kbrelectivedeferralplanr






           KBR  ELECTIVE DEFERRAL PLAN      Restated September 1, 2019                  





 






                            TABLE OF CONTENTS   I. Definitions and Construction ....................................................................................................... 2    1.1   Definitions....................................................................................................................... 2    1.2   Number and Gender ........................................................................................................ 5    1.3   Headings ......................................................................................................................... 5   II. Participation ............................................................................................................................... 5    2.1   Participation .................................................................................................................... 5    2.2   Cessation of Active Participation.................................................................................... 5   III. Deferral Account Credits; Investment Elections ...................................................................... 6    3.1   Base Salary Deferrals ...................................................................................................... 6    3.2   Bonus Compensation Deferrals ...................................................................................... 6    3.3   Long-Term Incentive Compensation Deferrals .............................................................. 7    3.4   Investment of Deferral Accounts .................................................................................... 7   IV. Emergency Withdrawals ........................................................................................................... 8   V. Payment of Benefits ................................................................................................................... 8    5.1   Payment Election Generally ........................................................................................... 8    5.2   Time of Benefit Payment ................................................................................................ 9    5.3   Form of Benefit Payment ................................................................................................ 9    5.4   Total and Permanent Disability ...................................................................................... 9    5.5   Death ............................................................................................................................. 10    5.6   Designation of Beneficiaries ......................................................................................... 10    5.7   Other Separation from Service ...................................................................................... 10    5.8   Payment of Benefits ...................................................................................................... 10    5.9   Unclaimed Benefits ....................................................................................................... 10    5.10  No Acceleration of Bonus or Long-Term Incentive Compensation ............................. 11   VI. Administration of the Plan ...................................................................................................... 11    6.1   Committee Powers and Duties ...................................................................................... 11    6.2   Self-Interest of Participants........................................................................................... 12    6.3   Claims Review .............................................................................................................. 12    6.4   Employer to Supply Information .................................................................................. 13    6.5   Indemnity ...................................................................................................................... 13   VII. Administration of Funds ........................................................................................................ 13    7.1   Payment of Expenses .................................................................................................... 13    7.2   Trust Fund Property ...................................................................................................... 13   VIII. Nature of the Plan ................................................................................................................ 13   IX. Participating Employers.......................................................................................................... 14   X. Miscellaneous........................................................................................................................... 15    10.1  Not Contract of Employment ........................................................................................ 15                                         i  





 






  10.2  Alienation of Interest Forbidden ................................................................................... 15    10.3  Withholding .................................................................................................................. 15    10.4  Amendment and Termination ....................................................................................... 15    10.5  Severability ................................................................................................................... 16    10.6  Governing Laws ............................................................................................................ 16    10.7  Section 409A Compliance ............................................................................................ 16   Schedule A .................................................................................................................................. A-1   Appendix A ................................................................................................................................. A-1   III. Grandfathered Plan Account Credits; Investment Elections ................................................ A-2    3.1   Base Salary Deferrals .................................................................................................. A-2    3.2   Bonus Compensation Deferrals .................................................................................. A-2    3.3   Long-Term Incentive Compensation Deferrals .......................................................... A-2    3.4   Investment of Grandfathered Plan Accounts .............................................................. A-2   IV. Withdrawals .......................................................................................................................... A-3    4.1   Emergency Withdrawals ............................................................................................. A-3    4.2   Non-Emergency Withdrawals ..................................................................................... A-3   V. Payment of Benefits ............................................................................................................... A-4    5.1   Payment Election Generally ....................................................................................... A-4    5.2   Time of Benefit Payment ............................................................................................ A-4    5.3   Form of Benefit Payment ............................................................................................ A-4    5.4   Total and Permanent Disability .................................................................................. A-5    5.5   Death ........................................................................................................................... A-5    5.6   Other Termination of Employment ............................................................................. A-5    5.7   Payment of Benefits .................................................................................................... A-5    5.8   No Acceleration of Bonus or Long-Term Incentive Compensation ........................... A-6                                            ii  





 






                      KBR ELECTIVE DEFERRAL PLAN                                W I T N E S S E T H:         WHEREAS, the Board of Directors of Halliburton Company (“Halliburton”) previously  adopted the Halliburton Company Elective Deferral Plan, as most recently amended and restated  prior to the Deconsolidation Date effective May 1, 2002, for the benefit of its employees and the  employees of its subsidiaries to aid such employees in making more adequate provision for their  retirement; and         WHEREAS, Halliburton took action on the Deconsolidation Date to split-off KBR, Inc.  (the  “Company”)  and  its  subsidiaries  such  that  they  ceased  to  be  members  of  the  Halliburton  controlled group; and         WHEREAS, the Company desired to provide benefits for certain of its new employees  including certain current employees who had previously participated in the HAL Plan; and         WHEREAS, pursuant to the terms of the HAL Plan, each Employer thereunder was liable  for the benefits related to its employees, and the Company and the Employers hereunder continued  to provide to such employees an opportunity to make deferrals of certain amounts, consistent with  the provisions of Section 409A; and         WHEREAS, the provisions of the HAL Plan, as amended through the Deconsolidation  Date, will remain in effect for all deferrals prior to the Deconsolidation Date; and         WHEREAS, the Company preserved the material terms of the HAL Plan as in effect on  December 31,  2004  in  order  that  the  Grandfathered  Plan  qualify  as  a  grandfathered  plan  for  purposes of Section 409A; and         WHEREAS, certain provisions applicable solely to the Grandfathered Plan are preserved  in Appendix A, for purposes of determining the terms applicable to amounts deferred under the  Grandfathered  Plan,  which  provisions  shall  be  substituted  for  the  corresponding  provisions  contained herein; and         WHEREAS,  the  Company  previously  amended  and  restated  the  Plan  effective  December 31, 2010, without making any changes to the material terms of the Grandfathered Plan;  and         WHEREAS,  the  Company  desires  to  make  certain  amendments  to  the  Plan  effective  September 1, 2019, without making any changes to the material terms of the Grandfathered Plan.         NOW THEREFORE, the Plan, including the Grandfathered Plan, is hereby restated to  include the terms set forth below, effective as of the Effective Date:      





 






                                      I.                                                                     Definitions and Construction         1.1   Definitions. Where the following words and phrases appear in the Plan, they shall  have the respective meanings set forth below, unless their context clearly indicates to the contrary.   (1)   Act: The Employee Retirement Income Security Act of 1974, as amended.   (2)   Affiliate: Any entity of which an aggregate of 50% or more of the ownership interest is        owned  of  record  or  beneficially,  directly  or  indirectly,  by  the  Company  or  any  other        Affiliate.   (3)   Base Salary: The base rate of cash compensation (inclusive of cash overtime pay) paid by        the Employer to or for the benefit of a Participant for services rendered or labor performed        while  a  Participant,  including  base  pay (and  overtime  pay) a  Participant  could  have        received  in  cash  in  lieu  of (a) deferrals  pursuant  to Section 3.1  and (b) elective        contributions made on his or her behalf to any qualified plan maintained by the Employer        or to any cafeteria plan under Section 125 of the Code maintained by the Employer.   (4)   Bonus Compensation: With respect to any Participant for a Plan Year, remuneration based        on calendar year performance under an annual incentive compensation plan maintained by        the Employer that is payable to the Participant in cash.   (5)   Code: The Internal Revenue Code of 1986, as amended.   (6)   Committee: The administrative committee appointed by the Compensation Committee to        administer the Plan.   (7)   Compensation Committee: The Compensation Committee of the Directors.   (8)   Company:  KBR,  Inc.,  or,  only  for  amounts  deferred  under  the  HAL  Plan  and  similar        purposes, Halliburton Company.    (9)   Credited Investment Return: The hypothetical gain or loss credited to a Participant’s        Deferral Account or Grandfathered Plan Account, as applicable, pursuant to the applicable        provisions of Section 3.4(e).   (10)  Deconsolidation Date: The date upon which the amount of the Company stock owned        directly or indirectly by Halliburton Company was reduced to less than the amount required        for  Halliburton  Company  to  control  the  Company  within  the  meaning  of        Section 1504(a)(2) of the Code.   (11)  Deemed Investment Elections: The investment elections described in Section 3.4.   (12)  Deferral Account: A memorandum bookkeeping account established on the records of the        Employer  for  a  Participant  that  is  credited  with  specified  deferrals,  and  the  Credited        Investment Return determined in accordance with Section 3.4(e) of the Plan, made and                                         2  





 






      earned after December 31, 2004. A Participant shall have a 100% nonforfeitable interest in        his or her Deferral Account at all times.   (13)  Deferral  and  Investment  Election  Form:  The  form  or  procedure prescribed  by  the        Committee pursuant to which a Participant elects for a particular Plan Year (a) the deferral        of a portion of his or her Base Salary, Bonus Compensation and/or Long-Term Incentive        Compensation, and (b) one or more Deemed Investment Options into which amounts to be        allocated to his or her Deferral Account in respect of such deferrals for such Plan Year will        be deemed invested.   (14)  Determination Date: The date on which the amount of a Participant’s Deferral Account        or Grandfathered Plan Account is determined as provided in Section 3.4, as applicable. The        last day of each month shall be a Determination Date. As of any Determination Date, a        Participant’s aggregate benefit under the Plan shall be equal to the amount credited to his        or her Deferral Account and Grandfathered Plan Account, if applicable, as of such date.   (15)  Directors: The Board of Directors of the Company.   (16)  Effective Date: The effective date of this restatement is September 1, 2019. The original        effective date of the Plan is the Deconsolidation Date.   (17)  Eligible  Employee:  Any  Employee  who  is (a) a regular  Full-Time  Active  Employee,        (b) paid in United States dollars and subject to the income tax laws of the United States,        (c) an  officer  or  member  of  a  select  group  of  highly  compensated  employees  of  the        Employer, and (d) employed on or after the Effective Date.   (18)  Employee: Any person employed by the Employer.   (19)  Employer: The Company, each of the entities identified on Schedule A and each eligible        organization designated as an Employer in accordance with the provisions of Article IX of        the Plan.   (20)  Full-Time  Active  Employee:  An  Employee  whose  employment  with  the  Employer        requires, and who regularly and actively performs, 30 or more hours of service for the        Employer each week at a usual place of business of the Employer or at a location to which        such Employee is required or permitted to travel on behalf of the Employer for which such        Employee is paid regular compensation.   (21)  Grandfathered Plan: The Halliburton Elective Deferral Plan as in effect on December 31,        2004, the material terms of which have not been materially modified (within the meaning        of Section 409A) after October 3, 2004, and are preserved and continued in the Plan as        reflected in Appendix A.   (22)  Grandfathered Plan Account: A memorandum bookkeeping account established on the        records  of  the  Employer  for  a  Participant  that  is  credited  with  specified  deferrals  of        amounts earned and vested prior to January 1, 2005, and the Credited Investment Return        on such amounts determined in accordance with Section 3.4(e) of the Grandfathered Plan.                                          3  





 






      A Participant has a 100% non-forfeitable interest in his or her Grandfathered Plan Account        at all times.   (23)  HAL  Plan:  The  Halliburton  Elective  Deferral  Plan,  as  amended  and  restated  effective        May 1,  2002  and  as  subsequently  amended  with  respect  to  any  period  up  to  the        Deconsolidation Date.   (24)  Investment Election Change Form: The form or procedure prescribed by the Committee        pursuant  to  which  a  Participant may  make  changes  to  his  or  her  Deemed  Investment        Elections applicable to future allocations to his or her Deferral Account or Grandfathered        Plan Account and/or to his or her current Deferral Account balance or Grandfathered Plan        Account balance.   (25)  Investment  Options:  One  or  more  alternatives  designated  from  time  to  time  by  the        Committee  for  purposes  of  crediting  earnings  or  losses  to  Deferral  Accounts  and        Grandfathered Plan Accounts.   (26)  Long-Term Incentive Compensation: Awards, other than Bonus Compensation and Base        Salary, earned under such plans or programs as the Compensation Committee may, from        time to time, designate that are payable in cash.   (27)  Participant: Each individual who has been selected for participation in the Plan and who        has become a Participant pursuant to Article II.   (28)  Plan:  The  KBR  Elective  Deferral  Plan,  as  amended  from  time  to  time,  constituting  a        continuation of the HAL Plan.   (29)  Plan Year: The twelve consecutive month period commencing January 1 of each year.   (30)  Retirement:  The  date  the  Participant  separates  from  service  within  the  meaning  of        Section 409A after attaining age 55 or after the sum of the Participant’s age and years of        service is 70 or greater.   (31)  Section 409A: Section 409A of the Code and applicable Treasury authorities.   (32)  Trust: The trust, if any, established under the Trust Agreement.   (33)  Trust  Agreement:  The  agreement,  if  any,  entered  into  between  the  Employer  and  the        Trustee pursuant to Article VIII.   (34)  Trust Fund: The funds and properties, if any, held pursuant to the provisions of the Trust        Agreement, together with all income, profits and increments thereto.   (35)  Trustee: The trustee or trustees appointed by the Committee who are qualified and acting        under the Trust Agreement at any time.   (36)  Unforeseeable Emergency: A severe financial hardship to the Participant or beneficiary        resulting from an illness or accident of the Participant or beneficiary, the Participant’s or                                         4  





 






      beneficiary’s spouse or of a dependent (as defined in Section 152 of the Code, without        regard to Section 152(b)(1), (b)(2) and (d)(1)(B) of the Code) of the Participant; loss of the        Participant’s or beneficiary’s property due to casualty (including the need to rebuild a home        following  damage  to  a  home  not  otherwise  covered  by  insurance);  or  other  similar        extraordinary and unforeseeable  circumstances  arising as  a  result of events  beyond the        control of the Participant or beneficiary; provided, however, that such circumstances meet        the  definition  of  “unforeseeable  emergency”  under Section 409A,  related  Treasury        pronouncements and any successor thereto.         1.2   Number and Gender. Wherever appropriate herein, words used in the singular  shall be considered to include the plural and words used in the plural shall be considered to include  the singular. The masculine gender, where appearing in the Plan, shall be deemed to include the  feminine gender.         1.3   Headings. The headings of Articles and Sections herein  are included solely for  convenience, and if there is any conflict between such headings and the text of the Plan, the text  shall control.                                        II.                                                                            Participation         2.1   Participation. Each individual who was a Participant in the Plan immediately prior  to the Effective Date shall continue as a Participant in the Plan as of the Effective Date.  From and  after the Effective Date, Participants shall also include those Eligible Employees who are selected  by  the  Committee,  in  its  sole  discretion,  as  Participants.  The  Committee  shall  notify  each  Participant  of  his  or  her  selection  as  a  Participant.  Subject  to  the  provisions  of Section 2.2,  a  Participant shall remain eligible to defer Base Salary, Bonus Compensation and/or Long-Term  Incentive  Compensation  hereunder  for  each  Plan  Year  following  his  or  her  initial  year  of  participation in the Plan.         2.2   Cessation of Active Participation. Notwithstanding any provision herein to the  contrary, an individual who has become a Participant in the Plan shall cease to be entitled to defer  Base Salary, Bonus Compensation and/or Long-Term Incentive Compensation hereunder effective  as of the date he or she ceases to be an Eligible Employee; provided, however, that any irrevocable  deferral election made prior to the time that the Participant ceased to be an Eligible Employee shall  remain in effect to the extent required by Section 409A. Any such cessation of the right to defer  pursuant to the preceding sentence that is not in connection with a separation from service within  the  meaning  of  Section  409A shall  be  communicated  to  the  affected  individual as  soon  as  administratively feasible.                                          5  





 






                                     III.                                                             Deferral Account Credits; Investment Elections         3.1   Base Salary Deferrals.               (a)   Any Participant may elect to defer receipt of an integral percentage of from  5% to 75% of his or her Base Salary, in 5% increments, for any Plan Year. Notwithstanding the  foregoing, however, in no event may the deferred amount under this Section 3.1(a) exceed the  percentage of the Participant’s Base Salary remaining as of the first pay period of the Plan Year  after application of all other amounts withheld from the Participant’s Base Salary for any reason,  including amounts withheld due to tax withholding or pursuant to the Participant’s elections, as in  effect  on January 1 of  the  Plan  Year,  under  any  other  plans  maintained  by  the  Employer.  A  Participant’s election to defer receipt of a percentage of his or her Base Salary for any Plan Year  shall be made on or before the last day of the preceding Plan Year. Notwithstanding the foregoing,  if an individual initially becomes eligible to participate in the Plan other than on the first day of a  Plan Year, such Participant’s election to defer receipt of a percentage of his or her Base Salary for  such Plan Year may be made no later than 30 days after the date he or she becomes eligible to  participate in the Plan, but such election shall be prospective only. The reduction in a Participant’s  Base Salary pursuant to his or her election shall be effected by Base Salary reductions as of each  payroll period within the election period. Deferrals of Base Salary under the Plan shall be made  before elective deferrals or contributions of Base Salary under any other plan maintained by the  Employer.  Base  Salary  deferrals  made  by  a  Participant  shall  be  credited  to  such  Participant’s  Deferral  Account  as  of  the  date  the  Base  Salary  deferred  would  have  been  received  by  such  Participant had no deferral been made pursuant to this Section. Except as provided in Paragraph (b)  of this Section, deferral elections for a Plan Year pursuant to this Section shall be irrevocable.               (b)   If  a  revocation  would  not  result  in  taxation  under Section 409A,  a  Participant shall be permitted to revoke his or her election to defer receipt of his or her Base Salary  under Section 3.1(a) for any Plan Year in the event of an Unforeseeable Emergency, as determined  by the Committee in its sole discretion. For purposes of the Plan, the decision of the Committee  regarding the existence or nonexistence of an Unforeseeable Emergency of a Participant shall be  final  and  binding.  Further,  the  Committee  shall  have  the  authority  to  require  a  Participant  to  provide such proof as it deems necessary to establish the existence and significant nature of the  Participant’s Unforeseeable Emergency. A Participant who is permitted to revoke his or her Base  Salary deferral election during a Plan Year shall not be permitted to resume Base Salary deferrals  under the Plan until the next following Plan Year.         3.2   Bonus Compensation Deferrals. Any Participant may elect to defer receipt of an  integral percentage of from 5% to 75% of his or her Bonus Compensation, in 5% increments, for  any  Plan  Year.  A  Participant’s  election  to  defer  receipt  of  a percentage  of  his  or  her  Bonus  Compensation attributable to services performed in any Plan Year shall be made on or before the  last day of the preceding Plan Year; provided, however, that to the extent Bonus Compensation  satisfies  the  requirements  for  performance-based  compensation  under Section 409A,  the  Committee may allow a Participant to make a deferral election no later than the date that is six  months  before  the  end  of  the  performance  period  for  which  the  Bonus  Compensation  is  paid  (provided that such compensation has  not  become readily  ascertainable as  of the date of such                                         6  





 






election). Notwithstanding the foregoing, if any individual initially becomes eligible to participate  in the Plan other than on the first day of a Plan Year, such Participant’s election to defer receipt of  a percentage of his or her Bonus Compensation for such Plan Year may be made no later than 30  days  after  the  date  he  or  she  becomes  eligible  to  participate  in  the  Plan,  with  the  Bonus  Compensation prorated as provided under Section 409A. Deferrals of Bonus Compensation under  the Plan shall be made before elective deferrals or contributions of Bonus Compensation under  any other plan maintained by the Employer. Bonus Compensation deferrals made by a Participant  shall be credited to such Participant’s Deferral Account as of the date the Bonus Compensation  deferred would have been received by such Participant had no deferral been made pursuant to this  Section 3.2. Deferral elections for a Plan Year pursuant to this Section shall be irrevocable.         3.3   Long-Term  Incentive  Compensation  Deferrals.  Any  Participant  may  elect  to  defer receipt of an integral percentage of from 5% to 75% of his or her Long-Term Incentive  Compensation,  in  5%  increments,  payable  in  any  Plan  Year.  A  Participant’s  election to  defer  receipt of a percentage of his or her Long-Term Incentive Compensation payable with respect to  any performance cycle shall be made on or before the last day of the Plan Year preceding the first  Plan Year of the performance cycle; provided, however, that to the extent the Long-Term Incentive  Compensation  satisfies  the  requirements  for  performance-based  compensation  under Section  409A, the Committee may allow a Participant to make a deferral election no later than the date  that is six months prior to the end of such performance cycle (provided that (a) the Participant  performs services continuously from the later of the beginning of the performance cycle or the  date the performance criteria are established through the date such election is made and (b) such  compensation has not become readily ascertainable as of the date of such election). Long-Term  Incentive Compensation deferrals made by a Participant shall be credited to such Participant’s  Deferral Account as of the date the Long-Term Incentive Compensation deferred would have been  received  by  such  Participant  had  no  deferral  been  made pursuant  to  this Section 3.3.  Deferral  elections pursuant to this Section shall be irrevocable.         3.4   Investment of Deferral Accounts.               (a)   As of any Determination Date, each Participant’s Deferral Account shall  consist  of  the  balance  of  the  Participant’s  Deferral  Account  as  of  the  immediately  preceding  Determination Date adjusted for:                     (1)   additional deferrals pursuant to Sections 3.1, 3.2 and/or 3.3;                     (2)   distributions (if any); and                     (3)   the appropriate Credited Investment Return.         All  adjustments  will  be  recorded  to  the  Participants’  Deferral  Accounts  as  of  each  Determination Date.               (b)   The Committee shall designate from time to time one or more Investment  Options in which the Deferral Accounts may be deemed invested. The Committee shall have the  sole discretion to determine the number of Investment Options to be designated hereunder and the  nature of the Investment Options and may change or eliminate any of the Investment Options from  time to time. In the event of such change or elimination, the Committee shall give each Participant                                         7  





 






timely  notice  and  opportunity  to  make  a  new  election.  No  such  change  or  elimination  of  any  Investment Options shall be considered to be an amendment to the Plan pursuant to Section 10.4.  A  Participant  may  request  that  his  or  her  Deferral  Account  be  allocated among  the  deemed  Investment Options. If a Participant fails to make an election, his or her Deferral Account shall be  deemed invested in a single fund selected by the Committee.               (c)   A  Participant  shall,  in  connection  with  his  or  her  election  to  defer  Base  Salary,  Bonus  Compensation  and/or  Long-Term  Incentive  Compensation  for  a  particular  Plan  Year,  elect  one  or  more  Investment  Options  into  which  amounts  to  be allocated  to  his  or  her  Deferral Account in respect of deferrals for such Plan Year shall be deemed invested by submitting  on or before the last day of the preceding Plan Year (or on or before the last day a Participant may  make his election to defer an amount subject to the 30-day requirement for new Participants, or  the  six-month  requirement  for  performance-based  compensation)  a  Deferral  and  Investment  Election Form in accordance with the procedures prescribed by the Committee.               (d)   A  Participant  may  request  a  change  to  his  or  her  Deemed  Investment  Elections  for  future  amounts  allocated  to  his  or  her  Deferral Account  and  amounts  already  allocated  to  his  or  her  Deferral  Account.  Any  such  change  shall  be  made  by  filing  with  the  Committee  an  Investment  Election  Change  Form.  The  Committee  shall  establish  procedures  relating to changes in Deemed Investment Elections, which may include limiting the percentage,  amount and frequency of such changes and specifying the effective date for any such changes.               (e)   Each  Participant’s  Deferral  Account  shall  be  credited  monthly  with  the  Credited Investment Return attributable to his or her Deferral Account. The Credited Investment  Return is the amount that the Participant’s Deferral Account would have earned if the amounts  credited to the Deferral Account had, in fact, been invested in accordance with the Participant’s  Deemed Investment Elections.                                        IV.                                                                       Emergency Withdrawals         Participants shall be permitted to make withdrawals from the Plan, without penalty, only  in the event of an Unforeseeable Emergency, as determined by the Committee in its sole discretion.  No withdrawal shall be allowed to the extent that such Unforeseeable Emergency is or may be  relieved (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation  of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe  financial  hardship  or (c) by  cessation  of  Base  Salary  deferrals  under  the  Plan  pursuant  to  Section 3.1(b). Further, the Committee shall permit a Participant to withdraw only the amount it  determines, in its sole discretion, to be reasonably needed to satisfy the Unforeseeable Emergency.                                         V.                                                                         Payment of Benefits         5.1   Payment Election Generally. In conjunction with each deferral election made by  a  Participant  pursuant  to Article III for  a  Plan  Year,  such  Participant  shall  elect,  subject  to                                         8  





 






Sections 5.4, 5.5 and 5.7, the time and the form of payment with respect to such deferral and the  Credited Investment Returns attributable thereto.         5.2   Time  of  Benefit  Payment.  With  respect  to  each  deferral  election  made  by  a  Participant  pursuant  to Article III,  such  Participant  shall  elect  to  commence  payment  of  such  deferral, and the Credited Investment Returns attributable thereto, on one of the following dates:               (a)   Retirement; or               (b)   On a specific future month and year, but not earlier than five years from the  date of the deferral if the Participant has not attained age fifty-five at the time of the deferral or  one year from the date of the deferral if the Participant has attained age fifty-five at the time of the  deferral, and not later than the first day of the year in which the Participant attains age seventy.                     For purposes of the Plan, all Participants shall be “specified employees”  within the meaning of Section 409A(a)(2)(B)(i) of the Code. Accordingly, any payments payable  as a result of the Employee’s termination of employment (other than death or disability (as defined  under Section 409A)) shall not be payable before the earlier of (i) the date that is six months after  the Employee’s termination of employment, (ii) the date of the Employee’s death, or (iii) the date  that otherwise complies with the requirements of Section 409A.         5.3   Form  of  Benefit  Payment.  With  respect  to  each  deferral  election  made  by  a  Participant pursuant to Article III, such Participant shall elect the form of payment with respect to  such deferral and the Credited Investment Returns attributable thereto from one of the following  forms:               (a)   A lump sum; or               (b)   Annual installment payments for a period not to exceed ten years.         Annual installment payments shall be paid on or before the last business day of January of  each Plan Year. Each installment payment shall be determined by multiplying the deferral and the  Credited  Investment  Returns  attributable  thereto  at  the  time  of  the  payment  by  a  fraction,  the  numerator of which is one and the denominator of which is the number of remaining installment  payments to be made to the Participant.         Notwithstanding any provision of the Plan to the contrary, in the event the amount credited  to a Participant’s Deferral Account does not exceed the limit under Section 402(g)(1)(B) of the  Code, the Deferral Account shall be paid only in the form of a lump sum. The provisions of this  paragraph shall only apply if and to the extent permitted under Section 409A.         5.4   Total and Permanent Disability. If a Participant becomes totally and permanently  disabled while employed by the Employer, payment of the amounts credited to such Participant’s  Deferral  Account  shall  commence  on  the  first  business  day  of  the  second  calendar  quarter  following  the date  the  Committee  makes  a  determination  that  the  Participant  is  totally  and  permanently disabled, in the form of payment determined in accordance with Section 5.3. The  above notwithstanding, if such Participant is already receiving payments pursuant to Section 5.2(b)  and Section 5.3(b), such payments shall continue. For purposes of the Plan, a Participant shall be                                         9  





 






considered  totally  and  permanently  disabled  if  the  Committee  determines,  based  on  a  written  medical  opinion  (unless  waived  by  the  Committee  as  unnecessary),  that  such  Participant  is  disabled within the meaning of Section 409A(a)(2)(C) of the Code.         5.5   Death. In the event of a Participant’s death at a time when amounts are credited to  such Participant’s Deferral Account, such amounts shall be paid to such Participant’s designated  beneficiary or beneficiaries in a lump sum within 74 days after the Participant’s death.         5.6   Designation of Beneficiaries.               (a)   Each  Participant  shall  have  the  right  to  designate  the  beneficiary  or  beneficiaries to receive payment of his or her benefit in the event of his or her death. Each such  designation shall be made by executing and submitting the beneficiary designation form prescribed  by the Committee. Any  such designation may  be changed  at  any  time by  execution of  a new  designation in accordance with this Section.               (b)   If no such designation is on file with the Committee at the time of the death  of  the  Participant  or  such  designation  is  not  effective  for  any  reason  as  determined  by  the  Committee, then the designated beneficiary or beneficiaries to receive such benefit shall be as  follows:                     (1)   If a Participant leaves a surviving spouse, his or her benefit shall be                          paid to such surviving spouse.                     (2)   If a Participant leaves no surviving spouse, his or her benefit shall                          be paid to such Participant’s executor or administrator, or to his or                          her heirs at law if there is no administration of such Participant’s                          estate.         5.7   Other  Separation  from  Service.  Subject  to  the  provisions  of Section 5.2, if  a  Participant has a separation from service within the meaning of Section 409A(a)(2)(A)(i) of the  Code before Retirement for a reason other than total and permanent disability or death, the amounts  credited to such Participant’s Deferral Account shall be paid to the Participant in a lump sum sixty  days after the Participant’s date of separation from service. For purposes of this Section, transfers  of employment between and among the Company and any of its Affiliates shall not be considered  a separation from service.         5.8   Payment of Benefits. To the extent the Trust Fund, if any, has sufficient assets, the  Trustee shall pay benefits to Participants or their beneficiaries, except to the extent the Employer  pays the benefits directly and provides adequate evidence of such payment to the Trustee. To the  extent the Trustee does not or cannot pay benefits out of the Trust Fund, the benefits shall be paid  by the Employer. Any benefit payments made to a Participant or for his or her benefit pursuant to  any provision of the Plan shall be debited to such Participant’s Deferral Account or Grandfathered  Plan  Account,  as  applicable.  All  benefit  payments  shall  be  made  in  cash  to  the  fullest  extent  practicable.         5.9   Unclaimed Benefits. In the case of a benefit payable on behalf of a Participant, if  the Committee is unable to locate the Participant or beneficiary to whom such benefit is payable,                                         10  





 






upon  the  Committee’s  determination  thereof,  such  benefit  shall  be  forfeited  to  the  Employer.  Notwithstanding the foregoing, if subsequent to any such forfeiture the Participant or beneficiary  to whom such benefit is payable makes a valid claim for such benefit, such forfeited benefit shall  be paid by the Employer or restored to the Plan by the Employer.         5.10  No Acceleration of Bonus or Long-Term Incentive Compensation. The time of  payment of any Bonus Compensation or Long-Term Incentive Compensation that the Participant  has elected to defer but that has not yet been credited to the Participant’s Deferral Account because  it  is  not  yet  payable  without  regard  to  the  deferral  shall  not  be  accelerated as  a  result  of  the  provisions of this Article. If, pursuant to the provisions of this Article, payment of such Bonus  Compensation or Long-Term Incentive Compensation would no longer be deferred at the time it  becomes payable, such Bonus Compensation or Long-Term Incentive Compensation shall be paid  to the Participant as soon as practicable following the date it would have been payable had the  Participant not made a deferral election.                                        VI.                                                                      Administration of the Plan         6.1   Committee Powers and Duties. The general administration of the Plan shall be  vested in the Committee. The Committee shall supervise the administration and enforcement of  the  Plan  according  to  the  terms  and  provisions  hereof  and  shall  have  all  powers  necessary  to  accomplish these purposes, including, but not by way of limitation, the right, power, authority, and  duty:               (a)   To make rules, regulations, procedures and bylaws for the administration of  the Plan that are not inconsistent with the terms and provisions hereof, and to enforce the terms of  the Plan and the rules and regulations promulgated thereunder by the Committee;               (b)   To designate, change and eliminate Investment Options in which Deferral  Accounts and Grandfathered Plan Accounts may be deemed invested and to establish procedures  relating to elections of Investment Options by Participants;               (c)   To  construe  in  its  discretion  all  terms,  provisions,  conditions,  and  limitations of the Plan, including any associated documents;               (d)   To  correct  any  defect  or  to  supply  any  omission  or  to  reconcile  any  inconsistency that may appear in the Plan in such manner and to such extent as it shall deem in its  discretion expedient to effectuate the purposes of the Plan;               (e)   To  employ  and  compensate  such  accountants,  attorneys,  investment  advisors, and other agents, employees, and independent contractors as the Committee may deem  necessary or advisable for the proper and efficient administration of the Plan;               (f)   To determine in its discretion all questions relating to eligibility;               (g)   To determine whether and when a Participant has incurred a separation from  service with the Employer, and the reason for such separation;                                         11  





 






            (h)   To make a determination in its discretion as to the right of any person to a  benefit under the Plan and the amount and to prescribe procedures to be followed by distributees  in obtaining benefits hereunder; and               (i)   To receive and review reports from the Trustee as to the financial condition  of the Trust Fund, if any, including its receipts and disbursements.         6.2   Self-Interest of Participants. No member of the Committee shall have any right  to vote or decide upon any matter relating solely to himself under the Plan (including, without  limitation,  Committee  decisions  under Article II)  or  to  vote  in  any  case  in  which  his  or  her  individual right to claim any benefit under the Plan is particularly involved. In any case in which  a  Committee  member  is  so  disqualified  to  act  and  the  remaining  members  cannot  agree,  the  Compensation Committee shall appoint a temporary substitute member to exercise all the powers  of the disqualified member concerning the matter in which he or she is disqualified.         6.3   Claims Review. In any case in which a claim for Plan benefits of a Participant or  beneficiary is denied or modified, the Committee shall furnish written notice to the claimant within  ninety days (or within 180 days if additional information requested by the Committee necessitates  an extension of the ninety-day period), which notice shall:               (a)   State the specific reason or reasons for the denial or modification;               (b)   Provide specific reference to pertinent Plan provisions on which the denial  or modification is based;               (c)   Provide a description of any additional material or information necessary  for the Participant, his or her beneficiary, or representative to perfect the claim and an explanation  of why such material or information is necessary; and               (d)   Explain the Plan’s claim review procedure as contained herein.   In the event a claim for Plan benefits is denied or modified, if the Participant, his or her beneficiary,  or a representative of such Participant or beneficiary desires to have such denial or modification  reviewed,  he  or  she  must,  within  sixty  days  following  receipt  of  the  notice  of  such  denial  or  modification,  submit  a  written  request  for  review  by  the  Committee  of  its  initial  decision.  In  connection with such request, the Participant, his or her beneficiary, or the representative of such  Participant  or  beneficiary  may  review  any  pertinent  documents  upon  which  such  denial  or  modification  was  based  and  may  submit  issues  and  comments  in  writing.  Within  sixty  days  following such request  for review the Committee shall, after providing  a full  and  fair review,  render its final decision in writing to the Participant, his or her beneficiary or the representative of  such  Participant  or  beneficiary  stating  specific  reasons  for  such  decision  and  making  specific  references to pertinent Plan provisions upon which the decision is based. If special circumstances  require an extension of such sixty-day period, the Committee’s decision shall be rendered as soon  as possible, but not later than 120 days after receipt of the request for review. If an extension of  time for review is required, written notice of the extension shall be furnished to the Participant,  beneficiary, or the representative of such Participant or beneficiary prior to the commencement of  the extension period.                                          12  





 






      6.4   Employer  to  Supply  Information.  The  Employer  shall  supply  full  and  timely  information  to  the  Committee,  including,  but  not  limited  to,  information  relating  to  each  Participant’s compensation, age, retirement, death, or other cause of separation from service to the  Employer and such other pertinent facts as the Committee may require. The Employer shall advise  the Trustee, if any, of such of the foregoing facts as are deemed necessary for the Trustee to carry  out the Trustee’s duties under the Plan and the Trust Agreement. When making a determination in  connection with the Plan, the Committee shall be entitled to rely upon the aforesaid information  furnished by the Employer.         6.5   Indemnity. The Company shall indemnify and hold harmless each member of the  Committee against any and all expenses  and liabilities arising out of his or her administrative  functions or fiduciary responsibilities, including any expenses and liabilities that are caused by or  result from an act or omission constituting the negligence of such member in the performance of  such functions or responsibilities, but excluding expenses and liabilities that are caused by or result  from such member’s own gross negligence or willful misconduct. Expenses against which such  member  shall  be  indemnified  hereunder  shall  include,  without  limitation,  the  amounts  of  any  settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection  with a claim asserted or a proceeding brought or settlement thereof.                                        VII.                                                                       Administration of Funds         7.1   Payment of Expenses. All expenses incident to the administration of the Plan and  Trust, including but not limited to, legal, accounting, Trustee fees, and expenses of the Committee,  may be paid by the Employer and, if not paid by the Employer, shall be paid by the Trustee from  the Trust Fund, if any.         7.2   Trust Fund Property. All income, profits, recoveries, contributions, forfeitures  and any and all moneys, securities and properties of any kind at any time received or held by the  Trustee, if any, shall be held for investment purposes as a commingled Trust Fund pursuant to the  terms  of  the  Trust  Agreement.  The  Committee  shall  maintain  one  or  more  Deferral  Accounts  and/or  Grandfathered  Plan  Accounts,  as  necessary,  in  the  name  of  each  Participant,  but  the  maintenance of any such account designated as the account of a Participant shall not mean that  such Participant shall have a greater or lesser interest than that due him or her by operation of the  Plan and shall not be considered as segregating any funds or property from any other funds or  property contained in the commingled fund. No Participant shall have any title to any specific asset  in the Trust Fund, if any.                                       VIII.                                                                          Nature of the Plan         The Employer intends and desires by the adoption of the Plan to recognize the value to the  Employer of the past and present services of employees covered by the Plan and to encourage and  assure their continued service with the Employer by making more adequate provision for their  future  retirement  security.  The  Plan  is  intended  to  constitute  an  unfunded,  unsecured  plan  of                                         13  





 






deferred compensation for a select group of management or highly compensated employees of the  Employer. Plan benefits herein provided are to be paid out of the Employer’s general assets. The  Plan constitutes a mere promise by the Employers to make benefit payments in the future and  Participants have the status of general unsecured creditors of the Employers. Nevertheless, subject  to the terms hereof and of the Trust Agreement, if any, the Employers, or the Company on behalf  of the Employers, may transfer money or other property to the Trustee and the Trustee shall pay  Plan benefits to Participants and their beneficiaries out of the Trust Fund.         The Committee, in its sole discretion, may establish the Trust and direct the Employers to  enter into the Trust Agreement and adopt the Trust for purposes of the Plan. In such event, the  Employers shall remain the owner of all assets in the Trust Fund and the assets shall be subject to  the claims of each Employer’s creditors if such Employer ever becomes insolvent. For purposes  hereof, an Employer shall be considered “insolvent” if (a) the Employer is unable to pay its debts  as they become due, or (b) the Employer is subject to a pending proceeding as a debtor under the  United States Bankruptcy Code (or any successor federal statute). The chief executive officer of  the Employer and its board of directors shall have the duty to inform the Trustee in writing if the  Employer becomes insolvent. Such notice given under the preceding sentence by any party shall  satisfy all of the parties’ duty to give notice. When so informed, the Trustee shall suspend payments  to the Participants and hold the assets for the benefit of the Employer’s general creditors. If the  Trustee receives  a written allegation that the Employer is  insolvent,  the  Trustee shall suspend  payments to the Participants and hold the Trust Fund for the benefit of the Employer’s general  creditors,  and shall determine within the period  specified in  the Trust  Agreement  whether the  Employer is insolvent. If the Trustee determines that the Employer is not insolvent, the Trustee  shall resume payments to the Participants. No Participant or beneficiary shall have any preferred  claim to, or any beneficial ownership interest in, any assets of the Trust Fund.                                        IX.                                                                       Participating Employers         The Committee may designate any entity or organization eligible by law to participate in  the Plan as an Employer by written instrument delivered to the Secretary of the Company and the  designated Employer. Such written instrument shall specify the effective date of such designated  participation, may incorporate specific provisions relating to the operation of the Plan which apply  to  the  designated  Employer  only  and  shall  become,  as  to  such  designated  Employer  and  its  employees, a part of the Plan. Each designated Employer shall be conclusively presumed to have  consented to its designation and to have agreed to be bound by the terms of the Plan and any and  all amendments thereto upon its submission of information to the Committee required by the terms  of or with respect to the Plan; provided, however, that the terms of the Plan may be modified so as  to materially increase the obligations of an Employer only with the consent of such Employer,  which consent shall be conclusively presumed to have been given by such Employer upon its  submission of any information to the Committee required by the terms of or with respect to the  Plan. Except as modified by the Committee in its written instrument, the provisions of the Plan  shall be applicable with respect to each Employer separately, and amounts payable hereunder shall  be paid by the Employer which employs the particular Participant, if not paid from the Trust Fund.                                          14  





 






                                      X.                                                                            Miscellaneous         10.1  Not Contract of Employment. The adoption and maintenance of the Plan shall not  be deemed to be a contract between the Employer and any person or to be consideration for the  employment of any person. Nothing herein contained shall be deemed to give any person the right  to be retained in the employ of the Employer or to restrict the right of the Employer to discharge  any person at any time nor shall the Plan be deemed to give the Employer the right to require any  person to remain in the employ of the Employer or to restrict any person’s right to terminate his  or her employment at any time.         10.2  Alienation of Interest Forbidden. Except as hereinafter provided, the interest of  a Participant or his or her beneficiary or beneficiaries hereunder may not be sold, transferred,  assigned, or encumbered in any manner, either voluntarily or involuntarily, and any attempt so to  anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and  void; neither shall the benefits hereunder be liable for or subject to the debts, contracts, liabilities,  engagements or torts of any person to whom such benefits or funds are payable, nor shall they be  an  asset  in  bankruptcy  or  subject  to  garnishment,  attachment  or other  legal  or  equitable  proceedings. Plan provisions to the contrary notwithstanding, the Committee shall comply with  the  terms  and  provisions  of  an  order  that  satisfies  the  requirements  for  a  “qualified  domestic  relations order” as such term is defined in Section 206(d)(3)(B) of the Act, including an order that  requires distributions to an alternate payee prior to a Participant’s “earliest retirement age” as such  term is defined in Section 206(d)(3)(E)(ii) of the Act.         10.3  Withholding. All deferrals and payments provided for hereunder shall be subject  to applicable withholding and other deductions as shall be required of the Employer under any  applicable local, state or federal law.         10.4  Amendment and Termination. The Compensation Committee may from time to  time, in its discretion, amend, in whole or in part, any or all of the provisions of the Plan; provided,  however,  that  amendments  to  the  Plan (a) that  are  required  to  comply  with  applicable  law  or  (b) that  facilitate  Plan  administration  without  increasing  benefits  under  the  Plan  to  any  Participants, may be made by the Chief Executive Officer of the Company (the “CEO”), or his  designee. Notwithstanding the preceding sentence, no amendment may be made that would impair  the rights of a Participant with respect to amounts already allocated to his or her Deferral Account  and Grandfathered Plan Account, as applicable. The Compensation Committee may terminate the  Plan at any time. In the event that the Plan is terminated, the balance in a Participant’s Deferral  Account and Grandfathered Plan Account shall be paid to such Participant or his or her designated  beneficiary in a single lump sum payment of cash in full satisfaction of all of such Participant’s or  beneficiary’s benefits hereunder if such distribution is permitted under Section 409A. Any such  amendment  to  or  termination  of  the  Plan  shall  be  in  writing  and  signed  by  a  member  of  the  Compensation  Committee  or  its  designee  (or  the  CEO,  or  his  designee,  as  applicable).  Notwithstanding  the above,  any  action  taken  under  this  Section  is  subject  to  the  limitations  provided in Appendix A.                                          15  





 






 





 






                                SCHEDULE A   BE&K, Inc. and its subsidiaries   KBR Technical Services, Inc.   KBR, Inc.   KBRwyle Technology Solutions, LLC   Kellogg Brown & Root LLC   Overseas Administration Services, Ltd.                                        Schedule A-1  





 






                                APPENDIX A         The Grandfathered Plan contains the provisions governing the deferrals of accounts earned  and  vested  by Participants  on  or  before December 31,  2004.  This Appendix A preserves  the  material terms of the Grandfathered Plan as in effect on December 31, 2004, and is intended to  satisfy  the  requirements  of Section 409A  as  to  grandfathered amounts.  The  provisions  of  this  Appendix A shall apply to, and be effective only with respect to, the deferral of earned and vested  amounts under the Grandfathered Plan before January 1, 2005, and the Credited Investment Return  on such deferrals credited at any time. The Plan provides for separate accounting of such amounts  deferred, earned, and vested before January 1, 2005, and the Credited Investment Return thereon.         No amendment to the Plan shall be deemed to amend this Appendix A and the relevant  provisions of the Plan in effect prior to such amendment unless otherwise specifically set forth  therein. Pursuant to Section 1.409A-6(a)(4) of the Treasury Regulations, a modification is material  “if a benefit or right existing as of October 3, 2004 is materially enhanced or a new material benefit  or right is added....” Section 5.8 of the Grandfathered Plan was removed because that section does  not  relate  to  the  Company  or  to  the  rights  of Participants  under  the  Plan.  The  removal  of  Section 5.8, below, is hereunder intended to be in good faith compliance with Section 409A, and  is  not  intended  to  materially  modify  the  benefits  existing  as  of October 3,  2004  under  the  Grandfathered Plan.         The  provisions  of  the  Plan  applicable  to  the  Grandfathered  Plan  Accounts  shall be  administered in a manner consistent with the Grandfathered Plan and Appendix A. Wherever the  Plan has added, changed, or otherwise altered any terms of the Grandfathered Plan that were in  effect  on December 31,  2004,  in  a  manner  that  would  constitute  a material  modification,  as  described above, such changes will be disregarded in the administration of the Grandfathered Plan  Accounts herein.                   APPLICABLE GRANDFATHERED PLAN TERMS         With respect to the deferral of amounts earned and vested prior to January 1, 2005, and the  Credited Investment Return on such deferrals credited at any time, the following definitions and  Articles in this Appendix A shall be substituted for the corresponding definitions and Articles of  the Plan:         Retirement: The date the Participant retires in accordance with the terms of his or her  Employer’s retirement policy as in effect at that time.         Unforeseeable Emergency: A severe financial hardship to the Participant resulting from  a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in  Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty,  or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond  the  control  of  the  Participant.  For  purposes  of  the  Grandfathered  Plan,  the  decision  of  the  Committee  regarding  the  existence  or  nonexistence  of  an  Unforeseeable  Emergency  of  a  Participant shall be final and binding. Further, the Committee shall have the authority to require a  Participant to provide such proof as it deems necessary to establish the existence and significant  nature of the Participant’s Unforeseeable Emergency.                                    Appendix A-1  





 






                                     III.                                                        Grandfathered Plan Account Credits; Investment Elections         3.1   Base Salary Deferrals. Effective from and after January 1, 2005, no deferrals of  Base Salary shall be credited to a Participant’s Grandfathered Plan Account.         3.2   Bonus  Compensation  Deferrals.  Effective  from  and  after January 1,  2005,  no  deferrals of Bonus Compensation shall be credited to a Participant’s Grandfathered Plan Account.         3.3   Long-Term  Incentive  Compensation  Deferrals.  Effective  from  and  after  January 1,  2005,  no  deferrals  of  Long-Term  Incentive  Compensation  shall  be  credited  to  a  Participant’s Grandfathered Plan Account.         3.4   Investment of Grandfathered Plan Accounts.               (a)   As  of  any  Determination  Date,  each  Participant’s  Grandfathered  Plan  Account shall consist of the balance of the Participant’s Grandfathered Plan Account as of the  immediately preceding Determination Date adjusted for:                     (1)   distributions (if any); and                     (2)   the appropriate Credited Investment Return.         All adjustments will be recorded to the Participants’ Grandfathered Plan Accounts as of  each Determination Date.               (b)   The Committee shall designate from time to time one or more Investment  Options in which the Grandfathered Plan Accounts may be deemed invested. The Committee shall  have the sole discretion to determine the number of Investment Options to be designated hereunder  and the nature of the  Investment  Options and may  change or eliminate any of the  Investment  Options from time to time. In the event of such change or elimination, the Committee shall give  each  Participant  timely  notice  and  opportunity  to  make  a  new  election.  No  such  change  or  elimination of any Investment Options shall be considered to be an amendment to the Plan pursuant  to Section 10.4. A Participant may request that his or her Grandfathered Plan Account be allocated  among  the  deemed  Investment  Options.  If  a  Participant  fails  to  make  an  election,  his  or  her  Grandfathered Plan Account shall be deemed invested in a single fund selected by the Committee.               (c)   Except  as  changed  under Section 3.4(d),  the  Participant’s  Deemed  Investment Elections designated in the Participant’s initial deferral election shall remain in effect  with respect to his or her Grandfathered Plan Account and any additional amounts credited thereto.               (d)   A  Participant  may  request  a  change  to  his  or  her  Deemed  Investment  Elections  for future amounts  allocated to  his  or her Grandfathered Plan Account  and amounts  already allocated to his or her Grandfathered Plan Account. Any such change shall be made by  filing with the Committee an Investment Election Change Form. The Committee shall establish  procedures relating to changes in Deemed Investment Elections, which may include limiting the                                     Appendix A-2  





 






percentage, amount and frequency of such changes and specifying the effective date for any such  changes.               (e)   Each Participant’s Grandfathered Plan Account shall be credited monthly  with the Credited Investment Return attributable to his or her Grandfathered Plan Account. The  Credited Investment Return is the amount that the Participant’s Grandfathered Plan Account would  have earned if the amounts credited to the Grandfathered Plan Account had, in fact, been invested  in accordance with the Participant’s Deemed Investment Elections.                                        IV.                                                                            Withdrawals         4.1   Emergency  Withdrawals.  Participants  shall  be  permitted  to  make  withdrawals  from  the Grandfathered  Plan Account,  without penalty, only in  the event of an Unforeseeable  Emergency, as determined by the Committee in its sole discretion. No withdrawal shall be allowed  to the extent that such Unforeseeable Emergency is or may be relieved (a) through reimbursement  or compensation by insurance or otherwise or (b) by liquidation of the Participant’s assets, to the  extent the liquidation of such assets would not itself cause severe financial hardship. Further, the  Committee  shall  permit  a  Participant  to  withdraw  only  the  amount  it  determines,  in  its  sole  discretion, to be reasonably needed to satisfy the Unforeseeable Emergency.         4.2   Non-Emergency Withdrawals. A Participant may make withdrawals from his or  her Grandfathered Plan Accounts at any time for reasons other than an Unforeseeable Emergency,  subject to the following:               (a)   the minimum amount that may be withdrawn is $5,000;               (b)   only one such withdrawal may be made during any Plan Year;               (c)   the  withdrawal  shall  be  in  cash  in  a  lump  sum  and  taken  from  the  Grandfathered Plan Accounts and Investment Options designated by the Participant;               (d)   the withdrawal must be designated in a whole percentage or a whole dollar  amount; and               (e)   upon such withdrawal,  a portion  of the Participant’s Grandfathered Plan  Account balance shall be forfeited based on the amount withdrawn from the Grandfathered Plan,  determined as follows:              With Respect to the Amount             Percentage of Amount            Withdrawn from the Following      Withdrawn from the Percentile to be           Percentiles of the Grandfathered    Forfeited from the Grandfathered                        Plan                                Plan                      First 50%                             10%                    Second 50%                              25%                                     Appendix A-3  





 






      The withdrawal amount shall be reduced to the extent necessary for the sum of the amount  of the withdrawal and the forfeiture not to exceed 100% of the Participant’s Grandfathered Plan  Account balance.         Notwithstanding  the  foregoing,  if  such  a  withdrawal  is  made  on  or  within  one  year  following a Corporate Change (as defined below), the amount of the Participant’s Grandfathered  Plan  Accounts  forfeited  upon  such  withdrawal  shall  be  equal  to  10%  of  the  amount  of  such  withdrawal.  A  Corporate  Change  means  one  of  the  following  events  occurs: (i) the  merger,  consolidation or other reorganization of the Company in which the outstanding common stock of  the Company is converted into or exchanged for a different class of securities of the Company, a  class of securities of any other issuer (except a direct or indirect wholly owned subsidiary of the  Company), cash or other property; (ii) the sale, lease or exchange of all or substantially all of the  assets of the Company to any other corporation or entity (except a direct or indirect wholly owned  subsidiary of the Company); (iii) the adoption of the stockholders of the Company of a plan of  liquidation and dissolution; (iv) the acquisition (other than any acquisition pursuant to any other  clause  of  this  definition)  by  any  person  or  entity,  including,  without  limitation,  a  “group”  as  contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, of beneficial ownership,  as contemplated by such Section, of more than twenty percent (based on voting power) of the  Company’s outstanding capital stock; or (v) as a result of or in connection with a contested election  of members of the board of directors of the Company, the persons who were directors before such  election shall cease to constitute a majority of the directors of the Company.         Withdrawals shall be paid as soon as reasonably practicable following the Participant’s  request, which must be in such form or manner as the Company may prescribe from time to time.                                         V.                                                                         Payment of Benefits         5.1   Payment  Election  Generally. Pursuant  to Article III hereof,  no  additional  deferrals are allowed under the Grandfathered Plan.         5.2   Time  of  Benefit  Payment.  With  respect  to  each  deferral  election  made  by  a  Participant  pursuant  to Article III,  such  Participant  shall  elect  to  commence  payment  of  such  deferral and the Credited Investment Returns attributable thereto on one of the following dates:               (a)   Retirement; or               (b)   A specific future month and year, but not earlier than five years from the  date of the deferral if the Participant has not attained age fifty-five at the time of the deferral or  one year from the date of the deferral if the Participant has attained age fifty-five at the time of the  deferral, and not later than the first day of the year in which the Participant attains age seventy.         5.3   Form  of  Benefit  Payment.  With  respect  to  each  deferral  election  made  by  a  Participant pursuant to Article III, such Participant shall elect the form of payment with respect to  such deferral and the Credited Investment Returns attributable thereto from one of the following  forms:                                     Appendix A-4  





 






            (a)   A lump sum; or               (b)   Installment payments for a period not to exceed ten years.         Installment payments shall be paid annually on or before the last business day of January  of each Plan Year; provided however, that not later than sixty days prior to the date payment is to  commence, a Participant may elect to have his or her installment payments paid quarterly on the  first  business  day  of  each  calendar  quarter.  Each  installment  payment  shall  be  determined  by  multiplying the deferral and the Credited Investment Returns attributable thereto at the time of the  payment by a fraction, the numerator of which is one and the denominator of which is the number  of remaining installment payments to be made to the Participant.         In  the  event  the  aggregate  amount  credited  to  a  Participant’s  Deferral  Account  and  Grandfathered Plan Account does not exceed $50,000, the Committee may, in its sole discretion,  pay the Grandfathered Plan Account in the form of a lump sum.         5.4   Total and Permanent Disability. If a Participant becomes totally and permanently  disabled while employed by the Employer, payment of the amounts credited to such Participant’s  Grandfathered Plan Account  shall commence on the first  business  day of the second calendar  quarter following the date the Committee makes a determination that the Participant is totally and  permanently disabled, in the form of payment determined in accordance with Section 5.3. The  above notwithstanding, if such Participant is already receiving payments pursuant to Section 5.2(b)  and Section 5.3(b), such payments shall continue. For purposes of the Plan, a Participant shall be  considered  totally  and  permanently  disabled  if  the  Committee  determines,  based  on  a  written  medical  opinion  (unless  waived  by  the  Committee  as  unnecessary),  that  such  Participant  is  permanently incapable of performing his or her job for physical or mental reasons.         5.5   Death. In the event of a Participant’s death at a time when amounts are credited to  such Participant’s Grandfathered Plan Account, such amounts shall be paid to such Participant’s  designated  beneficiary  or  beneficiaries  in  five  annual  installments  commencing  as  soon  as  administratively  feasible  after  such  Participant’s  date  of  death.  However,  the  Participant’s  designated beneficiary or beneficiaries may request a lump sum payment based upon hardship,  and the Committee, in its sole discretion, may approve such request.         5.6   Other  Termination  of  Employment.  If  a  Participant  terminates  his  or  her  employment with the Employer before Retirement for a reason other than total and permanent  disability or death, the amounts credited to such Participant’s Grandfathered Plan Account shall  be paid to the Participant in a lump sum no less than sixty days and no more than one year after  the Participant’s date of termination of employment. For purposes of this Section, transfers of  employment between and among the Company and any of its Affiliates shall not be considered a  termination of employment.         5.7   Payment of Benefits. To the extent the Trust Fund, if any, has sufficient assets, the  Trustee shall pay benefits to Participants or their beneficiaries, except to the extent the Employer  pays the benefits directly and provides adequate evidence of such payment to the Trustee. To the  extent the Trustee does not or cannot pay benefits out of the Trust Fund, the benefits shall be paid  by the Employer. Any benefit payments made to a Participant or for his or her benefit pursuant to                                    Appendix A-5  





 






any provision of the Grandfathered Plan shall be debited to such Participant’s Grandfathered Plan  Account. All benefit payments shall be made in cash to the fullest extent practicable.         5.8   No Acceleration of Bonus or Long-Term Incentive Compensation. The time of  payment of any Bonus Compensation or Long-Term Incentive Compensation that the Participant  has  elected to  defer but  that has  not  yet  been credited to  the Participant’s  Grandfathered Plan  Account because it is not yet payable without regard to the deferral shall not be accelerated as a  result of the provisions of this Article. If, pursuant to the provisions of this Article, payment of  such Bonus Compensation or Long-Term Incentive Compensation would no longer be deferred at  the time it becomes payable, such Bonus Compensation or Long-Term Incentive Compensation  shall be paid to the Participant within 90 days of the date it would have been payable had the  Participant not made a deferral election.                                        Appendix A-6