<PAGE>

                                                                    Exhibit 10.4











                               SYMMETRICOM, INC.


                          DEFERRED COMPENSATION PLAN


                        Effective as of October 1, 1999
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                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----
ARTICLE I       TITLE AND DEFINITIONS..................................    2
ARTICLE II      PARTICIPATION..........................................    4
ARTICLE III     DEFERRAL ELECTIONS.....................................    5
ARTICLE IV      ACCOUNTS...............................................    8
ARTICLE V       VESTING................................................    9
ARTICLE VI      GENERAL DUTIES.........................................    9
ARTICLE VII     DISTRIBUTIONS................................... ......   10
ARTICLE VIII    ADMINISTRATION.........................................   14
ARTICLE IX      MISCELLANEOUS..........................................   16

                                      -i-
<PAGE>

                 SYMMETRICOM, INC. DEFERRED COMPENSATION PLAN

     This Plan, effective as of October 1, 1999 (the "Effective Date"), is
adopted by Symmetricom, Inc. (the "Company"), acting on behalf of itself and its
designated subsidiaries. Throughout, the term "Company" shall include wherever
relevant any entity that is directly or indirectly controlled by the Company,
any entity in which the Company has a significant equity or investment interest,
or any subsidiary of the Company, as determined by the Committee.

                                   RECITALS

     1.  The Company wishes to establish a supplemental retirement plan for the
benefit of the non-employee members of the Company's Board of Directors, and for
a select group of management or highly compensated employees of the Company.

     2.  The Company wishes to provide that the supplemental retirement plan to
be established shall be designated the Symmetricom, Inc. Deferred Compensation
Plan (the "Plan").

     3.  The Company wishes to provide under the Plan for the payment of accrued
vested benefits to Plan participants and their beneficiaries.

     4.  Under the Plan, the Company is obligated to pay vested accrued benefits
to the Plan participants and their beneficiaries from the Company's general
assets.

     5.  The Company intends to enter into an agreement (the "Trust Agreement!)
with to be appointed as trustee (the "Trustee") under an irrevocable trust (the
"Trust") to be used in connection with the Plan.

     6.  The Company intends to make contributions to the Trust so that such
contributions will be held by the Trustee and invested, reinvested and
distributed, all in accordance with the provisions of this Plan and the Trust
Agreement.

     7.  The Company intends that amounts contributed to the Trust and the
earnings thereon shall be used by the Trustee to satisfy the liabilities of the
Company under the Plan with respect to each Plan participant for whom an Account
has been established and such utilization shall be in accordance with the
procedures set forth herein.

     8.  The Company intends that the Trust be a "grantor trust" with the
principal and income of the Trust treated as assets and income of the Company
for federal and state income tax purposes.

     9.  The Company intends that the assets of the Trust shall at all times be
subject to the claims of the general creditors of the Company as provided in the
Trust Agreement.

     10.  The Company intends that the existence of the Trust shall not alter
the characterization of the Plan as "unfunded" for purposes of the Employee
Retirement Income Security Act of 1974,
<PAGE>

as amended ("ERISA"), and shall not be construed to provide income to Plan
participants under the Plan prior to actual payment of the vested accrued
benefits thereunder.

     NOW THEREFORE, the Company hereby establishes the Plan as follows:

                                   ARTICLE I

                             TITLE AND DEFINITIONS

I.1  Title.
     -----

     This Plan shall be known as the Symmetricom, Inc. Deferred Compensation
Plan.

I.2  Definitions.
     -----------

     Whenever the following words and phrases are used in this Plan, with the
first letter capitalized, they shall have the meanings specified below:

     "Account" means, for each Participant, the bookkeeping account maintained
by the Committee that is credited with amounts equal to (a) the portion of the
Participant's Salary that he or she elects to defer, (b) the portion of the
Participant's Commissions that he or she elects to defer, (c) the portion of the
Participant's Bonus that he or she elects to defer, (d) Company Contributions,
if any, made to the Plan for the Participant's benefit, and (e) adjustments to
reflect deemed earnings pursuant to Section 4.1 (d).

     "Beneficiary" or "Beneficiaries" means the beneficiary last designated in
writing by a Participant in accordance with procedures established by the
Committee from time to time to receive the benefits specified hereunder in the
event of the Participant's death. No Beneficiary designation shall become
effective until it is filed with the Committee during the Participant's
lifetime.

     "Board of Directors"' or "Board" means the Board of Directors of the
Company.

     "Bonus" means any cash-based incentive compensation payable (other than
Commissions) to a Participant in addition to the Participant's Salary,

     "Code" means the Internal Revenue Code of 1986, as amended. Reference to a
section of the Code includes such section and any comparable section or sections
of any future legislation that amends, supplements or supersedes such section.

     "Commissions" means any cash-based commission compensation payable to a
Participant.

     "Committee" means the Committee appointed by the Board to administer the
Plan in accordance with Article VIII.

                                       2
<PAGE>

     "Company" means Symmetricom, Inc. ("Symmetricom"), any successor
corporation, any entity that is directly or indirectly controlled by the
Company, or any entity in which the Company has a significant equity or
investment interest, as determined by the Committee.

     "Company Contributions" is defined in Section 3.2

     "Compensation" means the Bonus, Commissions, Salary and/or Directors Fees
that the Participant earns for services rendered to the Company.

     "Director" means a non-employee member of the Board of Directors.

     "Directors Fees" means the annual cash fees paid by the Company, including
retainer fees, committee fees and meeting fees, paid by the Company to non-
employee members of the Board as compensation for serving on the Board.

     "Disability" means total and permanent disability within the meaning of the
Company's long-term disability plan.

     "Distributable Amount" means the amount credited to a Participant's
Account. Such amount shall be valued on the first day of the month following the
calendar quarter in which the Participant is to receive a distribution under
Article VII or as soon as administratively practicable thereafter, as determined
in the sole and absolute discretion of the Committee.

     "Distribution Event" means, with respect to each Participant, (a) the
Participant's termination of employment with the Company (or service on the
Board, in the case of a Director) for any reason, including Retirement, death or
Disability, or (b) a specific date, if specified by the Participant pursuant to
Article VII. A Participant's Distribution Event election shall be made in
writing at such time, on such form and subject to such procedures as the
Committee may, in its sole and absolute discretion, specify from time to time.

     "Eligible Employee" means an Employee who is in a select group of
management or highly-compensated Employees as determined by the Committee.

     "Employee" means a common law employee of the Company regularly-performing
services in the United States.

     "Fund" or "Funds" means one or more of the investment funds selected by the
Committee pursuant to Section 3.3.

     "Initial Election Period" means (a) for Employees who are Eligible
Employees or Directors as of October 1, 1999, the period ending September 15,
1999; otherwise (b) the 30-day period following the Eligible Employee's date of
hire (or appointment to the Board, as applicable) or, if later, upon first
becoming an Eligible Employee or Director.

                                       3
<PAGE>

     "Investment Return" means, for each Fund, an amount equal to the pre-tax
rate of gain or loss on the assets of such Fund (net of applicable fund and
investment charges) during each valuation period, but not less frequently than
monthly.

     "Participant" means any Eligible Employee or Director who elects to defer
Compensation in accordance with Section 3.1.

     "Payment Commencement Date" means as soon as administratively possible
after the first day of the month following the end of the calendar quarter in
which the Participant has a Distribution Event.

     "Plan" means the Symmetricom, Inc. Deferred Compensation Plan set forth
herein, now in effect, or as amended from time to time.

     "Plan Year" means the calendar year; provided, however, for the first short
Plan Year only, "Plan Year" means the period beginning October 1, 1999 and
ending December 31, 1999.

     "Retirement" means the Participant's resignation if, at such time, the
Participant has attained age fifty (50) and completed five (5) Years of Service.

     "Salary" means the Employee's base salary for the Plan Year. Salary
excludes any other form of compensation such as restricted stock, proceeds from
stock options or stock appreciation rights, severance payments, moving expenses,
car or other special allowance, or any other amounts included in an Eligible
Employee's taxable income that is not compensation for services.

     "Years of Service" means the Employee's consecutive years of employment
with the Company and any predecessor employer, as designated by the Committee.
Such years of employment will be measured from the Employee's most recent hire
date.

                                  ARTICLE II

                                 PARTICIPATION

II.1  Participation.
      -------------

     An Eligible Employee or Director shall become a Participant in the Plan by
electing to defer a portion of his or her Compensation in accordance with
Section 3.1.

                                       4
<PAGE>

                                  ARTICLE III

                              DEFERRAL ELECTIONS

III.1  Elections to Defer Compensation.
       -------------------------------

     (a) Initial Election Period.  Each Eligible Employee or Director may elect
         -----------------------
to defer Compensation by filing an election with the Committee that conforms to
the requirements of this Section, on a form approved by the Committee, no later
than the last day of his or her Initial Election Period.

     (b) General Rule.  The amount of Compensation that an Eligible Employee or
         ------------
Director may elect to defer is as follows:

          (1)  Any whole percentage of Salary up to one hundred percent (100%);
               and/or

          (2)  Any whole percentage of Bonus up to one hundred percent (100%);
               and/or

          (3)  Any whole percentage of Commissions up to one hundred percent
               (100%); or

          (4)  Any whole percentage of Directors Fees up to one hundred percent
               (100%);

provided, however, that no election shall be effective to reduce the
Compensation paid to an Eligible Employee for a calendar year to an amount that
is less than the amount necessary to pay (i) applicable employment taxes (e.g.,
FICA, hospital insurance) payable with respect to amounts deferred hereunder,
(ii) amounts necessary to satisfy any other benefit plan withholding
obligations, (iii) any resulting income taxes payable with respect to
Compensation that cannot be so deferred, and (iv) any amounts necessary to
satisfy any wage garnishment or similar type obligations.

     (c)  Minimum Deferrals.  For each Plan Year during which the Eligible
          -----------------
Employee or Director is a Participant, the minimum Compensation that may be
deferred under this Section shall be Five Thousand Dollars ($5,000) (One
Thousand Dollars ($1,000) in the case of Directors); provided, however, that for
the short first Plan Year, the minimum Compensation amount that may be deferred
by Eligible Employees shall be One Thousand Two Hundred Fifty Dollars ($1,250).

     (d)  Effect of Initial Election to Defer Salary and/or Commission.  An
          ------------------------------------------------------------
election to defer Salary and/or Commissions and/or Directors Fees made during an
Initial Election Period shall be effective as to Salary and/or Commissions
and/or Directors Fees earned beginning (in the case of Salary and/or
Commissions) with the first pay period beginning after the Initial Election
Period and beginning (in the case of Directors Fees) with any services performed
as a Director after the Initial Election Period.

     (e)  Effect of Initial Election to Defer Bonus.  An election made on or
          -----------------------------------------
before September 15, 1999, to defer a Bonus shall be effective as to any Bonus
paid for the period ending

                                       5
<PAGE>

June 30, 2000. An election to defer any subsequent Bonus made during an Initial
Election Period shall be effective as to any Bonus paid in the Plan Year
following the Plan Year during which the election is made, provided such
election is filed with the Committee on or before December 15 of the immediately
preceding year.

     (f)  Duration of Salary and/or Commissions and/or Directors Fees Deferral
          --------------------------------------------------------------------
Election.  A deferral election made under subsection (a) or (h) of this Section
--------
shall remain in effect, notwithstanding any change in the Participant's Salary
or Commissions or Directors Fees for the Plan Year for which that election is
made. Subject to the minimum deferral requirement of subsection (c) of this
Section, the percentage of Salary and/or Commissions and/or Directors Fees
designated by the Participant for deferral must be restated, increased, or
decreased by filing a new election, in accordance with the terms of this
Section, with the Committee no later than December 15 of the year immediately
preceding the beginning of the Plan Year for which the election shall be in
effect. A Participant's deferral election shall terminate with respect to future
Salary and/or Commissions and/or Directors Fees upon the earliest of (i) the
Participant ceasing to be an Eligible Employee or Director; (ii) the
Participant's election to discontinue all Salary and/or Commissions and/or
Directors Fees deferrals for the remainder of that Plan Year; in such case, the
election to discontinue contributions shall be irrevocable for that Plan Year
and shall become effective as soon as administratively practicable after it is
filed with the Committee; or (iii) the end of the Plan Year for which the
Participant has a valid election.

     (g)  Duration of Bonus Deferral Election.  A Bonus deferral election made
          -----------------------------------
under subsection (a) or (h) of this Section shall remain in effect for the Plan
Year for which that election is made. Subject to the minimum deferral
requirement of subsection (c) of this Section, the percentage of Bonus
designated by the Participant for deferral must be restated, increased or
decreased by filing a new election, in accordance with the terms of this
Section, with the Committee no later than December 15 of the year immediately
preceding the beginning of the Plan Year for which the election shall be in
effect. A Participant's Bonus deferral election shall terminate with respect to
future Bonuses upon the Participant ceasing to be an Eligible Employee.

     (h)  Elections Other Than Elections During the Initial Election Period. Any
          -----------------------------------------------------------------
Eligible Employee or Director who fails to elect to defer Compensation during
his or her Initial Election Period may subsequently become a Participant, and
any Eligible Employee or Director who has terminated a prior deferral election
may again elect to defer Compensation, by filing an election, on a form approved
by the Committee, to defer Compensation as described in subsection (b) above. An
election to defer Compensation must be filed no later than December 15 (or such
other date as the Committee may establish from time to time) and will be
effective for Salary and/or Commissions and/or Directors Fees earned beginning
(in the case of Salary and/or Commissions) with the first pay period beginning
on and after the beginning of the next succeeding Plan Year and as to any
Directors Fees or Bonus paid for the fiscal year after the election is made.

     (i)  Termination of Deferral Election. Notwithstanding the foregoing, a
          --------------------------------
Participant may, at any time, terminate his or her deferral election with
respect to Compensation not yet earned or

                                       6
<PAGE>

payable. A Participant who so terminates his or her deferral election may again
defer Compensation by timely filing an election for a subsequent Plan Year,
provided that a Participant may not so terminate his or her deferral election
more than twice during the period of his or her Plan participation; and provided
further, that a Participant who terminates his or her deferral election for a
Plan Year and who has not, with respect to such Plan Year, met the minimum
deferral requirement of subsection (c) of this Section, shall be refunded any
amounts deferred for such Plan Year, together with any earnings credited
thereon, promptly following termination of his or her deferral election

III.2  Company Contributions.
       ---------------------

     The Company may, in its sole and absolute discretion, make discretionary
contributions to the Accounts of one or more Participants at such times and in
such amounts as the Board may determine.

III.3  Investment Elections.
       --------------------

     The Committee may, in its sole and absolute discretion, provide each
Participant with a list of investment Funds available for hypothetical
investment, and the Participant may designate, in a manner specified by the
Committee, one or more Funds that his or her Account will be deemed to be
invested in for purposes of determining the amount of earnings to be credited to
that Account. The Committee may, from time to time, in its sole and absolute
discretion, select a commercially-available fund to constitute the Fund actually
selected. The Investment Return of each such commercially-available fund shall
be used to determine the amount of earnings to be credited to Participants'
Accounts under subsection 4.1 (d).

     In making the designation pursuant to this Section, the Participant may
specify that all or any one percent (1%) multiple of his or her Account be
deemed to be invested in one or more of the Funds offered by the Committee.
Subject to such limitations and conditions as the Committee may specify, a
Participant may change the designation made under this Section in such manner
and at such time or times as the Committee shall specify. If a Participant fails
to elect a Fund under this Section or if the Committee shall not provide such
Participant with a list of Funds pursuant to this Section, then the Participant
shall be deemed to have elected a money market or similar fund.

     The Company may, but need not, acquire investments corresponding to those
designated by the Participants hereunder, and it is not under any obligation to
maintain any investment it may make. Any such investments, if made, shall be
Company property in which no Participant shall have any interest.

                                       7
<PAGE>

                                  ARTICLE IV

                                   ACCOUNTS

IV.1  Participant Accounts.
      --------------------

     The Committee shall establish and maintain an Account for each Participant
under the Plan. Each Participant's Account may be further divided into separate
subaccounts ("investment fund subaccounts"), corresponding to investment Funds
elected by the Participant pursuant to Section 3.3 or as otherwise determined by
the Committee to be necessary or appropriate for proper Plan administration. A
Participant's Account shall be credited as follows:

     (a)  As soon as administratively practicable after the last day of the
month during which a payroll withholding is made for a Participant, the
Committee shall credit the investment fund subaccounts of that Participant's
Account with an amount equal to Salary and/or Commissions and/or Directors Fees
deferred by the Participant during each pay period falling in that month in
accordance with the Participant's election; that is, the portion of the
Participant's deferred Salary and/or Commissions and/or Directors Fees that the
Participant has elected to be deemed to be invested in a certain type of
investment Fund shall be credited to the investment fund subaccount
corresponding to that investment Fund.

     (b)  At the end of the month after each Bonus or partial Bonus would have
been paid, or as soon as administratively practicable thereafter, the Committee
shall credit the investment fund subaccounts of the Participant's Account with
an amount equal to the portion of the Bonus deferred by the Participant's
election; that is, the portion of the Participant's deferred Bonus that the
Participant has elected to be deemed to be invested in a certain type of
investment Fund shall be credited to the investment fund subaccount
corresponding to that investment Fund.

     (c)  As soon as administratively practicable after the last day of the Plan
Year or such earlier time or times as the Committee may determine, the Committee
shall credit the investment fund subaccounts of the Participant's Account with
an amount equal to the portion, if any, of any Company Contribution made to or
for the Participant's benefit in accordance with Section 3.3; that is, the
portion of the Participant's Company Contribution, if any, that the Participant
has elected to be deemed to be invested in a certain type of investment Fund
shall be credited to the investment fund subaccount corresponding to that
investment Fund.

     (d)  At such time or times as the Committee may determine, but not less
frequently than monthly, each investment fund subaccount of a Participant's
Account shall be credited with earnings in an amount equal to that determined by
multiplying the balance credited to such investment fund subaccount as of the
last day of the preceding valuation period by the Investment Return for the
corresponding Fund selected by the Company.

                                       8
<PAGE>

                                   ARTICLE V

                                    VESTING

V.1  Account.
     -------

     (a) Compensation Deferrals.  A Participant's Account attributable to
         ----------------------
Compensation deferred by a Participant pursuant to the terms of this Plan,
together with any amounts credited to the Participant's Account under Section
4.1(d) with respect to such deferrals, shall be one hundred percent (100%)
vested at all times.

     (b) Company Contributions.  The value of a Participant's Account
         ---------------------
attributable to any Company Contributions pursuant to Section 3.2 shall vest at
such time or times as the Board shall specify in connection with any such
contributions. Unless otherwise specified by the Board, Participants shall be
one hundred percent (100%) vested in such amounts together with any amounts
credited to the Participant's Account under Section 4.1(d) with respect to such
amounts.

                                  ARTICLE VI

                                GENERAL DUTIES

VI.1 Trustee Duties.
     --------------

     The Trustee shall manage, invest and reinvest the Trust Fund as provided in
the Trust Agreement. The Trustee shall collect the income on the Trust Fund, and
make distributions therefrom, all as provided in this Plan and in the Trust
Agreement.

VI.2 Company Contributions.
     ---------------------

          While the Plan remains in effect, the Company shall make contributions
     to the Trust Fund at least once each quarter. As soon as administratively
     practicable after the close of each Plan quarter, the Company shall make an
     additional contribution to the Trust Fund to the extent that previous
     contributions to the Trust Fund for the current Plan quarter are less than
     the total of the Compensation deferrals made by each Participant plus
     Company Contributions, if any, accrued as of the close of the current Plan
     quarter.

VI.3 Department of Labor Determination.
     ---------------------------------

     In the event that any Participants are found to be ineligible, that is, not
members of a select group of management or highly compensated employees,
according to a determination made by the Department of Labor, the Committee may
take whatever steps it deems necessary, in its sole and absolute discretion, to
equitably protect the interests of the affected Participants.

                                       9
<PAGE>

                                  ARTICLE VII

                                 DISTRIBUTIONS

VII.1  Distribution of Deferred Compensation - Termination of Employment.
       ------------------------------------------------------------------

       (a) Automatic Form of Distribution.  Subject to Section 7.2(b) below, in
           ------------------------------
the event that a Participant's employment terminates for any reason, then the
Participant's Distributable Amount shall automatically be paid to the
Participant (and after the Participant's death to his or her Beneficiary) in a
cash lump sum payment payable on his or her Payment Commencement Date.

       (b) Optional Forms of Distribution.
           ------------------------------

          (1) An eligible Participant may, in lieu of a lump sum distribution
specified in Section 7.1(a) above, elect any of the following optional forms of
distribution based on his or her Years of Service (subject to Section 7.1(c)
below):

                  Years of Service              Form(s) of Distribution
             -------------------------          -----------------------

             More than 4 but less than 7        20 quarterly installments
             More than 6 but less than 10       20 or 40 quarterly installments
             10 years or more                   20, 40, or 60 Quarterly
                                                installments

In addition, a Participant whose employment terminates due to Disability shall
be eligible for the same optional forms of distribution as a Participant with
ten (10) or more Years of Service. If a Participant is eligible for and elects
installment payments, then the substantially-equal quarterly installments shall
begin on the Participant's Payment Commencement Date.

          (2) Upon a Participant's termination of employment for any reason, all
of his or her Plan Year's distribution elections will be cancelled in favor of
the most recent termination distribution election, provided that such election
was made at least one (1) year prior to the Participant's termination;
otherwise, the most recent distribution election made by the Participant one (1)
or more years prior to the date of his or her termination shall govern.

     (c)  Distribution Elections.
          ----------------------

          (1) A Participant may make such distribution election by completing a
form approved by and filed with the Committee within thirty (30) days (or such
other period as the Committee may establish from time to time) of the date the
Eligible Employee first becomes a Participant. A Participant may change his or
her form of distribution under this Section provided that he or she files the
change with the Committee at least one (1) year prior to his or her Payment
Commencement Date.

                                       10
<PAGE>

            (2) Notwithstanding the foregoing, if the Participant's
Distributable Amount is Fifty Thousand Dollars ($50,000) or less, the
Distributable Amount shall automatically be distributed in the form of a cash
lump sum on the Participant's Payment Commencement Date.

            (3) If the Participant's Distributable Amount is paid in
installments, the Participant's Account shall continue to be credited monthly
with earnings pursuant to Section 4.1(d) and the installment amount shall be
adjusted annually to reflect gains and losses until all amounts credited to his
or her Account under the Plan have been distributed.

            (4) Amounts payable pursuant to this Section shall be subject to the
limitation on payout under Section 7.4.

       (d) Death While Receiving Benefits. If the Participant is receiving
           ------------------------------
installment payments at the time of his or her death, then the Participant's
Beneficiary shall be paid the remaining quarterly installments as they come due.
Under all other circumstances, if the Participant dies prior to receiving any of
his or her Account, such Participant's Distributable Amount shall be paid to his
or her Beneficiary in a cash lump sum payment.

VII.2  Scheduled and Unscheduled In-Service Withdrawals.
       ------------------------------------------------

       (a) Scheduled In-Service Withdrawal. A Participant may, in connection
           -------------------------------
with his or her Compensation deferral election for a Plan Year, specify a
withdrawal (a "Scheduled In-Service Withdrawal") of all of his or her Account
attributable to Compensation deferred for such Plan Year, including any amounts
credited with respect to such deferrals pursuant to Section 4.1(d), subject to
the following restrictions:

              (1) A Participant's Scheduled In-Service Withdrawal election must
specify a Scheduled In-Service Withdrawal date that is at least two (2) years
(or such longer period) from the date the election is received by the Company. A
Participant may revoke his or her scheduled withdrawal election or may amend
such election consistent with the preceding sentence with at least one year's
advance notice thereof, provided that a Participant may not revoke or amend a
scheduled withdrawal election (whether or not relating to the same Distributable
Amount) more than twice during his or her period of Plan participation.

              (2) The election to take a Scheduled In-Service Withdrawal shall
be made by completing a form approved by and filed with the Committee.

              (3) The amount payable to a Participant in connection with a
Scheduled In-Service Withdrawal shall in all cases be one hundred percent (100%)
of the Compensation deferred for the Plan Year with respect to which the
election applies, together with any earnings credited to such amount pursuant to
Section 4.1(d), determined as of the end of the calendar month preceding the
month of the Scheduled In-Service Withdrawal date.

                                       11
<PAGE>

              (4) Subject to Section 7.4, payment of a Scheduled In-Service
Withdrawal shall be made in either a single lump sum or in quarterly
installments over a two (2), three (3), four (4) or five (5)-year period (as
elected by the Participant). Lump sum distributions shall be paid in January of
the year specified on the election form. Quarterly distributions shall commence
in January of the year specified on the election form, and shall continue to be
paid as soon as practicable following the end of the calendar quarter, for the
duration elected on the election form.

              (5) A Participant's Scheduled In-Service Withdrawal election shall
become void and of no effect upon termination of the Participant's employment
with the Company for any reason before the Participant's scheduled withdrawal
date. In such event, the distribution provisions of Section 7.1 shall apply.

        (b)   Unscheduled In-Service Withdrawals.  Participants may request to
              ----------------------------------
withdraw amounts from their Accounts attributable to Compensation deferrals
prior to termination of employment with the Company (an "Unscheduled In-Service
Withdrawal"). Upon receiving an Unscheduled In-Service Withdrawal request, the
Committee shall authorize such Unscheduled In-Service Withdrawal subject to the
following restrictions:

              (1)  The election to take an Unscheduled In-Service Withdrawal
shall be made by completing a form approved by and filed with the Committee.

              (2)  The amount payable to a Participant in connection with an
Unscheduled In-Service Withdrawal shall equal ninety percent (90%) of the
Distributable Amount. Notwithstanding the foregoing, if more than ten percent
(10%) of the Distributable Amount consists of Company Contributions (and
earnings thereon), then the Unscheduled In-Service Withdrawal amount (the "In-
Service Withdrawal Amount") shall not include any amounts attributable to
Company Contributions (and earnings thereon). The In-Service Withdrawal Amount
shall be calculated as of the end of the calendar month immediately preceding
the month in which the Unscheduled In-Service Withdrawal is made. The In-Service
Withdrawal Amount (and not the forfeited amount) shall be subject to all
applicable Federal and state income taxes.

              (3)  If a Participant receives an Unscheduled In-Service
Withdrawal, the remaining portion of the Distributable Amount, as applicable
(i.e., ten percent (10%) of such amount), shall be permanently forfeited and the
Company shall have no obligation to the Participant or his or her Beneficiary
with respect to such forfeited amount.

              (4)  If a Participant receives an Unscheduled In-Service
Withdrawal, the Participant shall be ineligible to participate in the Plan for
the balance of the Plan Year in which the Unscheduled In-Service Withdrawal
occurs and all of the following Plan Year.

              (5)  An Unscheduled In-Service Withdrawal of the Participant's
Distributable Amount pursuant to this Section shall be made pro rata from his or
her assumed investments according to the balances in such investments. Subject
to the foregoing and subject to the


                                     -12-
<PAGE>

Committee's approval payment of any amount with respect to which a Participant
has filed a request under this Section shall be made in a single cash lump sum
as soon as administratively practicable after the Unscheduled In-Service
Withdrawal election is approved.

VII.3  Unforeseeable Emergency Withdrawal.
       ----------------------------------

        (a)   Triggering an Unforeseeable Emergency Hardship Withdrawal.  The
              ----------------------------------------------------------
Committee may, in its sole and absolute discretion, accelerate the date of
distribution of a Participant's Account because of an Unforeseeable Emergency at
any time. "Unforeseeable Emergency" shall mean an unforeseeable, severe
financial condition resulting from (1) a sudden and unexpected illness or
accident of the Participant or his or her dependent (as defined in Section
152(a) of the Code); (2) loss of the Participant's property due to casualty; or
(3) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant, but which may not be
relieved through other available resources of the Participant, as determined by
the Committee. If a Participant receives a distribution pursuant to this
Section, the Participant shall be ineligible to  participate in the Plan for the
balance of the Plan Year in which the distribution occurs and all of the
following Plan Year.


       (b)   Distribution Attributable to an Unforeseeable Emergency. Unless the
             -------------------------------------------------------
Committee, in its sole and absolute discretion, determines otherwise,
distribution pursuant to this Section of less than the Participant's entire
interest in the Plan shall be made pro rata from his or her assumed investments
according to the balances in such investments. Subject to the foregoing, payment
of any amount with respect to which a Participant has filed a request under this
Section shall be made in a single cash lump sum as soon as administratively
practicable after the Committee approves the Participant's request.

VII.4  Section 162(m) Limitation.
       -------------------------

       If the Committee determines in good faith that there is a reasonable
likelihood that all or any portion of any payment of benefits under this Article
VII to a Participant would not be deductible for federal income tax purposes by
the Company because of a limitation on the total amount of the Participant's
deductible compensation from the Company, including any other such compensation
already paid to the Participant earlier in the same fiscal year of the Company,
the following shall apply:

       (a) Payment of the non-deductible amount shall be deferred until the
first day of the following fiscal year of the Company;

       (b) If the amount deferred under subsection (a) above would exceed the
limitation of the total amount of the Participant's deductible compensation from
the Company for the following fiscal year, the excess shall be deferred to the
first day of the succeeding fiscal year in which the deductibility of
compensation paid or payable to the Participant will not be so limited, subject
to subsection (c) below;



                                  -13-
<PAGE>

       (c) In no event shall any payment be deferred under this Section more
than three (3) years from the date scheduled for payment under this Article VII;
and

       (d) Adjustment for earning shall continue to be applied under Section
4.1(d) duri ng the period of deferral under this Section.

VII.5  Inability To Locate Participant.
       -------------------------------

       In the event that the Committee is unable to locate a Participant or
Beneficiary within two (2) years following the Participant's Distribution Event,
the amount allocated to the Participant's Deferral Account shall be forfeited.
If, after such forfeiture, the Participant or Beneficiary later claims such
benefit, such benefit (calculated immediately prior to the forfeiture) shall be
reinstated without interest or earnings.

                                 ARTICLE VIII

                                ADMINISTRATION

VIII.1  Committee.
        ---------

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

VIII.2  Committee Action.
        ----------------

        The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if a written consent to the action is signed by all
members of the Committee and such written consent is filed with the minutes of
the proceedings of the Committee. A member of the Committee shall not vote or
act upon any matter that relates solely to himself or herself as a Participant.
The chairman or any other member or members of the Committee designated by the
chairman may execute any certificate or other written direction on behalf of the
Committee.

VIII.3  Powers and Duties of the Committee.
        ----------------------------------

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

                                       14
<PAGE>

          (1)  To select the funds to be the Funds in accordance with Section
               3.3 hereof;

          (2)  To construe and interpret the terms and provisions of this Plan;

          (3)  To amend, modify, suspend or terminate the Plan in accordance
               with Section 9.4;

          (4)  To compute and certify the amount and kind of benefits payable to
               Participants and their Beneficiaries and to direct the Trustee as
               to the distribution of Plan assets;

          (5)  To maintain all records that may be necessary for the
               administration of the Plan;

          (6)  To provide for the disclosure of all information and the filing
               or provision of all reports and statements to Participants,
               Beneficiaries or governmental agencies as shall be required by
               law;

          (7)  To make and publish such rules for the regulation of the Plan and
               procedures for the administration of the Plan as are not
               inconsistent with the terms hereof;

          (8)  To appoint a plan administrator or any other agent, and to
               delegate to them such powers and duties in connection with the
               administration of the Plan as the Committee may from time to time
               prescribe;

          (9)  To designate the subsidiaries that will participate in the Plan;
               and

          (10) To determine the entities that constitute predecessor employers
               for purposes of determining Years of Service.

VIII.4 Construction and Interpretation.
       -------------------------------

       The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretation or construction shall be
final and binding on all parties, including but not limited to the Company and
any Participant or Beneficiary.

VIII.5 Information.
       -----------

       To enable the Committee to perform its functions, the Company shall
supply full and timely information to the Committee on all matters relating to
the Compensation of all Participants, their death or other cause of termination,
and such other pertinent facts as the Committee may reasonably require.

                                       15
<PAGE>

VIII.6  Compensation, Expenses and Indemnity.
        ------------------------------------

     (a) The members of the Committee shall serve without compensation for their
services hereunder.

     (b) The Committee is authorized at the expense of the Company to employ
such legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company.

     (c) To the extent permitted by applicable state law, the Company shall
indemnify and save harmless the Committee and each member thereof, the Board and
any delegate of the Committee who is an employee of the Company against any and
all expenses, liabilities and claims, including legal fees to defend against
such liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct or gross negligence. This
indemnity shall not preclude such further indemnities as may be available under
insurance purchased by the Company or provided by the Company under any bylaw,
agreement or otherwise, as such indemnities are permitted under state law.

VIII.7  Quarterly Statements.
        --------------------

     Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Account on a quarterly basis.

                                  ARTICLE IX

                                 MISCELLANEOUS

IX.1  Unsecured General Creditor.
      --------------------------

     Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interests in any specific property
or assets of the Company. No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan. Any and all of the Company's assets shall be, and remain, the general
unpledged, unrestricted assets of the Company. The Company's obligation under
the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors.

IX.2  Restriction Against Assignment.
      ------------------------------

     The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation. No
part of a Participant's Account shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant's Account be subject to execution by

                                       16
<PAGE>

levy, attachment, or garnishment or by any other legal or equitable proceeding,
nor shall any such person have any right to alienate, anticipate, commute,
pledge, encumber, or assign any benefits or payments hereunder in any manner
whatsoever.  If any Participant, Beneficiary or successor in interest is
adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge any distribution or payment from the Plan,
voluntarily or involuntarily, the Committee, in its sole and absolute
discretion, may cancel such distribution or payment (or any part thereof) to or
for the benefit of such Participant, Beneficiary or successor in interest in
such manner as the Committee shall direct.

IX.3  Withholding.
      -----------

     There shall be deducted from each payment made under the Plan, all taxes
that are required to be withheld by the Company in respect to such payment. The
Company shall have the right to reduce any payment by the amount of cash
sufficient to provide the amount of said taxes.

IX.4  Amendment, Modification, Suspension or Termination.
      --------------------------------------------------

     The Committee may amend, modify, suspend or terminate the Plan in whole or
in part, except that no amendment, modification, suspension or termination shall
have any retroactive effect to reduce any amounts allocated to a Participant's
Account, provided that a termination or suspension of the Plan or any Plan
amendment or modification that will significantly increase costs to the Company
shall be approved by the Board. In the event that this Plan is terminated, the
timing of the disposition of the amounts credited to a Participant's Account
shall occur in accordance with Section 7.1, subject to earlier distribution at
the discretion of the Committee.

IX.5  Governing Law.
      -------------

     This Plan shall be construed, governed and administered in accordance with
the laws of the State of California.

IX.6  Receipt or Release.
      ------------------

     Any payment to a Participant or the Participant's Beneficiary in accordance
with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Committee and the Company. The Committee
may require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect.

IX.7  Payments on Behalf of Persons Under Incapacity.
      ----------------------------------------------

     In the event that any amount becomes payable under the Plan to a person
who, in the sole judgment of the Committee, is considered by reason of physical
or mental condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person. Any
payment

                                       17
<PAGE>

made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Company.

IX.8  No Employment Rights.
      --------------------

     Participation in this Plan shall not confer upon any person any right to be
employed by the Company or any other right not expressly provided hereunder.

IX.9  Headings, etc. Not Part of Agreement.
      ------------------------------------

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

     IN WITNESS WHEREOF, the Company has caused this document to be executed by
its duly authorized officer on this _____ day of _____________, 1999.



                                    SYMMETRICOM INC.


                                    By:   /s/
                                        ----------------------------------------

                                    Title:______________________________________

                                       18