**Exhibit10.3**

** **

**First Amendment and Restatement of**

** **

**the Communications & Power Industries, Inc.**

** **

**Non-Qualified Deferred Compensation Plan**

** **

**Effective As Of December 1, 2004**

 

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**TABLE OF CONTENTS**

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| ** ** | ** ** | ** **                       | ** **                             | **Page**   |
|------------|------------|----------------------------------|----------------------------------------|------------|
|       | ** ** |                             | ** **                             | ** ** |
| ARTICLE 1  |       | DEFINITIONS                      |                                   | 1          |
|       |       |                             |                                   |       |   |
|       | 1.1.       |                             | Account                                |       | 1 |
|       | 1.2.       |                             | Affiliate                              |       | 2 |
|       | 1.3.       |                             | Base Salary                            |       | 2 |
|       | 1.4.       |                             | Beneficiary                            |       | 2 |
|       | 1.5.       |                             | Code                                   |       | 2 |
|       | 1.6.       |                             | Compensation                           |       | 2 |
|       | 1.7.       |                             | Corporation Contribution               |       | 2 |
|       | 1.8.       |                             | Disability                             |       | 2 |
|       | 1.9.       |                             | Effective Date                         |       | 2 |
|       | 1.10.      |                             | Election of Deferral                   |       | 2 |
|       | 1.11.      |                             | Eligible Employee                      |       | 2 |
|       | 1.12.      |                             | ERISA                                  |       | 3 |
|       | 1.13.      |                             | Key Employee                           |       | 3 |
|       | 1.14.      |                             | MIP Bonus                              |       | 3 |
|       | 1.15.      |                             | Participant                            |       | 3 |
|       | 1.16.      |                             | Participant Annual Deferral            |       | 3 |
|       | 1.17.      |                             | Plan                                   |       | 3 |
|       | 1.18.      |                             | Plan Administrator                     |       | 3 |
|       | 1.19.      |                             | Plan Year                              |       | 3 |
|       | 1.20.      |                             | Trust                                  |       | 3 |
|       | 1.21.      |                             | Valuation Date                         |       | 3 |
|       |       |                             |                                   |       |   |
| ARTICLE 2  |       | ELIGIBILITY AND PARTICIPATION    |                                   | 3          |
|       |       |                             |                                   |       |   |
|       | 2.1.       |                             | Eligibility                            |       | 3 |
|       | 2.2.       |                             | Participation                          |       | 4 |
|       |       |                             |                                   |       |   |
| ARTICLE 3  |       | CONTRIBUTIONS AND CREDITS        |                                   | 4          |
|       |       |                             |                                   |       |   |
|       | 3.1.       |                             | Deferral Election                      |       | 4 |
|       | 3.2.       |                             | Corporation Contributions              |       | 5 |
|       | 3.3.       |                             | Withholding of Taxes                   |       | 5 |
|       |       |                             |                                   |       |   |
| ARTICLE 4  |       | ACCOUNTS AND ALLOCATION OF FUNDS |                                   | 5          |
|       |       |                             |                                   |       |   |
|       | 4.1.       |                             | Account Allocations                    |       | 5 |
|       | 4.2.       |                             | Investment Election and Declared Rates |       | 6 |
|       | 4.3.       |                             | Determination of Accounts              |       | 7 |

 

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|       |   |                     | ** **                                                                                              | ** ** | **Page**   |
|------------|--------|--------------------------|---------------------------------------------------------------------------------------------------------|------------|------------|
|       |   |                     |                                                                                                    | ** ** | ** ** |
| ARTICLE 5  |   | ENTITLEMENT TO BENEFITS  |                                                                                                    | 7          |
|       |   |                     |                                                                                                    |       |       |
|       | 5.1.   |                     | Vesting of Benefits                                                                                     |       | 7          |
|       | 5.2.   |                     | Disability or Termination of Employment Benefits                                                        |       | 7          |
|       | 5.3.   |                     | Death Benefits                                                                                          |       | 7          |
|       | 5.4.   |                     | Hardship Distribution                                                                                   |       | 8          |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 6  |   | RIGHTS ARE LIMITED       |                                                                                                    | 8          |
|       |   |                     |                                                                                                    |       |       |
|       | 6.1.   |                     | Benefits Payable  Only From General Corporate Assets: Unsecured General Creditor Status of  Participant |       | 8          |
|       | 6.2.   |                     | No Contract of Employment                                                                               |       | 9          |
|       | 6.3.   |                     | Benefits Not Transferable                                                                               |       | 9          |
|       | 6.4.   |                     | No Trust Created                                                                                        |       | 9          |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 7  |   | BENEFICIARIES            |                                                                                                    | 9          |
|       |   |                     |                                                                                                    |       |       |
|       | 7.1.   |                     | Beneficiary Designation                                                                                 |       | 9          |
|       | 7.2.   |                     | Spouse’s Interest                                                                                  |       | 9          |
|       | 7.3.   |                     | Facility of Payment                                                                                     |       | 10         |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 8  |   | PLAN ADMINISTRATION      |                                                                                                    | 10         |
|       |   |                     |                                                                                                    |       |       |
|       | 8.1.   |                     | Responsibility of Administration of the Plan                                                            |       | 10         |
|       | 8.2.   |                     | Claims Procedure                                                                                        |       | 10         |
|       | 8.3.   |                     | Arbitration                                                                                             |       | 15         |
|       | 8.4.   |                     | Notice                                                                                                  |       | 16         |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 9  |   | AMENDMENT OR TERMINATION |                                                                                                    | 17         |
|       |   |                     |                                                                                                    |       |       |
|       | 9.1.   |                     | Amendment or Termination                                                                                |       | 17         |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 10 |   | THE TRUST                |                                                                                                    | 17         |
|       |   |                     |                                                                                                    |       |       |
|       | 10.1.  |                     | Establishment of Trust                                                                                  |       | 17         |
|       | 10.2.  |                     | Interrelationship of the Plan and the Trust                                                             |       | 17         |
|       | 10.3.  |                     | Contribution to the Trust                                                                               |       | 18         |
|       |   |                     |                                                                                                    |       |       |
| ARTICLE 11 |   | MISCELLANEOUS            |                                                                                                    | 18         |
|       |   |                     |                                                                                                    |       |       |
|       | 11.1.  |                     | Governing Law                                                                                           |       | 18         |

 

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** **

**FIRST AMENDMENT ANDRESTATEMENT OF THECOMMUNICATIONS & POWER INDUSTRIES, INC.NON-QUALIFIED DEFERRED COMPENSATION PLAN**

** **

**THIS FIRSTAMENDMENT AND RESTATEMENT OF THE COMMUNICATIONS & POWER INDUSTRIES,INC. NON-QUALIFIED DEFERRED COMPENSATION PLAN** is adopted asof the 1st day of December, 2004, by Communications & Power Industries, Inc.,a Delaware corporation (the “Corporation”), as follows:

 

**RECITALS**

** **

**WHEREAS**,the Corporation has established the Communications & Power Industries, Inc.Non-Qualified Deferred Compensation Plan (the “Plan”), as of December 1,1995, to provide additional retirement benefits and income tax deferralopportunities for a select group of management and highly compensatedemployees;

 

**WHEREAS**,the Corporation intends that the Plan shall at all times be administered andinterpreted in such a manner as to constitute an unfunded nonqualified deferredcompensation plan for a select group of management or highly compensatedemployees and to qualify for all available exemptions from the provisions ofERISA; and

 

**WHEREAS**,the Corporation wished to amend and restate the Plan, in its entirety, tocomply with the provisions of the American Jobs Creation Act of 2004 applicableto deferred compensation plans, effective for deferral of compensation that isearned (i.e., the services that earned such compensation are performed) orvested after December 31, 2004, while retaining the original provisions ofthe Plan for deferral of compensation that is earned (i.e., the services thatearned such compensation are performed) and vested before January 1, 2005.

 

**NOW,THEREFORE**, the Corporation hereby adopts the following FirstAmendment and Restatement of the Communications & Power Industries, Inc.Non-Qualified Deferred Compensation Plan (the “First Amendment and Restatement”),effective for deferral of compensation that is earned (i.e., the services thatearned such compensation are performed) or vested after December 31, 2004,while retaining the original provisions of the Plan for deferral ofcompensation that is earned (i.e., the services that earned such compensationare performed) and vested before January 1, 2005.

 

# **ARTICLE 1**

#  

# **DEFINITIONS**

#  

**DEFINITIONOF TERMS**.  Certain words and phrases are defined whenfirst used in later sections of this plan. In addition, the following words and phrases when used herein, unlessthe context clearly requires otherwise, shall have the following respectivemeanings.

 

## 1.1.          **Account**.  Bookentries maintained by the Corporation, reflecting the sum of all amountsdeferred hereunder by or on behalf of a Participant, including (i) allCorporation Contributions, and (ii)  any earnings, gains, losses, andchanges in value credited to the Participant or his or her Beneficiariespursuant to the Plan, provided, however, that the existence of such bookentries and the Account shall not create, and shall not be deemed to create, atrust of any kind, or a fiduciary relationship between the Corporation and theParticipant, his or her Beneficiaries.

##  

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##  

## 1.2.          **Affiliate**.  Anycorporation, partnership, joint venture, association, or similar organizationor entity, which is a member of a controlled group of companies which includes,or which is under common control with, the Corporation under Section 414of the Code.

##  

## 1.3.          **Base Salary**.  Theannual compensation (excluding bonuses, commissions, overtime, incentivepayments, non-monetary awards, directors fees and other fees, stock options andgrants, and car allowances) paid to a Participant for services rendered to theCorporation, before reduction for compensation deferred pursuant to allqualified, non-qualified and Code Section 125 plans of the Corporation.

##  

## 1.4.          **Beneficiary**.  TheBeneficiary designated by a Participant under Article 7, or, if theParticipant has not designated a Beneficiary under Article 7, the personor persons entitled to receive distributions of benefits under Section 5.3.

##  

## 1.5.          **Code**.  The InternalRevenue Code of 1986, as amended from time to time.

##  

## 1.6.          **Compensation**.  TheBase Salary and MIP Bonus paid by the Corporation to an employee for a calendaryear.

##  

## 1.7.          **Corporation Contribution.** A contribution to the Plan made by theCorporation under Section 3.2.

##  

## 1.8.          **Disability**.  Inabilityto engage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment which can be expected to result indeath or can be expected to last for a continuous period of not less than 12months, or receipt of income replacement benefits for a period of not less thanthree months under an accident and health plan of the Corporation or anAffiliate by reason of any medically determinable physical or mental impairmentwhich can be expected to result in death or can be expected to last for acontinuous period of not less than 12 months.

##  

## 1.9.          **EffectiveDate**.  December 1, 1995 for the Plan asoriginally adopted, the provisions of which shall remain in effect for deferralof Compensation that is earned (i.e., the services that earned suchCompensation are performed) and vested before January 1, 2005, and December 1,2004 for the First Amendment and Restatement, the provisions of which shallapply to deferral of Compensation that is earned (i.e., the services thatearned such Compensation are performed) or vested after December 31, 2004.

 

## 1.10.        **Electionof Deferral**.  A written notice filed by the Participantwith the Plan Administrator in form prescribed by the Plan Administrator,specifying the amount (if any) of Base Salary and MIP Bonus to be deferred.

##  

## 1.11.        **EligibleEmployee**.  Any employee of the Corporation or anAffiliate who is one of a select group of management or highly compensatedemployees, as defined by ERISA.

##  

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##  

## 1.12.        **ERISA**.  TheEmployee Retirement Income Security Act of 1974, as amended from time to time.

##  

## 1.13.        **KeyEmployee**.  A key employee of the Corporation or anyAffiliate, as defined in Section 416(i) of the Code without regard toparagraph (5) thereof, who is a participant in this Plan.

##  

## 1.14.        **MIP Bonus.** Theannual bonus payable to a participant under the Corporation’s annual ManagementIncentive Program.

##  

## 1.15.        **Participant**.  AnEligible Employee designated as a participant by the Plan Administrator.

##  

## 1.16.        **ParticipantAnnual Deferral**.  The portion of a Participant’s Compensation,which he or she elects to defer for the Plan Year in question.

##  

## 1.17.        **Plan**.  ThisPlan, together with any and all amendments or supplements thereto.

##  

## 1.18.        **PlanAdministrator**.  The Board of Directors of Communications &Power Industries, Inc. (a Delaware corporation) or its designee.

##  

## 1.19.        **Plan Year**.  The calendarYear.

##  

## 1.20.        **Total Deferrals**.  The sum of a Participant’sdeferrals of Compensation and Corporation Contributions made for suchParticipant.

##  

## 1.21.        **Trust.** Agrantor trust of the type commonly referred to as a “rabbi trust” establishedunder Article 10 of this Plan.

##  

## 1.22.        **ValuationDate**.  The last day of each quarter during the PlanYear, or such other dates as the Plan Administrator may establish in itsdiscretion.

##  

# **ARTICLE 2**

#  

# **ELIGIBILITY AND PARTICIPATION**

#  

## 2.1.          **Eligibility**.

##  

#### (a)              An Eligible Employeeshall become a Participant in the Plan if such Employee is designated as a Participantby the Corporation, in writing.

####  

#### (b)              Once an employeebecomes a Participant, he or she shall remain a Participant until his or hertermination of employment with the Corporation and all Affiliates, andthereafter until all benefits to which he or she (or his or her Beneficiaries)is entitled under the Plan have been paid.

 

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##  

## 2.2.          **Participation**.

##  

#### (a)              The Participant mayelect a Participant Annual Deferral hereunder by filing an Election ofDeferral.  Except as provided in Sections2.2(b) and (c), any Election of Deferral, to be effective, must be filedbefore the beginning of the Plan Year to which it applies, and shall beeffective only for Base Salary and MIP Bonus which the Participant earns (i.e.,the Participant performs the services that earn such Base Salary and MIP Bonus)in the Plan Year to which the Election of Deferral applies.  The Plan Administrator may, in its discretion,require that Elections of Deferral be filed a stated number of days before thebeginning of the Plan Year to which the Elections of Deferral apply.

####  

#### (b)              Any employee whobecomes an Eligible Employee and is designated as a Participant by the PlanAdministrator during a Plan Year may elect to participate and commence deferralsby filing an Election of Deferral within 30 days following his designation as aParticipant, in which case the Election of Deferral shall be effective for BaseSalary and MIP Bonus earned (i.e., the Participant performs the services thatearn such Base Salary and MIP Bonus) after the date of the filing of suchElection of Deferral in such Plan Year.

####  

#### (c)              In the case of any MIPBonus which is “performance-based compensation,” within the meaning ofregulations promulgated by the U.S. Treasury Department under Section 409Aof the Code, based on services performed over a period of at least 12 months,the Plan Administrator may permit a Participant to file an Election of Deferralapplying to such MIP Bonus not later than six months before the end of such period.

####  

#### (d)              Each Election ofDeferral shall, and shall be irrevocable during the Plan Year to which itrelates, or, if it relates to a MIP Bonus which is “performance-basedcompensation,” within the meaning of regulations promulgated by the U.S.Treasury Department under Section 409A of the Code, based on servicesperformed over a period of at least 12 months, during such 12 month period.

####  

# **ARTICLE 3**

#  

# **CONTRIBUTIONS AND CREDITS**

#  

## 3.1.          **DeferralElection**.

##  

#### (a)              Commencing on theEffective Date, and continuing through the date on which the Participant’semployment terminates because of his or her death, Retirement, Disability, orany other cause, each Participant shall be entitled to elect to defer into hisor her Account, by filing with the Plan Administrator an Election of Deferral, inthe form prescribed by the Plan Administrator, at the times specified in Section 2.2,a portion of the Base Salary and MIP Bonus that the Participant will earn forthe period for which the Election of Deferral will be effective as set forth inSection 2.2.  Such deferrals shallbe accomplished by payroll deduction.

####  

#### (b)              In the Election ofDeferral, the Participant shall specify the amount to be deferred, which suchspecification may be separate for the Base Salary and the MIP Bonus, and may beexpressed as a percentage of the Base Salary or MIP Bonus or as a fixed dollaramount.  Subject to the provisions of Section 3.3,the Participant may elect to defer up to 100% of his Base Salary and up to 100%of his MIP Bonus.

 

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## 3.2.          **CorporationContributions**.

##  

TheCorporation shall make Corporation Contributions for each Plan Year for eachParticipant in an amount equal to the sum of:

 

#### (a)              4.75% of theParticipant’s Base Salary paid in such Plan Year in excess of the SocialSecurity Taxable Wage Base in effect for such Plan Year, up to and including thedollar limit in Section 401(a)(17) of the Code (which is $210,000 for2005, and which will be indexed by the Internal Revenue Service for future changesin the cost of living), plus

####  

#### (b)              9.5% of theParticipant’s Base Salary paid in such Plan Year in excess of the dollar limitin Section 401(a)(17) of the Code (which is $210,000 for 2005, and whichwill be indexed by the Internal Revenue Service for future changes in the costof living).

####  

## 3.3.          **Withholdingof Taxes**.

##  

#### (a)             **AnnualWithholding from Compensation.** For any Plan Year in which contributions are made to the Plan, theCorporation shall withhold the Participant’s share of FICA, FUTA and other employmenttaxes from the Participant’s Base Salary or MIP Bonus other than TotalDeferrals.  If deemed appropriate by theCorporation, the amount of a Participant’s Participant Annual Deferral electedon the Participant’s Election of Deferral may be reduced where necessary tofacilitate compliance with applicable withholding requirements.  If any taxes, including but not limited to,FICA, FUTA and other employment taxes with respect to the Account, are requiredto be withheld before the time of payment, the Corporation may withhold suchamounts for other compensation paid to the Participant.

####  

#### (b)             **Withholdingfrom Benefit Distributions.** The Corporation (or the trustee of the Trust, as applicable), shallwithhold from any payments made to a Participant or Beneficiary under this Planall federal, state and local income, FICA, FUTA and other employment and othertaxes required to be withheld by the Corporation (or the trustee of the Trust,as applicable), in connection with such payments, in amounts and in a manner tobe determined in the sole discretion of the Corporation (or the trustee of theTrust, as applicable).

####  

# **ARTICLE 4**

#  

# **ACCOUNTS AND ALLOCATION OF FUNDS**

#  

## 4.1.          **AccountAllocations**.

##  

#### (a)              Compensation whichis deferred under the Plan shall be deemed to be added to the Account on thefirst day of the following month in which the Compensation would otherwise havebeen paid.

 

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####  

#### (b)              CorporationContributions shall be credited to the Participant’s Account at such time asdirected by the Plan Administrator.

####  

#### (c)              All amounts paidfrom an Account shall be deemed to be paid on the first day of the month inwhich such payments are made.

####  

#### (d)              Based on theInvestment Elections of a Participant made under Section 4.2, the Participant’sAccount shall be credited with investment earnings, gains, losses or changes invalue effective at the end of each calendar quarter during the Plan Year,except as otherwise provided in this Plan.

####  

#### (e)              The PlanAdministrator may, at any time, change the timing or methods for crediting ordebiting earnings, gains, losses, and changes in value of investment options,deferrals of Compensation, Corporation Contributions, and payments of benefitsand withdrawals under this Plan; provided, however, that the times and methodsfor crediting or debiting such items in effect at any particular time shall beuniform among all Participants and Beneficiaries.

####  

## 4.2.          **InvestmentElection and Declared Rates**.

##  

#### (a)              Investment Electionsmay be made from any of the various investment alternatives selected by theParticipant from among those made available by the Corporation from time totime.

####  

#### (b)              A Participant (or,in the event of the Participant’s death, the Participant’s Beneficiary) shallmake Investment Elections for the Participant’s Account by filing a form prescribedby the Plan Administrator with the Plan Administrator.  A Participant may elect to have his or herAccount deemed to be invested in up to 10 investment alternatives, provided,however, that such investment alternative must be applied to at least 10% ofthe total balance in his or her Account and must be in a whole percentageamount.  Investment Elections shallremain in effect until changed and may be changed once during each calendarquarter, with such change to be effective on the first day of the succeedingcalendar quarter.  The Plan Administratormay in its discretion modify the timing of changes of Investment Elections,provided that any such modification applies uniformly to all Participants and Beneficiaries.

####  

#### (c)              At the end of eachcalendar quarter (or such shorter period as the Plan Administrator maydetermine), the Corporation shall compute the total return for the quarter (orsuch shorter period) as to each Participant’s Investment Elections and reducesuch returns for that quarter’s (or shorter period’s) money management fees,mortality charges, cost of insurance and investment expenses associatedspecifically with each investment alternative. The total return for each investment alternative shall be thatinvestment alternative’s total return for that quarter (or shorter period)reduced for expenses as described above.

####  

#### (d)              From time to time,and at its sole discretion, the Corporation may change the investmentalternatives which it makes available to the Participant.  However, notwithstanding the provisions ofthis Section 4.2, the Corporation may invest contributions in investments otherthan the investments selected by such Participant but the Participant’s returnwill solely be based on the results of his or her Investment Election reducedfor expenses as described in Section 4.2(c) above.  Nothing in this Plan shall require theCorporation actually to acquire or hold any particular investment.

 

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####  

## 4.3.          **Determination of Accounts**.  AParticipant’s Account balance as of each Valuation Date shall consist of the TotalDeferrals, and investment earnings, gains, losses, and changes in value in hisor her Account determined in accordance with this Section 4.  The Plan Administrator shall keepsub-accounts within the Account of each person who was a Participant before theEffective Date of this First Amendment and Restatement to reflect the portionof such Participant’s Account attributable to Total Deferrals that are earned(i.e., the services that earned such Total Deferrals are performed) and vestedbefore January 1, 2005 (which shall continue to be governed by theoriginal provisions of this Plan) and the portion of such Participant’s Accountattributable to Total Deferrals that are earned (i.e., the services that earnedsuch Total Deferrals are performed) or vested after December 31, 2004(which shall be governed by the terms and provisions of this First Amendmentand Restatement).

##  

# **ARTICLE 5**

#  

# **ENTITLEMENT TO BENEFITS**

#  

## 5.1.          **Vestingof Benefits**.  Subject to the provisions of Section 5.2(b),a Participant shall be 100% vested in his Account balance at all times.

##  

## 5.2.          **Disabilityor Termination of Employment Benefits**.

##  

#### (a)              In the event of theParticipant’s Disability, or termination of employment with the Corporation oran Affiliate for any reason, including but not limited to retirement or death,the Corporation shall pay to the Participant a termination benefit equal to thebalance of the Participant’s Account in one lump sum within 2-1/2 months aftersuch Disability or termination of employment. Notwithstanding the foregoing, if any stock of this Corporation ispublicly traded on established securities market or otherwise, no payment shallbe made to a Key Employee within six months after such Key Employee’s separationfrom service (or, if earlier, the date of his or her death).

####  

## 5.3.          **DeathBenefits.** Inthe event of the Participant’s death before payment of benefits under Section 5.2,a death benefit equal to the balance of the Participant’s Account shall be paidto the Participant’s beneficiary in one lump sum within 2-1/2 months after theParticipant’s death.  If no designation ofa Beneficiary has been received by the Corporation, such payment shall be madeto the Participant’s surviving legal spouse. If the Participant is not survived by a legal spouse, the said paymentshall be made to the then living children of the Participant, if any, in equalshares.  If there are no survivingchildren, the balance of the Account balance shall be paid to the estate of theParticipant.

 

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## 5.4.          **HardshipDistribution**.

##  

#### (a)              **HardshipWithdrawal**.  In the eventthat the Plan Administrator, upon the written request of a Participant,determines, in its sole discretion, that the Participant has suffered anunforeseeable financial emergency, the Corporation shall pay to theParticipant, as soon as practicable following such determination, an amountnecessary to meet the emergency (the “Hardship Withdrawal”), but not exceedingthe vested balance of such Participant’s Account as of the date of suchpayment.  For purposes of this Section 5.4(a),an “unforeseeable financial emergency” shall mean a severe financial hardshipto the Participant resulting from an illness or accident of the Participant,the Participant’s spouse, or a dependent (as defined in Section 152(a) ofthe Code) of the Participant, loss of the Participant’s property due tocasualty, or other similar extraordinary and unforeseeable circumstancesarising as a result of events beyond the control of the Participant.  The amounts of a Hardship Withdrawal may notexceed the amount the Plan Administrator reasonably determines, underregulations issued by the U.S. Treasury Department under Section 409A ofthe Code, to be necessary to meet such emergency needs (including taxesincurred by reason of a taxable distribution), after taking into account theextent to which such hardship is or may be relieved through reimbursement orcompensation by insurance or otherwise or by liquidation of the Participant’sassets (to the extent that the liquidation of such assets would not itselfcause severe financial hardship).

####  

#### (b)              **Rules Adoptedby Plan Administrator**. The Plan Administrator shall have the authority to adopt additional rules relatingto hardship distributions.  Inadministering these rules, the Plan Administrator shall act in accordance withthe principle that the primary purpose of this Plan is to provide additionalretirement income, not additional funds for current consumption.

####  

# **ARTICLE 6**

#  

# **RIGHTS ARE LIMITED**

#  

## 6.1.          **BenefitsPayable Only From General Corporate Assets: Unsecured General Creditor Statusof Participant**.

##  

#### (a)              Payment to theParticipant or any Beneficiary hereunder shall be made from assets which shallcontinue, for all purposes, to be part of the general, unrestricted assets ofthe Corporation; no person shall have any interest in any such asset by virtueof any provision of this Plan.  TheCorporation’s obligation hereunder shall be an unfunded and unsecured promiseto pay money in the future.  To theextent that any person acquires a right to receive payments from theCorporation under the provisions hereof, such right shall be no greater thanthe right of any unsecured general creditor of the Corporation; no such personshall have or acquire any legal or equitable right, interest or claim in or toany property or assets of the Corporation.

####  

#### (b)              In the event that,in its discretion, the Corporation purchases an insurance policy or policiesinsuring the life of a Participant, or any employee of the Corporation, toallow the Corporation to recover or meet the cost of providing benefits inwhole or in part, hereunder, no Participant or Beneficiary shall have any rightswhatsoever therein or in said policy or the proceeds therefrom.  The Corporation shall be the sole owner andbeneficiary of any such insurance policy or property and shall possess and mayexercise all incidents of ownership therein.

 

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6.2.          **No Contract of Employment****.**  Nothingcontained herein shall be construed to be a contract of employment for any termof years, nor as conferring upon the Participant the right to continue to beemployed by the Corporation in his or her present capacity or in anycapacity.  It is expressly understoodthat this Plan relates only to the payment of deferred compensation for theParticipant’s services.

 

6.3.          **Benefits Not Transferable****.**  No Participantor Beneficiary under this Plan shall have any power or right to transfer,assign, anticipate, hypothecate or otherwise encumber any part of all theamounts payable hereunder.  No part ofthe amounts payable shall, prior to actual payment, 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, or dissolution of marriage. Any such attemptedassignment shall be void.

 

6.4.          **No Trust Created****.**  Except as setforth in Article 10, nothing contained in this Plan, and no action takenpursuant to its provisions by any person shall create, or be construed tocreate, a trust of any kind, or a fiduciary relationship between theCorporation and any other person.

 

**ARTICLE 7**

 

**BENEFICIARIES**

 

7.1.          **Beneficiary Designation****.**  TheParticipant shall have the right, at any time, to submit in a form prescribedby the Plan Administrator, a written designation of primary and secondarybeneficiaries to whom payment under this Plan shall be made in the event of hisor her death prior to complete distribution of the benefits payable.  Each Beneficiary designation shall becomeeffective only when receipt thereof is acknowledged in writing by the PlanAdministrator.  The Plan Administratorshall have the right, in its sole discretion, to reject any Beneficiarydesignation, which is not in a form satisfactory to the Plan Administrator.  Any attempt to designate a Beneficiary,otherwise than as provided in this Section 7.1, shall be ineffective.

 

7.2.          **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 thegenerality of the foregoing, the interest in the benefits hereunder of a spouseof a Participant who has predeceased the Participant or whose marriage with theParticipant has been dissolved shall automatically pass to the Participant andshall not be transferable by such spouse in any manner, including but notlimited to such spouse’s will, nor shall such interest pass under the laws ofintestate succession.

 

 

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7.3.          **Facility of Payment****.**  If adistribution is to be made to a minor, or to a person who is otherwiseincompetent, then the Plan Administrator may, in its discretion, make suchdistribution (i) to the legal guardian, or if none, to a parent of a minorpayee with whom the payee maintains his or her residence, or (ii) to theconservator or committee or, if none, to the person having custody of anincompetent payee.  Any such distributionshall fully discharge the Plan Administrator, the Corporation and Plan from furtherliability on account thereof.

 

**ARTICLE 8**

** **

**PLANADMINISTRATION**

** **

8.1.          **Responsibility of Administration of the Plan.**

 

#### (a)             The Plan Administrator shall be responsible for themanagement, operation and administration of the Plan.  The Plan Administrator may employ others torender advice with regard to its responsibilities under this Plan.  It may also allocate its responsibilities toothers and may exercise any other powers necessary for the discharge of itsduties.  The Plan Administrator shall beentitled to rely conclusively upon all tables, valuations, certifications,opinions and reports furnished by any actuary, accountant, controller, counselor other person employed or engaged by the Plan Administrator with respect tothe Plan.

 

#### (b)             The primary responsibility of the Plan Administratoris to administer the Plan for the benefit of the Participants and theirbeneficiaries, subject to the specific terms of the Plan.  The Plan Administrator shall administer thePlan in accordance with its terms and shall have the power to determine allquestions arising in connection with the administration, interpretation, andapplication of the Plan.  Any suchdetermination shall be conclusive and binding upon all persons and their heirs,executors, beneficiaries, successors and assigns.  The Plan Administrator shall have all powersnecessary or appropriate to accomplish its duties under the Plan.  The Plan Administrator shall also have the discretionand authority to make, amend, interpret, and enforce all appropriate rules andregulations for the administration of this Plan and decide or resolve any andall questions, including but not limited to, interpretations of this Plan andentitlement to or amount of benefits under this Plan, as may arise inconnection with the Plan.

 

8.2.          **Claims Procedure.**

 

#### (a)             **Claim****.**  A person who believes that he or she is beingdenied a benefit to which he or she is entitled under the Plan or such person’sauthorized representative (hereinafter collectively referred to as a “Claimant”)may file a written request for such benefit with the Vice President of HumanResources, setting forth his or her claim. The request must be addressed to the Vice President of Human Resourcesat his then principal place of business. Neither the Corporation, the Plan Administrator nor the Plan shallcharge a Claimant a fee or any costs in connection with making a claim orappealing an adverse benefit determination pursuant to this Section 8.2;provided, however, that, except as provided in Section 8.3(c), the Claimantshall pay the fees, costs and expenses of his own attorneys, accountants, orother professionals or representatives that he retains to make a claim orappeal under this Article 8.

 

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#### (b)             **Claim Decision****.**  Upon receiptof a claim, the Vice President of Human Resources shall advise the Claimantthat a reply will be forthcoming within 90 days and that the Vice President ofHuman Resources shall, in fact, deliver such reply within such period. The VicePresident of Human Resources may, however, extend the reply period for anadditional 90 days for reasonable cause, provided that the Vice President ofHuman Resources provides the Claimant with a written or electronic Notice ofExtension, as defined in Section 8.2(c) of this Plan, within theinitial 90 day period.  In no event shallan extension exceed a period of 180 days from the date the claim was initiallyreceived by the Vice President of Human Resources.  Upon receipt of a Disability claim, the VicePresident of Human Resources shall advise the Claimant that a reply will beforthcoming within 45 days and that the Vice President of Human Resourcesshall, in fact, deliver such reply within such period.  This period may be extended by the VicePresident of Human Resources for up to 30 days, provided that the VicePresident of Human Resources (i) determines that such extension isnecessary due to matters beyond his control, and (ii) provides a writtenor electronic Notice of Extension to the Claimant prior to the termination ofthe initial 45-day period.  If, prior tothe end of the first 30-day extension period, the Vice President of HumanResources determines that, due to matters beyond his control, he cannot make adetermination within the extension period, the period for making adetermination may be extended for an additional 30 days, provided that the VicePresident of Human Resources provides the Claimant with a Notice of Extensionprior to the expiration of the initial extension period.  In the event the Vice President of HumanResources extends the determination period of any claim due to a Claimant’sfailure to submit information necessary to decide the claim, the period formaking the determination shall be tolled from the date the Notice of Extensionis sent to the Claimant until the date the Vice President of Human Resourcesreceives the information.  If a claim isdenied in whole or in part, the Vice President of Human Resources shall adopt awritten opinion, using language calculated to be understood by the Claimant,setting forth to the extent applicable:

 

#### (i)            The specific reasons for such denial;

 

#### (ii)           Specific reference to pertinent provisions of thisPlan on which such denial is based;

 

#### (iii)          A description of any additional material orinformation necessary for the Claimant to perfect his or her claim and anexplanation why such material or such information is necessary;

 

#### (iv)          Appropriate information as to the steps to be taken ifthe Claimant wishes to submit the claim for review;

 

#### (v)           The time limits for requesting a review under Section 8.2(d) andfor review under Section 8.2(e) of this Plan;

 

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####  

#### (vi)          A statement that the Claimant has the right toarbitrate under Section 8.3 of this Plan and to bring a civil action underSection 502(a) of ERISA following an adverse determination on review;

 

#### (vii)         The date by which an appeal must be filed with respectto the adverse determination; and

 

#### (viii)        If the adverse determination is in connection with aDisability claim and if the Vice President of Human Resources relied on aninternal rule, guideline, protocol, or other similar criterion in making theadverse determination, the Notice shall either (i) state the specificrule, guideline, protocol, or other similar criterion, or (ii) include astatement that such internal rule, guideline, protocol, or other similarcriterion was relied upon in making the adverse determination and that a copyof such internal rule, guideline, protocol, or other similar criterion shall beprovided free of charge to the Claimant upon request.

 

#### (c)             **Notice of Extension****.**  For purposesof this Section 8.2, a “Notice of Extension” means a notice provided to aClaimant that indicates (i) the date the notice is sent to the Claimant, (ii) thespecial circumstances requiring an extension of time, and (iii) the dateby which the Vice President of Human Resources or the Plan Administrator, asthe case may be, expects to render the determination.  In the case of a Disability claim, the Noticeshall also (i) explain the standards on which entitlement to benefits isbased, (ii) explain the unresolved issues that prevent a decision on theclaim, (iii) specify the additional information needed to resolve thoseissues, if any, and (iv) provide the Claimant with at least 45 days toprovide the specified information.  Ifthe Notice of Extension is in connection with a Claimant’s failure to submitinformation necessary to decide the claim, the Notice shall also state that thedetermination period is tolled from the date the Notice is sent until the datethe Vice President of Human Resources or the Plan Administrator, as the casemay be, receives the information.

 

#### (d)             **Request for Review****.**  The Claimantmay request in writing no later than 60 days from the date the notice providedunder Section 8.2(b) of this Plan is sent to the Claimant that thePlan Administrator review the determination of the Vice President of HumanResources.  Such request must beaddressed to the Plan Administrator at its then principal place ofbusiness.  The date an appeal is filedshall be the date the Plan Administrator receives the written request from theClaimant, without regard to whether all the information necessary to make abenefit determination is filed with such request.  The Plan Administrator shall issue itswritten decision on each appeal no later than the date of the regularlyscheduled meeting of the Plan Administrator that immediately follows theClaimant’s request for a review, unless the request for review is filed within30 days preceding the date of such meeting, in which event the PlanAdministrator shall make a determination no later than the date of the secondregularly scheduled meeting of the Plan Administrator following the receipt ofthe request for review by the Plan Administrator.  If special circumstances (such as the need tohold a hearing or obtain additional information) require an extension of thetime for processing the appeal, the Plan Administrator shall issue its decisionas soon as possible but not later than the Board of Director’s third regularlyscheduled meeting after the date on which the appeal is filed.  The Plan Administrator shall provide aClaimant with a written Notice of Extension prior

 

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#### to the commencement of the extension.  If the Vice President of Human Resourcesdenies a Disability claim in whole or in part, a request for review must befiled with the Plan Administrator no later than 180 days from the date thenotice provided under Section 8.2(b) is sent to the Claimant.  The Plan Administrator shall issue itswritten decision on each appeal of a Disability claim within 45 days after thereceipt thereof, unless special circumstances (such as the need to hold ahearing or obtain additional information) require an extension of the time forprocessing the appeal, in which event the Plan Administrator shall issue itsdecision as soon as possible but not later than 90 days from the date theappeal is filed.  If the PlanAdministrator determines that an extension of time for processing is required,a Notice of Extension shall be provided to the Claimant prior to thetermination of the 45-day period.  In theevent the Plan Administrator requires an extension of time to make itsdetermination due to a Claimant’s failure to submit information necessary todecide a claim, the period for making a benefit determination shall be tolledfrom the date the Notice of Extension is sent to the Claimant until the datethe Plan Administrator receives the information.  If the Claimant does not request a review ofthe adverse determination within the applicable time limitations, he or sheshall be barred and estopped from challenging the determination.

 

#### (e)             **Review of Decision****.**  The PlanAdministrator shall provide the Claimant an opportunity to submit writtencomments, documents, records, and other information relating to the claim forbenefits.  The Plan Administrator shallreview and take into account all comments, documents, records, and otherinformation submitted by the Claimant relating to the claim, without regard towhether such information was submitted or considered in the initial benefitdetermination.  The Claimant shall beprovided upon request and free of charge, reasonable access to, and copies of, alldocuments, records, and other information relevant to the Claimant’s claim forbenefits.  A document, record, or otherinformation shall be considered relevant for purposes of the preceding sentenceif such document, record, or information was (i) relied upon by the VicePresident of Human Resources in making the benefit determination, (ii) wassubmitted, considered, or generated in the course of making the benefitdetermination, without regard to whether such document, record, or otherinformation was relied upon by the Vice President of Human Resources in makingthe benefit determination, or (iii) demonstrates compliance with theadministrative processes and safeguards required under Department of LaborRegulation Section 2560.501-1.  Inaddition, in the event of an adverse determination of a Disability claim, (i) anymember of the Plan Administrator who is either the Vice President of HumanResources who issued the initial adverse determination or a subordinate of suchindividual shall not participate with the Plan Administrator for purposes ofthe review of such claim, and (ii) the Plan Administrator shall notprovide any deference to the initial adverse determination of the VicePresident of Human Resources.  If theappeal of a Disability claim is based in whole or in part on a medicaljudgment, the Plan Administrator shall consult with a health care professionalwho has appropriate training and experience in the field of medicine involvedin the medical judgment.  Any health careprofessional the Plan Administrator engages for purposes of such consultationshall be an individual who is neither an individual who was consulted inconnection with the adverse benefit determination that is the subject of theappeal nor the subordinate of any such individual.  The Vice President of Human Resources shallprovide the identification of the medical or vocational experts whose advicewas obtained on behalf of the Plan in connection with the Claimant’s adversebenefit determination, without regard to whether the advice was relied upon bythe Vice President of Human Resources in making the adverse determination.

 

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#### (f)              **Adverse Benefit Determination onAppeal-Information Access.**  In the eventof an adverse benefit determination by the Plan Administrator, the PlanAdministrator shall provide the Claimant access to, and copies of, documents,records, and other information relating to the adverse benefit determination onappeal, whether or not such information was relied on by the Plan Administratorin reaching a determination on the claim.

 

#### (g)             **Notice of an Adverse Benefit Determination onAppeal.**  If the claim is granted on review, the PlanAdministrator shall provide the Claimant written notice of such determinationand the appropriate distribution, adjustment, or other action shall be made ortaken within a reasonable period of time. If the Plan Administrator denies the claim in whole or in part, the PlanAdministrator shall provide the Claimant with written notification of itsdetermination as soon as possible, but no later than 5 days after the adversebenefit determination is made.  Thewritten notice issued by the Plan Administrator shall set forth, in a mannercalculated to be understood by the Claimant, the following:

 

(i)            The specific reasons for the adversedetermination;

 

(ii)           The specific references to the pertinentPlan provisions on which the decision is based;

 

(iii)          Astatement that the Claimant is entitled to receive, upon request and free ofcharge, reasonable access to, and copies of, all documents, records, and otherinformation relevant to the Claimant’s claim for benefits; and

 

(iv)          A statement of the Claimant’s right toarbitrate under Section 8.3 of this Plan and to bring a civil action underSection 502(a) of ERISA.

 

If the adverse benefitdetermination is in connection with a Disability claim, the notice shall alsoprovide the following:

 

(v)           If the Plan Administrator relied on an internal rule,guideline, protocol, or other similar criterion in making the adversedetermination, the notice shall either (i) state the specific rule,guideline, protocol, or other similar criterion, or (ii) include astatement that such internal rule, guideline, protocol, or other similarcriterion was relied upon in making the adverse determination and that a copyof such internal rule, guideline, protocol, or other similar criterion shall beprovided free of charge to the Claimant upon request; and

 

(vi)          The following statement: “You and your plan may haveother voluntary alternative dispute resolution options, such as mediation.  One way to find out what may be available isto contact your local U.S. Department of Labor Office and your State insuranceregulatory agency.”

 

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8.3.          **Arbitration****.**  Any claim orcontroversy between the parties which the parties are unable to resolvethemselves, and which is not resolved through the claims procedure set forth inSection 8.2, including any claim arising out of a Participant’s employmentor the termination of that employment, and including any claim arising out of,connected with, or related to the formation, interpretation, performance orbreach of any provision of this Plan, and any claim or dispute as to whether aclaim is subject to arbitration, shall be submitted to and resolved exclusivelyby expedited arbitration by a single arbitrator in accordance with thefollowing procedures:

 

#### (a)             In the event of a claim or controversy subject to thisarbitration provision, the complaining party shall promptly send written noticeto the other party identifying the matter in dispute and the proposedremedy.  Following the giving of suchnotice, the parties shall meet and attempt in good faith to resolve thematter.  In the event the parties areunable to resolve the matter within 21 days, the parties shall meet and attemptin good faith to select a single arbitrator acceptable to both parties.  If a single arbitrator is not selected bymutual consent within 10 business days following the giving of the writtennotice of dispute, an arbitrator shall be selected from a list of nine personseach of whom shall be an attorney who is either engaged in the active practiceof law or a recognized arbitrator and who, in either event, is experienced in servingas an arbitrator in disputes between employers and employees, which list shallbe provided by the main office of the American Arbitration Association (“AAA”)having jurisdiction over Palo Alto, California or of the Federal Mediation andConciliation Service. If, within three business days of the parties’ receipt ofsuch list, the parties are unable to agree upon an arbitrator from the list,then the parties shall each strike names alternatively from the list, with thefirst to strike being determined by the flip of a coin.  After each party has had four strikes, theremaining name on the list shall be the arbitrator.  If such person is unable to serve for anyreason, the parties shall repeat this process until an arbitrator is selected.

 

#### (b)             Unless the parties agree otherwise, within 60 days ofthe selection of the arbitrator, a hearing shall be conducted before sucharbitrator at a time and a place in Palo Alto, California agreed upon by theparties.  In the event the parties areunable to agree upon the time or place of the arbitration, the time and placewithin Palo Alto, California shall be designated by the arbitrator afterconsultation with the parties.  Within 30days of the conclusion of the arbitration hearing, the arbitrator shall issuean award, accompanied by a written decision explaining the basis for thearbitrator’s award.

 

#### (c)             In any arbitration hereunder, the Corporation shallpay all administrative fees of the arbitration and all fees of the arbitrator,except that the Participant or Beneficiary may, if he wishes, pay up toone-half of those amounts.  Each partyshall pay its own attorneys’ fees, costs, and expenses, unless the arbitratororders otherwise.  The prevailing partyin such arbitration, as determined by the arbitrator, and in any enforcement orother court proceedings, shall be entitled, to the extent permitted by law, toreimbursement from the other party for all of the prevailing party’s costs(including but not limited to the arbitrator’s compensation), expenses, andattorneys’ fees.  The arbitrator shallhave no authority to add to or to modify this Plan, shall apply all applicablelaw, and shall have no lesser and no greater remedial authority than would acourt of law resolving the same claim or controversy. The arbitrator shall,upon an appropriate motion, dismiss any claim without an evidentiary hearing ifthe party bringing the motion establishes that it would be entitled to summaryjudgment if the matter had been pursued in court litigation.  The parties shall be entitled to reasonablediscovery subject to the discretion of the arbitrator.

 

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

 

#### (e)             This arbitration provision of the Plan shall extend toclaims against any parent, subsidiary, or affiliate of each party, and, whenacting within such capacity, any officer, director, shareholder, Participant,Beneficiary, or agent of each party, or of any of the above, and shall apply aswell to claims arising out of state and federal statutes and local ordinancesas well as to claims arising under the common law or under this Plan.

 

#### (f)              Notwithstanding the foregoing, and unless otherwiseagreed between the parties, either party may, in an appropriate matter, applyto a court for provisional relief, including a temporary restraining order orpreliminary injunction, on the ground that the arbitration award to which theapplicant may be entitled may be rendered ineffectual without provisionalrelief.

 

#### (g)             Any arbitration hereunder shall be conducted inaccordance with the employee benefit plan claims rules and procedures ofthe AAA then in effect; provided, however, that, (i) all evidencepresented to the arbitrator shall be in strict conformity with the legal rules ofevidence, and (ii) in the event of any inconsistency between the employeebenefit plan claims rules and procedures of the AAA and the terms of thisPlan, the terms of this Plan shall prevail.

 

#### (h)             If any of the provisions of this Section 8.3 aredetermined to be unlawful or otherwise unenforceable, in whole or in part, suchdetermination shall not affect the validity of the remainder of this Section 8.3,and this Section 8.3 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 court should find that the provisions ofthis Section 8.3 are not absolutely binding, then the parties intend anyarbitration decision and award to be fully admissible in evidence in anysubsequent action, given great weight by any finder of fact, and treated asdeterminative to the maximum extent permitted by law.

 

#### (i)              In the case of a Disability claim, the timeframesprovided for an appeal under Section 8.2 of this Plan shall apply forpurposes of this Section 8.3.  Arbitrationof a Disability claim under this Section 8.3 shall (i) be consideredone of the two levels of mandatory appeals permitted under Department of LaborRegulation Section 2560.503-1 and (ii) shall not preclude theClaimant from challenging the decision of the arbitrator under Section 502(a) ofERISA.

 

8.4.          **Notice****.**  Any notice,consent or demand required or permitted to be given under the provisions ofthis Plan shall be in writing and shall be signed by the party giving or makingthe same.  If such notice, consent ordemand is mailed, it shall be sent by United States certified mail, postageprepaid, addressed to the addressee’s last known address as shown on therecords of the Corporation.  The date ofsuch mailing shall be deemed the date of notice consent or demand.  Any person may change the address to whichnotice is to be sent by giving notice of the change of address in the manneraforesaid.

 

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**ARTICLE 9**

 

**AMENDMENT OR TERMINATION**

 

9.1.          **Amendment or Termination****.**

 

#### (a)             This Plan may be amended or terminated by theCorporation at any time, without notice to or consent of any person, pursuantto resolutions adopted by its Board of Directors.  Any such amendment or termination shall takeeffect as of the date specified therein and, to the extent permitted by law.

 

However,no such amendment or termination shall reduce:

 

(i)            the amount then credited to the Participant’s Account,or

 

(ii)           his or her vested percentage under Section 5.1.

 

If the Plan is terminated,(A) the portion of such Participant’s Account attributable to TotalDeferrals that are earned (i.e., the services that earned such Total Deferralsare performed) and vested before January 1, 2005 (which shall continue tobe governed by the original provisions of this Plan) will be distributed in onelump sum, and (B) the portion of such Participant’s Account attributableto Total Deferrals that are earned (i.e., the services that earned such TotalDeferrals are performed) or vested after December 31, 2004 (which shall begoverned by the terms and provisions of this First Amendment and Restatement)shall be distributed as and when such portion of such Account would have beendistributed if the Plan had not terminated.

 

#### (b)             Any other provision of this Plan to the contrarynotwithstanding, the Plan may be amended by the Corporation at any time, to theextent that, in the opinion of the Corporation, such amendment shall benecessary in order to ensure that the Plan will be characterized as a planmaintained for a select group of management or highly compensated employees, asdescribed in sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, or toconform the Plan to the requirements of any applicable law, including ERISA andthe Code.  No such amendment shall beconsidered prejudicial to any interest of a Participant or Beneficiaryhereunder.

 

**ARTICLE 10**

** **

**THE TRUST**

** **

10.1.        **Establishment of Trust****.**  The Corporation shall establish a grantortrust, of which the Corporation is the grantor, within the meaning of subpartE, part I, subchapter J, subtitle A of the Code, to pay benefits under thisPlan.

 

10.2.        **Interrelationship of the Plan and the Trust****.**  The provisionsof the Plan shall govern the rights of a Participant to receive distributionspursuant to the Plan.  The provisions of theTrust shall govern the rights of the Participant and the creditors of theCorporation to the assets transferred to the Trust.  The Corporation shall at all times remainliable to carry out its obligations under the Plan.  The Corporation’s obligations under the Planmay be satisfied with Trust assets distributed pursuant to the terms of theTrust.

 

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10.3.        **Contribution to the Trust****.**  Amounts may be contributed by the Corporationto the Trust in the sole discretion of the Corporation.

 

**ARTICLE 11**

** **

**MISCELLANEOUS**

 

11.1.        **Governing Law****.**  The Plan and the rights and obligations ofall persons hereunder shall be governed by and construed in accordance with thelaws of the State of California, other than its laws regarding choice of law,to the extent that such state law is not preempted by federal law.

** **

**INWITNESS WHEREOF,**the Corporation has executed this First Amendment and Restatement as of the dayand year above first written.

 
|   | The “Corporation”                           |
|--------|-------------------------------------------------------|
|   |                                                  |
|   | **COMMUNICATIONS & POWER  INDUSTRIES, INC.** |
|   |                                                  |
|   |                                                  |
|   | By:                                                   | /s/ JOEL A. LITTMAN |   |
|   |                                                  |
|   |                                                  |
|   | Title:                                                | CFO |   |
|        |                                                       |  |  |  |

 

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