** Exhibit10.4**

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**EDS EXECUTIVE DEFERRALPLAN**

**(AsAmended and Restated Effective January 1, 2008)**

 

 

 

 

 

 

 

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**EDS EXECUTIVE DEFERRALPLAN**

**(AsAmended and Restated Effective January 1, 2008) **

**ARTICLE I**

**INTRODUCTION**

1.1       Restatement.  The EDSExecutive Deferral Plan (the "Plan") was originally established as of January 1, 2000 and waspreviously restated effective January 1, 2002. The Compensation and BenefitsCommittee of the Board of Directors of Electronic Data Systems Corporation,hereby amends and restates the Plan in its entirety, effective January 1, 2008, except where specificallyprovided otherwise.

1.2      Purpose. The objective and purpose of the Plan is to attract andretain competent officers, key executives and highly compensated employees byoffering flexible compensation opportunities to officers, key executives andhighly compensated employees of the Company and to offer them an opportunity todefer income to be paid at a later date.  The Plan shall not constitute a"qualified plan" subject to the limitations of Section 401(a) of the Code, norshall it constitute a "funded plan," for purposes of suchrequirements.  The Plan shall be exempt from the participation and vestingrequirements of Part 2 of Title I of ERISA, the funding requirements of Part 3of Title I of ERISA, and the fiduciary requirements of Part 4 of Title Iof ERISA by reason of the exclusions afforded plans which are unfunded andmaintained by an employer primarily for the purpose of providing deferredcompensation for a select group of management or highly compensated employees.

### ARTICLE II

**DEFINITIONS ANDCONSTRUCTION**

2.1       Definitions.  Thefollowing words and phrases shall have the meaning set forth below, unless adifferent meaning is required by the context in which the word or phrase isused.

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

(b)       Additional Credits shall meanamounts credited to a Participant's Account pursuant to Section 4.3, and anyearnings thereon.

(c)       Affiliateshall mean (i) a corporation that is a member of a controlled group ofcorporations (as determined pursuant to Section 414(b) of the Code) whichincludes the Company, and (ii) a trade or business (whether or notincorporated) which is under common control (as determined pursuant to Section414(c) of the Code) of the Company.  For purposes of aParticipant's Post-2004 Account, the Plan shall use the fifty percent (50%) orgreater ownership threshold provided under Treasury Regulation Section1.409A-1(h)(3) in applying this Section 2.1(c) to the provisions of Article V.

 

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

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

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

(g)        Cash DividendEquivalent shall mean, with respect to any dividend declared on CommonStock, an amount of cash equal to the per-share value of such dividend (whetherpayable in cash or property).

(h)        Cause shall mean a Participanthas:

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

(ii)        materiallyfailed to follow and/or violated the Employer's policies (including withoutlimitation the Employer's Code of Business Conduct, as amended from time totime), directives or orders applicable to employees holding comparablepositions;

(iii)       intentionallydestroyed or stolen Employer property or falsified Employer documents;

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

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

 

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(a)       during theParticipant's employment with the Employer or during the 6-month time periodthereafter, the Participant performed duties as or for a direct competitor ofthe Employer in the geographic region in which the Participant providedservices to the Employer during the 6-month period preceding the Participant'stermination (i) which are the same or similar to the duties performed by theParticipant at any time during the 12-month period preceding the Participant'stermination; or (ii) which involved the use or disclosure of any confidentialinformation which the Participant received, obtained or acquired during, or asa consequence of, his/her employment with the Employer;

(b)       during thetime of the Participant's employment with the Employer or during the 12-monthtime period thereafter, the Participant performed duties for any current clientor prospective client of the Employer with whom the Participant interactedduring the 6-month period preceding his/her termination (i) which are the sameor similar to the duties performed by the Participant at any time during the12-month period preceding the Participant's termination; or (ii) which involvethe use or disclosure of any confidential information which the Participantreceived, obtained or acquired during, or as a consequence of, his/heremployment with the Employer;

(c)       during thetime of the Participant's employment with the Employer or during the 12-monthtime period thereafter, the Participant was involved in the inducement of orotherwise encouraged the Employer's employees, clients, or vendors to currentlyand/or prospectively breach, modify, or terminate any agreement or relationshipthey have or had with the Employer within the 12‐month period prior tothe Participant's termination; or

(d)       during thetime of the Participant's employment with the Employer or during the 12-monthtime period thereafter, the Participant participated voluntarily with orprovided assistance or information to any person or entity with regard to (i)negotiations with the Employer involving a contract or services to be renderedby the Employer, regarding such contract or services; or (ii) a potential orexisting business or legal dispute with the Employer, including, but notlimited to, litigation, except as may be required by law; or

 

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

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

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

(i)        Change ofControl shall, with respect to a Participant's Pre-2005 Account, mean achange in control of the Company of a nature that would be required to bereported in response to Item 6(e) of Schedule 14A of Regulation 14A (or inresponse to any similar item on any similar schedule or form) under theSecurities Exchange Act of 1934, as amended (the "Exchange Act"), whether or notthe Company is then subject to such reporting requirement; provided, however,that, without limiting the generality of the foregoing, a Change of Controlshall be deemed to have occurred (irrespective of the applicability of theinitial clause of this provision) if at any time (a) any "person" (as such termis used in Sections 13(d) and 14(d) of the Exchange Act, but excluding (i) anyemployee benefit plan of the Company or any Affiliate, and (ii) any entityorganized, appointed or established by the Company pursuant to the terms of anysuch plan) is or becomes the "beneficial owner" (as defined in Rule 13d-3 underthe Exchange Act), directly or indirectly, of securities of the Companyrepresenting 20% or more of the combined voting power of the Company's thenoutstanding securities without the prior approval of at least two‐thirds of themembers of the Board in office immediately prior to such person's attaining suchpercentage interest; (b) the Company is a party to a merger, consolidation,share exchange, sale of assets or other reorganization, or a proxy contest, as aconsequence of which members of the Board in office immediately prior to suchtransaction or event constitute less than a majority of the whole Boardthereafter; or (c) during any period of two consecutive years, 

 

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individuals who at the beginning of suchperiod constituted members of the Board (including for this purpose any newmember whose election or nomination for election by the Company's stockholderswas approved by at least two-thirds of the members of the whole Board then stillin office who were members of the Board at the beginning of such period) ceasefor any reason to constitute a majority of the whole Board.

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

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

(ii)        any one person,or more than one person acting as a group, acquires (or has acquired during the12-month period ending on the date of the most recent acquisition by suchperson or persons) ownership of stock of the Company possessing 30% or more ofthe total voting power of the stock of the Company; or

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

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

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

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

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

 

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(m)      Committeeshall mean the Compensation and Benefits Committee of the Board, or any successorthereto.

(n)       CommonStock shall mean the common stock, par value $.01 per share, of theCompany.

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

(p)       Compensationshall mean the total earnings prior to withholding (excluding any imputedincome items) payable to any Employee by an Employer for a Plan Year,disregarding any Deferral Election under the Plan, and increased by amounts notincluded in income through a salary reduction election made pursuant to a cafeteriaplan described in Code Section 125 or the EDS 401(k) Plan.  The term"Compensation" shall exclude (i) compensation from awards under any stockoption, stock or restricted stock award plan of an Employer, and the exerciseof any grant, option or right thereunder, (ii) extraordinary expenses such asmoving expenses, overseas living allowances, car allowance or imputed value ofgroup life insurance; (iii) benefit dollars provided to purchase certain healthand welfare benefits in the EDS Flexible Benefit Program and (iv) any otherpayments or benefits under any other employee benefit plan of an Employer. 

(q)       Current Year Election shall meanan irrevocable Deferral Election made byan individual described in Section 4.1(b) after suchindividual's date of hire or salary increase, which isapplicable to base salary onlythat is payablefor services to be performed starting on the first day of the calendar monthafter such Deferral Election is made, but in the same Plan Year in which suchDeferral Election is made.  An individual who is eligible to make a CurrentYear Election pursuant to Section 4.1(b) must make such Current Year Election during the twenty- five (25) day period commencing onthe individual's EligibilityDate.

(r)        DeferralElection shall mean the agreement between the Company or ParticipatingEmployer and an Eligible Employee pursuant to which the Eligible Employeeconsents to participation and the deferral of Compensation hereunder, anddesignates the amount of Compensation to be deferred.

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

 

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(1)       TheDeferral Election Deadline for an Employee who becomes a Springing EligibleEmployee (as such term is defined in Section 2.1(x)(3)), who is newly hired (and otherwise eligible to defer byreason of Section 2.1(x)(2)) orwho becomes a Transitioned Employee (and otherwise eligible to defer by reasonof Section 2.1(x)(4)) on or after November 1, but on or beforeDecember 31, shall be thetwenty-fifth (25th) day after the Employee's Eligibility Date; provided, however, that any DeferralElection made pursuant to this Section 2.1(s)(1) shall be applicable only with respect to (i) base salary that is payablefor services to be performed starting on the first day of the calendar monthafter the Deferral Election is made and (ii)Commissions, Performance Bonuses and Sales Bonuses, as applicable, for thefollowing Sales and Performance Compensation Deferral Period.  Notwithstandingthe October 1, 2005 Eligibility Date in Section 2.1(w) or any other provisionto the contrary, an Employee who is described in this Section 2.1(s)(1) and whosatisfies the requirements in Section 2.1(s)(2) for a Corporate Bonus DeferralElection in the following Plan Year shall be eligible to make such CorporateBonus Deferral Election.

(2)       ACorporate Bonus Deferral Election shall only be available for a Plan Year if(i) the Corporate Bonus for that Plan Year satisfies the definition of"performance-based compensation" set forth in Treasury Regulation Section1.409A-1(e) and (ii) as of the date of the Corporate Bonus Deferral ElectionDeadline, the Corporate Bonus is not both substantially certain to be paid andreadily ascertainable.  If a Corporate Bonus does not satisfy both (i) and (ii)for a Plan Year, then no Bonus Deferral Election may be made for that PlanYear.  Further, notwithstanding anything herein to the contrary, only thoseParticipants who perform services continuously from the date upon which theCorporate Bonus performance criteria for a Plan Year are established throughthe date the Participant makes a Corporate Bonus Deferral Election for thatPlan Year shall be eligible to make a Corporate Bonus Deferral Election forthat Plan Year.  In no event shall a Corporate Bonus be subject to a CurrentYear Election.

(3)       In the caseof those Eligible Employees who were inadvertently excluded from the basesalary and Commission Deferral Election process for the 2005 Plan Year due toan administrative error in calculating their Earnings as of the 2005 PlanYear's Eligibility Date, the Deferral Election Deadline for such EligibleEmployees is March 15, 2005 and the Deferral Election shall only apply todeferrable items of Compensation for the 2005 Plan Year that are payable forservices to be performed after such Deferral Election is made.  EligibleEmployees who are entitled to make the Deferral Elections described in theimmediately preceding sentence may make such elections during the period March1, 2005 through March 15, 2005.  

 

 

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

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

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

(w)      EligibilityDate means October 1, 2005, and each succeeding October 1 thereafter provided that for purposes of Corporate Bonus DeferralElections made during June 2005 the Eligibility Date means May 1, 2005.  In thecase of an Eligible Employee described in 2.1(x)(2), "Eligibility Date" meansthe first day of the calendar month following the calendar month in which theEmployee is newly hired while in the case of an Eligible Employee described in2.1(x)(3) or (4), "Eligibility Date" means the first day of the calendar monthfollowing the calendar month in which the Employee is designated as an EligibleEmployee by the Company's Vice President, Global Compensation and Benefits.

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

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

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

 

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

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

(3)       anEmployee on the U.S. payroll of the Company or other Participating Employerwho, by reason of salary increasesatisfies the eligibility provisions of subdivision (1) above after the October 1 Eligibility Date ("Springing EligibleEmployee"); or

(4)       aTransitioned Employee acquired before or after the October1 Eligibility Date, but only if (i) during the 12-month period ending on September 30 (or, for the 12 month period ended April 30for purposes of the Corporate Bonus Deferral Elections made during June 2005), the Transitioned Employeereceived combined compensation from his or her prior employer(s) and theCompany (or other Participating Employer) in an amount which would haveotherwise classified him or her as an Eligible Employee under subdivision (1)(B) above, and (ii) theTransitioned Employee is so designated as an Eligible Employee by the Company's Vice President, Global Compensation and Benefits.

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

Notwithstanding the foregoing, the following Employees shallnot be Eligible Employees:

(1)        non-residentaliens who are not subject to United States federal income taxation onCompensation;

(2)        residentaliens who are not subject to United States federal income taxation onCompensation;

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

(4)        any personhired by a foreign entity in which the Company has a direct or indirectownership interest; and

 

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

Notwithstanding theforegoing, any Employee whom the PlanAdministrator determines is not a member of a select group of management or ahighly compensated employee willnot be an Eligible Employee.

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

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

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

(bb)     Fair MarketValue of a share of Common Stock shall mean, as of a particular date, (i)if shares of Common Stock are listed on a national securities exchange, themean between the highest and lowest sales price per share of Common Stock onthe consolidated transaction reporting system for the principal nationalsecurities exchange on which shares of Common Stock are listed on that date,or, if there shall have been no such sale so reported on that date, on the lastpreceding date on which such a sale was so reported, (ii) if shares of CommonStock are not so listed but are quoted on the Nasdaq National Market, the meanbetween the highest and lowest sales price per share of Common Stock reportedby the Nasdaq National Market on that date, or, if there shall have been nosuch sales reported on that date, on the last preceding date on which such asale was so reported, or (iii) if the Common Stock is not so listed orquoted but is traded in the over‐the‐counter market, the meanbetween the closing bid and asked price on that date, or, if there are noquotations available for such date, on the last preceding date on which suchquotations shall be available, as reported by the Nasdaq Stock Market, or, ifnot reported by the Nasdaq Stock Market, by the National Quotations BureauIncorporated.

(cc)      FICAshall mean the taxes imposed under the Federal Insurance Contributions Act forwhich withholding from employees may be required from time to time.

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

(ee)     IP Awardshall mean any RSU, option or other award granted to an Employee under theSIP.  

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

 

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(gg)      Participantshall mean each Eligible Employee who has properly completed and filed a DeferralElection with the PlanAdministrator and each Eligible Employee who has been credited withdiscretionary additional credits pursuant to Section 4.3(c).

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

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

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

(kk)      PlanYear shall mean the calendar year.

(ll)        Pre-2005Account shall mean that portion of a Participant's Account as of December31, 2004 that is "earned and vested" (as defined in Section 409A), plussubsequent rates of return on that amount calculated pursuant to Section 4.4.

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

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

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

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

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

(rr)       Section409A shall mean Section 409A of the Code and any regulations or otherguidance promulgated thereunder.

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

 

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

For purposes of thisSection 2.1(ss), the determination of which Participants are "key employees"pursuant to the preceding paragraph shall, in accordance with TreasuryRegulation Section 1.415(c)-2(g)(5)(ii), be made by excluding all compensationof employees of the Company and its Affiliates who were "nonresident aliens" (assuch term is defined in Treasury regulation Section 1.409A-1(j)) duringthe applicable Determination Period provided that such exclusion is made in allof the Company's and its Affiliates' other nonqualified deferred compensationplans and arrangements that are subject to Section 409A.  In addition, forpurposes of this Section 2.1(ss), the term "Key Employee Compensation" means,in accordance with Treasury Regulation Section 1.415(c)‐2(d)(4),compensation received from the Company and any Affiliates that is required tobe reported under Code Sections 6041 and 6051 and 6052 (i.e. Box 1compensation) but, except as provided in the immediately preceding sentence,determined without regard to any rules that limit remuneration included inwages based on the nature or location of the employment or the servicesperformed, increased by amounts excluded from compensation in lieu of benefitsunder a cash or deferred arrangement under Code Section 401(k), a cafeteriaplan under Code Section 125 or a salary reduction agreement under Code Section132(f)(4).

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

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

 

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(vv)     ValuationDate shall mean the last business day of each calendar month, or morefrequently as authorized by the PlanAdministrator.

2.2       Construction. If any provision of this Plan is determined to be for any reason invalid orunenforceable, the remaining provisions of this Plan shall continue in fullforce and effect.  All of the provisions of this Plan shall be construed andenforced in accordance with the laws of the State of Delaware (other than itslaws regarding choice of laws) and shall be administered according to the lawsof such state, except as otherwise required by ERISA, the Code or otherapplicable federal law.  The masculine gender, where appearing in this Plan,shall include the feminine gender, and vice versa.  The terms "delivered to the Plan Administrator" and "filedwith the Plan Administrator," asused in this Plan, shall include, respectively, delivery to and filing with aperson or persons designated by the PlanAdministrator for the disbursement and the receipt of administrative forms. Whenever a Participant is required to make a "filing" of an election or form orrequired to make a submission in "writing" under this Plan, such "filing" or"writing" requirement may be satisfied by the Participant electronically (butonly if the Plan Administratorhas designated that such requirement may be satisfied electronically). Headings and subheadings in the Plan are for the purpose of reference only andare not to be considered in the construction of this Plan.

2.3       Compliancewith Section 409A.  To the extent applicable, it is intended that this Plancomply with the provisions of Section 409A with respect to Post-2004 Accounts. With respect to Pre-2005 Accounts, it is intended that such accounts qualifyfor "grandfathered" status and continue to be governed by the law applicable tononqualified deferred compensation prior to enactment of Section 409A.  ThisPlan shall be administered in a manner consistent with this intent, and anyprovision that would cause a Post-2004 Account to fail to satisfy Section 409Ashall have no force and effect until amended to comply with Section 409A (whichamendment may be retroactive to the extent permitted by Section 409A and may bemade by the Company without the consent of the affected Participants).

**ARTICLE III**

**PARTICIPATION ANDVESTING**

3.1      Eligibility andParticipation.  An Eligible Employee who properly completes and files withthe Plan Administrator a DeferralElection pursuant to which a portion of his Compensation is deferred under thePlan shall become a Participant.  A Participant shall remain a Participantuntil his entire Account under the Plan is extinguished, through distributionor otherwise.  An Eligible Employee shall also become a Participant if he orshe is credited with discretionary additional credits pursuant to Section4.3(c).

 

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

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

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

(b)       EarlyDistribution Penalty.  A Participant who, withrespect to the Participant's Pre-2005 Account, receives an early distributionpursuant to Section 5.5 shall incur a forfeiture as provided in such section.

(c)       Forfeitureof Additional Credits for Cause.  Notwithstanding a Participant'seligibility for a distribution from or of his/her Account, the portion of aParticipant's Account attributable to Additional Credits shall be subject toforfeiture at the Committee's discretion if, upon consideration of the factsand circumstances and any advice or recommendation of the Employer, theCommittee finds that Cause exists.  Similarly, in the event the Committee, inits discretion, upon consideration of the facts and circumstances and anyadvice or recommendation of the Employer, concludes, subsequent to theParticipant's receiving a distribution (or distributions) of any portion ofAdditional Credits from his/her Account (including any Dividend Equivalentsreceived thereon), that the Participant violated the non-compete and/ornon-solicitation provisions of Section 2.1(h), the Participant shall berequired to reimburse the Employer in an amount equal to such distribution(s).

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

 

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### ARTICLE IV

**DEFERRALELECTIONS, MATCHING CREDITS**

**ANDACCOUNTING**

4.1       DeferralElections.  

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

Deferral Elections for aPlan Year and a Sales and Performance CompensationDeferral Period shall be made on forms provided by the Plan Administrator.  Deferral Elections shall be filed withthe Plan Administrator no earlierthan the date permitted by the PlanAdministrator and no later than the Deferral Election Deadline.  Deferral Electionsfor a Plan Year and a Sales and Performance CompensationDeferral Period shall become irrevocable on the Deferral Election Deadline.

(b)       CurrentYear Elections.  Notwithstanding the foregoing, an individual who meets therequirements to be an Eligible Employee on the firstday of the calendar month following his or her date ofhire shall be eligible to make a Current Year Election, if his or her date ofhire is prior to November 1.   Inaddition, an individual who, by reason of salary increase, meets therequirements to be an Eligible Employee on the first dayof the calendar month following the salary increase, shall be eligible to makea Current Year Election, if such salaryincrease and the designation by the Company's Vice President, GlobalCompensation and Benefits that the individual is eligibleto make a Current Year Election bothoccur prior to November 1.  A Transitioned Employee who is an Eligible Employeesolely by reason of Section 2.1(x)(4)shall not be eligible to make a Current Year Election.

 

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(c)       NewElections and Terminations of Elections.  A new Deferral Election will berequired for each Plan Year and each Sales andPerformance Compensation Deferral Period.  A Participant's Deferral Electionshall automatically terminate on theearlier of (i) the Participant's termination of employment, (ii) the date the Participant is disabled or (iii) the dateprovided in Section 4.1(g).  For purposes of this Section 4.1(c), "disabled"means a medically determinable physical or mental impairment resulting in theParticipant's inability to perform the duties of his or her position or anysubstantially similar position, where such impairment can be expected to resultin death or can be expected to last for a continuous period of not less thansix months.

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

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

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

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

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

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

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

 

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(f)        Withholding for Deferrals.  Amountsdeferred pursuant to a Participant's Deferral Election shall be credited to aParticipant's Account as soon as administratively practicable after such amount would otherwise have beenpaid to the Participant.  The amount credited to the Account shall not be reducedby any applicable taxes (includingbut not limited to FICA taxes).  Instead,at the discretion of the Company, any amounts required to be withheld for taxeswith respect to amounts deferred pursuant to a Participant's Deferral Election shall bewithheld from other cash compensation of the Participantor shall be satisfied by payment by personal check from theParticipant to the Company as the Companymay permit on a case‐by‐casebasis.

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

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

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

Establishment andmaintenance of Accounts hereunder shall not be construed as giving any personany interest in assets of the Company or an Affiliate, or a right to paymentother than as provided hereunder.  An Account shall be maintained until allamounts credited to such Account have been withdrawn, distributed, forfeited,or otherwise extinguished in accordance with the terms and provisions of thisPlan.

 

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4.3       AdditionalCredits. 

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

(b)       Match ofAmounts Deferred into Stock.  Nofurther Match credits are made to the Plan effective January 1, 2005.  Prior toJanuary 1, 2005, a Participant's Pre-2005 Account was credited each Plan Year with anamount ("Match") based on the amount of Bonus and Matchable Compensation (asdefined below) deferred in such Plan Year with respect to which the Participantimmediately elected the StockEquivalent rate of return.  The amount of the Match was equal to 25% of the sum of(i) the amount of the Bonus so deferred (up to a maximum deferral of 25%of the pre-deferral Bonus) plus (ii) the amount of deferred MatchableCompensation (up to a maximum deferral of 15% of the pre-deferral amount ofMatchable Compensation). "Matchable Compensation" for this purpose was Compensation (other than RSUs orBonuses and other than amounts arising under a plan or agreement providing forpayment (as opposed to acceleration) of amounts in the event of a Change ofControl).  Such Match (net of applicable withholding for taxes) was credited to the Participant's Pre-2005 Account as of the last day of the Plan Year, andonly if the Participant was anEligible Employee as defined in Section 2.1(x), but determined as of the lastday of the Plan Year instead of as of the Eligibility Date; provided, however,that this last day of the Plan Year requirement did not apply to any Participant who was not an Eligible Employee asof the last day of the Plan Year solely because (i) he or she was a U.S. citizen who was residing (whether permanently or temporarily) outsidethe United States, or (ii) as of the last day of the Plan Year, he or she did not meet the income thresholdfor Eligible Employee status set forth in Section 2.1(x)(1). All Match amounts wereonly credited to the Stock Equivalent Portion of aParticipant's to the StockEquivalent Portion of a Participant's Pre‐2005Account.

 

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(c)       DiscretionaryAdditional Credits.  At the discretion of the Committee, which may beexercised on a case by case basis, the Stock Equivalent Portion of aParticipant's Post-2004 Account may be credited fromtime to time with additional credits in the form of any number of deferredstock units.

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

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

(iii)       Withrespect to Ronald Rittenmeyer only, any amounts required to be withheld for FederalInsurance Contributions Act (FICA) taxes (and for income taxes on such withheldFICA taxes) with respect to discretionary additional credits credited to hisPost-2004 Account and related Dividend Equivalents shall be withheld and paidfrom his discretionary additional credits in accordance with the requirementsof Treasury Regulation Section 1.409A-3(j)(4)(vi).  In the case of all otherParticipants (and in the case of Ronald Rittenmeyer with respect to taxes otherthan FICA taxes and income taxes on the withheld FICA taxes), any amountsrequired to be withheld for taxes (including but not limited to FICA taxes)with respect to their Post-2004 Account discretionary additional credits andDividend Equivalents shall not be withheld and paid from such credits andDividend Equivalents but shall instead, at the discretion of the Company, bewithheld from other cash compensation of the Participant or shall be satisfiedby payment by personal check from the Participant to the Company as theCompany may permit on a case by case basis.

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

 

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with respect to any Dividend Equivalents shall not be withheld and paid from such DividendEquivalents but shall instead, at the discretion of the Company, be withheld from other cashcompensation of the Participant, or shall be satisfied by payment by personalcheck from the Participant to the Company as the Companymay permit on a case by case basis.

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

4.4       Rates of Return.  

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

 

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(i)        FixedIncome Equivalent.  The Fixed-Income Equivalent rate of return shall be the30-year U.S. Treasury bond yield rate as published in the Wall StreetJournal (or, if not published in the Wall StreetJournal, then as announced by the U.S. Treasury Department) for the first business day of September of the prior PlanYear, plus 50 basis points.  

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

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

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

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

(b)       Electingand Changing Rates of Return.  Deferred RSUs and Additional Credits shallalways receive the Stock Equivalent rate of return.  At the time a DeferralElection is filed, a Participant shall irrevocablyspecify the percentage of other deferred Compensation for the next Plan Yearthat shall be allocated to the Fixed-Income Equivalent Portion of theParticipant's Account and the percentage thereof that shall be allocated to theStock Equivalent Portion of the Participant's Account.  Notwithstanding the irrevocability requirement of theimmediately preceding sentence, a Participant may electto prospectively change the 

 

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rate of return on all or any portion of the existingbalance in the Fixed-Income Equivalent Portion of his orher Account to the Stock Equivalent rate of return,effective as of the first day of the month immediately following the date theelection is filed with the PlanAdministrator.  (No change shall be permitted from the Stock Equivalent rate ofreturn to the Fixed-Income Equivalent rate of return.)  Notwithstanding thepreceding, the Plan Administratormay postpone until after such period any transfer which would otherwise be madein a period in which the Participant would be prohibited (by Company policy orotherwise) from acquiring or disposing of equity securities of an Employer.  Ifa Participant fails to specify a rate of return upon filing his DeferralElection, amounts deferred pursuant to such Deferral Electionfor the next Plan Year shall be shall be credited as if the Participant elected theStock Equivalent rate of return pursuant to thisSection 4.4(b).  The Beneficiary of a Participant who has died shall havethe same right as the Participant to elect the rate of return for therespective Account (or portion of an Account).

(c)       Authority to EliminateStock Equivalent Rate of Return.  The Vice President, Global Compensation and Benefits may, inhis sole discretion, eliminate the Stock Equivalent rate of return provided bythis Section 4.4 in the event he determines that it is necessary to eliminatesuch rate of return in order to maintain the Plan's grandfathered status underthe New York Stock Exchange's shareholder approval requirements for equitycompensation plans (the "NYSE Shareholder Approval Requirements").  In theevent that the Stock Equivalent rate of return is eliminated under this Section4.4(c), any references in this Plan to the Stock Equivalent Portion of aParticipant's Account after the date on which the Stock Equivalent rate ofreturn is eliminated shall, to the extent permitted by the NYSE ShareholderApproval Requirements or a reasonable interpretation thereof, mean the numberof stock units credited to the Stock Equivalent Portion of a  Participant'sAccount on the date of elimination.  In such a case, no amounts (includingDividend Equivalents) shall be credited to the Stock Equivalent Portion of aParticipant's Account after the date of elimination.  Instead, all deferralamounts, Additional Credits and any dividends declared on shares of CommonStock that are represented by units in the Stock Equivalent Portion of aParticipant's Account shall be credited to the Fixed-Income Equivalent Portionof the Participant's Account starting on the day after the date the StockEquivalent rate of return is eliminated.

(d)       Segregationof Pre-2005 and Post-2004 Accounts.  A Participant's rate of return calculatedunder this Section 4.4 shall be divided on a pro rata basis between theParticipant's Pre-2005 Account and Post-2004 Account depending on therespective balances in such accounts at the time the rate of return iscalculated.  

 

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**ARTICLEV**

**DISTRIBUTIONOF BENEFITS**

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

(a)        a single lumpsum, or 

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

For purposes of Section409A, the entire vested portion of amounts credited to the Participant'sPost-2004 Account during each Plan Year and/or each Sales and PerformanceCompensation Deferral Period (and the rate of return on those amounts) shall bepaid to the Participant in the form elected under this Section 5.1 except asotherwise provided in the last paragraph of Section 5.3.

Unless otherwise elected by a Participant, the lump sumpayment or the first installment payment shall, subjectto Section 5.15, be made onJanuary 31 of the calendar year following the calendaryear in which the Participantseparates from service (or, if earlier, is Disabled) ("Commencement Date"), and any remaininginstallment payments shall, subject to Section 5.15, bemade on January31 of each successive year until payments are completed.  The Participant maydefer the lump sum payment or the first installment payment past the Commencement Date by so electing onthe form on which the Participant makes his or her distribution election.  Ifthe Participant fails to elect a distribution option, distribution shall bemade in a lump sum on the Commencement Date.  Distribution shall be subject towithholding for applicable taxes.

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

 

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

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

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

5.2      Restrictions on Distributionof Deferred RSUs.  Deferred RSUs and any returns credited thereto shall notbe distributed and shall be subject to forfeiture for a period ("RestrictedPeriod") commencing on the date the deferred RSUs are credited to theParticipant's Account, and ending on the first anniversary of the last day ofthe Plan Year in which such deferred RSUs are so credited.  Thereafter,deferred RSUs shall be fully vested and nonforfeitable.  Restricted deferredRSUs shall be forfeited (or if distributed, subject to repayment) if theCommittee, in its discretion, upon consideration of the facts and circumstancesand any advice or recommendation of the Employer, finds at any time that Causeexisted during the Restricted Period.  Deferred RSUs (and any returns creditedthereto) which would otherwise have been distributed during the RestrictedPeriod shall, subject to Section 5.15, be distributed on the first day of the calendarmonth after the end of the Restricted Period. 

 

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5.3       Changes in DistributionOptions for a Participant's Pre-2005 Account; NoDistribution Option Changes for a Participant's Post-2004 Account.  AParticipant may, with respect to the Participant'sPre-2005 Account, change a form of distribution previously elected under Section5.1, including selecting a later commencement date, by filing an election withthe Plan Administrator in a formpermitted by the PlanAdministrator; provided, however, that no election shall be effective whichextends the date of final distribution beyond the ninth anniversary of theCommencement Date; and provided further, that any change in a Participant'sdistribution option will become effective only if more than twelve months have elapsed from the date the election to changethe distribution option is filed with the Plan Administrator to the date the Participant separatesfrom service.  The form of distribution of a Participant's Pre-2005Account on the Participant's separation from service shall therefore bedetermined by the most recent distribution option election that meets theforegoing requirement, except as provided in Sections 5.2, 5.5 and 5.6.

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

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

 

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Notwithstanding theforegoing provisions of this Section 5.3, in the case of a Participant for whoma Post-2004 Account is established but who either doesn't make a DeferralElection or whose Deferral Elections have all been accompanied by an electionunder Section 5.4 to receive an in-service distribution of the entire amount ofthe related deferrals, the Participant may (unless the Participant has made adistribution form and timing election during the special July 1, 2006 to October31, 2006 election period described above) make a distribution form and timingelection under Section 5.1 for the Participant's first Deferral Election (or,if applicable, the Participant's first Deferral Election that is notaccompanied by an election under Section 5.4 to receive an in-servicedistribution of the entire amount of related deferrals), and such distributionform and timing election (or the lump sum default payment specified in Section5.1 in the absence of an election) shall (i) be irrevocable on the Deferral ElectionDeadline under Section 2.1(s) applicable to such first Deferral Electionand (ii) apply to all amounts credited to the Participant's Post-2004 Accountstarting on the January 1 that immediately follows such Deferral ElectionDeadline.

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

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

 

 

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reasonably anticipates, or shouldreasonably anticipate, that the deduction of the distribution will not be barredby the application of Code Section 162(m).  The preceding sentence shallapply to all scheduled distributions under this Section 5.4 from theParticipant's Post-2004 Account to the extent the Company or ParticipatingEmployer reasonably anticipates that the deduction for such distributions wouldnot be permitted by the application of Code Section 162(m). 

(b)       Any amountsdistributed in accordance with this section shall be in either of the followingforms as properly elected by the Participant (and withrespect to the Participant's Post-2004 Account, such election shall beirrevocable on that Plan Year's and/or Sales and Performance CompensationDeferral Period's Deferral Election Deadline):

(i)        single lumpsum, or

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

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

For purposes of Section409A, the vested portions of amounts credited to the Participant's Post-2004Account during a particular Plan Year and/or each Sales and PerformanceCompensation Deferral Period (and the rate of return on those amounts) shall bea separately identifiable amount to which the Participant is entitled topayment in the manner elected under this Section 5.4.

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

 

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5.6       SmallAccount Balances.  If at the time a Participant separates from service, the vested balance of aParticipant's Account is less than $15,000 (or, in the case of a Participant's Pre-2005 Account, if theportion of such account that ispayable to a single Beneficiary followingthe Participant's death is less than $15,000),then notwithstanding the foregoing provisions of this Article V or anyParticipant's election to the contrary (but subject toSection 5.2), the Participant's Account (or such portionof the Participant's Pre-2005 Account following the Participant's death) shall, subject to Section 5.15, be distributed in a single lumpsum on the first day of the calendar monthfollowing the calendar month in which the Participantseparates from service provided, however, that if the Participant is aSpecified Employee on the date of the Participant's separation from service for any reason other than death,the lump sum payment of the Participant's Post-2004 Account shall, subject toSection 5.15, be paid on thefirst day of the seventh (7th) calendar month following the calendar month inwhich the Participant separates from service.  The provisions of this Section5.6 shall not apply to the Participant's Post-2004 Account unless theParticipant's interest in all other plans, agreements, methods, programs orarrangements that must be aggregated under Treasury Regulation Section1.409A-1(c)(2) with the Participant's respective interests in the Plan areterminated and liquidated in their entirety at the same time as the lump sum paymentunder this Section 5.6. 

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

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

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

 

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

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

5.10     PostponedDistributions.  Notwithstanding the preceding sections of this Article V,the Plan Administrator may, with respect to a Participant's Pre-2005 Account,postpone until after such period any distribution which would otherwise be madein a period in which the Participant would be prohibited (by Company policy orotherwise) from acquiring or disposing of equity securities of an Employer.  Further, with respect to a Participant's Post-2004Account and notwithstanding the preceding sections of this Article V, the PlanAdministrator will, effective for distributions occurring on or after January1, 2006, postpone the distribution of a Participant's Account where the Companyreasonably anticipates that the making of the payment will violate Federalsecurities laws or other applicable law provided that the distribution shall bemade at the earliest date on which the Company reasonably anticipates that themaking of the payment will not cause such violation.

5.11     Claims forBenefits.  In the event that a Participant or Beneficiary claims to beeligible for benefits, or claims any rights hereunder, the Participant orBeneficiary must complete and submit such claims forms and supportingdocumentation as shall be required by the Plan Administrator, in its sole discretion.  The Plan Administrator shall decide eachclaim and give the person making the claim (a "Claimant") writtennotice of the disposition of the claim within 90 days after the claim isfiled.  If the Plan Administrator denies a claim, the notice of denialshall be in writing, shall contain the specific reason or reasons for the denialof the claim, shall contain a specific 

 

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reference to the pertinent Plan provisionsupon which the denial is based, shall contain a description of any additionalmaterial or information necessary for the claimant to perfect the claim alongwith an explanation why such material or information is necessary, and shallcontain an explanation of these claims review procedures.

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

5.12    Withholding. A Participant's Employer or the Company shall have the right to deductapplicable taxes (including, but not limited to FICA) from anyamounts paid hereunder to aParticipant or Beneficiary, and to withhold anappropriate amount of cash or a number of shares of Common Stock or acombination thereof for payment of taxes or to take such other action as may benecessary in the opinion of the Employer or the Company to satisfy allobligations for withholding of such taxes.  Except asset forth in Section 4.3(c)(iii), no taxes shall be deducted from aParticipant's deferred Compensation hereunder until the deferred Compensationtriggering the taxes is paid to the Participant under the terms of the Plan. The Plan Administrator may alsopermit withholding to be satisfied by the transfer to the Company of cash,shares of Common Stock, or other property theretofore owned by the Participantor Beneficiary.

Notwithstanding anythingin this Section 5.12 or any other provision of this Plan to the contrary, inthe event that the Stock Equivalent rate of return is eliminated pursuant tothe provisions of Section 4.4(c), then effective on the date of suchelimination, shares of Common Stock may not be used to satisfy any withholdingobligations except to the extent permitted by the NYSE Shareholder ApprovalRequirements or a reasonable interpretation thereof.  

5.13    Facility ofPayment.  In the event any distribution is payable under this Plan to aminor or other individual who is legally, physically or mentally incompetent toreceive such payment, the PlanAdministrator in its sole discretion shall pay such benefits to one or more ofthe following persons:

            (a)        Directlyto such minor or other person;

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

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

            (d)        Tosuch other person as the PlanAdministrator deems appropriate. 

 

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

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

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

**ARTICLE VI**

**PAYMENTLIMITATIONS**

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

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

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

 

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

(c)        Planamendments shall be subject to the last sentence of thefirst paragraph of Section 10.1.

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

### ARTICLE VII

**FUNDING AND EXPENSES**

7.1      Funding. Benefits under this Plan shall be funded solely by the Company and itsAffiliates.  Benefits hereunder shall constitute an unfunded general obligationof each Participant's respective Employer.  In the event a Participant has beenemployed by more than one Employer, benefits hereunder shall constitute anunfunded general obligation of the Participant's most recent Employer.  Allpayments under this Plan shall be deemed made by the Participant's Employerfrom general assets available to all unsecured creditors of the Employer in theevent of its insolvency.  Each Participant has merely the status of a generalunsecured creditor of his Employer.  

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

 

 

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distributions under this Plan on behalf ofthe Employers.  The assets so held in trust shall remain the general assetsof the Employers, which are the grantors under the trust.  The rights ofParticipants and their Beneficiaries under this Plan and the trust shall beexclusively unsecured contractual rights.  No Participant or Beneficiaryshall have any right, title or interest whatsoever in the trust.

Notwithstanding thepreceding paragraph, no assets shall be transferred to any rabbi or other trustto fund distributions under this Plan for any Participant who is an "applicablecovered employee" (as such term is defined in Code Section 409A(b)(3)(D))during (i) any period during which the EDS Retirement Plan or anysuccessor plan is in "at-risk" status (as such term is defined in Code Section430(i)), (ii) any period the Company or any Employer is a debtor in a caseunder Title 11 of the United States Code or similar Federal or State law or(iii) the twelve month period beginning on the date which is six months priorto the date of termination of the EDS Retirement Plan or any successor planwhere, as of the date of such termination, such plan is not sufficient forbenefit liabilities (within the meaning of section 4041 of the EmployeeRetirement Income Security Act of 1984, as amended).  In addition, no assetsshall be transferred to any rabbi or other trust to fund distributions underthis Plan if such transfer would violate the restriction under Code Section409A(b)(2).

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

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

### ARTICLE VIII

**ADMINISTRATION**

8.1      Committee.  Except forrights and powers expressly reserved to the Board or the Company, the Plan willbe administered by the Committee provided that theCommittee may designate and authorize a person or entity to exercise the powersset forth in Section 8.2 below and such other powers granted to the PlanAdministrator in the Plan.

 

 

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8.2       CommitteePowers.  The Committee shall have the power and authority in its sole andabsolute discretion:

(a)       To construeand interpret the Plan, determine the application of the Plan to situationswhere such application is unclear or disputable, to resolve all questionsarising under the Plan (including questions of fact) and make equitableadjustments for any mistakes or errors made in the administration of the Plan;provided that individual exceptions to the provisions of the Plan shall not bepermitted;

(b)      To determineall questions arising in the administration of the Plan, including the power todetermine the status of individuals as Eligible Employees, the rights ofParticipants and their beneficiaries and the amount of their respectivebenefits and such determination, interpretation or other action shall be finaland binding for all purposes and upon all persons;

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

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

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

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

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

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

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

(j)        To maintainrecords concerning the Plan sufficient to prepare reports, returns and otherinformation required by the Plan or by law, and to communicate the terms of thePlan and any material amendments thereto to the Eligible Employees andParticipants;

 

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

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

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

**ARTICLE IX**

**OTHER BENEFIT PLANS OFAN EMPLOYER**

9.1      Other Plans.  Nothingcontained in this Plan shall prevent a Participant prior to his death, or hisBeneficiary after his death, from receiving, in addition to any paymentsprovided for under this Plan, any payments provided for under any other plan orbenefit program of an Employer, or which would otherwise be payable ordistributable to the Participant or Beneficiary under any plan or policy of anEmployer or otherwise.  Nothing in this Plan shall be construed as preventingthe Company or any Affiliate from establishing any other or different plansproviding for current or deferred compensation for employees.  Benefitsprovided under this Plan shall not constitute pensionable earnings for purposesof determining contributions or benefits under any plan of the Company intendedto "qualify" under Section 401 of the Code, unless specificallyprovided otherwise in such plan.

**ARTICLEX**

**AMENDMENT ANDTERMINATION OF THE PLAN**

10.1    Amendment and Termination. The Committee may amend or terminate this Plan at any time and in its solediscretion, by (and only by) written resolution.  Any such amendment ortermination shall be binding on the Employers and all Participants and theirBeneficiaries, even though it may be retroactive and applicable to Participantswhose employment by the Company or an Employer has terminated.  However, noamendment or  

 

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termination of the Plan shall adversely affect the right of aParticipant to payment of a benefit (including, but not limited to, the paymentprovided by the last paragraph of Section 6.2) to which the Participant wouldbe entitled (then or thereafter) under the terms of the Plan as in effect immediately before the adoption ofsuch amendment or termination of the Plan, unless such amendment or terminationof the Plan in the reasonable judgment of the Committee is required to complywith applicable law or to preserve the tax treatment of benefits under thisPlan for the Employers or for the Participant, or is consented to by theaffected Participant.  Following the occurrence of a CIC Event, no amendment ofthe Plan may be made (including, but not limited to, amodification or revocation of any of the provisions in Section 6.2 or of theaction, if any, taken by the Board under Section 6.2(a)) without the writtenconsent of the Board serving immediately prior to theCIC Event, except for amendments necessary to comply with applicable law.

Notwithstanding anythingherein to the contrary, in the event the Plan is terminated pursuant to thisSection 10.1, no payments shall be made from the Participants' Post-2004Accounts during the twelve month period following the date the Board takes allnecessary actions to irrevocably terminate and liquidate the Plan (althoughpayments that would have occurred under the Plan in the absence of thetermination of the Plan, including but not limited to the payments required bythe last paragraph of Section 6.2, shall be made as otherwise set forth in thePlan) and all amounts in the Participants' Post‐2004 Accounts must bepaid to the Participants or their Beneficiaries, as the case may be, during theperiod of the thirteenth (13th) month through the twenty-fourth (24th) monthfollowing the date the Board takes such irrevocable actions.  Further, in theevent the Plan is terminated pursuant to this Section 10.1, then (i) theCompany and each Affiliate must terminate all other deferred compensationplans, agreements, methods, programs and arrangements that would be aggregatedwith the Plan under Treasury Regulation Section 1.409A‐1(c)(2) ifthe same Participant participated in such other plans, agreements, methods,programs and arrangements, and (ii) for the 3-year period following the datethe Board takes all necessary actions to irrevocably terminate and liquidatethe Plan, neither the Company nor any Affiliate adopts a new deferredcompensation plan, agreement, method, program or arrangement that would beaggregated with the Plan or any other terminated and liquidated plan,agreement, method, program or arrangement under Treasury Regulation Section1.409A-1(c)(2) if the same Participant participated in both such plans,agreements, methods, programs or arrangements.  Notwithstanding the foregoing,no amounts shall be paid from the Participants' Post-2004 accounts under thisSection 10.1 due to Plan termination if the termination of the Plan occursproximate to a downturn in the financial health of the Company or anyAffiliate.

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

 

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10.2     Continuation.  TheCompany intends to continue this Plan indefinitely, but nevertheless assumes nocontractual obligation beyond the promise to pay the benefits described in thisPlan to its Employees.

### ARTICLE XI

**MISCELLANEOUS**

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

11.2   Indemnification. The Company hereby indemnifies the Plan Administratorand each member of the Committee against any and allliabilities and expenses, including attorney's fees, actually and reasonablyincurred by them in connection with any threatened, pending or completed legalaction or judicial or administrative proceeding to which they may be a party,or may be threatened to be made a party, by reason of membership on suchCommittee or service as PlanAdministrator, except with regard to any matters as to which they shall beadjudged in such action or proceeding to be liable for gross negligence orwillful misconduct in connection therewith. 

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

INWITNESS WHEREOF, the Committeehas caused this restatement to beexecuted this 8th day of August, 2007.

COMPENSATIONAND BENEFITS COMMITTEE

OFTHE BOARD OF DIRECTORS OF

 

ELECTRONIC DATA SYSTEMS CORPORATION

 

 

 

By:      /S/M.E. PAOLUCCI                                                 

Michael E. Paolucci, Secretary of the Committee

and Vice President, Global Compensation and

Benefits of the Company

 

 

 

 

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