means the first day of the calendar month following the
calendar month in which the Employee is designated as an Eligible Employee by
the Company's Vice President, Global Compensation and Benefits.

(x)        Eligible Employee shall mean an Employee of the Company or a
Participating Employer who, as of the Eligibility Date, satisfies the following
requirements:

(1)        an Employee on the U.S. payroll of the Company or other Participating
Employer whose Compensation

(A)       as of the Eligibility Date, includes salary payable at a rate equal to
or in excess of the Section 401(a)(17) Limitation, or

 

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(B)       For the 12 month period ended September 30 (or, for the 12 month
period ended April 30 for purposes of the Corporate Bonus Deferral Elections
made during June 2005) equaled or exceeded the Section 401(a)(17) Limitation; or

(2)       an Employee on the U.S. payroll of the Company or other Participating
Employer who is hired after the October 1 Eligibility Date and who otherwise
would have been an Eligible Employee under the provisions of subdivision (1)
above; or

(3)       an Employee on the U.S. payroll of the Company or other Participating
Employer who, by reason of salary increase satisfies the eligibility provisions
of subdivision (1) above after the October 1 Eligibility Date ("Springing
Eligible Employee"); or

(4)       a Transitioned Employee acquired before or after the October 1
Eligibility Date, but only if (i) during the 12-month period ending on September
30 (or, for the 12 month period ended April 30 for purposes of the Corporate
Bonus Deferral Elections made during June 2005), the Transitioned Employee
received combined compensation from his or her prior employer(s) and the Company
(or other Participating Employer) in an amount which would have otherwise
classified him or her as an Eligible Employee under subdivision (1)(B) above,
and (ii) the Transitioned Employee is so designated as an Eligible Employee by
the Company's Vice President, Global Compensation and Benefits.

If an Employee becomes an Eligible Employee pursuant to the provisions of
subsection (2), (3) or (4), he or she shall remain an Eligible Employee for two
Plan Years.  After such time, the Employee shall no longer be an Eligible
Employee unless he or she meets the requirements to be an Eligible Employee
under the other provisions of this Section 2.1(x) (disregarding subsection (2),
(3) or (4), as applicable, for such purposes).

Notwithstanding the foregoing, the following Employees shall not be Eligible
Employees:

(1)        non-resident aliens who are not subject to United States federal
income taxation on Compensation;

(2)        resident aliens who are not subject to United States federal income
taxation on Compensation;

(3)        U.S. citizens residing (whether permanently or temporarily) outside
the United States;

(4)        any person hired by a foreign entity in which the Company has a
direct or indirect ownership interest; and

 

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(5)        any person eligible to participate in the EDS Puerto Rico Savings
Plan.

Notwithstanding the foregoing, any Employee whom the Plan Administrator
determines is not a member of a select group of management or a highly
compensated employee will not be an Eligible Employee.

(y)      Employee shall mean any person employed as an employee by an Employer
and on the payroll of an Employer.  If a person's status as an employee is
redetermined retroactively, such redetermination shall not affect participation
in the Plan prior to the redetermination.

(z)        Employer shall mean the Company and Participating Employers.  A list
of the Employers which participate in this Plan is attached as Appendix A.

(aa)      ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.

(bb)     Fair Market Value of a share of Common Stock shall mean, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported, (ii)
if shares of Common Stock are not so listed but are quoted on the Nasdaq
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the Nasdaq National Market on that date, or, if
there shall have been no such sales reported on that date, on the last preceding
date on which such a sale was so reported, or (iii) if the Common Stock is not
so listed or quoted but is traded in the over‑the‑counter market, the mean
between the closing bid and asked price on that date, or, if there are no
quotations available for such date, on the last preceding date on which such
quotations shall be available, as reported by the Nasdaq Stock Market, or, if
not reported by the Nasdaq Stock Market, by the National Quotations Bureau
Incorporated.

(cc)      FICA shall mean the taxes imposed under the Federal Insurance
Contributions Act for which withholding from employees may be required from time
to time.

(dd)     Fixed-Income Equivalent Portion shall mean that term as defined in
Section 4.4(a).

(ee)     IP Award shall mean any RSU, option or other award granted to an
Employee under the SIP. 

(ff)       Leave of Absence shall mean any Employee's absence from active
employment with an Employer by reason of leave granted in conformity with the
Employer's policy other than a Disability Leave of Absence or a Permitted
Absence.

 

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(gg)      Participant shall mean each Eligible Employee who has properly
completed and filed a Deferral Election with the Plan Administrator and each
Eligible Employee who has been credited with discretionary additional credits
pursuant to Section 4.3(c).

(hh)      Participating Employer shall mean any Affiliate which, with the
consent of the Committee, elects to become and accepts the obligations of an
Employer hereunder.

(ii)        Plan shall mean this EDS Executive Deferral Plan, as amended from
time to time.

(jj)        Plan Administrator shall mean the Committee or such person or entity
designated and authorized by the Committee under Section 8.1 to act as Plan
Administrator.

(kk)      Plan Year shall mean the calendar year.

(ll)        Pre-2005 Account shall mean that portion of a Participant's Account
as of December 31, 2004 that is "earned and vested" (as defined in Section
409A), plus subsequent rates of return on that amount calculated pursuant to
Section 4.4.

(mm)    Post-2004 Account shall mean the remainder of a Participant's Account
after subtracting the amount of the Pre-2005 Account.

(nn)      Restricted Period shall mean such term as defined in Section 5.2.

(oo)     RSU shall mean a restricted stock unit IP Award.  Effective January 1,
2005, no new RSU Deferral Elections are permitted under the Plan.  Any
references in the Plan to RSUs applies to RSU Deferral Elections that were made
prior to January 1, 2005.

(pp)     Section 401(a)(17) Limitation shall mean the dollar amount established
by Code Section 401(a)(17) which limits the annual compensation of each employee
taken into account under a qualified plan.

(qq)     SIP shall mean the 1996 Incentive Plan of Electronic Data Systems
Corporation.

(rr)       Section 409A shall mean Section 409A of the Code and any regulations
or other guidance promulgated thereunder.

(ss)      Specified Employee shall, for the period described in the last
sentence of this paragraph, mean a Participant who at any time during the
12-month period ending on the immediately preceding December 31 (the
"Determination Period") met the definition of "key employee" as defined and
determined under Internal Revenue Code Section 416(i) and the regulations
thereunder because the Participant was: (i) an officer of the Company or an
Affiliate with Key Employee Compensation of at least $130,000 (as adjusted
pursuant to Code Section 416(i)(1)(A)); (ii) a 5% owner of the Company; or (iii)
a 1% owner of the Company with Key Employee Compensation of at least $150,000. 
For purposes of (i) above, only an employee of the Company or an Affiliate who,
based solely on the nature of his or her respective duties, was an officer of

 

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the Company or an Affiliate during the Determination Period and whose Key
Employee Compensation during the Determination Period, when ranked with all
other such officers of the Company and Affiliates, was one of the fifty highest
compensated officers during the Determination Period, shall be considered an
officer of the Company or an Affiliate, as the case may be, during such
Determination Period.  If a Participant was a key employee during a
Determination Period pursuant to the foregoing provisions, the Participant shall
be considered a "Specified Employee" for the 12‑month period commencing on the
April 1 immediately following such Determination Period provided that (A) each
Participant who was a key employee during the Determination Period ended
December 31, 2004 shall be considered a "Specified Employee" for the period
January 1, 2005 through March 31, 2006 and (B) for the period January 1, 2005
through March 31, 2006 only, the "key employees" for the Determination Period
ended December 31, 2004 shall include both (I) the fifty highest compensated
officers of just the Company and (II) the fifty highest compensated officers of
the Company and its Affiliates on an aggregate basis. 

For purposes of this Section 2.1(ss), the determination of which Participants
are "key employees" pursuant to the preceding paragraph shall, in accordance
with Treasury Regulation Section 1.415(c)-2(g)(5)(ii), be made by excluding all
compensation of employees of the Company and its Affiliates who were
"nonresident aliens" (as such term is defined in Treasury regulation
Section 1.409A-1(j)) during the applicable Determination Period provided that
such exclusion is made in all of the Company's and its Affiliates' other
nonqualified deferred compensation plans and arrangements that are subject to
Section 409A.  In addition, for purposes of this Section 2.1(ss), the term "Key
Employee Compensation" means, in accordance with Treasury Regulation
Section 1.415(c)‑2(d)(4), compensation received from the Company and any
Affiliates that is required to be reported under Code Sections 6041 and 6051 and
6052 (i.e. Box 1 compensation) but, except as provided in the immediately
preceding sentence, determined without regard to any rules that limit
remuneration included in wages based on the nature or location of the employment
or the services performed, increased by amounts excluded from compensation in
lieu of benefits under a cash or deferred arrangement under Code Section 401(k),
a cafeteria plan under Code Section 125 or a salary reduction agreement under
Code Section 132(f)(4).

(tt)       Stock Equivalent Portion shall mean that term as defined in Section
4.4(a).

(uu)     Transitioned Employee means an Employee who becomes employed by an
Employer by reason of a merger or acquisition transaction.  A Transitioned
Employee shall be considered to be a Transitioned Employee on the date he or she
is first employed by an Employer.

 

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(vv)     Valuation Date shall mean the last business day of each calendar month,
or more frequently as authorized by the Plan Administrator.

2.2       Construction.  If any provision of this Plan is determined to be for
any reason invalid or unenforceable, the remaining provisions of this Plan shall
continue in full force and effect.  All of the provisions of this Plan shall be
construed and enforced in accordance with the laws of the State of Delaware
(other than its laws regarding choice of laws) and shall be administered
according to the laws of such state, except as otherwise required by ERISA, the
Code or other applicable federal law.  The masculine gender, where appearing in
this Plan, shall include the feminine gender, and vice versa.  The terms
"delivered to the Plan Administrator" and "filed with the Plan Administrator,"
as used in this Plan, shall include, respectively, delivery to and filing with a
person or persons designated by the Plan Administrator for the disbursement and
the receipt of administrative forms.  Whenever a Participant is required to make
a "filing" of an election or form or required to make a submission in "writing"
under this Plan, such "filing" or "writing" requirement may be satisfied by the
Participant electronically (but only if the Plan Administrator has designated
that such requirement may be satisfied electronically).  Headings and
subheadings in the Plan are for the purpose of reference only and are not to be
considered in the construction of this Plan.

2.3       Compliance with Section 409A.  To the extent applicable, it is
intended that this Plan comply with the provisions of Section 409A with respect
to Post-2004 Accounts.  With respect to Pre-2005 Accounts, it is intended that
such accounts qualify for "grandfathered" status and continue to be governed by
the law applicable to nonqualified deferred compensation prior to enactment of
Section 409A.  This Plan shall be administered in a manner consistent with this
intent, and any provision that would cause a Post-2004 Account to fail to
satisfy Section 409A shall have no force and effect until amended to comply with
Section 409A (which amendment may be retroactive to the extent permitted by
Section 409A and may be made by the Company without the consent of the affected
Participants).

ARTICLE III

PARTICIPATION AND VESTING

3.1      Eligibility and Participation.  An Eligible Employee who properly
completes and files with the Plan Administrator a Deferral Election pursuant to
which a portion of his Compensation is deferred under the Plan shall become a
Participant.  A Participant shall remain a Participant until his entire Account
under the Plan is extinguished, through distribution or otherwise.  An Eligible
Employee shall also become a Participant if he or she is credited with
discretionary additional credits pursuant to Section 4.3(c).

 

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3.2      Ceasing to be an Eligible Employee.  Status as an Eligible Employee
will be redetermined from time to time, at least annually.  If an individual
ceases for any reason to be an Eligible Employee, through termination of
employment or otherwise, his Deferral Election shall forthwith terminate, and he
shall not again become eligible to make a Deferral Election until he again
becomes an Eligible Employee; provided, however, that an Eligible Employee who
ceases to be an Eligible Employee by reason of not having the requisite Earnings
under Section 2.1(x)(1) shall continue to be an Eligible Employee (and shall
continue to be eligible to make a Deferral Election) for the Plan Year and/or
the Sales and Performance Compensation Deferral Period (as defined in Section
4.1(a)) immediately following the Eligibility Date on which he or she fails to
meet the Earnings requirements of Section 2.1(x)(1).

3.3       Vesting.  Except as provided below, a Participant shall at all times
be fully vested in and have a nonforfeitable right to amounts credited to his
Account.

(a)        Deferred RSUs Subject to Restrictions.  Restricted deferred RSUs
shall be subject to forfeiture as provided in Section 5.2.

(b)       Early Distribution Penalty.  A Participant who, with respect to the
Participant's Pre-2005 Account, receives an early distribution pursuant to
Section 5.5 shall incur a forfeiture as provided in such section.

(c)       Forfeiture of Additional Credits for Cause.  Notwithstanding a
Participant's eligibility for a distribution from or of his/her Account, the
portion of a Participant's Account attributable to Additional Credits shall be
subject to forfeiture at the Committee's discretion if, upon consideration of
the facts and circumstances and any advice or recommendation of the Employer,
the Committee finds that Cause exists.  Similarly, in the event the Committee,
in its discretion, upon consideration of the facts and circumstances and any
advice or recommendation of the Employer, concludes, subsequent to the
Participant's receiving a distribution (or distributions) of any portion of
Additional Credits from his/her Account (including any Dividend Equivalents
received thereon), that the Participant violated the non-compete and/or
non-solicitation provisions of Section 2.1(h), the Participant shall be required
to reimburse the Employer in an amount equal to such distribution(s).

(d)       Waiver and Release.  If a Participant or Beneficiary refuses or fails
to execute a binding waiver and release in such form as the Committee may
require as a condition of participating in the Plan or receiving a distribution
from or of a Participant's Account, the Committee may, in its discretion, direct
that all or any portion of such Account be forfeited.

 

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ARTICLE IV

DEFERRAL ELECTIONS, MATCHING CREDITS

AND ACCOUNTING

4.1       Deferral Elections. 

(a)       Elections.  Eligible Employees shall be notified of their status as
such.  Each Eligible Employee shall be provided an opportunity to make Deferral
Elections prior to the Deferral Election Deadline.  Notwithstanding anything
herein to the contrary, no Deferral Elections for Commissions, Performance
Bonuses or Sales Bonuses shall be permitted for Commissions, Performance Bonuses
or Sales Bonus paid during the period January 1, 2006 through March 31, 2006. 
Effective April 1, 2006, an Eligible Employee's Commission, Performance Bonus
and/or Sales Bonus Deferral Election shall apply to all Commissions, Performance
Bonuses and Sales Bonuses paid to the Eligible Employee during the twelve (12)
month period of April 1 through March 31 that immediately follows the
Commission, Performance and Sales Bonus Deferral Election Deadline set forth in
the first paragraph of Section 2.1(s) or in Section 2.1(s)(1), as applicable
(the "Sales and Performance Compensation Deferral Period"). 

Deferral Elections for a Plan Year and a Sales and Performance Compensation
Deferral Period shall be made on forms provided by the Plan Administrator. 
Deferral Elections shall be filed with the Plan Administrator no earlier than
the date permitted by the Plan Administrator and no later than the Deferral
Election Deadline.  Deferral Elections for a Plan Year and a Sales and
Performance Compensation Deferral Period shall become irrevocable on the
Deferral Election Deadline.

(b)       Current Year Elections.  Notwithstanding the foregoing, an individual
who meets the requirements to be an Eligible Employee on the first day of the
calendar month following his or her date of hire shall be eligible to make a
Current Year Election, if his or her date of hire is prior to November 1.   In
addition, an individual who, by reason of salary increase, meets the
requirements to be an Eligible Employee on the first day of the calendar month
following the salary increase, shall be eligible to make a Current Year
Election, if such salary increase and the designation by the Company's Vice
President, Global Compensation and Benefits that the individual is eligible to
make a Current Year Election both occur prior to November 1.  A Transitioned
Employee who is an Eligible Employee solely by reason of Section 2.1(x)(4) shall
not be eligible to make a Current Year Election.

 

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(c)       New Elections and Terminations of Elections.  A new Deferral Election
will be required for each Plan Year and each Sales and Performance Compensation
Deferral Period.  A Participant's Deferral Election shall automatically
terminate on the earlier of (i) the Participant's termination of employment,
(ii) the date the Participant is disabled or (iii) the date provided in Section
4.1(g).  For purposes of this Section 4.1(c), "disabled" means a medically
determinable physical or mental impairment resulting in the Participant's
inability to perform the duties of his or her position or any substantially
similar position, where such impairment can be expected to result in death or
can be expected to last for a continuous period of not less than six months.

(d)      Separate Elections; Limitations on Elections.  Separate Deferral
Elections may be made with respect to Corporate Bonuses, Performance Bonuses
Sales Bonuses, base salary and Commissions.  Deferral Elections must be made in
whole percentage increments of at least 1% where dollars will be rounded down up
to the next whole dollar.  Any amounts which are not deferred by reason of being
rounded down shall be paid to the Participant as Compensation through the usual
payroll process.

For any Plan Year and/or Sales and Performance Compensation Deferral Period, an
Eligible Employee may make a Deferral Election with respect to a maximum of:

(i)         50% of base salary that is earned and would otherwise be payable in
the Plan Year earned,

(ii)        100% of Corporate Bonuses that are earned in the Plan Year and would
otherwise be payable in the following Plan Year,

(iii)       100% of the Participant's Commissions, Performance Bonuses and Sales
Bonuses, as applicable, that are earned in the Plan Year and would otherwise be
payable in the Sales and Performance Compensation Deferral Period commencing
during the Plan Year.

Notwithstanding anything herein to the contrary, the Deferral Election in (iii)
above shall not apply to payments of an Eligible Employee's Commissions and/or
Sales Bonuses that have been deferred pursuant to the terms of the Company's
Bonus Plan for Selling.

(e)       Deferral Limitations for Current Year Elections.  Individuals who are
eligible to make a Current Year Election under Section 4.1(b) may defer base
salary only under such Current Year Election, and shall not be eligible to defer
Corporate Bonuses, Commissions, Performance Bonuses or Sales Bonuses under such
Current Year Election.

 

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(f)        Withholding for Deferrals.  Amounts deferred pursuant to a
Participant's Deferral Election shall be credited to a Participant's Account as
soon as administratively practicable after such amount would otherwise have been
paid to the Participant.  The amount credited to the Account shall not be
reduced by any applicable taxes (including but not limited to FICA taxes). 
Instead, at the discretion of the Company, any amounts required to be withheld
for taxes with respect to amounts deferred pursuant to a Participant's Deferral
Election shall be withheld from other cash compensation of the Participant or
shall be satisfied by payment by personal check from the Participant to the
Company as the Company may permit on a case‑by‑case basis.

(g)       Limit on Deferral Elections After Hardship Distribution. 
Notwithstanding any other provision of this Section 4.1 to the contrary, if a
Participant in this Plan takes a hardship distribution from the EDS 401(k) Plan,
then the Participant's Deferral Election for the remainder of that Plan Year and
the remainder of that Sales and Performance Compensation Deferral Period (and,
if applicable, the immediately following Plan Year and the immediately following
Sales and Performance Compensation Deferral Period) shall automatically
terminate on the date the Participant must cease making elective deferrals under
the EDS 401(k) Plan. Thereafter, effective as of the start of the first Plan
Year and the first Sales and Performance Compensation Deferral Period
immediately following the expiration of the period during which the Participant
must cease making elective deferrals under the EDS 401(k) Plan, the Participant,
if otherwise an Eligible Employee for such Plan Year and such Sales and
Performance Compensation Deferral Period, may make a Deferral Election pursuant
to Section 4.1 for such Plan Year and such Sales and Performance Compensation
Deferral Period.

(h)        Other Limitations.  In the event that the Stock Equivalent rate of
return is eliminated pursuant to Section 4.4(c), then the Vice President, Global
Compensation and Benefits may, in his sole discretion, eliminate one or more of
the forms of compensation that are identified under Section 4.1(d) as eligible
for a Deferral Election.

4.2       Accounting for Deferred Compensation.  The Plan Administrator shall
maintain a Pre‑2005 Account (if applicable) and a Post-2004 Account in the name
of each Participant.  The value of each Pre-2005 Account and Post-2004 Account
shall be adjusted as of each Valuation Date to reflect the deferred Compensation
credited thereto, the rate of return credited (or charged) to such Account, and
any amounts distributed or withdrawn from such Account since the most recent
prior Valuation Date.  In the sole discretion of the Plan Administrator, one or
more additional sub-Accounts may be established for each Participant to
facilitate recordkeeping convenience and accuracy.

Establishment and maintenance of Accounts hereunder shall not be construed as
giving any person any interest in assets of the Company or an Affiliate, or a
right to payment other than as provided hereunder.  An Account shall be
maintained until all amounts credited to such Account have been withdrawn,
distributed, forfeited, or otherwise extinguished in accordance with the terms
and provisions of this Plan.

 

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4.3       Additional Credits.

(a)       Deemed Limit Credit.  A Participant's Post-2004 Account shall be
eligible to be credited each Plan Year with an amount ("Deemed Limit Credit")
equal to 1.5% of the amount, if any, by which the Participant's Compensation
exceeds the Section 401(a)(17) Limitation for such Plan Year.  Deemed Limit
Credits will be credited to a Participant's Post-2004 Account for a Plan Year
only to the extent the Participant has deferred in such Plan Year for immediate
allocation to the Stock Equivalent Portion of his Account Compensation (not
including any RSUs) in an amount at least equal to the amount of the Deemed
Limit Credit.  Deemed Limit Credits, if made, shall be credited as of the last
day of the Plan Year, and only if the Participant is an Eligible Employee as
defined in Section 2.1(x), but determined as of the last day of the Plan Year
instead of as of the Eligibility Date; provided, however, that this last day of
the Plan Year requirement shall not apply to any Participant who is not an
Eligible Employee as of the last day of the Plan Year solely because (i) he or
she is a U.S. citizen who is residing (whether permanently or temporarily)
outside the United States, or (ii) as of the last day of the Plan Year, he or
she does not meet the income threshold for Eligible Employee status set forth in
Section 2.1(x)(1).  Deemed Limit Credits that were made under the Plan prior to
January 1, 2005 are reflected in the Pre-2005 Accounts of those Participants who
received such Deemed Limit Credits.

(b)       Match of Amounts Deferred into Stock.  No further Match credits are
made to the Plan effective January 1, 2005.  Prior to January 1, 2005, a
Participant's Pre-2005 Account was credited each Plan Year with an amount
("Match") based on the amount of Bonus and Matchable Compensation (as defined
below) deferred in such Plan Year with respect to which the Participant
immediately elected the Stock Equivalent rate of return.  The amount of the
Match was equal to 25% of the sum of (i) the amount of the Bonus so deferred (up
to a maximum deferral of 25% of the pre-deferral Bonus) plus (ii) the amount of
deferred Matchable Compensation (up to a maximum deferral of 15% of the
pre-deferral amount of Matchable Compensation). "Matchable Compensation" for
this purpose was Compensation (other than RSUs or Bonuses and other than amounts
arising under a plan or agreement providing for payment (as opposed to
acceleration) of amounts in the event of a Change of Control).  Such Match (net
of applicable withholding for taxes) was credited to the Participant's Pre-2005
Account as of the last day of the Plan Year, and only if the Participant was an
Eligible Employee as defined in Section 2.1(x), but determined as of the last
day of the Plan Year instead of as of the Eligibility Date; provided, however,
that this last day of the Plan Year requirement did not apply to any Participant
who was not an Eligible Employee as of the last day of the Plan Year solely
because (i) he or she was a U.S. citizen who was residing (whether permanently
or temporarily) outside the United States, or (ii) as of the last day of the
Plan Year, he or she did not meet the income threshold for Eligible Employee
status set forth in Section 2.1(x)(1). All Match amounts were only credited to
the Stock Equivalent Portion of a Participant's to the Stock Equivalent Portion
of a Participant's Pre‑2005 Account.

 

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(c)       Discretionary Additional Credits.  At the discretion of the Committee,
which may be exercised on a case by case basis, the Stock Equivalent Portion of
a Participant's Post-2004 Account may be credited from time to time with
additional credits in the form of any number of deferred stock units.

(i)        Such discretionary additional credits shall be subject to such
vesting and other conditions (including but not limited to conditions regarding
distributions and treatment of Dividend Equivalents) as the Committee may
impose.

(ii)        Cash Dividend Equivalents shall be credited to the Stock Equivalent
Portion of the Participant's Post-2004 Account.  In the event an extraordinary
dividend (whether payable in cash or other property) is declared on Common
Stock, the Dividend Equivalent of such extraordinary dividend shall be credited
to the Stock Equivalent Portion of each Participant's Post-2004 Account.

(iii)       With respect to Ronald Rittenmeyer only, any amounts required to be
withheld for Federal Insurance Contributions Act (FICA) taxes (and for income
taxes on such withheld FICA taxes) with respect to discretionary additional
credits credited to his Post-2004 Account and related Dividend Equivalents shall
be withheld and paid from his discretionary additional credits in accordance
with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(vi).  In the
case of all other Participants (and in the case of Ronald Rittenmeyer with
respect to taxes other than FICA taxes and income taxes on the withheld FICA
taxes), any amounts required to be withheld for taxes (including but not limited
to FICA taxes) with respect to their Post-2004 Account discretionary additional
credits and Dividend Equivalents shall not be withheld and paid from such
credits and Dividend Equivalents but shall instead, at the discretion of the
Company, be withheld from other cash compensation of the Participant or shall be
satisfied by payment by personal check from the Participant to the Company as
the Company may permit on a case by case basis.

(iv)       Discretionary additional credits that were made under the Plan and
became vested prior to January 1, 2005 are reflected in the Pre-2005 Accounts of
those Participants who received such discretionary additional credits.  The
Committee may have imposed a prohibition against the Participant changing
distribution options under Section 5.3, electing In-Service Distributions under
Section 5.4 or electing Early Distributions under Section 5.5 with respect to
any such discretionary additional credits. Further, at the discretion of the
Committee, Cash Dividend Equivalents on such discretionary additional credits
may either be paid in cash with respect to a Participant's discretionary
additional credits at the same time as dividends are paid on Common Stock or
credited to the Stock Equivalent Portion of the Participant's Pre-2005 Account. 
Notwithstanding the foregoing, in the event an extraordinary dividend on such
discretionary additional credits (whether payable in cash or other property) is
declared on Common Stock, the Committee may, in its discretion, provide that the
Dividend Equivalent of such extraordinary dividend shall be credited to the
Stock Equivalent Portion of each Participant's Pre-2005 Account in lieu of being
paid as a Cash Dividend Equivalent.  Finally, with respect to a Participant's
Pre-2005 Account, any amounts required to be withheld for taxes (including but
not limited to FICA)

 

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with respect to any Dividend Equivalents shall not be withheld and paid from
such Dividend Equivalents but shall instead, at the discretion of the Company,
be withheld from other cash compensation of the Participant, or shall be
satisfied by payment by personal check from the Participant to the Company as
the Company may permit on a case by case basis.

(v)        Notwithstanding the vesting schedule set forth in those Awards of
Additional Credit Under the EDS Executive Deferral Plan granted effective
February 10, 2003 by the Committee to certain Participants employed by A.T.
Kearney, Inc. (the "Awards"), all unvested deferred stock units granted under
such Awards shall, except as provided in the last sentence of this Section
4.3(c)(v), completely vest on (i) the closing of the transaction pursuant to
which A.T. Kearney, Inc. ceases to be an Affiliate (the "A.T. Kearney
Transaction Closing") for those Award holders who are employed by A.T. Kearney,
Inc. in any of its business operations other than the executive search business
or the management, maintenance, repair and operations business at the time of
the A.T. Kearney Transaction Closing or (ii)  the closing of the sale of the
A.T. Kearney, Inc. executive search business (the "Executive Search Closing")
for those Award holders who are A.T. Kearney, Inc. executive search employees at
the time of the Executive Search Closing.  Notwithstanding anything to the
contrary in the terms of the Awards, such vested deferred stock units shall be
distributed on the date of the A.T. Kearney Transaction Closing or the Executive
Search Closing, as applicable (or in accordance with the terms of the Plan in
the case of those Award holders who elected under the Award to defer the
distribution of the vested deferred stock units until after separation from
service) provided that if there is a delay in such distribution for
administrative or any other reasons, the distribution shall not be delayed
beyond the last day permitted under Section 409A for treating a delayed payment
as having been made on the date of the A.T. Kearney Transaction Closing or the
Executive Search Closing, as applicable, or other applicable distribution date
specified under the Plan.  For purposes of those vested deferred stock units
that are distributable as of the date of the A.T. Kearney Transaction Closing or
the Executive Search Closing pursuant to the foregoing, the Valuation Date shall
be the date of the A.T. Kearney Transaction Closing or the Executive Search
Closing, as applicable.  This Section 4.3(c)(v) shall not apply to John Egan.

4.4       Rates of Return. 

(a)       Alternative Rates of Return.  Subject to Section 4.4(b), each
Participant may elect either a "Fixed-Income Equivalent" or a "Stock Equivalent"
rate of return for all or any portion of his entire Account (the "Fixed-Income
Equivalent Portion" and "Stock Equivalent Portion," respectively) by filing an
appropriate election with the Plan Administrator.

 

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(i)        Fixed Income Equivalent.  The Fixed-Income Equivalent rate of return
shall be the 30-year U.S. Treasury bond yield rate as published in the
Wall Street Journal (or, if not published in the Wall Street Journal, then as
announced by the U.S. Treasury Department) for the first business day of
September of the prior Plan Year, plus 50 basis points. 

(ii)        Stock Equivalent.  Amounts credited to the Stock Equivalent Portion
of a Participant's Account shall be denominated in stock units.  The number of
stock units shall be the sum of:

(1)        the number of RSUs deferred under the Plan, net of applicable taxes
(if any) withheld from the deferred RSUs themselves, plus

(2)       the number (including fractions of an integer) determined by dividing
(x) the value of any amount (other than RSUs) credited to the Stock Equivalent
Portion of a Participant's Account, valued at its fair market value (as
determined by the Plan Administrator) on the date it is so credited, net of any
applicable taxes withheld, by (y) the Fair Market Value of a share of Common
Stock on such date.

Each stock unit shall have a value equal to one share of Common Stock.  The
number of stock units deemed credited to the Stock Equivalent Portion of a
Participant's Account shall be subject to such equitable adjustment in the event
of a stock dividend, stock split, share combination, spinoff, reorganization,
recapitalization, merger or other transaction involving the Company as the
Committee determines to be appropriate, subject to the overall limitation on
shares available under the Plan.   As of the ex-dividend date of any cash
dividend declared on Common Stock, the Dividend Equivalent attributable thereto
shall automatically be credited to the Stock Equivalent Portion of each
Participant's Account, unless the Participant is to receive Cash Dividend
Equivalents with respect to deferred stock units credited to the Participant's
Pre-2005 Account as discretionary additional credits under Section 4.3(c), in
which case the Cash Dividend Equivalents with respect to such deferred stock
units shall be paid to the Participant in cash, subject to applicable
withholding.

(b)       Electing and Changing Rates of Return.  Deferred RSUs and Additional
Credits shall always receive the Stock Equivalent rate of return.  At the time a
Deferral Election is filed, a Participant shall irrevocably specify the
percentage of other deferred Compensation for the next Plan Year that shall be
allocated to the Fixed-Income Equivalent Portion of the Participant's Account
and the percentage thereof that shall be allocated to the Stock Equivalent
Portion of the Participant's Account.  Notwithstanding the irrevocability
requirement of the immediately preceding sentence, a Participant may elect to
prospectively change the

 

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rate of return on all or any portion of the existing balance in the Fixed-Income
Equivalent Portion of his or her Account to the Stock Equivalent rate of return,
effective as of the first day of the month immediately following the date the
election is filed with the Plan Administrator.  (No change shall be permitted
from the Stock Equivalent rate of return to the Fixed-Income Equivalent rate of
return.)  Notwithstanding the preceding, the Plan Administrator may postpone
until after such period any transfer which would otherwise be made in a period
in which the Participant would be prohibited (by Company policy or otherwise)
from acquiring or disposing of equity securities of an Employer.  If a
Participant fails to specify a rate of return upon filing his Deferral Election,
amounts deferred pursuant to such Deferral Election for the next Plan Year shall
be shall be credited as if the Participant elected the Stock Equivalent rate of
return pursuant to this Section 4.4(b).  The Beneficiary of a Participant who
has died shall have the same right as the Participant to elect the rate of
return for the respective Account (or portion of an Account).

(c)       Authority to Eliminate Stock Equivalent Rate of Return.  The Vice
President, Global Compensation and Benefits may, in his sole discretion,
eliminate the Stock Equivalent rate of return provided by this Section 4.4 in
the event he determines that it is necessary to eliminate such rate of return in
order to maintain the Plan's grandfathered status under the New York Stock
Exchange's shareholder approval requirements for equity compensation plans (the
"NYSE Shareholder Approval Requirements").  In the event that the Stock
Equivalent rate of return is eliminated under this Section 4.4(c), any
references in this Plan to the Stock Equivalent Portion of a Participant's
Account after the date on which the Stock Equivalent rate of return is
eliminated shall, to the extent permitted by the NYSE Shareholder Approval
Requirements or a reasonable interpretation thereof, mean the number of stock
units credited to the Stock Equivalent Portion of a  Participant's Account on
the date of elimination.  In such a case, no amounts (including Dividend
Equivalents) shall be credited to the Stock Equivalent Portion of a
Participant's Account after the date of elimination.  Instead, all deferral
amounts, Additional Credits and any dividends declared on shares of Common Stock
that are represented by units in the Stock Equivalent Portion of a Participant's
Account shall be credited to the Fixed-Income Equivalent Portion of the
Participant's Account starting on the day after the date the Stock Equivalent
rate of return is eliminated.

(d)       Segregation of Pre-2005 and Post-2004 Accounts.  A Participant's rate
of return calculated under this Section 4.4 shall be divided on a pro rata basis
between the Participant's Pre-2005 Account and Post-2004 Account depending on
the respective balances in such accounts at the time the rate of return is
calculated. 

 

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ARTICLE V

DISTRIBUTION OF BENEFITS

5.1      Time and Form of Distribution. In accordance with the provisions of
Section 5.3 applicable to a Participant's Post-2004 Account, a Participant shall
elect, on a form permitted by and delivered to the Plan Administrator, one of
the following distribution methods for payment of the entire vested portion of
amounts credited to the Participant's Post-2004 Account during each Plan Year
and/or Sales and Performance Compensation Deferral Period (and such election
shall become irrevocable on the applicable date set forth in Section 5.3):

(a)        a single lump sum, or

(b)       annual installments over a period, not exceeding ten (10) years,
elected by the Participant, with the amount of each annual installment (prior to
the last) being the balance of the Participant's Account subject to this
distribution option as of January 31 of the calendar year in which such annual
installment is paid divided by the number of installments (including the current
installment) remaining to be paid, and with the last installment being the
balance of the Participant's Account subject to distribution.

For purposes of Section 409A, the entire vested portion of amounts credited to
the Participant's Post-2004 Account during each Plan Year and/or each Sales and
Performance Compensation Deferral Period (and the rate of return on those
amounts) shall be paid to the Participant in the form elected under this Section
5.1 except as otherwise provided in the last paragraph of Section 5.3.

Unless otherwise elected by a Participant, the lump sum payment or the first
installment payment shall, subject to Section 5.15, be made on January 31 of the
calendar year following the calendar year in which the Participant separates
from service (or, if earlier, is Disabled) ("Commencement Date"), and any
remaining installment payments shall, subject to Section 5.15, be made on
January 31 of each successive year until payments are completed.  The
Participant may defer the lump sum payment or the first installment payment past
the Commencement Date by so electing on the form on which the Participant makes
his or her distribution election.  If the Participant fails to elect a
distribution option, distribution shall be made in a lump sum on the
Commencement Date.  Distribution shall be subject to withholding for applicable
taxes.

For purposes of a Participant's Post-2004 Account, the terms "separation from
service" and "separates from service" are intended to have the same meaning as
the terms are defined and determined under Treasury Regulation Section
1.409A-1(h)(1) provided that a Participant who transfers employment to another
employer that is an Affiliate shall not be considered to separate from service. 
Meanwhile, for purposes of a Participant's Pre-2005 Account, a Participant
separates from service or a separation from service occurs when the Participant
is no longer employed by (i) the Company, (ii) a Participating Employer or (iii)
any member

 

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of a "controlled group of corporations" (as such term is defined in Code Section
414(b)) in which the Company is a member.  A separation from service is
effective on the date recorded in the terminating employer's payroll records for
purposes of the Participant's Pre-2005 Account while for purposes of the
Participant's Post-2004 Account, it is effective on the date on which the
Participant and the Company or Participating Employer, as the case may be, first
reasonably anticipate that either no further services or the 80% or greater
reduction in the level of services provided by Treasury Regulation Section
1.409A-1(h)(1)(ii) will be performed by the Participant for the Company or
Participating Employer.  For purposes of this paragraph and consistent with the
previous treatment of Participants who are employed by an Affiliate whose stock
is sold by the Company to an unrelated third party, those Participants who are
employed by A.T. Kearney, Inc. in any of its business operations other than the
executive search business or the management, maintenance, repair and operations
business at the time of the A.T. Kearney Transaction Closing shall be considered
to separate from service on the date of the A.T. Kearney Transaction Closing and
those Participants who are employed by A.T. Kearney, Inc. in its executive
search business at the time of the Executive Search Closing shall be considered
to separate from service on the date of the Executive Search Closing.

Notwithstanding anything herein to the contrary, if a Participant is a Specified
Employee on the date of the Participant's separation from service for any reason
other than death, distribution of the Participant's Post-2004 Account shall not
be made or shall not commence, as the case may be, under this Section 5.1 until
the later of (i) the Commencement Date described above or (ii) subject to
Section 5.15, the first day of the seventh (7th) calendar month following the
calendar month in which the Participant separates from service.  In the event
the payment date in (ii) applies, the payments that the Participant would
otherwise have received had payments started on the Commencement Date shall be
paid to the Participant on the date set forth in (ii).

The Committee may change the timing and forms of payment available hereunder. 
In making any such changes, the Committee shall take into account constructive
receipt considerations and, with respect to Participants' Post-2004 Accounts,
the requirements of Section 409A.  Notwithstanding anything herein to the
contrary, in the event that all or any portion of a Participant's Account is
includible in the Participant's income as a result of a failure to comply with
the requirements of Section 409A, the Plan shall automatically pay to the
Participant during the Plan Year in which such failure is identified a lump sum
amount from the Participant's Account equal to the amount required to be
included in the Participant's income as a result of such failure.

5.2      Restrictions on Distribution of Deferred RSUs.  Deferred RSUs and any
returns credited thereto shall not be distributed and shall be subject to
forfeiture for a period ("Restricted Period") commencing on the date the
deferred RSUs are credited to the Participant's Account, and ending on the first
anniversary of the last day of the Plan Year in which such deferred RSUs are so
credited.  Thereafter, deferred RSUs shall be fully vested and nonforfeitable. 
Restricted deferred RSUs shall be forfeited (or if distributed, subject to
repayment) if the Committee, in its discretion, upon consideration of the facts
and circumstances and any advice or recommendation of the Employer, finds at any
time that Cause existed during the Restricted Period.  Deferred RSUs (and any
returns credited thereto) which would otherwise have been distributed during the
Restricted Period shall, subject to Section 5.15, be distributed on the first
day of the calendar month after the end of the Restricted Period.

 

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5.3       Changes in Distribution Options for a Participant's Pre-2005 Account;
No Distribution Option Changes for a Participant's Post-2004 Account.  A
Participant may, with respect to the Participant's Pre-2005 Account, change a
form of distribution previously elected under Section 5.1, including selecting a
later commencement date, by filing an election with the Plan Administrator in a
form permitted by the Plan Administrator; provided, however, that no election
shall be effective which extends the date of final distribution beyond the ninth
anniversary of the Commencement Date; and provided further, that any change in a
Participant's distribution option will become effective only if more than twelve
months have elapsed from the date the election to change the distribution option
is filed with the Plan Administrator to the date the Participant separates from
service.  The form of distribution of a Participant's Pre-2005 Account on the
Participant's separation from service shall therefore be determined by the most
recent distribution option election that meets the foregoing requirement, except
as provided in Sections 5.2, 5.5 and 5.6.

With respect to the entire amount in the Post-2004 Account of each Participant
for whom a Post-2004 Account was established during the period January 1, 2005
through October 31, 2006, such a Participant may, during the period July 1, 2006
to October 31, 2006, make a final distribution form and timing election under
Section 5.1 which shall become irrevocable on October 31, 2006 and shall apply
to the entire amount in the Participant's Post-2004 Account provided, however,
that such election shall not be effective unless more than twelve months have
elapsed from the date on which the election is filed with the Plan Administrator
to the date the Participant separates from service.  In the event a Participant
described in the preceding sentence does not file a distribution form and timing
election during the July 1, 2006 to October 31, 2006 election period (or if the
Participant files such an election but it does not become effective because
twelve months do not elapse before the Participant separates from service), then
the Participant's entire Post-2004 Account shall be distributed in accordance
with (i) the election filed by the Participant during the base salary Deferral
Election period for the 2005 Plan Year (or, if later, during the base salary
Deferral Election period specified in Section 2.1(q), 2.1(s)(1) or 2.1(s)(3), as
applicable), (ii) the distribution election in effect for the Participant
immediately prior to the base salary Deferral Election period for the 2005 Plan
Year (where the Participant either failed to file a distribution election during
the base salary Deferral Election period for the 2005 Plan Year or such an
election did not become effective because twelve months did not elapse from when
the election was filed to when the Participant separated from service) or (iii)
the lump sum default payment form specified in Section 5.1 (where the
Participant did not make a distribution election under Section 5.1 or the
election did not become effective).

In the case of each Participant for whom a Post-2004 Account was established at
any time after October 31, 2006, the distribution form and timing election under
Section 5.1 (or the lump sum default payment form specified in Section 5.1 in
the absence of an election) shall be irrevocable on the Participant's Current
Year Election deadline specified in Section 2.1(q) or Deferral Election Deadline
specified in Section 2.1(s), as applicable, for the first Deferral Election made
by the Participant after October 31, 2006, and such irrevocable election (or
lump sum default in the absence of an election) shall apply to the entire
balance in the Participant's Post-2004 Account.

 

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Notwithstanding the foregoing provisions of this Section 5.3, in the case of a
Participant for whom a Post-2004 Account is established but who either doesn't
make a Deferral Election or whose Deferral Elections have all been accompanied
by an election under Section 5.4 to receive an in-service distribution of the
entire amount of the related deferrals, the Participant may (unless the
Participant has made a distribution form and timing election during the special
July 1, 2006 to October 31, 2006 election period described above) make a
distribution form and timing election under Section 5.1 for the Participant's
first Deferral Election (or, if applicable, the Participant's first Deferral
Election that is not accompanied by an election under Section 5.4 to receive an
in-service distribution of the entire amount of related deferrals), and such
distribution form and timing election (or the lump sum default payment specified
in Section 5.1 in the absence of an election) shall (i) be irrevocable on the
Deferral Election Deadline under Section 2.1(s) applicable to such first
Deferral Election and (ii) apply to all amounts credited to the Participant's
Post-2004 Account starting on the January 1 that immediately follows such
Deferral Election Deadline.

5.4      In-Service Distributions.  At the time a Participant makes a Deferral
Election with respect to any amounts of future Compensation for a particular
Plan Year and/or a Sales and Performance Compensation Deferral Period, then, at
the time of such Deferral Election, the Participant may also make an election
that is irrevocable on that Plan Year's and/or Sales and Performance
Compensation Deferral Period's Deferral Election Deadline to have any of such
deferrals made to the Participant's Account (other than RSUs and Additional
Credits) distributed to the Participant (except to any Participant who in the
tax year of distribution is a "covered employee" as defined by Code section
162(m)) no sooner than, subject to Section 5.15, the January 31 of the third
Plan Year following the Plan Year and/or the start of the Sales and Performance
Compensation Deferral Period for which the Deferral Election is made. 
Distribution shall be subject to withholding for applicable taxes.

(a)       Notwithstanding the provisions of this section, any Participant, who
as of a Commencement Date, is a "covered employee" as defined by Code
Section 162(m), shall not receive a distribution in accordance with any Deferral
Election made pursuant to this Section 5.4 from (i) the Participant's Pre-2005
Account if the Company or a Participating Employer believes that the deduction
for such payment would otherwise be limited or eliminated by the application of
Code Section 162(m), but the Participant shall instead receive distribution from
the Participant's Pre-2005 Account on January 31 of the first Plan Year in which
such Participant is no longer a "covered employee," and (ii) the Participant's
Post‑2004 Account to the extent the Company or a Participating Employer
reasonably anticipates that the deduction for such distribution would not be
permitted by the application of Code Section 162(m), but the Participant shall
instead receive such distribution during the first calendar year in which the
Company or Participating Employer

 

 

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reasonably anticipates, or should reasonably anticipate, that the deduction of
the distribution will not be barred by the application of Code Section 162(m). 
The preceding sentence shall apply to all scheduled distributions under this
Section 5.4 from the Participant's Post-2004 Account to the extent the Company
or Participating Employer reasonably anticipates that the deduction for such
distributions would not be permitted by the application of Code Section 162(m).

(b)       Any amounts distributed in accordance with this section shall be in
either of the following forms as properly elected by the Participant (and with
respect to the Participant's Post-2004 Account, such election shall be
irrevocable on that Plan Year's and/or Sales and Performance Compensation
Deferral Period's Deferral Election Deadline):

(i)        single lump sum, or

(ii)       annual installments over a period, not exceeding 10 years, elected by
the Participant, with the amount of each annual installment (prior to the last)
being the balance of the Participant's Account subject to this distribution
option as of January 31 of the calendar year in which such annual installment is
paid divided by the number of installments (including the current installment)
remaining to be paid, and with the last installment being the balance of the
Participant's Account subject to distribution.

(c)        If any Participant should die or separate from service before the
in-service commencement date set forth above of amounts subject to a Deferral
Election made pursuant to this section, then such Deferral Election shall be
void and the distribution provisions set forth in Section 5.1 shall be
controlling provided that if the in-service distribution of a Participant's
Post-2004 Account has been postponed pursuant to paragraph (a) above and the
Participant separates from service, such distribution shall be made or shall
commence during the first calendar year in which the Company or Participating
Employer reasonably anticipates or should reasonably anticipate that the
deduction of the distribution will not be barred by the application of Code
Section 162(m).

For purposes of Section 409A, the vested portions of amounts credited to the
Participant's Post-2004 Account during a particular Plan Year and/or each Sales
and Performance Compensation Deferral Period (and the rate of return on those
amounts) shall be a separately identifiable amount to which the Participant is
entitled to payment in the manner elected under this Section 5.4.

5.5       Early Distributions.  The Plan Administrator, and upon application of
a Participant, may direct distribution, prior to the Commencement Date either
during employment or after the Participant separates from service, of such
portion of the Participant's vested Pre‑2005 Account attributable to deferred
Compensation (but not amounts attributable to Additional Credits) as the
Participant may request.  The amount distributable shall be 90% of the amount
requested by the Participant.  The remaining 10% shall be permanently forfeited
by the Participant.

 

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5.6       Small Account Balances.  If at the time a Participant separates from
service, the vested balance of a Participant's Account is less than $15,000 (or,
in the case of a Participant's Pre-2005 Account, if the portion of such account
that is payable to a single Beneficiary following the Participant's death is
less than $15,000), then notwithstanding the foregoing provisions of this
Article V or any Participant's election to the contrary (but subject to Section
5.2), the Participant's Account (or such portion of the Participant's Pre-2005
Account following the Participant's death) shall, subject to Section 5.15, be
distributed in a single lump sum on the first day of the calendar month
following the calendar month in which the Participant separates from service
provided, however, that if the Participant is a Specified Employee on the date
of the Participant's separation from service for any reason other than death,
the lump sum payment of the Participant's Post-2004 Account shall, subject to
Section 5.15, be paid on the first day of the seventh (7th) calendar month
following the calendar month in which the Participant separates from service. 
The provisions of this Section 5.6 shall not apply to the Participant's
Post-2004 Account unless the Participant's interest in all other plans,
agreements, methods, programs or arrangements that must be aggregated under
Treasury Regulation Section 1.409A-1(c)(2) with the Participant's respective
interests in the Plan are terminated and liquidated in their entirety at the
same time as the lump sum payment under this Section 5.6.

5.7      Form of Payment.  The Stock Equivalent Portion of a Participant's
Account shall be distributed in shares of Common Stock (subject to the aggregate
limitation on shares available under the Plan).  For this purpose, 7,650,000
shares of Common Stock are reserved for delivery hereunder.  Such shares may be
newly-issued shares, treasury shares, or shares acquired on the open market. 
All other benefits under this Plan shall be paid by negotiable check or other
cash equivalent from the trust (if any) or other general funds of the Employer.

In the event of any stock dividend, stock split, share combination, spinoff,
reorganization, recapitalization, merger or other transaction involving the
Company, the number of shares of Common Stock reserved under this Plan shall be
adjusted by the Board, in its discretion, as the Board deems appropriate to
reflect such transaction.

5.8       Death of a Participant.  In the event of the death of a Participant
prior to distribution of all amounts otherwise payable to the Participant
hereunder, the Participant's Beneficiary or Beneficiaries shall, subject to
Section 5.15, receive or commence to receive on the January 31 of the calendar
year after the Plan Administrator receives notice of the Participant's death,
distribution of all vested amounts credited to the Participant's Account, in the
method such amounts would have been paid to the Participant, provided that, if
for any reason the distributee of benefits is an estate, the Plan Administrator
shall pay to the estate in a single lump sum the entire balance of the
Participant's Pre-2005 Account that is distributable to the estate and in
reliance on the distribution election transition rule set forth in IRS Notice
2005-1, Q&A-19(c), which rule was extended until December 31, 2007 by IRS Notice
2006-79, the Plan Administrator shall also pay to the estate in such
circumstances the entire balance of the Participant's Post-2004 Account that is
distributable to the estate provided that such payment is made prior to
December 31, 2007.  Each Participant may designate a Beneficiary or
Beneficiaries to receive payment of his benefits under this Plan in the event of
his death, and may revoke or

 

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change such designation, in accordance with such procedures as the Plan
Administrator shall promulgate. A Participant may revoke his designation of
Beneficiary (without the consent of any Beneficiary) and make a new designation
of Beneficiary by filing a new form with the Plan Administrator.  A properly
completed and executed change in a designation of Beneficiary shall take effect
immediately upon being filed with the Plan Administrator during the
Participant's lifetime.  If upon a Participant's death no valid designation of
Beneficiary is on file with the Plan Administrator, or if a Beneficiary dies
before payments are completed and there are no living contingent or successive
Beneficiaries, then any remaining payments under this Plan shall be made (1) to
the Participant's surviving spouse, if any, or (2) if there is no surviving
spouse, then to the Participant's estate.  For purposes of the immediately
preceding sentence, a Beneficiary or surviving spouse who makes a "qualified
disclaimer" (as such term is defined in Code Section 2518(b)) that meets the
requirements of Code Section 2518(b) and that is valid under applicable state
law shall be treated as dying before the Participant, provided that such
disclaimer is actually received by the Plan Administrator prior to the payment
of any death benefits under the Plan.

5.9       Domestic Relations Orders.  Any claim against benefits hereunder for
child support, spousal maintenance or alimony pursuant to a "domestic relations
order" (as defined in Code Section 414(p)(1)(B) shall be processed hereunder in
the same manner as would a claim for corresponding benefits under the EDS 401(k)
Plan.  Such claim shall be administered by the Plan's third-party recordkeeper. 
Any benefits assigned pursuant to a claim approved by the Plan's third-party
recordkeeper under this Section 5.9 shall, subject to Section 5.15, be paid to
the assignee on the first day of the calendar month following the calendar month
in which the claim has been approved by such claims administrators.

5.10     Postponed Distributions.  Notwithstanding the preceding sections of
this Article V, the Plan Administrator may, with respect to a Participant's
Pre-2005 Account, postpone until after such period any distribution which would
otherwise be made in a period in which the Participant would be prohibited (by
Company policy or otherwise) from acquiring or disposing of equity securities of
an Employer.  Further, with respect to a Participant's Post-2004 Account and
notwithstanding the preceding sections of this Article V, the Plan Administrator
will, effective for distributions occurring on or after January 1, 2006,
postpone the distribution of a Participant's Account where the Company
reasonably anticipates that the making of the payment will violate Federal
securities laws or other applicable law provided that the distribution shall be
made at the earliest date on which the Company reasonably anticipates that the
making of the payment will not cause such violation.

5.11     Claims for Benefits.  In the event that a Participant or Beneficiary
claims to be eligible for benefits, or claims any rights hereunder, the
Participant or Beneficiary must complete and submit such claims forms and
supporting documentation as shall be required by the Plan Administrator, in its
sole discretion.  The Plan Administrator shall decide each claim and give the
person making the claim (a "Claimant") written notice of the disposition of the
claim within 90 days after the claim is filed.  If the Plan Administrator denies
a claim, the notice of denial shall be in writing, shall contain the specific
reason or reasons for the denial of the claim, shall contain a specific

 

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reference to the pertinent Plan provisions upon which the denial is based, shall
contain a description of any additional material or information necessary for
the claimant to perfect the claim along with an explanation why such material or
information is necessary, and shall contain an explanation of these claims
review procedures.

Within 60 days after receipt by the Claimant of a written notice of denial of a
claim, the Claimant may file a written request with the Committee for a full and
fair review of the denial of the claim for benefits.  In connection with a
Claimant's appeal of the denial of the benefit, the Claimant may review
pertinent documents and may submit issues and comments in writing.  The
Committee shall deliver to the Claimant a written decision on the claim
promptly, but not later than sixty (60) days after the Claimant's request for
review.  Such decision shall be written in a manner calculated to be understood
by the Claimant, shall include specific reasons for the decision, and shall
contain specific references to the pertinent Plan provisions upon which the
decision is based.  The decision of the Committee on appeal shall be final,
conclusive and binding on all persons.

5.12    Withholding.  A Participant's Employer or the Company shall have the
right to deduct applicable taxes (including, but not limited to FICA) from any
amounts paid hereunder to a Participant or Beneficiary, and to withhold an
appropriate amount of cash or a number of shares of Common Stock or a
combination thereof for payment of taxes or to take such other action as may be
necessary in the opinion of the Employer or the Company to satisfy all
obligations for withholding of such taxes.  Except as set forth in
Section 4.3(c)(iii), no taxes shall be deducted from a Participant's deferred
Compensation hereunder until the deferred Compensation triggering the taxes is
paid to the Participant under the terms of the Plan.  The Plan Administrator may
also permit withholding to be satisfied by the transfer to the Company of cash,
shares of Common Stock, or other property theretofore owned by the Participant
or Beneficiary.

Notwithstanding anything in this Section 5.12 or any other provision of this
Plan to the contrary, in the event that the Stock Equivalent rate of return is
eliminated pursuant to the provisions of Section 4.4(c), then effective on the
date of such elimination, shares of Common Stock may not be used to satisfy any
withholding obligations except to the extent permitted by the NYSE Shareholder
Approval Requirements or a reasonable interpretation thereof. 

5.13    Facility of Payment.  In the event any distribution is payable under
this Plan to a minor or other individual who is legally, physically or mentally
incompetent to receive such payment, the Plan Administrator in its sole
discretion shall pay such benefits to one or more of the following persons:

            (a)        Directly to such minor or other person;

            (b)        To the legal guardian or conservator of such minor or
other person;

(c)        To the spouse, parent, brother, sister, child or other relative of
such minor or other person for the use of such minor or other person; or

            (d)        To such other person as the Plan Administrator deems
appropriate.

 

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The Plan Administrator shall not be required to see to the application of any
distribution so made to any of such persons, but the receipt thereof shall be a
full discharge of the liability of the Plan, the Committee, the Plan
Administrator, the Employers, and the trustee (if any) to such minor or other
person.

5.14     Waiver and Release.  The Committee may condition the payment of some or
all benefits hereunder on the Participant's entering into a binding release and
waiver in such form as the Committee shall permit.

5.15     Distribution Delays.  The payment of a benefit or the commencement of
benefit payments under the Plan shall be made or shall begin on the date
specified in the Plan, or as soon as administratively practicable thereafter
provided that with respect to the Participant's Post-2004 Account such payment
or commencement is in the same calendar year that contains the specified date. 
However, if for administrative or any other reasons there is a delay in the
payment or commencement of payments beyond the date specified in the Plan with
respect to a Participant's Post 2004-Account, the payment or commencement of
payments shall not be delayed beyond the last day permitted under Treasury
Regulation Section 1.409A-3(d) for treating a delayed payment as having been
made on the applicable specified payment date.

ARTICLE VI

PAYMENT LIMITATIONS

6.1      Assignment.  No Participant or Beneficiary of a Participant shall have
any right to assign, pledge, hypothecate, anticipate or any way create a lien on
any amounts payable hereunder.  No amounts payable hereunder shall be subject to
assignment or transfer or otherwise be alienable, either by voluntary or
involuntary act, or by operation of law, or subject to attachment, execution,
garnishment, sequestration or other seizure under any legal, equitable or other
process, or be liable in any way for the debts or defaults of Participants and
their Beneficiaries.

6.2       Change of Control.  Upon the first event constituting a part of the
Change of Control ("CIC Event"):

(a)        the members of the Board serving immediately prior to the CIC Event
may, in their sole and absolute discretion, direct the Plan Administrator to
distribute all amounts credited to the Pre-2005 Accounts of Participants
(including all remaining installments for which an installment distribution has
commenced) in a single lump sum payment to each Participant, net of investment
charges, surrender charges, etc., following which the Pre-2005 Account portion
of the Plan shall terminate;

 

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(b)        no changes shall be made to any provisions of this Plan in effect
immediately prior to the CIC Event and no new provisions shall be promulgated;
and

(c)        Plan amendments shall be subject to the last sentence of the first
paragraph of Section 10.1.

Further, upon a CIC Event occurring on or after July 16, 2007 (based on the
definition of Change of Control herein with respect to a Participant's Post-2004
Account), the Plan Administrator shall, subject to Section 5.15, distribute all
amounts credited to the Post‑2004 Accounts (including all remaining installments
for which an installment distribution has commenced) in a single lump sum
payment to each Participant within five (5) business days after the CIC Event
provided, however, that if a Participant separated from service prior to the CIC
Event for any reason other than death and the Participant was a Specified
Employee at the time of such separation from service, the Participant's
Post‑2004 Account shall not be distributed in a lump sum to the Participant
pursuant to this paragraph until the later of the date set forth in this
paragraph or, subject to Section 5.15, the first day of the seventh (7th)
calendar month following the calendar month in which the Participant separated
from service.  For purposes of the distribution provided by the preceding
sentence, (i) each unit credited to the Stock Equivalent Portion of a
Participant's Post-2004 Account shall be converted to an amount in cash equal to
the tender offer, exchange or other purchase price being paid by the acquiring
person or persons for a share of the Company's Common Stock in the CIC Event (or
in the event there is no such tender offer, exchange or other purchase price
being paid in connection with the CIC Event, the closing price of a share of the
Company's Common Stock as reported on the New York Stock Exchange on the date of
the CIC Event) and (ii) if the Participant was a Specified Employee who
separated from service prior to the CIC Event and whose distribution is delayed
beyond five (5) business days following the CIC Event pursuant to the preceding
sentence, such converted cash amount shall be increased for earnings at the rate
of return for the Evergreen Institutional Money Market Fund (or a substantially
equivalent money market mutual fund) for the period beginning on the date of the
CIC Event and continuing through the date of distribution of the Participant's
Post‑2004 Account.

ARTICLE VII

FUNDING AND EXPENSES

7.1      Funding.  Benefits under this Plan shall be funded solely by the
Company and its Affiliates.  Benefits hereunder shall constitute an unfunded
general obligation of each Participant's respective Employer.  In the event a
Participant has been employed by more than one Employer, benefits hereunder
shall constitute an unfunded general obligation of the Participant's most recent
Employer.  All payments under this Plan shall be deemed made by the
Participant's Employer from general assets available to all unsecured creditors
of the Employer in the event of its insolvency.  Each Participant has merely the
status of a general unsecured creditor of his Employer. 

Notwithstanding the foregoing, the Company and the Employers may, but need not
create for purposes of this Plan a trust of the type commonly referred to as a
"rabbi" trust, which may, but need not, be in substantial conformity to the
terms of the model trust published by the Internal Revenue Service in Rev. Proc.
92-64 or any successor thereto.  The Employer may transfer assets to the trustee
of such trust to hold and to make

 

 

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distributions under this Plan on behalf of the Employers.  The assets so held in
trust shall remain the general assets of the Employers, which are the grantors
under the trust.  The rights of Participants and their Beneficiaries under this
Plan and the trust shall be exclusively unsecured contractual rights.  No
Participant or Beneficiary shall have any right, title or interest whatsoever in
the trust.

Notwithstanding the preceding paragraph, no assets shall be transferred to any
rabbi or other trust to fund distributions under this Plan for any Participant
who is an "applicable covered employee" (as such term is defined in Code Section
409A(b)(3)(D)) during (i) any period during which the EDS Retirement Plan or any
successor plan is in "at-risk" status (as such term is defined in Code Section
430(i)), (ii) any period the Company or any Employer is a debtor in a case under
Title 11 of the United States Code or similar Federal or State law or (iii) the
twelve month period beginning on the date which is six months prior to the date
of termination of the EDS Retirement Plan or any successor plan where, as of the
date of such termination, such plan is not sufficient for benefit liabilities
(within the meaning of section 4041 of the Employee Retirement Income Security
Act of 1984, as amended).  In addition, no assets shall be transferred to any
rabbi or other trust to fund distributions under this Plan if such transfer
would violate the restriction under Code Section 409A(b)(2).

7.2      Creditor Status.  A Participant and his Beneficiary or Beneficiaries
shall be general creditors of the Participant's Employer with respect to the
payment of any benefit under this Plan, unless such benefits are provided under
a contract of insurance or an annuity contract that has been delivered to the
Participant, in which case the Participant and his Beneficiary or Beneficiaries
shall look to the insurance carrier or annuity provider for payment, and not to
the Employer or any Affiliate.  The Employer's or Affiliate's obligation for
such benefit shall be discharged by the purchase and delivery of such annuity or
insurance contract.

7.3       Expenses.  The expenses of administering the Plan shall be borne by
the Employers, provided that, prior to a CIC Event, the Committee may direct
that assets of the trust, if any, shall be applied to pay such expenses.

ARTICLE VIII

ADMINISTRATION

8.1      Committee.  Except for rights and powers expressly reserved to the
Board or the Company, the Plan will be administered by the Committee provided
that the Committee may designate and authorize a person or entity to exercise
the powers set forth in Section 8.2 below and such other powers granted to the
Plan Administrator in the Plan.

 

 

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8.2       Committee Powers.  The Committee shall have the power and authority in
its sole and absolute discretion:

(a)       To construe and interpret the Plan, determine the application of the
Plan to situations where such application is unclear or disputable, to resolve
all questions arising under the Plan (including questions of fact) and make
equitable adjustments for any mistakes or errors made in the administration of
the Plan; provided that individual exceptions to the provisions of the Plan
shall not be permitted;

(b)      To determine all questions arising in the administration of the Plan,
including the power to determine the status of individuals as Eligible
Employees, the rights of Participants and their beneficiaries and the amount of
their respective benefits and such determination, interpretation or other action
shall be final and binding for all purposes and upon all persons;

(c)       To adopt, amend and rescind such rules, regulations and forms as it
may deem necessary for the proper and efficient administration of the Plan
consistent with its purposes, which rules may permit case-by-case
determinations;

(d)       To enforce and administer the Plan in accordance with its terms and
the rules, regulations and forms it adopts;

(e)       To take such action and establish such procedures as it deems
necessary or appropriate to coordinate deferrals and benefits under this Plan
and any other plan;

(f)        To select, monitor and prospectively change the rates of return to be
credited under the Plan;

(g)       To take such action and establish such procedures as it deems
necessary or appropriate to implement Participant elections and designations of
rates of return, and to coordinate the Employers' actions, if any, taken to
reduce or eliminate the Employers' exposure to market fluctuations;

(h)       To direct the appropriate person to make payments from the Plan;

(i)        To employ such counsel, auditors, actuaries, or other specialists
(who may be counsel, auditors, actuaries or other specialists for the Company)
and to engage such clerical or other services to the extent such services are
not provided by the Company;

(j)        To maintain records concerning the Plan sufficient to prepare
reports, returns and other information required by the Plan or by law, and to
communicate the terms of the Plan and any material amendments thereto to the
Eligible Employees and Participants;

 

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(k)        To do all other things the Committee deems necessary or desirable for
the advantageous administration of the Plan and to make the Plan fully effective
in accordance with its terms and intent.

8.3       Receipt and Release of Necessary Information.  In implementing the
terms of this Plan, the Plan Administrator may, without the consent of or notice
to any person, release to or obtain from any other organization or person any
information, with respect to any person, which the Plan Administrator deems to
be necessary for such purposes.  Any Participant or Beneficiary claiming
benefits under this Plan shall furnish to the Plan Administrator such
information as may be necessary to determine eligibility for and amount of
benefit, as a condition of claiming and receiving such benefit.

8.4       Overpayment and Underpayment of Benefits.  The Committee may adopt, in
its sole discretion, whatever rules, procedures and accounting practices are
appropriate in providing for the collection of any overpayment of benefits.  If
a Participant or Beneficiary receives an underpayment of benefits, the Plan
Administrator shall direct that immediate payment be made to make up for the
underpayment.  If an overpayment is made to a Participant or Beneficiary, for
whatever reason, the Committee may, in its sole discretion, withhold payment of
any further benefits under the Plan until the overpayment has been collected or
may require repayment of benefits paid under this Plan without regard to further
benefits to which the Participant or Beneficiary may be entitled.

ARTICLE IX

OTHER BENEFIT PLANS OF AN EMPLOYER

9.1      Other Plans.  Nothing contained in this Plan shall prevent a
Participant prior to his death, or his Beneficiary after his death, from
receiving, in addition to any payments provided for under this Plan, any
payments provided for under any other plan or benefit program of an Employer, or
which would otherwise be payable or distributable to the Participant or
Beneficiary under any plan or policy of an Employer or otherwise.  Nothing in
this Plan shall be construed as preventing the Company or any Affiliate from
establishing any other or different plans providing for current or deferred
compensation for employees.  Benefits provided under this Plan shall not
constitute pensionable earnings for purposes of determining contributions or
benefits under any plan of the Company intended to "qualify" under Section 401
of the Code, unless specifically provided otherwise in such plan.

ARTICLE X

AMENDMENT AND TERMINATION OF THE PLAN

10.1    Amendment and Termination.  The Committee may amend or terminate this
Plan at any time and in its sole discretion, by (and only by) written
resolution.  Any such amendment or termination shall be binding on the Employers
and all Participants and their Beneficiaries, even though it may be retroactive
and applicable to Participants whose employment by the Company or an Employer
has terminated.  However, no amendment or

 

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termination of the Plan shall adversely affect the right of a Participant to
payment of a benefit (including, but not limited to, the payment provided by the
last paragraph of Section 6.2) to which the Participant would be entitled (then
or thereafter) under the terms of the Plan as in effect immediately before the
adoption of such amendment or termination of the Plan, unless such amendment or
termination of the Plan in the reasonable judgment of the Committee is required
to comply with applicable law or to preserve the tax treatment of benefits under
this Plan for the Employers or for the Participant, or is consented to by the
affected Participant.  Following the occurrence of a CIC Event, no amendment of
the Plan may be made (including, but not limited to, a modification or
revocation of any of the provisions in Section 6.2 or of the action, if any,
taken by the Board under Section 6.2(a)) without the written consent of the
Board serving immediately prior to the CIC Event, except for amendments
necessary to comply with applicable law.

Notwithstanding anything herein to the contrary, in the event the Plan is
terminated pursuant to this Section 10.1, no payments shall be made from the
Participants' Post-2004 Accounts during the twelve month period following the
date the Board takes all necessary actions to irrevocably terminate and
liquidate the Plan (although payments that would have occurred under the Plan in
the absence of the termination of the Plan, including but not limited to the
payments required by the last paragraph of Section 6.2, shall be made as
otherwise set forth in the Plan) and all amounts in the Participants' Post‑2004
Accounts must be paid to the Participants or their Beneficiaries, as the case
may be, during the period of the thirteenth (13th) month through the
twenty-fourth (24th) month following the date the Board takes such irrevocable
actions.  Further, in the event the Plan is terminated pursuant to this Section
10.1, then (i) the Company and each Affiliate must terminate all other deferred
compensation plans, agreements, methods, programs and arrangements that would be
aggregated with the Plan under Treasury Regulation Section 1.409A‑1(c)(2) if the
same Participant participated in such other plans, agreements, methods, programs
and arrangements, and (ii) for the 3-year period following the date the Board
takes all necessary actions to irrevocably terminate and liquidate the Plan,
neither the Company nor any Affiliate adopts a new deferred compensation plan,
agreement, method, program or arrangement that would be aggregated with the Plan
or any other terminated and liquidated plan, agreement, method, program or
arrangement under Treasury Regulation Section 1.409A-1(c)(2) if the same
Participant participated in both such plans, agreements, methods, programs or
arrangements.  Notwithstanding the foregoing, no amounts shall be paid from the
Participants' Post-2004 accounts under this Section 10.1 due to Plan termination
if the termination of the Plan occurs proximate to a downturn in the financial
health of the Company or any Affiliate.

The provisions of this Section 10.1 shall apply to any amendment to or
termination of the Plan occurring on or after July 16, 2007.

 

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10.2     Continuation.  The Company intends to continue this Plan indefinitely,
but nevertheless assumes no contractual obligation beyond the promise to pay the
benefits described in this Plan to its Employees.

ARTICLE XI

MISCELLANEOUS

11.1    No Reduction of Employer Rights.  Nothing contained in this Plan shall
be construed as a contract of employment between the Company or any Affiliate
and an employee, or as a right of any person to be continued in the employment
of the Company or any Affiliate, or as a limitation of the right of the Company
or an Affiliate to discharge any of its employees, with or without cause.

11.2   Indemnification.  The Company hereby indemnifies the Plan Administrator
and each member of the Committee against any and all liabilities and expenses,
including attorney's fees, actually and reasonably incurred by them in
connection with any threatened, pending or completed legal action or judicial or
administrative proceeding to which they may be a party, or may be threatened to
be made a party, by reason of membership on such Committee or service as Plan
Administrator, except with regard to any matters as to which they shall be
adjudged in such action or proceeding to be liable for gross negligence or
willful misconduct in connection therewith.

11.3     Successors.  All obligations of an Employer under this Plan shall be
binding on any successor to such Employer, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or assets of the
Employer.

IN WITNESS WHEREOF, the Committee has caused this restatement to be executed
this 8th day of August, 2007.

COMPENSATION AND BENEFITS COMMITTEE

OF THE BOARD OF DIRECTORS OF

 

ELECTRONIC DATA SYSTEMS CORPORATION

 

 

 

By:      /S/ M.E. PAOLUCCI                                                

Michael E. Paolucci, Secretary of the Committee

and Vice President, Global Compensation and

Benefits of the Company

 

 

 

 

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