**Exhibit 10.28**

 

 

**HILTON HOTELS2005 EXECUTIVE DEFERRED COMPENSATION PLAN**

 

**(As Amended and Restated Effective as of January 1,2005)**

 

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**HILTON HOTELS**

**EXECUTIVE DEFERRED COMPENSATION PLAN**

 

**TABLE OF CONTENTS**

 
| ** **                                      | **Page** |
|-------------------------------------------------|----------|
|                                            |     |
| ARTICLE I TITLE AND DEFINITIONS            | 1        |
|                                            |     |
| 1.1 – Title                                | 1        |
|                                            |     |
| 1.2 - Definitions                               | 1        |
|                                            |     |
| ARTICLE II  PARTICIPATION                  | 6        |
|                                            |     |
| ARTICLE III  DEFERRAL ELECTIONS            | 7        |
|                                            |     |
| 3.1 - Elections to Defer Compensation           | 7        |
|                                            |     |
| 3.2 – Distribution Elections               | 9        |
|                                            |     |
| 3.3 - Investment Elections                      | 12       |
|                                            |     |
| 3.4 – Subsequent Elections                 | 13       |
|                                            |     |
| 3.5 – Cancellation of Elections            | 14       |
|                                            |     |
| 3.6 – New Payment Elections                | 14       |
|                                            |     |
| ARTICLE IV  DISTRIBUTION OPTION ACCOUNTS   | 15       |
|                                            |     |
| 4.1 - Compensation Deferrals                    | 15       |
|                                            |     |
| 4.2 - Company Contribution                      | 15       |
|                                            |     |
| 4.3 - Investment Return                         | 17       |
|                                            |     |
| ARTICLE V  VESTING                         | 17       |
|                                            |     |
| 5.1 - Compensation Deferral                     | 17       |
|                                            |     |
| 5.2 - Company Contribution                      | 17       |
|                                            |     |
| ARTICLE VI  DISTRIBUTIONS                  | 18       |
|                                            |     |
| 6.1 – Form and Timing of Distribution | 18       |
|                                            |     |
| 6.2 – Small Benefit Cashout                | 19       |
|                                            |     |
| 6.3 – Payout                               | 20       |
|                                            |     |
| 6.4 – Distributions to Key Employees       | 21       |
|                                            |     |
| 6.5 – Financial Hardship of Participant    | 21       |
|                                            |     |
| 6.6 – Permissible Distribution Event       | 22       |
|                                            |     |
| 6.7 - Payment by Trust                          | 22       |
|                                            |     |
| 6.8 - Inability to Locate Participant           | 23       |
|                                            |     |
| ARTICLE VII  CHANGE IN CONTROL             | 23       |

 

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| ** **                                                 | **Page** |
|------------------------------------------------------------|----------|
|                                                       |     |
| ARTICLE VIII  DEATH BENEFITS                          | 24       |
|                                                       |     |
| ARTICLE IX  CLAIMS PROCEDURES                         | 24       |
|                                                       |     |
| 9.1 – Claims                                          | 24       |
|                                                       |     |
| 9.2 – Appeal                                          | 24       |
|                                                       |     |
| 9.3 – Authority                                       | 25       |
|                                                       |     |
| ARTICLE X  ADMINISTRATION                             | 26       |
|                                                       |     |
| 10.1 - Committee                                           | 26       |
|                                                       |     |
| 10.2 - Committee Action                                    | 26       |
|                                                       |     |
| 10.3 - Powers and Duties of the Committee                  | 26       |
|                                                       |     |
| 10.4 - Construction and Interpretation                     | 27       |
|                                                       |     |
| 10.5 - Information                                         | 28       |
|                                                       |     |
| 10.6 - Compensation, Expenses and Indemnity                | 28       |
|                                                       |     |
| 10.7 - Quarterly Statements                                | 29       |
|                                                       |     |
| ARTICLE XI  MISCELLANEOUS                             | 29       |
|                                                       |     |
| 11.1 - Unsecured General Creditor                          | 29       |
|                                                       |     |
| 11.2 - Restriction Against Assignment                      | 29       |
|                                                       |     |
| 11.3 - Withholding                                         | 30       |
|                                                       |     |
| 11.4 - Amendment, Modification, Suspension or  Termination | 30       |
|                                                       |     |
| 11.5 - Governing Law                                       | 31       |
|                                                       |     |
| 11.6 - Receipt or Release                                  | 31       |
|                                                       |     |
| 11.7 - Payments on Behalf of Persons Under  Incapacity     | 31       |
|                                                       |     |
| 11.8 - Headings                                            | 31       |

 

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**HILTON HOTELS**

 

**2005 EXECUTIVE DEFERRED COMPENSATION PLAN**

 

WHEREAS,Hilton Hotels Corporation (the “Company”) hereby establishes a deferredcompensation plan (the “Plan”), effective as of November 12, 2004 fordeferrals with respect to Compensation (as defined below) to be earned or to beotherwise paid on or after January 1, 2005, to provide supplementalretirement income benefits for a select group of management and highlycompensated employees through deferrals of base salary and bonus compensationand Company contributions.

 

NOW,THEREFORE, the Plan is hereby established, on the terms and conditionshereinafter set forth:

 

**ARTICLE ITITLE AND DEFINITIONS**

 

**1.1 – Title.**

 

ThisPlan shall be known as the Hilton Hotels 2005 Executive Deferred CompensationPlan.

 

**1.2 - Definitions.**

 

Wheneverthe following words and phrases are used in this Plan, with the first lettercapitalized, they shall have the meanings specified below.

 

“BaseSalary Deferral” shall mean that portion of Base Salary as to which an EligibleEmployee has made an irrevocable election to defer receipt of until the datespecified under the In-Service Distribution Option and/or as otherwisespecified under this Plan.

 

“Beneficiary”or “Beneficiaries” shall mean the person or persons, including a trustee,personal representative or other fiduciary, last designated in writing by aParticipant in accordance with procedures established by the Committee toreceive all of the benefits specified

 

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hereunder in the event ofthe Participant’s death. No Beneficiary designation shall become effectiveuntil it is filed with the Committee. If there is no Beneficiary designation ineffect, or if there is no surviving designated Beneficiary, then theParticipant’s surviving spouse shall be the Beneficiary. If there is nosurviving spouse to receive any benefits payable in accordance with thepreceding sentence, the duly appointed and currently acting personal representativeof the Participant’s estate (which shall include either the Participant’sprobate estate or living trust) shall be the Beneficiary. In any case wherethere is no such personal representative of the Participant’s estate dulyappointed and acting in that capacity within 90 days after the Participant’sdeath (or such extended period as the Committee determines is reasonablynecessary to allow such personal representative to be appointed, but not toexceed 180 days after the Participant’s death), then Beneficiary shall mean theperson or persons who can verify by affidavit or court order to thesatisfaction of the Committee that they are legally entitled to receive thebenefits specified hereunder. In the event any amount is payable under the Planto a minor, payment shall not be made to the minor, but instead be paid (i) tothat person’s living parent(s) to act as custodian, (ii) if that person’sparents are then divorced, and one parent is the sole custodial parent, to suchcustodial parent, or (iii) if no parent of that person is then living, toa custodian selected by the Committee to hold the funds for the minor under theUniform Transfers or Gifts to Minors Act in effect in the jurisdiction inwhich the minor resides. If no parent is living and the Committee decides notto select another custodian to hold the funds for the minor, then payment shallbe made to the duly appointed and currently acting guardian of the estate forthe minor or, if no guardian of the estate for the minor is duly appointed andcurrently acting within 60 days after the date the amount becomes payable,payment shall be deposited with the court having jurisdiction over the estateof the minor.

 

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“Board”shall mean the Board of Directors of Hilton Hotels Corporation.

 

“BonusCompensation Deferral” shall mean that portion of Bonus Compensation as towhich an Eligible Employee has made an irrevocable election to defer receipt ofuntil the date specified under the In-Service Distribution Option and/or asotherwise specified under this Plan.

 

“Changein Control” shall have the same meaning ascribed to the term “change in control”under the Treasury regulations to be issued under section 409A of theCode.

 

“Code”shall mean the Internal Revenue Code of 1986, as amended.

 

“Committee”shall mean the Committee appointed by the Board to administer the Plan inaccordance with Article X, or its delegate.

 

“Company”shall mean Hilton Hotels Corporation, any successor corporation and eachcorporation which is a member of a controlled group of corporations (within themeaning of section 414(b) of the Code) of which Hilton HotelsCorporation is a component member.

 

“CompanyContribution” shall equal the amount described in Section 4.2.

 

“Compensation”shall mean the total salary paid to the Eligible Employee, including cashbonuses, in a Plan Year. An Eligible Employee’s “Compensation” shall consist ofthe Eligible Employee’s “Base Salary” as in effect from time to time during aPlan Year and the Eligible Employee’s “Bonus Compensation” which shall equalthe amount of any cash incentive to be paid to an Eligible Employee under anincentive plan maintained by the Company and, effective January 1, 2006, anyother cash bonus of any kind.

 

“CompensationDeferral” means that portion of Compensation as to which a Participant has madean irrevocable election to defer receipt until the date specified under theIn-Service Distribution Option and/or as otherwise specified under this Plan.

 

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“Disabled”or “Disability” shall mean that a Participant is disabled due to sickness orinjury which qualifies the Participant for disability payments under theCompany’s long term disability plan. A Participant shall be considered totallyand permanently disabled on the date he qualifies for such long term disabilitypayments.

 

“DistributionOption” shall mean the two distribution options which are available under thePlan, consisting of the Separation Distribution Option and the In-ServiceDistribution Option.

 

“DistributionOption Account” or “Accounts” shall mean, with respect to a Participant, theSeparation Distribution Account and/or the In-Service Distribution Account(s)established on the books of account of the Company, pursuant to Article IV,for each Participant.

 

“EffectiveDate” shall mean November 12, 2004.

 

“EligibleEmployee” shall mean (i) officers of Hilton Hotels Corporation at the VicePresident level or higher, (ii) hotel managers who are employed by theCompany and selected by the Committee to participate in the Plan pursuant to Article II,or (iii) Highly Compensated Employees who are selected by the Committee toparticipate in the Plan pursuant to Article II.

 

“EnrollmentAgreement” shall mean the authorization form which an Eligible Employeefiles with the Committee to participate in the Plan.

 

“Fund”or “Funds” shall mean one or more of the investments selected by the Committeepursuant to Section 3.3(a).

 

“HighlyCompensated Employee” shall mean an employee of the Company who the Committee,in its discretion, anticipates will receive Compensation in excess of thesalary limitation contained in section 401(a)(17) of the Code for theapplicable Plan Year or who the Committee otherwise determines to be a highlycompensated employee or member of a select group of management within themeaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

 

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“In-ServiceDistribution Account or Accounts” shall mean the Account(s) maintained for aParticipant to which Compensation Deferrals and Company Contributions arecredited pursuant to the In-Service Distribution Option.

 

“In-ServiceDistribution Option” shall mean the Distribution Option pursuant to whichbenefits are payable in accordance with Article VI.

 

“InvestmentReturn” shall mean, for each Fund, an amount equal to the net investmentperformance of such Fund on a given day, as determined by the Committee.

 

“KeyEmployee” shall mean (i) officers ofthe Company having annual compensation greater than $130,000 (adjusted forinflation and limited to 50 employees), (ii) five percent owners, and (iii) onepercent owners having annual compensation from the employer greater than$150,000, all as determined by the Committee in a manner consistent with theregulations issues under section 409A of the Code.

 

“Participant”shall mean any Eligible Employee who elects to defer Compensation in accordancewith Section 3.1.

 

“Plan”shall mean the Hilton Hotels 2005 Executive Deferred Compensation Plan setforth herein, in effect as of the Effective Date, or as amended from time totime.

 

“PlanYear” shall mean the 12 consecutive month period beginning on a January 1.

 

“PriorPlan” shall mean the Hilton Hotels Executive Deferred Compensation Plan, asamended.

 

“Retirement”shall mean a Participant’s Separation from Service (for reasons other thandeath) on or after the combination of the Participant’s age and Years ofVesting Service equals at least 55.

 

“SeparationDate” shall mean the date a Participant incurs a Separation from Service.

 

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“SeparationDistribution Account” shall mean the Account maintained for a Participant towhich Compensation Deferrals and Company Contributions are credited pursuant tothe Separation Distribution Option.

 

“SeparationDistribution Option” shall mean the Distribution Option pursuant to whichbenefits are payable in accordance with Article VI.

 

“Separationfrom Service” shall mean a Participant’s separation from service with theCompany within the meaning of section 409A of the Code and the regulationsissued thereunder.

 

“UnvestedCompany Contribution” shall mean that portion of the Company Contributions (asdefined in the Prior Plan) credited to a participant under the Prior Plan thatare not earned and vested for purposes of Section 409A of the Code as of December 31,2004.

 

“Yearof Vesting Service” shall mean a “Year of Vesting Service” as defined in theHilton Hotels 401(k) Savings Plan.

 

**ARTICLE IIPARTICIPATION**

 

Priorto December 31 of each Plan Year, the Committee shall designate whichhotel managers and which Highly Compensated Employees shall become EligibleEmployees for the following Plan Year. An Eligible Employee designated as aParticipant shall thereafter, unless otherwise determined by the Committee, beeligible to make a Compensation Deferral for each Plan Year. Participation inthe Plan shall be made conditional upon an Eligible Employee’s acknowledgement,in writing or by making a deferral election under the Plan, that all decisionsand determinations of the Committee shall be final and binding on theParticipant, his or her beneficiaries and any other person having or claimingan interest under the Plan.

 

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**ARTICLE IIIDEFERRAL ELECTIONS**

 

**3.1 - Electionsto Defer Compensation.**

 

(a)                                  Each EligibleEmployee may elect to make a Compensation Deferral by filing with theCommittee an election that conforms to the requirements set forth in this Article III,on an Enrollment Agreement provided by the Committee, no later than December 31of the Plan Year preceding the Plan Year for which the Compensation is to beearned and specifying whether the Participant elects a Base Salary Deferral ora Bonus Compensation Deferral or a combination, the Distribution OptionAccounts to which such amounts will be credited, the form and timing ofdistribution and such other information as the Committee shall require.

 

                (i)                                     Notwithstanding (a) above,if an Eligible Employee’s Bonus Compensation is “performance-based compensation”as contemplated by section 409A of the Code and related regulations, theCommittee may allow the Eligible Employee to elect to defer all or aportion of his Bonus Compensation for a Plan Year at a time determined by theCommittee, which may be no less than six months before the end of theapplicable Plan Year in which such Bonus Compensation is to be earned.

 

                (ii)                                  The Eligible Employeeshall elect to allocate his or her Compensation Deferrals (and any CompanyContributions that may be credited with respect thereto) between the Distribution Options in wholepercentage increments; provided that 100 percent of such Deferrals (andCompany Contributions) may be allocated to one or the other of the DistributionOptions.

 

                (iii)                               The Committee may establishminimum or maximum amounts that may be deferred under this Section andmay change such standards from time to time. Any such limits shall becommunicated by the Committee to the Plan Administrator and by the Plan

 

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Administrator to theParticipants prior to the commencement of a Plan Year. No Participant may havemore than one Separation Distribution Account.

 

(b)                                 Notwithstandinganything herein to the contrary, no Eligible Employee shall be permitted todefer Compensation which the Committee reasonably determines is required to paythe Eligible Employee’s portion of payroll taxes and contributions towardsbenefits (including, but not limited to, medical, life, dental and disability)provided to the Eligible Employee and his or her dependents.

 

(c)                                  Any CompensationDeferral made under Section 3.1(a) above shall remain in effect andbe irrevocable, notwithstanding any change in a Participant’s Compensation, forthe entire Plan Year for which it is effective and for all subsequent PlanYears unless the Participant files a new Enrollment Agreement changing his orher Compensation Deferral election for a subsequent Plan Year in accordancewith Section 3.1(a) above. If aParticipant elects to allocate all or a portion of his Compensation Deferralsto an In-Service Distribution Account, that election will remain effective onlyfor the Plan Year to which the Enrollment Agreement relates. If the Participantdoes not elect an in-service distribution date for deferrals to the In-ServiceDistribution Account in a subsequent Plan Year, such deferrals shallautomatically be allocated to the Participant’s Separation Distribution Account.Compensation Deferral elections shall be made on an Enrollment Agreementfiled with the Committee by December 31 of a Plan Year (or such earlierdate as may be designated by the Committee) to make a CompensationDeferral for Compensation to be earned on or after January 1 of theimmediately following Plan Year.

 

(d)                                 The Committee may, inits discretion, permit Employees who first become Eligible Employees after thebeginning of a Plan Year, including Employees who become Eligible Employeesbecause they are promoted or hired by the Company on or after January 1 of

 

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a Plan Year to a positionof Vice President or as a hotel manager designated by the Committee as anEligible Employee, to enroll in the Plan for that Plan Year by filing acompleted and fully executed Enrollment Agreement as soon as practicablefollowing the date the Employee becomes an Eligible Employee but, in any event,within 30 days after such date. Notwithstanding the foregoing, however, anyEnrollment Agreement executed by an Eligible Employee, pursuant to thisSection, to make a Compensation Deferral shall apply only to Compensationearned by the Eligible Employee after the date on which such EnrollmentAgreement is filed.

 

(e)                                  Alldeferral elections under the Plan shall be made in accordance with section 409Aof the Code, and the regulations thereunder.

 

**3.2 – DistributionElections.**

 

Subjectto Section 3.4, in the Enrollment Agreement, each Eligible Employee shallselect the form and the timing of payment with respect to the EligibleEmployee’s Compensation Deferral. An Eligible Employee’s deferral electionunder this Article III shall not be effective unless and until theEligible Employee makes the required distribution elections under this Section 3.2.Each Eligible Employee shall make the following form and timing of paymentelections:

 

(a)                                  *Retirement*. An Eligible Employee shall elect the form ofpayment in which amounts credited to the Eligible Employee’s DistributionOption Accounts shall be paid where (i) the Eligible Employee’s SeparationDate occurs on or after eligibility for Retirement and (ii) the amount tobe distributed from all of the Eligible Employee’s Distribution Option Accountsexceeds $100,000 (taking into account all deferrals made to all of the EligibleEmployee’s Distribution Option Accounts). The Eligible Employee may electa lump sum, or quarterly, semi-annual or annual installments payable over 5,10, 15 or 20 years. This form of payment

 

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election shall apply toall Compensation Deferrals credited on behalf of the Eligible Employee to hisSeparation Distribution Account in any Plan Year in which the Eligible Employeemakes Compensation Deferrals under this Plan, subject to change only inaccordance with Section 3.4 below. Inthe event the amount to be distributed from a Participant’s Distribution OptionAccounts upon a Separation from Service after eligibility for Retirement doesnot exceed $100,000 (taking into account all deferrals made to all ofthe Eligible Employee’s Distribution Option Accounts) as determined under Section 6.2,the Participant’s Distribution Option Accounts shall be paid in a lump sum inaccordance with Section 6.2 without regard to the Participant’s actual form ofpayment election.

 

(b)                                 *In-Service Distribution*. An Eligible Employee shall elect (i) theform of payment in which amounts credited to the Eligible Employee’sIn-Service Distribution Account, if applicable, shall be paid where the amountto be distributed exceeds $25,000 and (ii) the Plan Year in which suchpayment shall commence; provided that the Plan Year selected in (ii) may notbe prior to the third Plan Year following the Plan Year in which theCompensation Deferral is made, except as permitted under Section 3.6. TheEligible Employee may elect a lump sum, or quarterly, semi-annual orannual installments payable over 2, 3, 4 or 5 years. This election shall applyonly to the Compensation Deferrals credited on behalf of the Eligible Employeeto the In-Service Distribution Account created pursuant to the Enrollment Form towhich such Compensation Deferrals relate, except to the extent changed pursuantto a subsequent election in accordance with Section 3.4 below. In theevent the amount to be distributed from a Participant’s In-Service DistributionAccount does not exceed $25,000 as of the applicable distribution date, theParticipant’s In-Service Distribution Account shall be paid in a lump sum inaccordance with Section 6.2 without regard to the Participant’s actual form ofpayment

 

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election(s). If aParticipant incurs a Separation from Service prior to the in-servicedistribution date elected by the Participant with respect to the Participant’sIn-Service Distribution Account, the Participant’s distribution election withrespect to such In-Service Distribution Account shall become invalid anddistribution shall instead be made in accordance with the Participant’selections under Sections 3.2(a), 3.2(c) or 3.4, as applicable.

 

(c)                                  *Separation from Service*.

 

AnEligible Employee shall elect the form of payment in which amountscredited to the Eligible Employee’s Separation Distribution Account, ifapplicable, shall be paid where (i) the Eligible Employee’s SeparationDate occurs prior to eligibility for Retirement, and (ii) the amount to bedistributed from all of the Eligible Employee’s Distribution Option Accountsexceeds $100,000 (taking into account all deferrals made to all of the EligibleEmployee’s Distribution Option Accounts). The Eligible Employee may electa lump sum, or annual installments payable over 5 years. This election shallapply to all Compensation Deferrals credited on behalf of the Eligible Employeeto his Separation Distribution Account in any Plan Year in which CompensationDeferrals are made under this Plan., subject to change only in accordance with Section 3.4below. In the event the amount to bedistributed from a Participant’s Distribution Option Accounts upon a Separationfrom Service before eligibility for Retirement does not exceed $100,000(taking into account all deferrals made to all of the Eligible Employee’sDistribution Option Accounts) as determined under Section 6.2, theParticipant’s Distribution Option Accounts shall be paid in a lump sum inaccordance with Section 6.2 without regard to the Participant’s actual form ofpayment election.

 

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**3.3 - InvestmentElections.**

 

(a)                                  At the time of makingthe deferral elections described in Section 3.1 and the distributionelections described in Section 3.2, the Participant shall designate, in amanner prescribed by the Committee, which Funds the Participant’s Accounts willbe deemed to be invested in for purposes of determining the Investment Returnto be credited to those Accounts. The Funds shall be as selected by theCommittee from time to time and the Committee may add, change, or deleteFunds at any time. In making the designation pursuant to this Section 3.3,the Participant may specify that all or any whole percentage of hisAccounts be deemed to be invested in one or more of the Funds. A Participant may changethe designation made under this Section 3.3, in a manner prescribed by theCommittee, on any business day. Such change shall be effective as soon asadministratively feasible after it is received.

 

(b)                                 If a Participant failsto elect a type of Fund under this Section 3.3, he or she shall be deemedto have elected an S & P 500 Index Fund (or, if no such Fund exists,the Fund designated by the Committee).

 

(c)                                  Although theParticipant may designate the Funds according to Section 3.3(a) above,the Committee shall select from time to time, in its sole discretion, for eachof the Funds described in Section 3.3(a) above, a commerciallyavailable mutual fund or contract or an investment fund established with andadministered by an investment manager selected by the Committee. The InvestmentReturn of each such commercially available mutual fund, contract or investmentfund shall be used to determine the amount of earnings to be credited toParticipants’ Accounts under Article IV although nothing set forth in thisPlan shall require an actual investment of monies in any such mutual fund or inany other Fund designated as a deemed investment vehicle for CompensationDeferrals.

 

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**3.4 – SubsequentElections.**

 

The Committee may establish rules allowing aParticipant to make a subsequent election to postpone payment of CompensationDeferrals under his In-Service Distribution Account(s) and/or his SeparationDistribution Account, in accordance with the rules in this Section 3.4;provided that any such subsequent election shall be made in accordance with therequirements of section 409A of the Code and the regulations thereunderand that no subsequent election may result in an impermissibleacceleration of payment as described in section 409A of the Code and theregulations thereunder. The following rules shall apply to subsequentelections under the Plan:

 

(a)                                  With respect to Compensation Deferrals under anIn-Service Distribution Account, a Participant may make a subsequentelection to defer the payment to a later Plan Year or to change the form ofpayment applicable to such In-Service Distribution Account; provided that (i) thesubsequent election must be made at least 12 months prior to the January inwhich the first scheduled payment was to occur, (ii) the subsequentelection may not take effect until at least 12 months after the date onwhich the election is made, and (iii) except with respect to an electionrelated to payment upon an unforeseeable emergency, the first payment withrespect to which such election is made must be deferred for a period of notless than five years from the date such payment would otherwise have been made.

 

(b)                                 A Participant may make a subsequent electionto change the form or time at which Compensation Deferrals credited to aParticipant’s Separation Distribution Account will be paid, provided that (i) thesubsequent election may not take effect until at least 12 months after thedate on which the election is made, and (ii) except with respect to anelection related to payment upon an unforeseeable emergency or death, the firstpayment with respect to which

 

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suchelection is made must be deferred for a period of five years from the date suchpayment would have otherwise have been made. Participants shall be permitted tomake only one subsequent election to change the form or time of payment oftheir Separation Distribution Account, excluding any changes made pursuant to Section 3.6...

 

**3.5 - Cancellationof Elections.**

 

To theextent permitted under Section 409A of the Code and the regulations issuedthereunder, the Committee may permit Participants during all or part ofcalendar year 2005 to cancel their deferral elections, in whole or in part,with respect to any amounts deferred under this Plan on or after January 1,2005, on such terms as shall be determined by the Committee. If a deferralelection is cancelled, the full amount of the distribution shall be included inthe Participant’s income in calendar year 2005, or if later, the Participant’staxable year in which the amount is earned and vested.

 

**3.6 - NewPayment Elections.**

 

To theextent permitted under Section 409A of the Code and the regulations issuedthereunder, the Committee may permit Participants to make new paymentelections on or before December 31, 2006 with respect to the time and/or form ofpayment of amounts deferred hereunder on or after January 1, 2005, on suchterms as shall be determined by the Committee, provided that a Participantshall not be permitted in calendar year 2006 (i) to change paymentelections with respect to amounts that the Participant would otherwise receivein 2006 or (ii) to cause payments to be made in 2006.

 

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**ARTICLE IVDISTRIBUTION OPTION ACCOUNTS**

 

**4.1 - CompensationDeferrals.**

 

TheCommittee shall establish and maintain separate Distribution Option Accountswith respect to a Participant. A Participant’s Distribution Option Accounts may consistof a Separation Distribution Account and/or one or more In-Service DistributionAccount(s), as elected by the Participant. Each Participant’s DistributionOption Accounts shall be further divided into separate subaccounts (“subaccounts”),each of which corresponds to a Fund elected by the Participant pursuant to Section 3.3(a).A Participant’s Distribution Option Account shall be credited as follows:

 

Assoon as practicable after the end of each calendar month, the Committee shallcredit the subaccounts of the Participant’s Distribution Option Account with anamount equal to the Base Salary and/or Bonus Compensation that would otherwisehave been earned for such calendar month in accordance with the DistributionOption irrevocably elected by the Participant in the Enrollment Agreement andin accordance with the Participant’s investment elections under Section 3.3(a).Any amount once taken into account as Base Salary and/or Bonus Compensation forpurposes of this Plan shall not be taken into account thereafter. TheParticipant’s Distribution Option Accounts shall be reduced by the amount ofpayments made by the Company to the Participant or the Participant’sBeneficiary pursuant to this Plan.

 

**4.2 - CompanyContribution.**

 

AParticipant’s Distribution Option Account shall be further credited with theCompany Contribution for that Participant as follows:

 

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(a)                                  As soon aspracticable after the end of each calendar month, the Committee shall creditthe subaccounts of the Participant’s Distribution Option Account with an amountequal to the portion of the Company Contribution, if any, which the Participantelected to be deemed to be invested in a certain type of Fund. A Participant’sCompany Contribution for any payroll period shall be equal to 50% of theCompensation Deferral by the Participant during such payroll period inaccordance with the Participant’s election under Section 3.1(a),disregarding any such deferral in excess of 10% of the Participant’sCompensation for such payroll period. Company Contributions, when credited, arecredited to the Distribution Option Accounts in the same proportion as the BaseSalary and/or Bonus Compensation they match;

 

(b)                                 As of the last day ofeach month, forfeitures that occur under Section 5.2 during such monthshall be returned to the Company for its unrestricted use; and

 

(c)                                  NotwithstandingSections 4.2(a) and (b) above, from time-to-time and in its solediscretion, the Board may provide that additional Company Contributions becredited to some or all Participants, according to the terms and conditionsdetermined by the Board.

 

(d)                                 Effectiveas of January 1, 2005, all Unvested Company Contributions under the PriorPlan shall be credited to this Plan and shall be governed by the terms andprovisions of this Plan in all respects. Whether or not an employee is aParticipant in this Plan, the value of the employee’s Unvested CompanyContributions, as of December 31, 2004, shall be credited to a SeparationDistribution Account under this Plan, effective as of January 1, 2005. Ifthe employee is not a Participant in this Plan, the employee shall be requiredto make the distribution elections required under Sections 3.2(a) and 3.2(c) withrespect to such amount no later than December 31, 2005. If the employee isa Participant in this Plan, such amount shall

 

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automatically become subjectto the Participant’s distribution elections under Sections 3.2 and 3.4 for theParticipant’s Separation Distribution Account.

 

**4.3 - InvestmentReturn.**

 

Eachsubaccount of a Participant’s Distribution Option Account shall, as of eachbusiness day, be credited with earnings and debited with losses in an amountequal to that determined by multiplying the balance credited to such subaccountas of the previous day by the Investment Return for the corresponding Fundpursuant to Section 3.3(a).

 

**ARTICLE VVESTING**

 

**5.1 - Compensation Deferral.**

 

AParticipant’s Compensation Deferral credited to his or her Distribution OptionAccount shall be 100% vested at all times.

 

**5.2 - CompanyContribution.**

 

(a)                                  All CompanyContributions credited to a Participant’s Distribution Option Account shallbecome nonforfeitable in the following increments:  (i) 25% upon the Participant’scompletion of two Years of Vesting Service, (ii) an additional 25% (50%total) upon completion of three Years of Vesting Service, (iii) an additional25% (75% total) upon completion of four Years of Vesting Service, and (iv) theDistribution Option Account balance shall be fully nonforfeitable in itsentirety on and after the Participant’s completion of five Years of VestingService.

 

(b)                                 Notwithstanding Section 5.2(a) above,a Participant’s Distribution Option Account balance shall be fullynonforfeitable in its entirety should:  (i) theParticipant die while providing service to the Company, (ii) theParticipant become Disabled while providing service to the Company, or (iii) thereoccur a Change in Control.

 

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(c)                                  When a Participantincurs a Separation Date, the portion of the Company Contribution credited tohis or her Distribution Option Account which is not vested shall immediately beforever forfeited to the Company, and the Company shall have no obligation tothe Participant (or Beneficiary) with respect to such forfeited amount.

 

**ARTICLE VIDISTRIBUTIONS**

 

**6.1 – Form andTiming of Distribution.**

 

(a)                                  Subjectto Section 6.2, in the case of a Participant whose Separation Date occurson or after eligibility for Retirement and the vested portion of theParticipant’s Separation Distribution Account exceeds $100,000 (taking intoaccount all deferrals made to the Participant’s Separation DistributionAccount), the Participant’s Separation Distribution Account shall bedistributed in the form elected by the Participant pursuant to Sections3.2 and 3.4, as applicable, and shall be paid, or commence to be paid, as soonas reasonably practicable following the end of the twelfth full calendar monthafter the Participant has a Separation from Service, unless payment is deferredpursuant to Section 3.4.

 

(b)                                 Subjectto Section 6.2 and to (i) and (ii) below, in the case of aParticipant who continues to provide service to the Company and the vestedportion of a Participant’s In-Service Distribution Account exceeds $25,000(applied on an Account by Account basis), the vested portion of the Participant’sIn-Service Distribution Account shall be paid to the Participant as soon asreasonable practicable following the date elected by the Participant pursuantto Sections 3.2 and 3.4, as applicable; provided that if the amount to bedistributed does not exceed $25,000, distribution shall be made in a lump sumin accordance with Section 6.2.

 

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(i)                                     Ifthe Participant is not fully vested when the In-Service Distribution Account isto be paid, the non-vested portion at the date of first payment willautomatically be transferred to the Participant’s Separation DistributionAccount.

 

(ii)                                  Ifthe Participant incurs a Separation from Service after distribution hascommenced in accordance with this Section 6.1(b) but prior to the dateon which the Participant’s In-Service Distribution Account(s) is fullydistributed, distribution of the remaining amounts shall be governed by theParticipant’s distribution elections under Section 3.2(a) or 3.2(c),as applicable, and shall be distributed in accordance with Section 6.1(a) or6.1(c), as applicable.

 

(c)                                  Inthe case of a Participant whose Separation Date occurs prior to the earliestdate on which the Participant is eligible for Retirement, other than by reasonof death, and the vested portion of the Participant’s Distribution OptionAccounts exceeds $100,000 (taking into account all deferrals made to theParticipant’s Distribution Option Accounts), the vested portion of aParticipant’s Distribution Option Accounts shall be distributed in the form electedby the Participant pursuant to Sections 3.2 and 3.4, as applicable, and shallbe paid or commence to be paid as soon as reasonably practicable following theend of the twelfth full calendar month after the Participant has a Separationfrom Service, unless payment is deferred pursuant to Section 3.4. Theunvested portion of any Distribution Option Account shall be forfeited inaccordance with Section 5.2.

 

**6.2 – SmallBenefit Cashout.**

 

(a)                                  Notwithstandingany provision of the Plan or election by a Participant to the contrary, in theevent the value of the vested portion of a Participant’s SeparationDistribution Account does not exceed $100,000 (taking into account alldeferrals made to the Eligible

 

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Employee’s SeparationDistribution Account) as of the date the Participant’s Account becomesdistributable, then the vested portion of the Participant’s Account shall bepaid in a lump sum as soon as reasonably practicable following the date the Participant’sAccount becomes distributable. For purposes of the foregoing, the Participant’sAccount shall be valued as of the last business day of the month following themonth in which the Participant’s Separation Date occurs. If the value at suchtime does not exceed $100,000, the Participant’s Account shall be distributedin a lump sum as soon as reasonably practicable thereafter.

 

(b)                                 Notwithstandingany provision of the Plan or election by a Participant to the contrary, in theevent the value of the vested portion of a Participant’s In-ServiceDistribution Account does not exceed $25,000 (applied on an Account by Accountbasis) as of the date the Participant’s Account becomes distributable, then thevested portion of the Participant’s Account shall be paid in a lump sum as soonas reasonably practicable following the date the Participant’s Account becomesdistributable.

 

**6.3 – Payout.**

 

(a)                                  Anylump sum benefit payable under this Article VI shall be paid in January ofthe Plan Year elected by the Participant pursuant to Sections 3.2(b) and3.4as applicable, or otherwise at the time specified for payment under Sections6.1(a) or 6.1(c), as applicable, in an amount equal to the vested value ofthe portion of such Distribution Option Account being distributed as of thebusiness day the Funds are deemed to be liquidated to make the payment.

 

(b)                                 Installmentpayments, if any, payable under this Article VI shall commence in January ofthe Plan Year elected by the Participant pursuant to Sections 3.2(b) and3.4, as applicable, or otherwise at the time specified for payment underSections 6.1(a) or 6.1(c), as applicable, in an amount equal to (i) thevested value of such portion of such Distribution Option

 

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Account being distributedas of the business day the Funds are deemed to be liquidated to make thepayment, divided by (ii) the number of installment payments elected by theParticipant in the applicable Enrollment Agreement with respect to anIn-Service Distribution Account or in the distribution election form filedpursuant to Section 3.2 or 4.2(d) with respect to the SeparationDistribution Account.. The remaining installments shall be paid in an amountequal to (i) the vested value of such portion of the Distribution OptionAccount being distributed as of the business day the Funds are deemed to beliquidated to make the payment divided by (ii) the number of installmentsremaining.

 

**6.4 – Distributionsto Key Employees.**

 

Notwithstandingany provision of the Plan to the contrary, distributions under Sections 6.1(a) and6.1(c) to Participants who are Key Employees shall be postponed to a datethat is not less than 6 months following the Participant’s Separation Date.

 

**6.5 – FinancialHardship of Participant.**

 

(a)                                  At any time prior to commencement of paymentpursuant to this Article VI, a Participant may request payment to himor her of all or a portion of the amounts that the Participant has deferredunder the Plan. The decision to approve or deny such a request shall be in theabsolute discretion of the Committee. However, such a request shall be approvedonly upon a finding that the Participant has suffered a severe financialhardship which has resulted from an illness or accident of the Participant, theParticipant’s spouse, or a dependent (as defined in section 152(a) ofthe Code) of the Participant, loss of the Participant’s property due tocasualty, or other similar extraordinary and unforeseeable circumstancesarising as a result of events beyond the Participant’s control, and then onlyin an amount necessary to eliminate such hardship plus amounts necessary to paytaxes reasonably anticipated as a result of the

 

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distribution,after taking into account the extent to which such hardship is or may berelieved through reimbursement or compensation by insurance or by liquidationof the Participant’s assets (to the extent the liquidation of such assets wouldnot itself cause severe financial hardship). In the event such a request isapproved, payment of all or a portion of the amounts previously deferred by theParticipant, with credited interest, to the extent approved by the Committee,shall be made as soon as practicable to the Participant. Amounts otherwise payableto a Participant hereunder shall be adjusted (as determined by the Committee inits absolute discretion) to take into account such financial hardship payment. TheCommittee shall administer hardship distribution requests consistently with section 409Aof the Code and the regulations thereunder.

 

(b)                                 If a Participant elects to take a hardshipdistribution prior to June 30 of any Plan Year, the Participant’s deferralelection shall be cancelled for the Plan Year in which the distribution occurswith respect to all salary and bonuses not yet earned.. If a Participant electsto take a hardship distribution on or after June 30 of any Plan Year, theParticipant’s deferral election shall be cancelled for the Plan Year in whichthe hardship distribution occurs with respect to all salary and bonuses not yetearned, and the Participant shall be suspended from participation in the Planfor the following Plan Year.

 

**6.6 – PermissibleDistribution Event.**

 

Notwithstandingany provision of the Plan to the contrary, no distributions shall be madeexcept upon a specified date or event as permitted pursuant to section 409Aof the Code and the regulations thereunder.

 

**6.7 - Paymentby Trust.**

 

TheCompany may cause the payment of benefits under this Plan to be made inwhole or in part by the trustee of a trust designated by the Committee(the “Trust”). The Committee may

 

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direct the Trustee to paythe Participant’s or Beneficiary’s benefit at the time and in the amountdescribed herein. In the event the amounts allocated to the Participant underthe Trust are not sufficient to provide the full amount of benefit payable tothe Participant, the Company shall pay the remainder of such benefit.

 

**6.8 - Inabilityto Locate Participant.**

 

In theevent that the Committee is unable to locate a Participant or Beneficiarywithin two years following the date the Participant was to commence receivingpayment, the entire amount allocated to the Participant’s Deferral Account andCompany Contribution Account shall be forfeited. If, after such forfeiture, theParticipant or Beneficiary later claims such benefit, such benefit shall bereinstated without interest or earnings from the date payment was to commencepursuant to the Participant’s elections under Sections 3.2 and 3.4, asapplicable.

 

**ARTICLE VIICHANGE IN CONTROL**

 

In theevent of a Change in Control, any Participant shall receive a distribution of100% of the value of the Participant’s Distribution Option Accounts at the timeof the distribution. Such distribution shall be made in a lump sum within 30days following the date the Change in Control is consummated, in an amountequal to the value of such Distribution Option Accounts as of the business daythe Funds are deemed to be liquidated to make the payment.

 

**ARTICLE VIIIDEATH BENEFITS**

 

Uponthe death of a Participant before his or her Distribution Option Account(s) hasbeen paid in full (either in a lump sum or installment payments), his or herBeneficiary shall receive the balance of the Participant’s vested Account as ofthe date of death, as adjusted by subsequent gains or losses prior todistribution, in the form of a lump sum payment as soon as reasonablypracticable following the date of the Participant’s death.

 

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**ARTICLE IXCLAIMS PROCEDURES**

 

**9.1 – Claims.**

 

AParticipant or, following the Participant’s death, a Beneficiary (collectivelyreferred to in this section as “Claimant”) may submit a claim forbenefits under the Plan. Any claim forbenefits under this Plan shall be made in writing to the Committee. If suchclaim for benefits is wholly or partially denied, the Committee shall, within90 days after receipt of the claim, notify the Claimant of the denial of theclaim unless special circumstances require an extension of time for processingthe claim, which extension shall not exceed 180 days from receipt of the claim.If such extension is required, written notice of the extension shall befurnished to the Claimant prior to the termination of the initial 90-day periodand shall indicate the special circumstances requiring an extension of time andthe date by which the Committee expects to render a final decision. A notice ofdenial shall be in writing, shall be written in a manner calculated to beunderstood by the Claimant, and shall contain the specific reason or reasonsfor denial of the claim, a specific reference to the pertinent Plan provisionsupon which the denial is based, a description of the additional material orinformation (if any) necessary to perfect the claim, together with anexplanation of why such material or information is necessary, and anexplanation of the claims review procedure set forth below, including astatement of the Claimant’s right to bring a civil action under section 502(a) ofthe Employee Retirement Income Security Act of 1974, as amended (“ERISA”)following an adverse benefit determination on review.

 

**9.2 – Appeal.**

 

Within 60 days after the receipt by a Claimant of awritten notice of denial of a claim, the Claimant may file a writtenrequest with the Committee that it conduct a full and fair review of

 

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thedenial of the claim for benefits. The Claimant, or duly authorizedrepresentative, shall receive, upon request and free of charge, reasonableaccess to, and copies of, all documents, records and other information relevantto the Claimant’s claim for benefits. The Claimant, or duly authorizedrepresentative may also submit written comments, documents, records andother information relating to the claim for benefits, and the review will takeinto account such items whether or not they were considered in the initialbenefit determination.

 

The Committee shall deliver to the Claimant, orauthorized representative, a written decision on the claim within 60 days afterthe receipt of the request for review, except that if there are specialcircumstances that require an extension of time, the 60-day period may beextended to 120 days. If such extension is required, written notice shall befurnished to the Claimant, or authorized representative, prior to thetermination of the initial 60-day period and shall indicate the specialcircumstances requiring an extension of time and the date by which the final decisionwill be rendered. The decision shall be written in a manner calculated to beunderstood by the Claimant, include the specific reason or reasons for thedecision, include a statement that the Claimant is entitled to receive uponrequest and free of charge, access to and copies of all documents and otherinformation relevant to the claim, contain a specific reference to thepertinent Plan provisions upon which the decision is based, and include astatement describing any voluntary appeal procedures offered by the Plan and astatement of the Claimant’s right to bring an action under section 502(a) ofERISA.

 

**9.3 – Authority.**

 

The Committee, in determining claims for benefits, shallhave the complete discretion to review and determine related factual questions,to construe the terms of the Plan, and to bind the Company with respect to thePlan.

 

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**ARTICLE XADMINISTRATION**

 

**10.1 - Committee.**

 

Acommittee shall be appointed by, and serve at the pleasure of, the Board. Thenumber of members comprising the Committee shall be determined by the Boardwhich may from time to time vary the number of members. A member of theCommittee may resign by delivering a written notice of resignation to theBoard. The Board may remove any member by delivering a certified copy ofits resolution of removal to such member. Vacancies in the membership of theCommittee shall be filled promptly by the Board.

 

**10.2 - Committee Action.**

 

TheCommittee shall act at meetings by affirmative vote of a majority of themembers of the Committee. Any action permitted to be taken at a meeting may betaken without a meeting if, prior to such action, a written consent to theaction is signed by all members of the Committee and such written consent isfiled with the minutes of the proceedings of the Committee. A member of theCommittee shall not vote or act upon any matter which relates solely to himselfor herself as a Participant. The Chairman or any other member or members of theCommittee designated by the Chairman may execute any certificate or otherwritten direction on behalf of the Committee.

 

**10.3 - Powersand Duties of the Committee.**

 

(a)                                  The Committee, onbehalf of the Participants and their Beneficiaries, shall enforce the Plan inaccordance with its terms, shall be charged with the general administration ofthe Plan, and shall have all powers necessary to accomplish its purposes,including, but not by way of limitation, the following:

 

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(i)                                     Toselect the mutual funds, contracts or investment funds to be the Funds inaccordance with Section 3.3(b) hereof;

 

(ii)                                  Toconstrue and interpret the terms and provisions of this Plan and to makefactual determinations;

 

(iii)                               Tocompute and certify to the amount and kinds of benefits payable to Participantsand their Beneficiaries;

 

(iv)                              Tomaintain all records that may be necessary for the administration of thePlan;

 

(v)                                 Toprovide for the disclosure of all information and the filing or provision of allreports and statements to Participants, Beneficiaries or governmental agenciesas shall be required by law;

 

(vi)                              Tomake and publish such rules for the regulation of the Plan and proceduresfor the administration of the Plan as are not inconsistent with the termshereof; and

 

(vii)                           Toappoint a plan administrator or any other agent, and to delegate to them suchpowers and duties in connection with the administration of the Plan as theCommittee may from time to time prescribe.

 

(viii)                        On behalfof the Company, to select those Highly Compensated Employees who shall beEligible Employees.

 

**10.4 - Constructionand Interpretation.**

 

(a)                                  TheCommittee shall have full discretion to construe and interpret the terms andprovisions of this Plan, which interpretation or construction shall be finaland binding on all parties, including but not limited to, the Company and anyParticipant or Beneficiary. The

 

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Committee shalladminister such terms and provisions in a uniform and nondiscriminatorymanner and in full accordance with any and all laws applicable to the Plan.

 

(b)                                 Nothingcontained in the Plan shall be construed to prevent the Company from taking anyaction which is deemed by it to be appropriate or in its best interest. NoParticipant, Beneficiary, or other person shall have any claim against theCompany as a result of such action. Any decisions, actions or interpretationsto be made under the Plan by the Company or the Board, or the Committee actingon behalf of the Company, shall be made in its respective sole discretion, notas a fiduciary, need not be uniformly applied to similarly situated individualsand shall be final, binding and conclusive on all persons interested in thePlan.

 

**10.5 - Information.**

 

Toenable the Committee to perform its functions, the Company shall supplyfull and timely information to the Committee on all matters relating to theCompensation of all Participants, their death, Disability, or other cause oftermination, and such other pertinent facts as the Committee may require.

 

**10.6 - Compensation,Expenses and Indemnity.**

 

(a)                                  The Committee isauthorized at the expense of the Company to employ such legal counsel as it may deemadvisable to assist in the performance of its duties hereunder. Expenses andfees in connection with the administration of the Plan shall be paid by theCompany.

 

(b)                                 To the extentpermitted by applicable state law, the Company shall indemnify and saveharmless the Committee and each member thereof, the Board and any delegate ofthe Committee who is an employee of the Company against any and all expenses,liabilities and claims, including legal fees to defend against such liabilitiesand claims arising out of their discharge in good faith of responsibilities underor incident to the Plan, other than expenses and

 

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liabilities arising outof willful misconduct. This indemnity shall not preclude such furtherindemnities as may be available under insurance purchased by the Companyor provided by the Company under any bylaw, agreement or otherwise, as suchindemnities are permitted under state law.

 

**10.7 -  Quarterly Statements.**

 

Underprocedures established by the Committee, a Participant shall receive astatement with respect to such Participant’s Accounts on a quarterly basis asof each March 31, June 30, September 30 and December 31.

 

**ARTICLE XIMISCELLANEOUS**

 

**11.1 - UnsecuredGeneral Creditor.**

 

Participantsand their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable rights, claims, or interest in any specific property or assets of theCompany. No assets of the Company shall be held under any trust, or held in anyway as collateral security for the fulfilling of the obligations of the Companyunder this Plan. Any and all of the Company’s assets shall be, and remain, thegeneral unpledged, unrestricted assets of the Company. The Company’s obligationunder the Plan shall be merely that of an unfunded and unsecured promise of theCompany to pay money in the future, and the rights of the Participants andBeneficiaries shall be no greater than those of unsecured general creditors.

 

**11.2 - RestrictionAgainst Assignment.**

 

TheCompany shall pay all amounts payable hereunder only to the person or personsdesignated by the Plan and not to any other person or corporation. No part ofa Participant’s Accounts shall be liable for the debts, contracts, orengagements of any Participant, his or her Beneficiary, or successors ininterest, nor shall a Participant’s Accounts be subject to execution

 

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by levy, attachment, orgarnishment or by any other legal or equitable proceeding, nor shall any suchperson have any right to alienate, anticipate, commute, pledge, encumber, orassign any benefits or payments hereunder in any manner whatsoever. If anyParticipant, Beneficiary or successor in interest is adjudicated bankrupt orpurports to anticipate, alienate, sell, transfer, assign, pledge, encumber orcharge any distribution or payment from the Plan, voluntarily or involuntarily,the Committee, in its discretion, may cancel such distribution or payment(or any part thereof) to or for the benefit of such Participant,Beneficiary or successor in interest in such mariner as the Committee shalldirect.

 

**11.3 - Withholding.**

 

Thereshall be deducted from each payment made under the Plan or any othercompensation payable to the Participant (or Beneficiary) all taxes which arerequired to be withheld by the Company in respect to such payment or this Plan.The Company shall have the right to reduce any payment (or compensation) by theamount of cash sufficient to provide the amount of said taxes.

 

**11.4 - Amendment,Modification, Suspension or Termination.**

 

It is the intention of the Company to continue the Planand to distribute benefits to Participants in accordance with Article 6 inthe absence of the development of circumstances concerning construction oroperation of the Plan which are materially adverse to the Company or theParticipants. However, the Committee or the Board may at any time, or fromtime to time, in its sole discretion amend or terminate the Plan in any mannerthat the Committee or Board deems appropriate, including amending orterminating outstanding deferral elections, if necessary or appropriate tocomply with changes to applicable law, without the consent of any Participant. Inthe event the Committee or the Board acts to terminate the Plan, distributionto Participant shall

 

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bemade in accordance with Article 6, unless an alternative method ofdistribution is permitted under applicable law.

 

**11.5 - GoverningLaw.**

 

ThisPlan shall be construed, governed and administered in accordance with the lawsof the State of California.

 

**11.6 - Receiptor Release.**

 

Anypayment to a Participant or the Participant’s Beneficiary in accordance withthe provisions of the Plan shall, to the extent thereof, be in fullsatisfaction of all claims against the Committee, the Company and the Trustee. TheCommittee may require such Participant or Beneficiary, as a conditionprecedent to such payment, to execute a receipt and release to such effect.

 

**11.7 - Paymentson Behalf of Persons Under Incapacity.**

 

In theevent that any amount becomes payable under the Plan to a person who, in thesole judgement of the Committee, is considered by reason of physical or mentalcondition to be unable to give a valid receipt therefore, the Committee may directthat such payment be made to any person found by the Committee, in its solejudgement, to have assumed the care of such person. Any payment made pursuantto such determination shall constitute a full release and discharge of theCommittee and the Company.

 

**11.8 - Headings.**

 

Headingsand subheadings in this Plan are inserted for convenience of reference only andare not to be considered in the construction of the provisions hereof.

 

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INWITNESS WHEREOF, the Company has caused this document to be executed by itsduly authorized officer to be effective on this 20th day of December, 2005.

 
|   | HILTON HOTELS  CORPORATION |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        | /s/ Molly  McKenzie Swarts |   |
|   |                       |   |
|   | Its:                       |    Senior  Vice President |   |
|        |                            |  |  |  |

 

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