**EXHIBIT10.4**

 

**CUBICCORPORATION**

** **

**2005DEFERRED COMPENSATION PLAN**

** **

**EFFECTIVEJANUARY 1, 2005**

 

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**Table of Contents**

** **
| ** **            | ** ** | ** **                               | **Page**   |
|-----------------------|------------|------------------------------------------|------------|
| ** **            | ** ** | ** **                               | ** ** |
| ARTICLE 1 Definitions |       | 1                                        |
|                  |       |                                     |       |
|                  | 1.1        | “Account Balance”              |       | 1 |
|                  |       |                                     |       |   |
|                  | 1.2        | “Annual Deferral Amount”       |       | 1 |
|                  |       |                                     |       |   |
|                  | 1.3        | “Annual Installment Method”    |       | 1 |
|                  |       |                                     |       |   |
|                  | 1.4        | “Base Annual Salary”           |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.5        | “Beneficiary”                  |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.6        | “Beneficiary Designation Form” |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.7        | “Board”                        |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.8        | “Bonus”                        |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.9        | “Change in Control”            |       | 2 |
|                  |       |                                     |       |   |
|                  | 1.10       | “Claimant”                     |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.11       | “Code”                         |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.12       | “Committee”                    |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.13       | “Company”                      |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.14       | “Compensation”                 |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.15       | “Deferral Account”             |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.16       | “Deferral Amount”              |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.17       | “Disability”                   |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.18       | “Distribution Date”            |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.19       | “Election Form”                |       | 3 |
|                  |       |                                     |       |   |
|                  | 1.20       | “Employee”                     |       | 3 |

 

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|                                                                    | 1.21   | “Employers”                                                  |   | 4      |
|-------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|--------|
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.22   | “ERISA”                                                      |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.23   | “Fiscal Year”                                                |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.24   | “Inactive Participant”                                       |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.25   | “In-Service Distribution”                                    |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.26   | “Key Employee”                                               |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.27   | “Participant”                                                |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.28   | “Plan”                                                       |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.29   | “Plan Agreement”                                             |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.30   | “Plan Year”                                                  |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.31   | “Re-Deferral Election”                                       |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.32   | “Separation from Service”                                    |   | 4      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.33   | “Termination Benefit”                                        |   | 5      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 1.34   | “Unforeseeable Financial Emergency”                          |   | 5      |
|                                                                    |   |                                                                   |   |
| ARTICLE 2  Eligibility, Selection, Enrollment                           |   | 5                                                                      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 2.1    | Selection by Committee                                                 |   | 5      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 2.2    | Enrollment Requirements                                                |   | 5      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 2.3    | Termination of Participation and/or  Deferrals                         |   | 5      |
|                                                                    |   |                                                                   |   |
| ARTICLE 3  Deferral Elections/Crediting of Interest                     |   | 6                                                                      |
|                                                                    |   |                                                                   |   |
|                                                                    | 3.1    | Deferred Compensation.                                                 |   | 6      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.2    | Election to Defer Compensation                                         |   | 6      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.3    | Time and Form of Payment                                          |   | 7      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.4    | Withholding of Deferral Amounts                                        |   | 7      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.5    | Interest                                                               |   | 8      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.6    | FICA and Other Taxes                                                   |   | 8      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 3.7    | Vesting                                                                |   | 8      |
|                                                                    |   |                                                                   |   |
| ARTICLE 4  In-Service Distribution; Unforeseeable Financial Emergencies |   | 8                                                                      |
|                                                                    |   |                                                                   |   |
|                                                                    | 4.1    | In-Service Distribution                                                |   | 8      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 4.2    | Withdrawal Payout/Suspensions for  Unforeseeable Financial Emergencies |   | 9      |
|                                                                    |   |                                                                   |   |
| ARTICLE 5  Termination Benefit                                          |   | 9                                                                      |
|                                                                    |   |                                                                   |   |
|                                                                    | 5.1    | Termination Benefits                                                   |   | 9      |
|                                                                    |   |                                                                   |   |   |
|                                                                    | 5.2    | Payment of Termination Benefit                                         |   | 9      |
|                                                                    |   |                                                                   |   |
| ARTICLE 6 Death  Benefit                                                |   | 10                                                                     |

 

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|                                               | 6.1    | Death Prior to Distribution of Account  Balance   |   | 10     |
|----------------------------------------------------|--------|---------------------------------------------------|--------|--------|
|                                               |   |                                              |   |
| ARTICLE 7  Disability                              |   | 10                                                |
|                                               |   |                                              |   |
|                                               | 7.1    | General                                           |   | 10     |
|                                               |   |                                              |   |
| ARTICLE 8  Beneficiary Designation                 |   | 10                                                |
|                                               |   |                                              |   |
|                                               | 8.1    | Beneficiary                                       |   | 10     |
|                                               |   |                                              |   |   |
|                                               | 8.2    | Beneficiary Designation; Change;  Spousal Consent |   | 10     |
|                                               |   |                                              |   |   |
|                                               | 8.3    | Acknowledgement                                   |   | 11     |
|                                               |   |                                              |   |   |
|                                               | 8.4    | No Beneficiary Designation                        |   | 11     |
|                                               |   |                                              |   |   |
|                                               | 8.5    | Doubt as to Beneficiary                           |   | 11     |
|                                               |   |                                              |   |   |
|                                               | 8.6    | Discharge of Obligations                          |   | 11     |
|                                               |   |                                              |   |
| ARTICLE 9  Termination, Amendment, or Modification |   | 11                                                |
|                                               |   |                                              |   |
|                                               | 9.1    | Termination                                       |   | 11     |
|                                               |   |                                              |   |   |
|                                               | 9.2    | Amendment                                         |   | 11     |
|                                               |   |                                              |   |   |
|                                               | 9.3    | Effect of Payment                                 |   | 11     |
|                                               |   |                                              |   |
| ARTICLE 10  Administration                         |   | 12                                                |
|                                               |   |                                              |   |
|                                               | 10.1   | Committee Duties                                  |   | 12     |
|                                               |   |                                              |   |   |
|                                               | 10.2   | Agents                                            |   | 12     |
|                                               |   |                                              |   |   |
|                                               | 10.3   | Binding Effect of Decisions                       |   | 12     |
|                                               |   |                                              |   |   |
|                                               | 10.4   | Indemnity of Committee                            |   | 12     |
|                                               |   |                                              |   |   |
|                                               | 10.5   | Employer Information                              |   | 12     |
|                                               |   |                                              |   |
| ARTICLE 11  Claims Procedure                       |   | 12                                                |
|                                               |   |                                              |   |
|                                               | 11.1   | Presentation of Claim                             |   | 12     |
|                                               |   |                                              |   |   |
|                                               | 11.2   | Notification of Decision                          |   | 13     |
|                                               |   |                                              |   |   |
|                                               | 11.3   | Requests for a Review of a Denied  Claim          |   | 13     |
|                                               |   |                                              |   |   |
|                                               | 11.4   | Decision on Review                                |   | 14     |
|                                               |   |                                              |   |   |
|                                               | 11.5   | Rules and Procedures                         |   | 15     |
|                                               |   |                                              |   |   |
|                                               | 11.6   | Exhaustion of Remedies                            |   | 15     |
|                                               |   |                                              |   |   |
|                                               | 11.7   | Optional Arbitration                              |   | 15     |
|                                               |   |                                              |   |
| ARTICLE 12  Miscellaneous                          |   | 17                                                |
|                                               |   |                                              |   |
|                                               | 12.1   | Unsecured General Creditor                        |   | 17     |
|                                               |   |                                              |   |   |
|                                               | 12.2   | Employer’s Liability                         |   | 17     |
|                                               |   |                                              |   |   |
|                                               | 12.3   | Non-Assignability                                 |   | 17     |
|                                               |   |                                              |   |   |
|                                               | 12.4   | Coordination with Other Benefits                  |   | 17     |

 

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|   | 12.5   | Not a Contract of Employment                           |   | 17     |
|--------|--------|--------------------------------------------------------|--------|--------|
|   |   |                                                   |   |   |
|   | 12.6   | Furnishing Information                                 |   | 17     |
|   |   |                                                   |   |   |
|   | 12.7   | Terms                                                  |   | 17     |
|   |   |                                                   |   |   |
|   | 12.8   | Captions                                               |   | 18     |
|   |   |                                                   |   |   |
|   | 12.9   | Governing Law                                          |   | 18     |
|   |   |                                                   |   |   |
|   | 12.10  | Notice                                                 |   | 18     |
|   |   |                                                   |   |   |
|   | 12.11  | Successors                                             |   | 18     |
|   |   |                                                   |   |   |
|   | 12.12  | Spouse’s Interest                                 |   | 18     |
|   |   |                                                   |   |   |
|   | 12.13  | Validity                                               |   | 18     |
|   |   |                                                   |   |   |
|   | 12.14  | Incompetent                                            |   | 18     |
|   |   |                                                   |   |   |
|   | 12.15  | Court Order                                            |   | 19     |
|   |   |                                                   |   |   |
|   | 12.16  | Effect on Employee Benefits                            |   | 19     |
|   |   |                                                   |   |   |
|   | 12.17  | Legal Fees to Enforce Rights Upon a  Change in Control |   | 19     |
|   |   |                                                   |   |   |
|   | 12.18  | Code Section 409A                                 |   | 19     |

 

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**PURPOSE**

 

The purpose of this Plan is to providespecified benefits to a select group of management or highly compensatedemployees, or independent directors, who contribute materially to the continuedgrowth, development and future business success of Cubic Corporation, aDelaware corporation, and its subsidiaries, if any. This Plan shall be unfundedfor tax purposes and for purposes of Title I of ERISA, and is intended tocomply, in form and operation, with the requirements of Code Section 409Aso as to avoid the inclusion of deferred compensation in the gross income ofparticipants until actual receipt. In the event of any inconsistency betweenthe provisions of the Plan and the requirements of Code Section 409A, asinterpreted by the Treasury Department and the Internal Revenue Service inguidance issued thereunder, the provisions of the Plan shall be applied in amanner consistent with the requirements of Section 409A.

 

In order to transition to the requirements ofCode Section 409A and related Treasury Regulations, the Committee may makeavailable to Participants certain transition relief provided under Treasuryguidance as described more fully in Appendix A of this Plan.

 

This Plan has been adopted by the Board ofDirectors of Cubic Corporation effective January 1, 2005, as a successorto the Cubic Corporation Restated Deferred Compensation Plan for DesignatedDirectors, Officers and Key Employees (the “Prior Plan”). The provisions of thePrior Plan shall continue to apply to the deferred compensation accountbalances earned and vested under the Prior Plan as of December 31, 2004,and subsequent earnings thereon, to the extent such amounts are not subject to Section 409A.The provisions of this Plan shall supersede the provisions of the Prior Planwith respect to amounts deferred after December 31, 2004, that are subjectto Section 409A.

 

# **ARTICLE 1**

# **Definitions**

#  

For purposes hereof, unless otherwise clearlyapparent from the context, the following phrases or terms shall have thefollowing indicated meanings:

 

## 1.1           “Account Balance” shall mean, withrespect to a Participant, the balance of his or her Deferral Account. Thisaccount shall be a bookkeeping entry only and shall be utilized solely as adevice for the measurement and determination of the amounts to be paid to or inrespect of a Participant pursuant to the Plan.

 

## 1.2           “Annual Deferral Amount” shall meanthat portion of a Participant’s Base Annual Salary or Bonus that a Participantelects to have, and is, deferred in accordance with Article 3 for any onePlan Year or Fiscal Year, as applicable. An Annual Deferral Amount shall alsomean that portion of a Participant’s Bonus payable with respect to more thanone Fiscal Year which a Participant elects to have, and is, deferred under thePlan.

 

## 1.3           “Annual Installment Method” shallmean the payment of a Participant’s benefit in annual installments to be paid,if so elected by a Participant, as follows: (i) during the calendar year in which payment begins, such paymentshall equal (a) the Account Balance as of the 

 

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## Termination Date; divided by (b) the total number of installmentpayments to be made; and (ii) during the benefit payment period, theamount of each installment to be paid during each calendar year thereaftershall be recalculated, and shall be equal to (a) the remaining amountpayable to the Participant as of such January 1; divided by (b) thenumber of installment payments to be made in or after such subsequent calendaryear. The first such installment shall be made as of the Termination Date andsubsequent installments shall be made on the 15th of the first January following theTermination Date and subsequent installments shall be made on the 15th of each subsequent January of eachsubsequent calendar year. The final installment payment shall be equal to theremaining amount payable to the Participant. In no event shall the amount ofany installment payment exceed the remaining amount payable to the Participant.

 

## 1.4           “Base Annual Salary” shall mean theannual compensation (excluding bonuses, commissions, overtime, incentivepayments, non-monetary awards, stock options and grants, restricted stock,severance or termination payments, foreign service payments, payments forconsulting services, and such other unusual or extraordinary payments as theCommittee may determine) paid to a Participant for services rendered to anyEmployer, before reduction for compensation deferred pursuant to alltax-qualified, non-qualified and Code Section 125 plans (other thancompensation deferred under individual employment contracts) of any Employer.The Committee may, in its discretion, with respect to any one or moreParticipants establish for any Plan Year a limit on the amount of Base AnnualSalary to be taken into account under this Plan.

##  

## 1.5           “Beneficiary” shall mean one or morepersons, trusts, estates or other entities, designated in accordance with Article 8,that are entitled to receive benefits under the Plan upon death of aParticipant.

 

## 1.6           “Beneficiary Designation Form” shallmean the form established from time to time by the Committee that a Participantcompletes, signs, and returns to the Committee to designate one or moreBeneficiaries.

 

## 1.7           “Board” shall mean the Board ofDirectors of the Company.

 

## 1.8           “Bonus” shall mean any compensation,in addition to Base Annual Salary, paid in respect of one or more Fiscal Yearsto a Participant as an Employee under the Company’s Bonus Plan, or any otherincentive plan of the Company. The Committee may, in its discretion, withrespect to any one or more Participants establish for any Fiscal Year or Yearsa limit on the amount of Bonus to be taken into account under this Plan.

 

## 1.9           “Change in Control” shall mean achange in ownership or control of the Company effected through any of thefollowing transactions:  (i) amerger, consolidation or other reorganization approved by the Company’sstockholders, UNLESS securities representing fifty percent (50%) or more of thetotal combined voting power of the voting securities of the successorcorporation are immediately thereafter beneficially owned, directly orindirectly and in substantially the same proportion, by the persons whobeneficially owned the Company’s outstanding voting securities immediatelyprior to such transaction; (ii) the sale, transfer or other disposition ofall or substantially all of the Company’s assets in complete liquidation ordissolution of the Company; or (iii) the acquisition, directly orindirectly by any person or related 

 

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##  

## group of persons (other than the Company or a person that directly orindirectly controls, is controlled by, or is under common control with, theCompany), of beneficial ownership (within the meaning of Rule 13d-3 of theSecurities Exchange Act of 1934, as amended from time to time), of securitiespossessing more than fifty percent (50%) of the total combined voting power ofthe Company’s outstanding securities.

 

## 1.10         “Claimant” shall have the meaning setforth in Section 11.1.

 

## 1.11         “Code” shall mean the Internal RevenueCode of 1986, as amended.

 

## 1.12         “Committee” shall mean theadministrative committee appointed to manage and administer the Plan inaccordance with its provisions pursuant to Article 10.

 

## 1.13         “Company” shall mean Cubic Corporation,a Delaware corporation.

 

## 1.14         “Compensation” refers to Base AnnualSalary and Bonus, as may be designated by the Committee.

 

## 1.15         “Deferral Account” shall mean the sumof (a) a Participant’s Deferral Amount, plus (b) interest credited inaccordance with Section 3.5, net of all distributions from such Account.This account shall be a bookkeeping entry only and shall be utilized solely asa device for the measurement and determination of the amounts to be paid to theParticipant pursuant to the Plan.

##  

## 1.16         “Deferral Amount” shall mean the sum ofall of a Participant’s Annual Deferral Amounts.

 

## 1.17         “Disability” shall mean a Participantis (1) unable to engage in any substantial gainful activity by reason ofany medically determinable physical or mental impairment which can be expectedto result in death or can be expected to last for a continuous period of notless than 12 months, or (2) by reason of any medically determinablephysical or mental impairment which can be expected to result in death or canbe expected to last for a continuous period of not less than 12 months,receiving income replacement benefits for a period of not less than threemonths under an accident and health plan covering employees of the Employer.

 

## 1.18         “Distribution Date” shall mean the dateor dates on which Compensation being deferred will be distributed, as selectedby the Participant on the Election Form. The term Distribution Date does notinclude other dates on which amounts may be distributed to a Participant underthe Plan such as upon Disability, death, Unforeseeable Financial Emergency, orSeparation from Service.

 

## 1.19         “Election Form” shall mean the formestablished from time to time by the Committee that a Participant completes,signs, and returns to the Committee to make an election under the Plan.

 

## 1.20         “Employee” refers to any employee,within the meaning of Section 3121(d) of the Code, who is highlycompensated, has the title of Vice President, President or Chief ExecutiveOfficer, or is otherwise a member of management, selected by the Committee toparticipate in 

 

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## this Plan. The Committee shall determine whether an employee is to beconsidered highly compensated, applying a definition with a dollar threshold atleast as high as that set under Section 414(q) of the Code from timeto time with respect to qualified plans.

 

## 1.21         “Employers” shall mean the Companyand/or any of its subsidiaries that have been selected by the Board toparticipate in the Plan.

 

## 1.22         “ERISA” shall mean the EmployeeRetirement Income Security Act of 1974, as amended from time to time.

 

## 1.23         “Fiscal Year” shall mean the Employer’stax year, which is currently the 12-month period ending on September 30.

 

## 1.24         “Inactive Participant” shall mean anyParticipant who has elected to defer Compensation under the Plan during aprevious Plan Year but who does not defer any Compensation payable during thecurrent Plan Year.

 

## 1.25         “In-Service Distribution” shall meanthe payout set forth in Section 4.1.

 

## 1.26         “Key Employee” shall mean an employeeas defined in Code Section 416(i) without regard to paragraph (5) thereof.

 

## 1.27         “Participant” shall mean any Employee (a) whois selected to participate in the Plan, (b) who elects to participate inthe Plan, (c) who signs a Plan Agreement and an Election Form, (d) whosesigned Plan Agreement and Election Form are accepted by the Committee, (e) whocommences participation in the Plan, and (f) whose Plan Agreement has notterminated.

 

## 1.28         “Plan” shall mean the Company’s 2005Deferred Compensation Plan which shall be evidenced by this instrument and,with respect to each Participant, by his or her Plan Agreement, as each may beamended from time to time.

 

## 1.29         “Plan Agreement” shall mean a writtenagreement, as may be amended from time to time, which is entered into by andbetween one or more Employers and a Participant. Each Plan Agreement executedby a Participant shall provide for the entire benefit to which such Participantis entitled under the Plan, and shall specify the Employer or Employers liablefor the Participant’s benefits hereunder and the magnitude or extent of suchliability. The Plan Agreement bearing the latest date of acceptance by theCommittee shall govern such entitlement and each Employer’s liability. Upon thecomplete payment of a Participant’s Account Balance, each individual’s PlanAgreement and his or her status as a Participant shall terminate.

 

## 1.30         “Plan Year” shall be the calendar year,starting with 2005.

 

## 1.31         “Re-Deferral Election” shall mean aParticipant’s irrevocable election to extend a Distribution Date.

 

## 1.32         “Separation from Service” means atermination of employment or service that constitutes a  “separation from service” within the meaningof Code Section 409A(a)(2)(A)(i). A Separation from Service shall notoccur merely by reason of the transfer of employment of a 

 

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## Participant from an Employer to any entity directly or indirectlycontrolled by or under common control with the Company and which is not anEmployer, unless otherwise provided under Section 409A. A Participant willnot be considered to have a termination of employment while the individual ison a military leave, sick leave, or other bona fide leave of absence if theperiod of the leave does not exceed six months or, if longer, so long as theindividual’s right to reemployment with the Employer is provided either bystatute or by contract.

 

## 1.33         “Termination Benefit” shall mean thebenefit set forth in Article 7.

 

## 1.34         “Unforeseeable Financial Emergency”shall mean an “unforeseeable emergency” within the meaning of Section 409A(2)(B)(ii) ofthe Code, including a severe financial hardship to the Participant resultingfrom illness or accident of the Participant, the Participant’s spouse or adependent (as defined in Section 152(a) of the Code) of theParticipant, loss of the Participant’s property due to casualty or othersimilar extraordinary unforeseeable circumstances arising as a result of eventsbeyond the control of the Participant. Further, to qualify for distribution onaccount of an “Unforeseeable Emergency,” the amounts distributed with respectto the unforeseeable emergency cannot exceed the amounts necessary to satisfythe emergency and pay taxes reasonably anticipated as a result of thedistribution. The amount needed is determined after taking into account amountsthat would be received by the Participant through reimbursement or compensationby insurance or otherwise, or that could be obtained, without severe financialhardship, through the liquidation of the Participant’s assets.

 

# **ARTICLE 2**

# **Eligibility,Selection, Enrollment**

#  

## 2.1           Selection by Committee. Participationin the Plan shall be limited to employees of an Employer who are part of aselect group of management or highly compensated employees, and non-employeemembers of the Board of Directors of the Company. From the foregoing, theCommittee shall select, in its sole and absolute discretion, individualseligible to participate in the Plan.

 

## 2.2           Enrollment Requirements. As acondition to participation, each selected individual shall complete, execute,and return to the Committee a Plan Agreement and an Election Form. In addition,the Committee shall establish from time to time such other enrollmentrequirements as it determines in its sole and absolute discretion arenecessary.

 

## 2.3           Termination of Participation and/orDeferrals. If the Committee determines in its sole discretion that aParticipant no longer meets the requirement of Section 2.1 hereof, theCommittee shall prevent the Participant from making future deferral elections.

 

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# **ARTICLE 3**

# **DeferralElections/Crediting of Interest**

#  

## 3.1           Deferred Compensation.

##  

### (a)           Minimum. For each Plan Year or FiscalYear, as applicable, a Participant may elect to defer Compensation paid inrespect of such year the following minimum amounts for each deferral elected:

###  

| **Deferral**       | ** ** | **Minimum  Amount** |
|--------------------|------------|---------------------|
|               |       |                |
| Base Annual Salary |       | 1% per Plan  Year   |
|               |       |                |
| Annual Bonus       |       | 5% per  Fiscal Year |

 

If no election is made, the amount deferredshall be zero.

 

### (b)           Short Plan Year. If a Participantfirst becomes a Participant after the first day of a Plan Year, the minimumBase Annual Salary shall be an amount equal to the minimum set forth above,multiplied by a fraction, the numerator of which is the number of completemonths remaining in the Plan Year and the denominator of which is 12.

###  

### (c)           Maximum. For each Plan Year or FiscalYear, as applicable, a Participant may elect to defer Base Annual Salary and/orBonus up to the following maximum amounts:

###  

| **Deferral**       | ** ** | **Maximum  Amount**   |
|--------------------|------------|-----------------------|
|               |       |                  |
| Base Annual Salary |       | 90% per Plan  Year    |
|               |       |                  |
| Bonus              |       | 100% per  Fiscal Year |

 

## 3.2           Election to Defer Compensation.

 

### (a)           General. An individual selected toparticipate must deliver to the Committee a completed and signed Election Form,which Election Form must be accepted by the Committee, for a validelection to exist. Except as otherwise provided under this Section 3.2, anelection to defer Compensation must be made and accepted (i) no later thanthe close of the Plan Year preceding the Plan Year in which any of the servicesfor which the Compensation would be paid are performed, or (ii) within30 days after the date the Participant first becomes eligible toparticipate in this Plan (and any other plan that would be aggregated with thePlan to the extent required under Section 409A), with respect to servicesto be performed subsequent to the election.

###  

### (b)           Special Rule for First Year ofEligibility. For purposes of Section 3.2(a) above, and to theextent permitted under Section 409A, if a deferral election is made withrespect to a Bonus during the first year of eligibility, but after thebeginning of the service period with respect to which the Bonus is payable, theelection is deemed to apply to compensation paid for services performedsubsequent to the election if the election applies to a portion of the Bonusthat is no greater than the total amount of the Bonus for the performanceperiod multiplied by the 

 

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### ratio of the number of days remaining in the performance period afterthe election over the total number of days in the performance period.

###  

### (c)           Special Rule for Fiscal YearCompensation. To the extent permitted under Section 409A, theCommittee may permit a Participant to defer a Bonus based on service to beperformed during one or more consecutive Fiscal Years by making an election nolater than the close of the Fiscal Year preceding the first Fiscal Year inwhich the services for which the Bonus is payable are to be performed, providedthat no portion of the Bonus is paid or payable during the Fiscal Year(s) inwhich the services are to be performed.

###  

### (d)           Special Rule for Performance-BasedCompensation. The Committee may permit a Participant to make an initialelection to defer a Bonus based on a performance period of one or more FiscalYears, provided that the Participant has performed services continuously fromthe date the performance criteria were established through the date of theelection, on any date that is at least six months prior to the end of theperformance period and before the Bonus has become both substantially certainto be paid and readily ascertainable. This Section 3.2(e) shall applyonly to the extent the Bonus qualifies as “performance-based compensation”within the meaning of Section 409A(a)(4)(B)(iii) of the Code and asotherwise permitted under Section 409A.

###  

### (e)           Subsequent Elections. For eachservice period (that is, a Plan Year or one or more consecutive Fiscal Yearswith respect to which a Bonus is payable), a new Election Form must bedelivered to the Committee in accordance with its rules and procedures andthe requirements of this Section 3.2. If no Election Form is timelydelivered for a service period, no Annual Deferral Amount shall be withheld forthat service period. Notwithstanding the foregoing, the Committee may providethat deferral elections shall remain in effect with respect to subsequentservice periods until changed or revoked, provided that the elections becomeirrevocable with respect to compensation for service performed in a serviceperiod as of the last day on which the Participant would be required to make adeferral election for that service period.

###  

## 3.3           Time and Form of Payment. At thetime of each election to defer an Annual Deferral Amount, the Committee maypermit the Participant to elect the time and form of payment of the AnnualDeferral Amount in accordance with the provisions of Section 4.1, withrespect to In-Service Distributions, and in accordance with such other rules andprocedures as the Committee may prescribe consistent with the requirements of Section 409Aof the Code with respect to a payment method for Termination Benefits. TheCommittee may permit the Participant to change an election of a payment methodfor Termination Benefits by submitting a new Election Form to theCommittee, provided that any such Election Form is submitted at least 12months prior to the scheduled payment date and is not effective for 12 months,and the first payment with respect to which the election is made is deferredfor a period of not less than five years from the earliest date such paymentwould otherwise have been made or commenced if payable in installments (unlesspayment is on account of death, Disability or Unforeseeable FinancialEmergency), subject to compliance with Code Section 409A.

 

## 3.4           Withholding of Deferral Amounts. Foreach Plan Year, the Base Annual Salary portion of the Annual Deferral Amountshall be withheld each payroll period in equal amounts or 

 

7

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## percentages from the Participant’s Base Annual Salary. The Bonusportion of the Annual Deferral Amount shall be withheld at the time the Bonusis or otherwise would be paid to the Participant. The Annual Deferral Amountshall be credited to the Participant’s Deferral Account. A Participant shall atall times have a fully vested and non-forfeitable interest in his or herDeferral Account.

 

## 3.5           Interest. The Committee shall creditthe Account Balances monthly with an interest rate of return equal to the “PromptPayment Act” interest rate set by the Secretary of the Treasury semi-annuallyon January 1st and July 1st, divided by 12. The crediting ofinterest shall be for bookkeeping purposes only, and the Company shall not beobligated actually to invest any money credited to the Account Balances.

 

## 3.6           FICA and Other Taxes. For each PlanYear in which an Annual Deferral Amount is being withheld, the Participant’sEmployer(s) shall ratably withhold from that portion of the Participant’sBase Annual Salary and/or Bonus that is not being deferred, the Participant’sshare of FICA taxes on deferred amounts and any other taxes which may berequired or appropriate. If necessary, but only to the extent permitted underCode Section 409A, the Committee shall reduce the Annual Deferral Amountin order to comply with this Section 3.6.

 

## 3.7           Vesting. A Participant shall at alltimes be one hundred percent (100%) vested in his or her Deferral Account andAnnual Deferral Amount.

 

# **ARTICLE 4**

# **In-ServiceDistribution; Unforeseeable Financial Emergencies**

#  

## 4.1           In-Service Distribution. At the timeof each election to defer an Annual Deferral Amount, the Committee may permit aParticipant to elect to receive a future “In-Service Distribution” from thePlan with respect to that Annual Deferral Amount in a lump sum payment orpursuant to an Annual Installment Method over a period up to five years, asearly as five years but no later than ten years, after the year of deferral (asdescribed below), with the portion of the In-Service Distribution payment whichis yet to be distributed being credited with interest as set forth in Section 3.5.The In-Service Distribution shall be an amount that is equal to the AnnualDeferral Amount plus interest credited on such amount under Section 3.5.Subject to the other terms and provisions of this Plan, each In-ServiceDistribution elected shall be paid or commence as soon as practicable after January 1stof the first calendar year elected by the Participant that occurs at least fiveyears and no more than ten years after the end of the Plan Year or latestFiscal Year in the service period for which an Annual Deferral Amount wouldotherwise have been paid. Subject to compliance with Code Section 409A,the Committee may permit a Participant to change this election to commencedistribution on an allowable alternative Distribution Date by submitting a newElection Form to the Committee, provided that any such Election Form issubmitted at least 12 months prior to the scheduled Distribution Date andis not effective for 12 months, and the commencement of the distributionwith respect to which the election is made is deferred for a period of not lessthan five years from the Distribution Date such payment would otherwise havebeen made or commenced if payable in installments (unless payment is on accountof death, Disability or Unforeseeable Financial Emergency). Notwithstanding theforegoing, but subject to compliance with Code Section 409A, should an 

 

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## event occur that triggers a benefit under Articles 5, 6 or 7, anyAnnual Deferral Amount, plus interest credited on such amount under Section 3.5,that is subject to an In-Service Distribution election under this Section 4.1shall not be paid in accordance with this Section 4.1, but shall be paidin accordance with the other applicable Article of this Plan.

 

## 4.2           Withdrawal Payout/Suspensions forUnforeseeable Financial Emergencies. If the Participant experiences anUnforeseeable Financial Emergency, the Participant may petition the Committeeto receive partial or full payout from the Plan. The payout shall notexceed the lesser of the Participant’s Account Balance, calculated as if suchParticipant were receiving a Termination Benefit, or the amount reasonablyneeded to satisfy the Unforeseeable Financial Emergency as determined under Section 1.34.Subject to the approval of the Committee in its sole and absolute discretion, andcompliance with Code Section 409A, the payout shall be made in a lump sumno later than 60 days following the date of approval. In addition, if theCommittee approves the payout, the Participant’s outstanding deferral electionunder the Plan  shall be cancelled. TheCommittee may also permit a cancellation of a deferral election due to ahardship distribution from the Company’s 401(k) plan to the extentpermitted under Section 409A. The Participant’s ability to make a deferralelection following a cancellation of a deferral election under this Section 4.2shall be subject to the provisions governing initial deferral elections under Section 3.2.

 

# **ARTICLE 5**

# **Termination Benefit**

#  

## 5.1           Termination Benefits. Upon aParticipant’s Separation from Service, the Participant shall receive aTermination Benefit equal to the Participant’s Account Balance, credited withinterest in accordance with Section 3.5.

 

## 5.2           Payment of Termination Benefit. TheTermination Benefit shall be paid in accordance with the installment paymentmethod previously elected by the Participant in accordance with Section 3.3or, if no election of an installment method was timely made, in a lump sum,with the portion of such Termination Benefit yet to be distributed beingcredited with interest in accordance with Section 3.5. The lump sumpayment shall be made, or installment payments shall commence, no later than 60days after the Participant’s Separation from Service; provided, however, thatif a Participant changes the payment method for the Termination Benefit inaccordance with Section 3.3, the payment date shall be determined inaccordance with Section 3.3. Despite the foregoing, if the Participant’sAccount Balance at the time of his or her Separation from Service is less than$50,000, payment of the Termination Benefit will be made in a lump sum no laterthan 60 days after Separation from Service, provided that such distribution maybe made without violating Section 409A of the Code. In addition,notwithstanding anything in the Plan to the contrary and to the extent requiredunder Section 409A, the distribution of a Termination Benefit to aParticipant who is a Key Employee shall not be made or commenced before thedate which is six months and one day after the Participant’s Separation from Service(or, if earlier, the Participant’s death) if any stock of the Company (or anyaffiliate of the Company which would be treated as a “single employer” with theCompany for purposes of Section 409A of the Code) is publicly traded on anestablished securities market or otherwise at such time. If a delay in thecommencement of installment 

 

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## payments is required under the preceding sentence, the suspendedinstallments shall be paid on the first business day following the expirationof the six-month period.

 

# **ARTICLE 6**

# **Death Benefit**

#  

## 6.1           Death Prior to Distribution of AccountBalance. If a Participant dies before or after Separation from Service, theParticipant’s unpaid Account Balance shall be paid to the Participant’sBeneficiary in a lump sum no later than 90 days following the date of death.The Committee may require suitable proof of death as a condition of payment.

 

# **ARTICLE 7**

# **Disability**

##  

## 7.1           General. If the Committee determinesthat the Participant has incurred a Disability, the Participant’s outstandingdeferral elections shall be cancelled and the Participant’s unpaid AccountBalance shall be paid to the Participant or the Participant’s legalrepresentative in a lump sum no later than 60 days after the date ofDisability. If the Participant returns to employment or service as a directorwith an Employer after a Disability ceases, the Participant’s ability to make adeferral election following a cancellation of a deferral election under this Section 7.1shall be subject to the provisions governing initial deferral elections under Section 3.2.

 

# **ARTICLE 8**

# **BeneficiaryDesignation**

#  

## 8.1           Beneficiary. Each Participant shallhave the right, at any time, to designate his or her Beneficiary (both primaryas well as contingent) to receive any benefits payable under the Plan to aBeneficiary upon the death of a Participant. The Beneficiary designated underthis Plan may be the same as or different from the Beneficiary designationunder any other plan of an Employer in which the Participant participates.

 

## 8.2           Beneficiary Designation; Change; SpousalConsent. A Participant shall designate his or her Beneficiary by completingand signing the Beneficiary Designation Form, and returning it to the Committeeor its designated agent. A Participant shall have the right to change aBeneficiary by completing, signing, and otherwise complying with the terms ofthe Beneficiary Designation Form and the Committee’s rules andprocedures, as in effect from time to time. Where required by law or by theCommittee, in its sole and absolute discretion, if the Participant namessomeone other than his or her spouse as a Beneficiary, a spousal consent, inthe form designated by the Committee, must be signed by that Participant’sspouse and returned to the committee. Upon the acceptance by the Committee of anew Beneficiary Designation Form, all Beneficiary designation previously filedshall be canceled. The Committee shall be entitled to 

 

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## rely on the last Beneficiary Designation Form filed by theParticipant and accepted by the Committee prior to his or her death.

 

## 8.3           Acknowledgement. No designation orchange in designation of a Beneficiary shall be effective until received,accepted and acknowledged in writing by the Committee or its designated agent.

 

## 8.4           No Beneficiary Designation. If aParticipant fails to designate a Beneficiary as provided in this Article 8or if all designated Beneficiaries predecease the Participant or die prior tocomplete distribution of the Participant’s benefits, then the Participant’sdesignated Beneficiary shall be his or her surviving spouse. If the Participanthas no surviving spouse, the benefits remaining under the Plan shall be paid tothe Participant’s issue upon the principle of representation and if there is nosuch issue, to the Participant’s estate.

 

## 8.5           Doubt as to Beneficiary. If theCommittee has any doubt as to the proper Beneficiary to receive paymentspursuant to this Plan, the Committee shall have the right, exercisable in itssole and absolute discretion, to cause the Participant’s Employer to withholdsuch payments until this matter is resolved to the Committee’s satisfaction.

 

## 8.6           Discharge of Obligations. The paymentof benefits under the Plan to a Beneficiary shall fully and completelydischarge all Employers and the Committee from all further obligations underthis Plan with respect to the Participant, and that Participant’s PlanAgreement shall terminate upon such full payment of benefits.

 

# **ARTICLE 9**

# **Termination,Amendment, or Modification**

#  

## 9.1           Termination. Any Employer reservesthe right to terminate the Plan at any time with respect to Participantsemployed by the Employer. No distributions shall be made prior to the date ordates otherwise provided under the Plan unless earlier distribution ispermitted under Code Section 409A. The Company shall have discretion toterminate the Plan and make distributions upon termination to the maximumextent permitted under Code Section 409A.

 

## 9.2           Amendment. Any Employer may, at anytime, amend or modify the Plan in whole or in part with respect to thatEmployer; provided, however, that no amendment or modification shall beeffective to decrease a Participant’s Account Balance at the time of suchamendment. Notwithstanding the foregoing, the Employer may amend the Plan atany time to comply with the provisions of Code Section 409A with respectto any benefits or payments under the Plan.

 

## 9.3           Effect of Payment. The full paymentof the applicable benefit under the Plan shall completely discharge allobligations to a Participant under this Plan and the Participant’s PlanAgreement shall terminate.

 

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# **ARTICLE 10**

# **Administration**

#  

## 10.1         Committee Duties. This Plan shall beadministered by a Committee, to be known as the Cubic Corporation DeferredCompensation Plan Committee, which shall consist of individuals approved by theBoard, or, after the occurrence of a Change in Control, a third party who,before the occurrence of such Change in Control, was appointed by the then CEOto act as the Plan Administrator in the event of a Change in Control, andaccepted such appointment. Members of the Committee may be Participants underthis Plan. The Committee shall also have the discretion and authority to make,amend, interpret, and enforce all appropriate rules and regulations forthe administration of this Plan and decide on resolve any and all questions,including but not limited to, interpretations of this Plan and entitlement toor amount of benefits under this Plan, as may arise in connection with thePlan. Any Committee member must recuse himself or herself on any matter ofpersonal interest to such member that comes before the Committee.

 

## 10.2         Agents. In the administration of thisPlan, the Committee may, from time to time, and at the expense of the Company,employ agents and delegate to them such administrative duties as it sees fitand may from time to time consult with counsel who may be counsel to anyEmployer.

 

## 10.3         Binding Effect of Decisions. Thedecision or action of the Committee with respect to any question arising out ofor in connection with the administration, interpretation and application of thePlan and the rules and regulations promulgated hereunder shall be finaland conclusive and binding upon all persons having any interest in the Plan.

 

## 10.4         Indemnity of Committee. All Employersshall indemnify and hold harmless the members of the Committee against any andall claims, losses, damages, expenses, or liabilities, including attorneys’fees, arising from any action or failure to act with respect to this Plan,except in the case of gross negligence or willful misconduct by the Committeeor any of its members.

 

## 10.5         Employer Information. To enable theCommittee to perform its functions, each Employer shall supply full and timelyinformation to the Committee on all matters relating to the compensation of itsParticipants, the date and circumstances of the Disability, death or Separationfrom Service of its Participants, and such other pertinent information as theCommittee may reasonably require.

 

# **ARTICLE 11**

# **Claims Procedure**

#  

## 11.1         Presentation of Claim. Any Participantor Beneficiary of a deceased Participant (such Participant or Beneficiary beingreferred to below as a “Claimant”) may deliver to the Committee a written claimfor a determination with respect to the amounts distributable to such Claimantfrom the Plan. If such a claim relates to the contents of a notice received bythe Claimant, the claim must be made within 60 days after such notice wasreceived by the Claimant. The claim must state with particularity thedetermination desired by the Claimant. All other claims must be made within 180days of the date on which the event that caused the claim to 

 

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## arise occurred. The claim must state with particularity thedetermination desired by the Claimant.

##  

## 11.2         Notification of Decision. If the claimis approved, prompt written notice to the Claimant shall be given.

 

In the event a Claimant’s claim for benefitsis denied in whole or in part, the Committee shall notify the Claimant of suchdenial in writing and shall advise the Claimant of the right to a reviewthereof. Such written notice shall set forth, in a manner calculated to beunderstood by the Claimant,

 

### (a)           specific reasons for the denial,

###  

### (b)           specific references to the Plan provisionson which the denial is based,

###  

### (c)           a description of any information or materialnecessary for the applicant to perfect the application, including anexplanation of why such material is necessary, and

###  

### (d)           an explanation of the Plan’s claims reviewprocedure, the time limits applicable under the procedures and a statementregarding the claimant’s right to bring a civil action under section 502(a) ofERISA following an adverse benefit determination on appeal.

###  

Such written notice shall be given to theapplicant within 90 days after the Committee receives the application, unlessspecial circumstances require an extension of time of up to an additional 90days for processing the application. If such an extension of time forprocessing is required, written notice of the extension shall be furnished tothe applicant prior to the termination of the initial 90-day period. This noticeof extension shall indicate the special circumstances requiring the extensionof time and the date by which the Committee expects to render its decision onthe application for benefits.

 

## 11.3         Requests for a Review of a Denied Claim.Any person whose claim is denied in whole or in part, or such person’sauthorized representative, may appeal from such denial by submitting to theCommittee a request for a review of the application within 60 days afterreceiving written notice of such denial from the Committee. The request for areview shall be in writing and shall set forth all of the grounds on which itis based, all facts and documents in support of the request and any othermatters which the applicant deems pertinent. The Committee may require theapplicant to submit such additional facts, documents or other material as itmay deem necessary or appropriate in making its review. The Claimant may submitwritten comments, documents, records and other information related to thebenefit claim on appeal. The Claimant must be provided, upon request and freeof charge, reasonable access to and copies of all documents, records and otherinformation relevant to the claim. A document is considered relevant to theclaim if it (i) was relied upon in making the determination on the claim; (ii) wassubmitted, considered or generated in the course of making the determination,without regard as to whether it was relied upon in making the decision; or (iii) demonstratescompliance in making the decision on the claim with the requirement that thedetermination must follow the terms of the Plan and be consistent when appliedto similarly situated claimants.

 

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## 11.4         Decision on Review. The Committee onappeal must undertake a full and fair review of the claim and consider allcomments, documents, records and other information submitted by the Claimant,without regard to whether such information was submitted or considered in theinitial claim determination. The Committee shall render its decision on reviewpromptly, and not later than 60 days after the filing of a written requestfor review of the denial, unless a hearing is held or other special circumstancesrequire an extension of time of up to an additional 60 days for processing therequest. If such an extension is required, written notice of the extensionshall be furnished to the applicant prior to the end of the initial 60-dayperiod. This notice of extension shall indicate the special circumstancesrequiring the extension of time and the date by which the Committee expects torender its decision on the application for benefits. If an extension of time isrequired due to the claimant’s failure to submit information necessary toreview the claim, the period of time that the Committee has to review the claimwill be tolled from the date on which the notice of extension is sent to theclaimant until the date on which the claimant responds to the request for additionalinformation.

 

Within the time prescribed above, theCommittee shall give written notice of its decision to the Claimant and theCompany. In the event that the Committee confirms the denial of the claim inwhole or in part, such notice shall set forth, in a manner calculated to beunderstood by the Claimant:

 

### (a)           specific reasons for the denial;

###  

### (b)           specific reference(s) to the pertinentPlan provisions upon which the decision was based;

###  

### (c)           a statement that the claimant is entitled toreceive, upon request and free of charge, reasonable access to and copies ofall documents, records and other information relevant to the benefit claim. Adocument is considered relevant to the claim if it (i) was relied upon inmaking the benefit determination; (ii) was submitted, considered orgenerated in the course of making the benefit determination, without regard asto whether it was relied upon in making the decision; or (iii) demonstratescompliance in making the benefit decision with the requirement that the benefitdetermination must follow the terms of the Plan and be consistent when appliedto similarly situated claimants, and

###  

### (d)           a description of any voluntary appealprocedures offered under the Plan, the claimant’s right to obtain informationabout such procedures and a statement regarding the claimant’s right to bring acivil action under section 502(a) of ERISA following an adverse benefitdetermination on appeal.

###  

If the Committee is a committee or board thatholds regularly scheduled meetings at least quarterly, the determination onappeal must be made no later than the date of the meeting that immediatelyfollows the Plan’s receipt of the appeal request. However, if the appeal isreceived within 30 days before the date of the meeting, the determination mustbe made by the date of the second meeting that immediately follows the Plan’sreceipt of the appeal request. If an extension of the time period forprocessing the claim is needed, the determination must be made by the date ofthe third meeting following the Plan’s receipt of the appeal request. If suchan extension for review is required, written notice of the extension shall befurnished to the applicant before the 

 

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commencement of the extension. This notice of extension shall indicatethe special circumstances requiring the extension of time and the date by whichthe Committee expects to render its decision on the claim. The Committee mustprovide the notice of determination on appeal to the Claimant as soon aspossible, but no later than 5 days after the determination is made.

 

In the event that the Committee determinesthat the claim should not have been denied in whole or in part, the Companyshall take appropriate remedial action as soon as reasonably practicable afterreceiving notice of the Committee’s decision.

 

## 11.5         Rules and Procedures. TheCommittee may establish such rules and procedures, consistent with thePlan and with ERISA, as it may deem necessary or appropriate in carrying out itsresponsibilities under this Article 11. The Committee may require aClaimant who wishes to submit additional information in connection with anappeal from the denial of a claim in whole or in part to do so at the Claimant’sown expense.

 

## 11.6         Exhaustion of Remedies. No legal actionfor benefits under the Plan shall be brought unless and until the Claimant (i) hassubmitted a written claim for benefits in accordance with Section 11.1; (ii) hasbeen notified by the Committee that the application is denied; (iii) hasfiled a written request for a review of the application in accordance with Section 11.3;and (iv) has been notified in writing that the Committee has affirmed thedenial of the claim. However, an action may not be brought by the Claimantunder Section 502(a) of ERISA if the Claimant fails to bring suchclaim within the period prescribed by law, or to the extent the Claimant hasagreed to binding arbitration, as provided in Section 11.7.

##  

## 11.7         Optional Arbitration. Any claim orcontroversy between the parties arising out of, connected with, or related tothe formation, interpretation, performance, or breach of any provision of thisPlan shall, at the option of the Claimant, be submitted to and resolvedexclusively by expedited arbitration by a single arbitrator in accordance withthe following procedures:

 

### (a)           In the event of a claim or controversysubject to this arbitration provision, the complaining party shall promptlysend written notice to the other party identifying the matter in dispute andthe proposed remedy. Following the giving of such notice, the parties shallmeet and attempt in good faith to resolve the matter. In the event the partiesare unable to resolve the matter within 21 days, the parties shall meetand attempt in good faith to select a single arbitrator acceptable to bothparties. If a single arbitrator is selected, the arbitrator shall proceed inaccordance with the Rules of the American Arbitration Association (“AAA”)for Employment Disputes. If a single arbitrator is not selected by mutualconsent within 31 days following the giving of the written notice ofdispute, either party may file a Demand for Arbitration with the AAA pursuantto its Rules for Employment Disputes.

###  

### (b)           Unless the parties agree otherwise, within60 days of the selection of the arbitrator, a hearing shall be conductedbefore such arbitrator at a time and a place in San Diego County agreed upon bythe parties. In the event the parties are unable to agree upon the time orplace of the arbitration, the time and place within San Diego County shall bedesignated by the arbitrator after consultation with the parties. Within30 days of the conclusion of the arbitration 

 

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### hearing, the arbitrator shall issue an award, accompanied by a reasonedwritten decision explaining the basis for the arbitrator’s award.

###  

### (c)           In any arbitration hereunder, the Companyshall pay all administrative fees of the arbitration and all fees of thearbitrator, except that the Participant or Beneficiary may, if he wishes, payup to one-half of those amounts. Each party shall pay its own attorneys’ fees,costs, and expenses, unless the arbitrator orders otherwise. The prevailingparty in such arbitration, as determined by the arbitrator, and in anyenforcement or other court proceedings, shall be entitled, to the extentpermitted by law, to reimbursement from the other party for all of theprevailing party’s costs (including but not limited to the arbitrator’scompensation), expenses, and attorneys’ fees. The arbitrator shall have noauthority to add to or to modify this Plan, shall apply all applicable law, andshall have no lesser and no greater remedial authority than would a court oflaw resolving the same claim or controversy. The arbitrator shall, upon anappropriate motion, dismiss any claim without an evidentiary hearing if theparty bringing the motion establishes that it would be entitled to summaryjudgment if the matter had been pursued in court litigation. The parties shallbe entitled to reasonable discovery subject to the discretion of thearbitrator.

###  

### (d)           The decision of the arbitrator shall befinal, binding, and non-appealable, and may be enforced as a final judgment inany court of competent jurisdiction.

###  

### (e)           This arbitration provision of the Plan shallextend to claims against any parent, subsidiary, or affiliate of each party,and, when acting within such capacity, any officer, director, shareholder,Participant, Beneficiary, or agent of each party, or of any of the above, andshall apply as well to claims arising out of state and federal statutes andlocal ordinances as well as to claims arising under the common law or underthis Plan.

###  

### (f)            Notwithstanding the foregoing, and unlessotherwise agreed between the parties, either party may, in an appropriatematter, apply to a court for provisional relief, including a temporaryrestraining order or preliminary injunction, on the ground that the arbitrationaward to which the applicant may be entitled may be rendered ineffectual withoutprovisional relief.

###  

### (g)           Any arbitration hereunder shall be conductedin accordance with the employment rules and procedures of the AAA then ineffect; provided, however, that, in the even of any inconsistency between the rules andprocedures of the AAA and the terms of this Plan, the terms of this Plan shallprevail.

###  

### (h)           If any of the provisions of this Section 11.7are determined to be unlawful or otherwise unenforceable, in whole or in part,such determination shall not affect the validity of the remainder of this Section 11.7,and this Section 11.7 shall be reformed to the extent necessary to carryout its provisions to the greatest extent possible and to insure that theresolution of all conflicts between the parties, including those arising out ofstatutory claims, shall be resolved by neutral, binding arbitration. If a courtshould find that the provisions of this Section 11.7 are not absolutelybinding, then the parties intend any arbitration decision and award to be fullyadmissible in evidence in any subsequent action, given great weight by anyfinder of fact, and treated as determinative to the maximum extent permitted bylaw.

 

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# **ARTICLE 12**

# **Miscellaneous**

#  

## 12.1         Unsecured General Creditor. Participantsand their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable right, interest or claim in any property or assets of an Employer.Any and all of an Employer’s assets shall be, and remain, the general,un-pledged, and unrestricted assets of the Employer. An Employer’s obligationunder the Plan shall be merely that of an unfunded and unsecured promise to paymoney in the future and the sole interest of a Participant and a Participant’sbeneficiaries shall be as a general creditor of the Company and any Employer.

 

## 12.2         Employer’s Liability. An Employer’sliability for the payment of benefits shall be defined only by the Plan. AnEmployer shall have no obligation to a Participant under the Plan except asexpressly provided in the Plan.

 

## 12.3         Non-Assignability. Neither aParticipant nor any other person shall have any right to commute, sell, assign,transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer,hypothecate, or convey in advance of actual receipt, the amounts, if any,payable hereunder, or any part thereof, which are, and all rights to which areexpressly declared to be un-assignable and non-transferable. No part of theamounts payable shall, prior to actual payments be subject to seizure orsequestration for the payment of any debts, judgments, alimony, or separatemaintenance owed by a Participant or any other person, nor be transferable byoperation of law in the event of a Participant’s or any other person’sbankruptcy or insolvency.

 

## 12.4         Coordination with Other Benefits. Thebenefits provided for a Participant and Participant’s Beneficiary under thePlan are in addition to any other benefits available to such Participant underany other plan or program for employees of the Participant’s Employer. The Planshall supplement and shall not supersede, modify, or amend any other such planor program except as may otherwise be expressly provided.

 

## 12.5         Not a Contract of Employment. The termsand conditions of this Plan shall not be deemed to constitute a contract ofemployment between any Employer and the Participant. Such employment is herebyacknowledged to be an “at will” employment relationship that can be terminatedat any time for any reason, with or without cause, unless expressly provided ina written employment agreement. Nothing in this Plan shall be deemed to give aParticipant the right to be retained in the service of any Employer, either asan employee or a director, or to interfere with the right of any Employer todiscipline or discharge the Participant at any time.

 

## 12.6         Furnishing Information. A Participantor his or her Beneficiary will cooperate with the Committee by furnishing anyand all information requested by the Committee and take such other actions asmay be requested in order to facilitate the administration of the Plan and thepayments of benefits hereunder, including but not limited to taking suchphysical examinations as the Committee may deem necessary.

 

## 12.7         Terms. Whenever any words are usedherein in the singular or in the plural, they shall be construed as though theywere used in the plural or the singular, as the case may be, in 

 

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## all cases where they would so apply. The masculine pronoun shall bedeemed to include the feminine and vice versa, unless the context clearlyindicates otherwise.

 

## 12.8         Captions. The captions of the articles,sections, and paragraphs of this Plan are for convenience only and shall notcontrol or affect the meaning or construction of any of its provisions.

 

## 12.9         Governing Law. Subject to ERISA, theprovisions of this Plan shall be construed and interpreted according to thelaws of the State of California.

 

## 12.10       Notice. Any notice or filing required orpermitted to be given to the Committee under this Plan shall be sufficient ifin writing and hand-delivered, or sent by registered or certified mail to:

 

CUBIC CORPORATION9333 BALBOA AVENUESAN DIEGO, CA 92123ATTN:  VICE PRESIDENT, HUMAN RESOURCES

 

Such notice shall be deemed given as of thedate of delivery or, if delivery is made by mail, as of the date shown on thepostmark on the receipt for registration or certification.

 

Any notice or filing required or permitted tobe given to a Participant under this Plan shall be sufficient if in writing andhand-delivered, or sent by First Class United States mail, to the lastknown address of the Participant.

 

## 12.11       Successors. The provisions of this Planshall bind and inure to the benefit of the Participant’s Employer and itssuccessors and assigns and the Participant, the Participant’s Beneficiaries,and their permitted successors and assigns.

 

## 12.12       Spouse’s Interest. A Participant’sBeneficiary designation shall be deemed automatically revoked if theParticipant names a spouse as Beneficiary and the marriage is later dissolvedor the spouse dies. Without limiting the generality of the foregoing, theinterest in the benefits hereunder of a spouse of a Participant who haspredeceased the Participant or whose marriage with the Participant has beendissolved shall automatically pass to the Participant and shall not betransferable by such spouse in any manner, including but not limited to suchspouse’s will, nor shall such interest pass under the laws of intestatesuccession.

 

## 12.13       Validity. In case any provision of thisPlan shall be illegal or invalid for any reason, said illegality or invalidityshall not affect the remaining parts hereof, but this Plan shall be construedand enforced as if such illegal or invalid provision had never been insertedherein.

 

## 12.14       Incompetent. If the Committee determinesin its discretion that a benefit under this Plan is to be paid to a minor, aperson declared incompetent or to a person incapable of handling thedisposition of that person’s property, the Committee may direct payment of suchbenefit to the guardian, legal representative, or person having the care andcustody of such minor, incompetent, or incapable person. The Committee mayrequire proof of minority, in competency, incapacity, or guardianship, as itmay deem appropriate prior to distribution of the 

 

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## benefit. Any payment of a benefit shall be a payment for the account ofthe Participant and the Participant’s Beneficiary, as the case may be, andshall be a complete discharge of any liability under the Plan for such paymentamount.

 

## 12.15       Court Order. The Committee is authorizedto make any payments as may be necessary to fulfill a domestic relations order(as defined in Section 414(p)(1)(B) of the Code) in any action inwhich the Plan or Committee has been named as a party.

 

## 12.16       Effect on Employee Benefits. Amountsdeferred under this Plan or distributed to the terms of this Plan are not takeninto account in the calculation of an Employee’s benefits under any employeepension or welfare benefit program or under any other compensation practicemaintained by the Company, except to the extent provided in such program orpractice.

 

## 12.17       Legal Fees to Enforce Rights Upon a Change inControl. The Company is aware that upon the occurrence of a Change inControl, the Board (which might then be composed of new members) or ashareholder of the Company, or of any successor corporation might then cause orattempt to cause the Company or such successor to refuse to comply with itsobligations under the Plan and might cause or attempt to cause the Company toinstitute, or may institute, litigation seeking to deny Participant’s thebenefits intended under the Plan. In these circumstances, the purpose of thePlan could be frustrated. Accordingly, if, following a Change in Control, itshould appear to any Participant that the Company or any successor has failedto comply with the provisions of the Plan or any other person takes any actionto declare the Plan void or unenforceable or institutes any litigation or otherlegal action designed to deny, diminish or to recover from any Participant thebenefits intended to be provided, then the Company irrevocably authorizes suchParticipant to retain legal counsel at the Company’s expense in connection withthe initiation or defense of any litigation or other legal action, whether byor against the Company or any director, officer, shareholder or other personaffiliated with the Company or any successor thereto in any jurisdiction.

 

## 12.18       Code Section 409A. Notwithstandingany provision of the Plan to the contrary, no distributions shall be made underthe Plan earlier than permitted under the requirements of Code Section 409A,and no elections to defer Compensation, or to change the time or form ofdistribution, shall be permitted unless in accordance with the requirements ofCode Section 409A.

 

IN WITNESS WHEREOF, the Company has signedthis Plan Document as of February 26, 2008.

 
|   | CUBIC CORPORATION,     |
|--------|------------------------|
|   |                   |
|   | a Delaware corporation |
|   |                   |
|   | By:                    | /s/ William Hoese |
|   |                   |   |
|   | Title:                 | Vice President, General Counsel &  Corporate Secretary |

 

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**APPENDIXA**

 

**LIMITEDTRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE AVAILABLE IN ACCORDANCE WITHNOTICES 2006-79, 2007-86 AND SUBSEQUENT GUIDANCE**

 

The capitalized terms below shall have the same meaning as provided in Article 1of the Plan.

 

**Opportunity to Make New (or Revise Existing)Distribution Elections**.

 

Notwithstanding the required deadlines for the submission of distributionelections under the Plan, the Committee may, to the extent permitted by Notice2006-79, provide a limited period in which Participants may make newdistribution elections, or revise existing distribution elections, with respectto amounts subject to the terms of the Plan, by submitting an Election Form onor before the deadline established by the Committee, which for amounts thatwould otherwise be paid to the Participant in 2008 shall in no event be laterthan December 31, 2007. If any distribution election submitted by aParticipant in accordance with this paragraph either (a) relates to anamount that would otherwise be paid to the Participant in 2007, or (b) wouldcause an amount to be paid to the Participant in 2007, such election shall not beeffective.

 

In addition, notwithstanding the required deadlines for the submissionof distribution elections under the Plan, the Committee may, to the extentpermitted by Notice 2007-86, provide a limited period in which Participants maymake new distribution elections, or revise existing distribution elections,with respect to amounts subject to the terms of the Plan, by submitting anElection Form on or before the deadline established by the Committee,which for amounts that would otherwise be paid to the Participant after 2008shall in no event be later than December 31, 2008. If any distributionelection submitted by a Participant in accordance with this paragraph either (a) relatesto an amount that would otherwise be paid to the Participant in 2008, or (b) wouldcause an amount to be paid to the Participant in 2008, such election shall notbe effective.

 

Any distribution election(s) made by a Participant, and acceptedby the Committee, in accordance with this Appendix A shall not be treated as achange in either the form or timing of a Participant’s benefit payment forpurposes of Code Section 409A or the Plan.

 

The Committee may provide further transition relief for newdistribution elections and changes in existing distribution elections withrespect to amounts subject to the terms of the Plan to the extent permitted infuture Treasury Department or Internal Revenue Service guidance.

 

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