TABLE OF CONTENTS        Page      I. PLAN HISTORY AND FEATURES  1      II. DEFINITIONS  2 2.1 Board of directors  2 2.2 Code  2 2.3 Deferral  2 2.4 Employee  2 2.5 Employer  3 2.6 Employment  3 2.7 ERISA  3 2.8 Participant  3 2.9 Plan  3 2.10 Plan Administrator  3 2.11 Trust or Trust Fund  3 2.12 Trust Agreement  4      III. PARTICIPATION  5 3.1 Requirements for Participation  5 3.2 Termination of Participation  5      IV. BENEFITS  6 4.1 Supplement to the Savings Plan  6 4.2 Accounts  7 4.3 Payment of Benefits  7 4.4 Hardship Withdrawals  8 
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        Page      V . SECURITY FOR PROMISED BENEFITS  9      VI. ADMINISTRATION OF THE PLAN  11 6.1 Duties of the Plan Administrator  11 6.2 Delegation of Administrative Responsibility  11 6.3 Claims Procedure  11 6.4 Effect of Plan Administrator Action  13      VII. AMENDMENT AND TERMINATION OF THE PLAN  15      VIII. MISCELLANEOUS PROVISIONS  16 8.1 Alienation  16 8.2 Duty to Provide Data  16 8.3 Limitation on Rights of Employees  17 8.4 Service of Process  18 8.5 Governing Law  18 8.6 Plurals  18 8.7 Titles  18 8.8 References  19 
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ELECTRO RENT CORPORATION SUPPLEMENTAL EXECUTIVERETIREMENT PLANARTICLE IPLAN HISTORY AND FEATURES     Electro Rent Corporation has adopted this Plan for the benefit of certain of its employees.The Plan is effective January 1, 1987.     The Plan is a non-qualified deferred compensation program which is a “pension benefit plan”subject to the Employee Retirement Income Security Act of 1974. Although benefits under the Planare unfunded contractual obligations of the Employer, the Employer may transfer money or otherproperty to one or more “rabbi” trusts and direct that benefits under the Plan be paid out of suchassets.     The purpose of the Plan is to provide benefits that cannot be provided under qualifiedretirement programs of the Employer because of limitations imposed by federal law, includingInternal Revenue Code Section 415 limitations on allowable benefits, Code Section 401(k)limitations on cash or deferred plan deferrals, and Code Section 401(a)(4) limitations on thegranting of benefits based on non-qualified deferred compensation and on discrimination incontributions or benefits.
 

 
ARTICLE IIDEFINITIONS     The following terms, when capitalized, shall have the meaning specified below unless thecontext clearly indicates to the contrary.     2.1 Board of Directors: The Board of Directors of Electro Rent Corporation.     2.2 Code: The Internal Revenue Code of 1986, as amended from time to time.     2.3 Deferral: An amount contributed to this Plan by the Employer in lieu of being paidto a Participant as salary or wages. Deferrals shall be made under salary reduction arrangementsbetween each Participant and the Employer. Article IV contains the provisions under which Deferralsmay be made. Deferrals may only be withheld from amounts earned after execution of the salaryreduction arrangement pursuant to which the Deferral is being made.     2.4 Employee: An individual who renders services to the Employer as a common lawemployee or officer (i.e., a person whose wages from the Employer are subject to federalincome tax withholding). A person rendering services to the Employer purportedly as an independentcontractor shall not be treated as an Employee before the Employer has acknowledged that it mustwithhold federal income taxes from his or her pay.
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     2.5 Employer: Electro Rent Corporation and any other company which adopts the Plan,and any successor entity which continues the Plan or such companies collectively. In contexts inwhich actions are required or permitted to be taken or notice is to be given, the Employer shallmean Electro Rent Corporation or any successor company.     2.6 Employment: The period during which an individual is an Employee. Employment shallcommence on the day the individual first performs services for the Employer as an Employee andshall terminate on the day the Employee resigns, dies, retires or is discharged or permanently laidoff.     2.7 ERISA: The Employee Retirement Income Security Act of 1974.     2.8 Participant: Any Employee who is included in the Plan pursuant to Article III.     2.9 Plan: This document and any Trust Agreement.     2.10 Plan Administrator: Electro Rent Corporation, acting through its chief executiveofficer or such other person as the Employer shall designate. The Plan Administrator is the Plan’s“named fiduciary” within the meaning of Section 402(a)(2) of ERISA.     2.11 Trust or Trust Fund: The fund established under one or more TrustAgreements pursuant to the Plan.
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     2.12 Trust Agreement: Any agreement between a trustee and the Employer entered intofor the purpose of investing and administering the Trust Fund. Each Trust Agreement constitutes apart of this Plan.
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ARTICLE IIIPARTICIPATION     3.1 Requirements for Participation          A person may participate in the Plan if: (1) the Plan Administrator determines that thelimitations of Code Sections 415 or 401(k) would preclude the individual from making Deferrals tothe maximum amount permitted under the Electro Rent Corporation Employee Stock Ownership andSavings Plan (the “Savings Plan”). In addition, any individuals selected by the Employer mayparticipate in the Plan. A person shall become a Participant on the date he or she is notified bythe Plan Administrator in writing that he or she has become a Participant.     3.2 Termination of Participation          An individual who has become a Participant shall cease to be a Participant upon terminationof Employment.
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ARTICLE IVBENEFITS     4.1 Supplement to the Savings Plan          (a) To the extent that a Participant cannot contribute the maximum amount permitted under theSavings Plan because of Code Section 415 or 401(k) limitations applicable to the Savings Plan, theamount that cannot be contributed to the Savings Plan shall automatically be treated as a Deferralunder this Plan in accordance with contribution elections which have been made under the SavingsPlan, except as otherwise permitted by the Plan Administrator. A Participant may make “catch-up”Deferrals to this Plan retroactive to January 1, 1987 but starting at a later date during 1987. AnyDeferral to be made under this Plan shall be deducted from the Participant’s paycheck on the samedate the amount would have been deducted under the Savings Plan but for legal limitations, or atsuch other time as the Plan Administrator specifies, and shall be credited to the Participant’saccount in accordance with Section 4.3.          (b) The Employer makes matching contributions under the Savings Plan. Matching contributionswhich cannot be provided under the Savings Plan due to Code Section 415 or applicableanti-discrimination requirements shall be provided under this Plan to the extent they are “earned”by the Participant by making contributions to the Savings Plan or Deferrals to this Plan. Employermatching contributions made to this Plan shall be subject to the same vesting provisions as theSavings Plan.
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     4.2 Accounts          Deferrals or Employer matching contributions for a Participant under Section 4.1 shall becredited to a separate unfunded account on the books of the Employer as soon as reasonably possibleafter such amounts have been ascertained. These accounts shall be credited with interest at a rateto be determined by the Plan Administrator. To the extent an account is funded through the TrustFund, it shall be credited instead with the approximate actual earnings (or losses) on the portionof the Trust Fund being held for the Participant’s benefit as authorized by the Plan Administrator.     4.3 Payment of Benefits          Benefits under this Section shall be paid to the Participant upon termination of Employment.A Participant’s benefit under the Plan shall consist of his or her Account balance as of the datedistribution is made or commences. Payment shall be made in a cash lump sum if the Participant’sbenefit under the Plan is less than $40,000. For benefits from $40,000 to $200,000, payment shallbe made in no more than five annual installments. The amount of each installment shall becalculated as follows; however, no installment shall be less than $20,000 except to the extentthat the unpaid account balance is less than $20,000, in which case the installment shall be equalto the entire unpaid account balance: the first installment shall be one-fifth of the totalbenefit, the second installment shall be one-fourth of the remaining benefit, the thirdinstallment, one-third, etc. For benefits exceeding $200,000, payment shall be made in ten annualinstallments, each payment being one-tenth of the unpaid amount of the benefit. By writtenagreement between the Plan Administrator and the Participant executed at the time the individualfirst becomes
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a Participant hereunder, the Plan Administrator in its sole discretion may authorize a differentform of payment. Payments shall commence as of the first day of the month coincident with or nextfollowing termination of Employment. Upon a Participant’s death, the balance payable to theParticipant shall be paid to the Participant’s surviving beneficiary in installments as describedabove or as a continuation of installments if the Participant’s benefit was already in pay statusat the time of the Participant’s death. The Participant shall designate a beneficiary in the mannerand form prescribed by the Plan Administrator. If the Participant has no surviving beneficiary, theParticipant’s benefit shall be paid in a lump sum to the Participant’s estate.     4.4. Hardship Withdrawals          The Plan Administrator in its sole discretion may permit a Participant to withdraw all or apart of his or her Account because of the existence of a hardship.
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ARTICLE VSECURITY FOR PROMISED BENEFITS     This Plan constitutes an unfunded, unsecured promise of the Employer to pay amounts to eachParticipant (or his or her beneficiary) out of the Employer’s general assets. Nevertheless, subjectto the following terms, the Employer is hereby authorized in its discretion to transfer money orother property to one or more Trust Funds and direct the trustee(s) (which may be any individual orgroup of individuals, including a Participant, or a corporate fiduciary) to pay Plan benefits to aParticipant out of such assets.          (a) The funding of such Trust Fund shall be at the discretion of any of the Employer’sofficers, but the Trust (including additions to it and earnings) shall be irrevocable.          (b) The Employer shall remain the owner of all assets in the Trust and the assets shall onlybe subject to the claims of Employer creditors if the Employer ever goes into bankruptcy, orbecomes insolvent. The term “insolvent,” as used herein shall mean the Employer’s inability to pay,within a reasonable time, its liabilities as they become due. The Employer shall have the duty toinform the trustee(s), within a reasonable time, if the Employer becomes insolvent or goes intobankruptcy. When so informed, the trustee(s) shall suspend payments to the Participants and holdthe assets for the benefit of the Employer’s general creditors. If the trustee(s) receives awritten allegation that the Employer is bankrupt or insolvent, the trustee(s) shall suspendpayments to the Participants and hold the assets for the benefit of the Employer’s generalcreditors, and shall determine within thirty days of receipt of such notice whether the Employer isbankrupt or insolvent.
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If the trustee(s) determines that the Employer is not bankrupt or insolvent, the trustee(s) shallresume payments to the Participants.          (c) Except as provided in subsection (b), Participants’ interest in the Trust shall be thesame as, but in no event better than, the rights of general unsecured creditors of the Employer.          (d) The Employer may retain the right to direct how the Trust Fund is to be invested and shallhave the power to substitute assets of like value for cash or assets in the Trust.          (e) To the extent the Trust Fund has sufficient assets, benefits under the Plan may be paid bythe trustee(s). To the extent the trustee(s) does not or cannot pay benefits out of the Trust, thebenefits shall be paid by the Employer.          (f) The Employer may reduce the amount of payment to be made under this Plan to a Participantor his or her beneficiary by the amount of any taxes on the payment which the Employer is requiredto withhold pursuant to applicable law.          (g) After all accrued benefits due under this Plan have been paid, or with the consent of allParticipants entitled to payment of benefits under the Trust, the Trust Agreement shall terminateand any remaining assets shall be transferred to the Employer.
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ARTICLE VIADMINISTRATION OF THE PLAN     6.1 Duties of the Plan Administrator          The Plan Administrator shall be responsible for the general administration and management ofthe Plan and shall administer the Plan in accordance with its terms.     6.2 Delegation of Administrative Responsibility          (a) The Plan Administrator may delegate all or any portion of its administrativeresponsibilities with respect to the Plan to any other person pursuant to this Section.          (b) A delegation under this Section shall be accomplished by a written instrument executed bythe Plan Administrator specifying responsibilities delegated and the fiduciary responsibilitiesallocated to such delegate. A delegation of such responsibility shall be effective upon the datespecified in the delegation, subject to written acceptance by the delegate.     6.3 Claims Procedure          (a) Normally, a Participant or beneficiary need not present a formal claim for benefits inorder to qualify for rights or benefits under this Plan. However, if any person is not granted therights or benefits to which the person believes himself or herself to be entitled, a formal claimfor benefits must be filed in accordance with this Section. A claim by any person shall bepresented to the claims official appointed by the Plan Administrator in writing within the maximumtime permitted
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by law orunder regulations promulgated by the Secretary of Labor or his or her delegatepertaining to claims procedures. The claims official shall, within a reasonable time, consider theclaim and shall issue his or her determination thereon in writing. If the claim is granted, theappropriate distribution or payment shall be made under the Plan.          (b) If the claim is wholly or partially denied, the claims official shall, within ninety days(or such longer period as may be reasonably necessary) provide the claimant with written notice ofthe denial, setting forth, in a manner calculated to be understood by the claimant:               (i) the specific reason or reasons for the denial,               (ii) specific references to pertinent Plan provisions on which thedenial is based,               (iii) a description of any additional material or information necessary for the claimant toperfect the claim and an explanation of why the material or information is necessary, and               (iv) an explanation of the Plan’s claim review procedure.          (c) Each claimant shall have the opportunity to appeal in writing the claims official’s denialof a claim to a review official designated by the Plan Administrator for a full and fair review.The claimant or his or her duly authorized representative:               (i) may request a review by filing a written application with the review official,               (ii) may review pertinent documents, and               (iii) may submit issues and comments in writing.
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          (d) The Plan Administrator may establish time limits within which a claimant may requestreview of a denied claim which are reasonable in relation to the nature of the benefit which is thesubject of the claim and other attendant circumstances, but which shall not be less than sixty daysafter receipt by the claimant of written notice of denial of his or her claim.          (e) The decision by the review official upon review of a claim shall be made not later thansixty days after his or her receipt of the request for review, unless special circumstances requirean extension of time for processing, in which case a decision shall be rendered as soon aspossible, but not later than one hundred twenty days after receipt of the request for review.          (f) The decision on review shall be in writing and shall include specific reasons for thedecision written in a manner calculated to be understood by the claimant, with specific referencesto the pertinent Plan provisions on which the decision is based.          (g) To the extent permitted by law, the decision of the claims official (if no review isproperly requested) or the decision of the review official, as the case may be, shall be final andbinding on all parties. No legal action for benefits under the Plan shall be brought unless anduntil the claimant has exhausted his or her remedies under this Section.     6.4 Effect of Plan Administrator Action          (a) All actions taken and all determinations made by the Plan Administrator in good faithshall be final and binding upon all Participants and any person interested in the Plan. To theextent the Plan Administrator has been granted discretionary authority under the Plan, its priorexercise of such authority shall not obligate the Plan Administrator to exercise its authority ina like fashion thereafter.
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          (b) The Plan shall be interpreted by the Plan Administrator in accordance with its terms andtheir intended meaning. If, due to errors in drafting, a provision does not accurately reflect itsintended meaning, as demonstrated by consistent interpretations by the Plan Administrator or otherevidence of intention, the provision shall be considered ambiguous and shall be interpreted by thePlan Administrator in a fashion consistent with its intent. The Plan Administrator, without theneed for Board approval, shall amend the Plan retroactively to cure any such ambiguity. Thissubsection may not be invoked by a Participant, beneficiary or any other person to require the Planto be interpreted in a manner which is inconsistent with its interpretation by the PlanAdministrator.
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ARTICLE VIIAMENDMENT AND TERMINATION OF THE PLAN     The Employer reserves the right at any time to amend or to restructure the Plan prospectivelyor retroactively. No amendment or other change shall reduce the present value of a Participant’sbenefit (ignoring income tax consequences) without the Participant’s consent. This Plan may not beterminated by the Employer until all benefits due under the Plan have been paid.
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ARTICLE VIIIMISCELLANEOUS PROVISIONS     8.1 Alienation          The rights of a Participant or beneficiary under the Plan shall not be subject to any claim of anycreditor of the Participant or beneficiary nor to attachment or garnishment or other legal processby any creditor of the Participant or beneficiary. A Participant or beneficiary shall not have theright to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or paymentsor proceeds which the individual may expect to receive, contingently or otherwise, under the Plan.     8.2 Duty to Provide Data          (a) Every person with an interest in the Plan or claiming benefits under the Plan shallfurnish the Plan Administrator on a timely and accurate basis with such documents, evidence orinformation as it considers necessary or desirable for the purpose of administering the Plan. ThePlan Administrator may postpone payment of benefits until such information and such documents havebeen furnished.          (b) Every person claiming a benefit under this Plan shall give written notice to the PlanAdministrator of his or her post office address and each change of post office address. Anycommunication, statement or notice addressed to such a person at his or her latest post officeaddress as filed with the Plan Administrator will, on deposit in the United States mail withpostage prepaid, be as binding upon such person for all purposes of the Plan as if it had beenreceived, whether actually received or not. If a person fails to give notice of his or her correctaddress, the
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Plan Administrator, the Employer and the trustee shall not be obliged to search for, or toascertain, his or her whereabouts.          (c) If benefits which are otherwise currently payable cannot be paid to the person entitled tothe benefits because the individual has failed to comply with this Section or other Plan provisionsrelating to claims for benefits, any unpaid amounts shall be forfeited.     8.3 Limitation on Rights of Employees          The Plan is strictly a voluntary undertaking on the part of the Employer and shall notconstitute a contract between the Employer and any Employee, or consideration for, or aninducement or condition of, the employment of an Employee. Except as otherwise required by statuteor an express, written employment contract, nothing contained in the Plan shall give any Employeethe right to be retained in the service of the Employer or to interfere with or restrict the rightof the Employer, which is hereby expressly reserved, to discharge or retire any Employee at anytime, with or without cause. Except as otherwise required by statute, inclusion under the Planwill not give any Employee any right or claim to any benefit hereunder except to the extent suchright has specifically become fixed under the terms of the Plan. The doctrine of substantialperformance shall have no application to Employees, Participants or their beneficiaries. Eachcondition and provision, including numerical items, has been carefully considered and constitutesthe minimum limit on performance which will give rise to the applicable right.
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     8.4 Service of Process          The Secretary of Electro Rent Corporation is hereby designated as agent for the service oflegal process on the Plan.     8.5 Governing Law          The Plan and Trust shall be interpreted, administered and enforced in accordance with ERISA,and the rights of Participants, former Participants, beneficiaries and all other persons shall bedetermined in accordance with that law. ERISA does not require that this Plan be “funded.” UnderERISA this Plan would be considered “unfunded” even if one or more Trust Funds are establishedsince the assets in such Trust Funds are subject to the claims of the Employer’s creditors underArticle V. To the extent that state law is applicable, the laws of the State of California shallapply.     8.6 Plurals          Where the context so indicates, the singular shall include the plural and vice versa.     8.7 Titles          Titles are provided herein for convenience only and are not to serve as a basis forinterpretation or construction of the Plan.
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