Document:

exv10w7

Exhibit 10.7

Dell Inc.

Deferred Compensation Plan

Amended and Restated

Effective as of January 1, 2005

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	Article I. Definitions and Construction	 	 	2	 
	 

	 	 	1.1	 	 	Definitions
	 	 	2	 
	 

	 	 	1.2	 	 	Number and Gender
	 	 	8	 
	 

	 	 	1.3	 	 	Headings
	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article II. Participation	 	 	8	 
	 

	 	 	2.1	 	 	Participation
	 	 	8	 
	 

	 	 	2.2	 	 	Termination of Participation
	 	 	9	 
	 

	 	 	2.3	 	 	Reemployment of a Participant
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article III. Contributions	 	 	10	 
	 

	 	 	3.1	 	 	Participant Compensation Deferrals
	 	 	10	 
	 

	 	 	3.2	 	 	Company Credits
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article IV. Allocations to Participant Accounts	 	 	12	 
	 

	 	 	4.1	 	 	Individual Accounts
	 	 	12	 
	 

	 	 	4.2	 	 	Investment of Accounts
	 	 	13	 
	 

	 	 	4.3	 	 	Allocation of Net Income or Loss and Changes in Value
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article V. Hypothetical Investment of Accounts	 	 	14	 
	 

	 	 	5.1	 	 	Hypothetical Investment of Accounts
	 	 	14	 
	 

	 	 	5.2	 	 	Designation of Investment Funds
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article VI. Vested Interest	 	 	15	 
	 

	 	 	6.1	 	 	Vesting of Compensation Deferrals Account
	 	 	15	 
	 

	 	 	6.2	 	 	Vesting of Company Credits Account
	 	 	15	 
	 

	 	 	6.3	 	 	Forfeitures
	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article VII. In-Service Withdrawals	 	 	17	 
	 

	 	 	7.1	 	 	Rules Governing Grandfathered Benefits.
	 	 	17	 
	 

	 	 	7.2	 	 	Rules Governing 409A Balances
	 	 	19	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article VIII. Benefit Distributions	 	 	20	 
	 

	 	 	8.1	 	 	General Rules
	 	 	20	 
	 

	 	 	8.2	 	 	Rules Governing Form and Timing for Payment of Grandfathered Benefits
	 	 	21	 
	 

	 	 	8.3	 	 	Rules Governing Form and Timing for Payment of 409A Balances
	 	 	22	 
	 

	 	 	8.4	 	 	Designation of Beneficiaries
	 	 	24	 

 i 

 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.5	 	 	Payments Pursuant to a QDRO
	 	 	25	 
	 

	 	 	8.6	 	 	Payer of Benefits
	 	 	25	 
	 

	 	 	8.7	 	 	Unclaimed Benefits
	 	 	25	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article IX. Transition Rules	 	 	26	 
	 

	 	 	9.1	 	 	Deferral Elections for Plan Years 2005 and 2006
	 	 	26	 
	 

	 	 	9.2	 	 	Distribution Elections
	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article X. Administration of Plan	 	 	27	 
	 

	 	 	10.1	 	 	Appointment of Committee
	 	 	27	 
	 

	 	 	10.2	 	 	Term, Vacancies, Resignation, and Removal
	 	 	27	 
	 

	 	 	10.3	 	 	Self-Interest of Committee Members
	 	 	27	 
	 

	 	 	10.4	 	 	Committee Powers and Duties
	 	 	28	 
	 

	 	 	10.5	 	 	Claims Review
	 	 	28	 
	 

	 	 	10.6	 	 	Company to Supply Information
	 	 	29	 
	 

	 	 	10.7	 	 	Indemnity
	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article XI. Purpose and Unfunded Nature of the Plan	 	 	30	 
	 

	 	 	11.1	 	 	Purpose of Plan
	 	 	30	 
	 

	 	 	11.2	 	 	Unfunded Nature of Plan
	 	 	30	 
	 

	 	 	11.3	 	 	Funding of Obligation
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article XII. Participating Entities	 	 	31	 
	 

	 	 	12.1	 	 	Designation of Participating Entities
	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article XIII. Miscellaneous	 	 	32	 
	 

	 	 	13.1	 	 	Not Contract of Employment
	 	 	32	 
	 

	 	 	13.2	 	 	Alienation of Interest Forbidden
	 	 	32	 
	 

	 	 	13.3	 	 	Withholding
	 	 	32	 
	 

	 	 	13.4	 	 	Amendment and Termination
	 	 	33	 
	 

	 	 	13.5	 	 	Severability
	 	 	34	 
	 

	 	 	13.6	 	 	Governing Laws
	 	 	34	 

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DELL INC.

DEFERRED COMPENSATION PLAN

     Dell Inc., a corporation organized and existing under the laws of the State of Delaware (the
“Company”), hereby restates the Dell Computer Corporation Deferred Compensation Plan, to be
retitled as the Dell Inc. Deferred Compensation Plan (the “Plan”), such restatement to be effective
as of January 1, 2005, except as otherwise provided herein;

W I T N E S S E T H:

     WHEREAS, the Company wishes to promote in certain of its highly compensated employees, and
those of its affiliates, the strongest interest in the successful operation of the business and
increased efficiency in their work, to align the financial interests of such employees with those
of Company shareholders and to provide an opportunity for accumulation of funds for their
retirement; and

     WHEREAS, the Plan was initially adopted effective May 1, 1991, and previously has been amended
and restated effective as of April 1, 1996, January 1, 1999, January 1, 2001, and January 1, 2002;
and

     WHEREAS, it is intended that the Plan be “unfunded” for purposes of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) and not be construed to provide income to any
participant or beneficiary under the Internal Revenue Code of 1986, as amended (the “Code”) prior
to actual receipt of benefits hereunder;

     WHEREAS, the Plan’s terms for the period between May 1, 1991 and December 31, 2004 have been
documented under the terms of the prior plan documents, summary plan descriptions, administrative
forms, administrative rules, summaries and other documentation as have been previously used by the
Company and the Committee to administer the Plan, which terms are expressly intended to continue to
apply to all Grandfathered Benefits (defined below); and

     WHEREAS, the Company desires to amend and restate the Plan, effective January 1, 2005, except
as otherwise provided herein, to revise the Plan’s terms to satisfy the applicable requirements of
Code Section 409A with regard to amounts that are not classified as Grandfathered Benefits and
intends that the Plan be interpreted and administered in accordance with Code Section 409A and any
guidance issued thereunder; and

     NOW THEREFORE, the Plan is hereby restated in its entirety as follows with no interruption in
time, effective as of January 1, 2005, except as otherwise indicated herein:

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ARTICLE I.

Definitions and Construction

	1.1	 	Definitions. Where the following words and phrases appear in the Plan, they shall
have the respective meanings set forth below, unless their context clearly indicates to the
contrary.

	 	(a)	 	Account: A Participant’s Compensation Deferrals and Company Credits
Account, if any. The amounts credited to the account shall be segregated and separately
accounted for as follows:

	 	(1)	 	Grandfathered Benefits. The portion of a Participant’s
Compensation Deferral and Company Credits Account, as applicable, which holds
amounts credited to such account for Plan Years beginning prior to January 1,
2005 and which are 100% vested as of December 31, 2004.
	 
	 	(2)	 	409A Benefits. The portion of a Participant’s
Compensation Deferral and Company Credits Account, as applicable, which holds
both amounts credited to such account for Plan Years beginning on and after
January 1, 2005, and amounts credited to such account for Plan Years beginning
prior to January 1, 2005 which were not 100% vested as of December 31, 2004. At
the direction of the Committee, the Plan shall establish a subaccount for each
Plan Year beginning on and after January 1, 2005, which shall hold the total of
amounts credited to a Participant’s Compensation Deferral and Company Credits
Account for the applicable Plan Year.

	 	(b)	 	Affiliate: Each trade or business (whether or not incorporated), which
together with Dell Inc. would be deemed to be a “single employer” within the meaning of
Code Section 414(b), (c), (m), or (o).
	 
	 	(c)	 	Base Salary: A Participant’s gross base salary payable in the ordinary
course of business under an Employer’s payroll system excluding periodic bonuses.
	 
	 	(d)	 	Base Salary Deferral(s): Base Salary deferred by a Participant pursuant
to Section 3.1.
	 
	 	(e)	 	Bonus: The Annual Incentive Bonus Plan and Annual Incentive
Compensation Plan, if any, paid in cash by an Employer to or for the benefit of a
Participant for services rendered or labor performed while a Participant during a Bonus
Year. The Bonus also may include any long-term cash incentive payments provided to
newly hired executives. For purposes of this Plan, the term Bonus expressly excludes
any bonuses received under any other compensation or bonus plan sponsored by an
Employer. Except as provided above, no additional bonus payments shall be classified
as a Bonus under this Plan.
	 
	 	(f)	 	Bonus Deferral(s): Bonus deferred by a Participant pursuant to Section
3.1.
	 
	 	(g)	 	Bonus Year: The twelve consecutive month period ending on the last day
of each fiscal year; provided, however, that the Bonus Year may be changed by the

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	 	 	 	Committee to reflect the twelve month period used by the Company under the Annual
Incentive Compensation Bonus program for each group of Eligible Employees hereunder, if
any.

	 	(h)	 	Change of Control:

	 	(1)	 	With Respect to Grandfathered Benefits: With respect to
Grandfathered Benefits, a Change of Control occurs upon the earliest to occur
of any of the following:

	 	(A)	 	The acquisition by any person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934 (“Exchange Act”)) of 20% or more of
either (i) the then outstanding shares of stock, or (ii) the combined
voting power of the then outstanding voting securities of Dell Inc.;
provided, however, that for purposes of this Paragraph (A), the
following acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from Dell Inc., (ii) any acquisition by Dell
Inc., (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Dell Inc. or any corporation
controlled by Dell Inc., (iv) any acquisition by Mr. Michael S. Dell,
his “affiliates” (as defined in Rule 12b-2 promulgated under the
Exchange Act) or “associates” (as defined in Rule 12b-2 promulgated
under the Exchange Act), his heirs, or any trust or foundation to which
he has transferred or may transfer stock (collectively, “Michael
Dell”), or (v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii), and (ii) of
Paragraph (C) of this Section 1.1(h); or
	 
	 	(B)	 	Individuals who constitute the Incumbent Board
(as later defined) cease for any reason to constitute at least a
majority of the Directors; or
	 
	 	(C)	 	Approval by the stockholders of Dell Inc. of a
reorganization, merger, or consolidation, or sale or other disposition
of all or substantially all of the assets of Dell Inc., or the
acquisition of assets of another corporation (a “Business
Combination”), unless following such Business Combination (i) all or
substantially all of the persons who were the beneficial owners,
respectively, of the outstanding stock and outstanding voting
securities of Dell Inc. immediately prior to such Business Combination
beneficially own, directly or indirectly, immediately following such
Business Combination more than 60% of the then outstanding shares of
common stock and more than 60% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of such
transaction owns Dell Inc. or all or substantially all of Dell Inc.’s
assets either

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	 	 	 	directly or through one or more subsidiaries), (ii) no
person (excluding any employee benefit plan (or related trust) of
Dell Inc., such corporation resulting from such Business Combination,
and Michael Dell) beneficially owns, directly or indirectly, 20% or
more of the then outstanding shares of common stock of the
corporation resulting from such Business Combination or 20% or more
of the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination, and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of
the Incumbent Board (as later defined) at the time of the execution
of the initial agreement, or of the action of the Directors,
providing for such Business Combination; or
	 
	 	(D)	 	Approval by the stockholders of Dell Inc. of a
complete liquidation or dissolution of Dell Inc.

	 	 	 	For purposes of this Subsection (1), “Incumbent Board” shall mean the
individuals who, as of the Effective Date, constitute the Directors;
provided, however, that any individual becoming a Director, subsequent to
such date whose election, or nomination for election by Dell Inc.’s
stockholders, was approved by a vote of at least a majority of the Directors
then comprising the Incumbent Board shall be considered a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of Directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Directors.
	 
	 	(2)	 	With Respect to 409A Benefits: With respect to 409A
Benefits, the occurrence of any event or transaction constituting a “change in
ownership or effective control” within the meaning of Treasury Regulations or
other Internal Revenue Service guidance promulgated pursuant to Code Section
409A(a)(2)(A)(v). The occurrence of a Change of Control will be determined and
certified by the Committee strictly in accordance with the foregoing sentence;
the Committee may not exercise discretion in applying the requirements of
relevant Internal Revenue Service guidance in the determination of the
occurrence of a Change of Control. For purposes of this provision, the
following acquisitions of stock by the Company shall not constitute a Change of
Control: (i) any acquisition directly from Dell Inc., (ii) any acquisition by
Dell Inc., (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Dell Inc. or any corporation controlled by
Dell Inc., (iv) any direct or indirect acquisition by Mr. Michael S. Dell.

	 	(i)	 	Code: The Internal Revenue Code of 1986, as amended from time to time.

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	 	(j)	 	Committee: The administrative committee appointed by the Leadership
Development and Compensation Committee of the Board of Directors of the Company to
administer the Plan.
	 
	 	(k)	 	Company: Dell Inc., a corporation organized and existing under the laws
of the State of Delaware, or its successor or successors.
	 
	 	(l)	 	Company Credits: The amount, if any, credited to a Participant’s
Company Credits Account pursuant to Section 3.2.
	 
	 	(m)	 	Company Credits Account: Included within a hypothetical account for
each Participant which is credited with his Company Credits, pursuant to Section 3.2,
and is credited with (or debited for) such account’s pro rata share of allocable net
income (or net loss) as provided in Section 4.3.
	 
	 	(n)	 	Compensation: A Participant’s Compensation for purposes of this Plan
shall be Compensation as defined under Section 1.9 of the Dell Inc. 401(k) Plan, except
that the limitation of Code Section 401(a)(17)(B) set forth in Section 1.9(b) of such
plan shall not be applied.
	 
	 	(o)	 	Compensation Deferral(s): Base Salary Deferrals and Bonus Deferrals.
Notwithstanding any provision of this Plan or a Participant’s deferral election,
Compensation Deferrals shall not be taken from amounts paid by an Affiliate that is not
incorporated under the laws of the United States.
	 
	 	(p)	 	Compensation Deferrals Account: Included within a hypothetical account
for each Participant which is credited with his Compensation Deferral pursuant to
Section 3.1, and credited with (or debited for) such account’s pro rata share of
allocable net income (or net loss) as provided in Section 4.3.
	 
	 	(q)	 	Directors: The Board of Directors of Dell Inc.
	 
	 	(r)	 	Disability:

	 	(1)	 	With Respect to Grandfathered Benefits: With respect to
Grandfathered Benefits, a Disability is a physical or mental condition which,
as determined in the sole discretion of the Committee, totally and presumably
permanently prevents a Participant from engaging in any substantial or gainful
employment; provided, however, that an individual shall be deemed to be
disabled if he is determined to be disabled under the terms of the Dell Inc.
401(k) Plan (prior to its restatement effective January 1, 2005).
	 
	 	(2)	 	With Respect to 409A Benefits: With respect to 409A
Benefits, a Participant will be considered to have incurred a Disability for
Plan purposes if the Participant:

	 	(A)	 	Is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can

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	 	 	 	be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months, or
	 
	 	(B)	 	Is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than
twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan
sponsored by an Employer.

Any determination of Disability under this Subsection (2) may be made by any
person, including the administrator of a disability insurance program, and
the Plan need not specify who will make the determination. The determination
shall be made in accordance with the requirements of Code Section 409A and
any guidance issued thereunder.

	 	(s)	 	Effective Date: January 1, 2005, except as otherwise provided herein.
	 
	 	(t)	 	Election Date: The first day of the Plan Year with respect to Base
Salary Deferrals and the last day of the sixth month of a Bonus Year with respect to
Bonus Deferrals.
	 
	 	(u)	 	Employee: Any individual on the payroll of an Employer (i) whose wages
from the Employer are subject to withholding for purposes of Federal income taxes and
for purposes of the Federal Insurance Contributions Act, (ii) who is included within a
“select group of management or highly compensated employees,” as such term is used in
ERISA Section 401(a)(1), and (iii) who is designated by the Committee as eligible to
participate in this Plan.
	 
	 	(v)	 	Employer or Participating Employer: The Company and any Affiliate of
the Company to the extent that (i) an Employee of such Affiliate is a Participant
hereunder, and (ii) the Affiliate has adopted the Plan in accordance with the
provisions of Article XII.
	 
	 	(w)	 	ERISA: Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as amended from time to time.
	 
	 	(x)	 	Investment Fund(s): The investment fund(s) designated by the Committee
from time to time for the hypothetical investment of a Participant’s Accounts pursuant
to Article V.
	 
	 	(y)	 	Participant: An Employee participating in the Plan in accordance with
the provisions of Section 2.1.
	 
	 	(z)	 	Plan: The Dell Inc. Deferred Compensation Plan, as amended from time to
time.
	 
	 	(aa)	 	Plan Year: The twelve (12)-consecutive month period commencing January
1 of each year.

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	 	(bb)	 	Retirement Date: The date upon which a Participant attains sixty-five
(65) years of age.
	 
	 	(cc)	 	Separation From Service or Separates From Service: The termination of
Participant’s employment with the Company in accordance with the Company’s policies and
procedures which is not an authorized leave of absence (as determined under the
Company’s standard leave policies); provided, however, that the Company and the
Participant reasonably anticipate that no further services will be performed after the
termination date or that the level of bona fide services the Participant will perform
after such date (whether as an employee or as an independent contractor) would
permanently decrease to no more than twenty percent (20%) of the average level of bona
fide services performed (whether as an employee or as an independent contractor) over
the immediately preceding thirty-six (36)-month period (or the full period of services
to the Company if the Participant has been providing services to the Company for less
than thirty-six (36) months).
	 
	 	(dd)	 	Specified Employee: The terms “Specified Employee” means (i) an officer
of an Employer earning more than $135,000 per year, as adjusted from time to time in
accordance with Internal Revenue Service guidelines, (ii) a five per cent (5%) owner of
a Participating Employer, or (iii) a one percent (1%) owner of a Participating Employer
having Compensation from the Participating Employer of more than $150,000, all as
determined in accordance with Sections 409A and 416(i) of the Code and applicable
Treasury Regulations issued thereunder. The Company shall designate those individual
Participants who are Specified Employees pursuant to any policy established by the
Board or Committee as applicable. In the event that a separate policy is not
established by the Board or Committee, this determination shall be made by the Board or
Committee in accordance with Code Sections 409A and Treasury Regulation Section
1.409A-1(i). This designation shall be made following each calendar year and shall
apply during the entire determination year, which shall be each April 1st
through March 31st.
	 
	 	(ee)	 	Trust or Trust Fund: The fund consisting of funds, investments and
properties, if any, held pursuant to the provisions of the Trust Agreement, together
with all income, profit, and increments thereto.
	 
	 	(ff)	 	Trust Agreement: The Dell Computer Corporation Deferred Compensation
Trust, entered into between the Company and the Trustee pursuant to Section 11.3, as
such agreement may be amended from time to time.
	 
	 	(gg)	 	Trustee: The corporation, individual or individuals appointed by the
Directors to administer the Trust Fund in accordance with the terms of the Trust
Agreement.
	 
	 	(hh)	 	Unforeseeable Financial Emergency:

	 	(1)	 	With Respect to Grandfathered Benefits: With respect to
Grandfathered Benefits, an Unforeseeable Financial Emergency is an unexpected
need of the Participant for cash, which (i) arises from an illness, casualty
loss, sudden

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	 	 	 	financial reversal, or such other unforeseeable occurrence that is
caused by an event beyond the control of the Participant, (ii) would result in
severe financial hardship to the Participant if his Compensation Deferral
election was not canceled pursuant to Section 3.1(c) or if a withdrawal
pursuant to Section 7.1 was not permitted, and (iii) cannot be reasonably
satisfied from other resources of the Participant. Cash needs arising from
foreseeable events, such as the purchase of a house or education expenses for
children, shall not be considered to be the result of an Unforeseeable
Financial Emergency.
	 
	 	(2)	 	With Respect to 409A Benefits: With respect to 409A
Benefits, an Unforeseeable Financial Emergency is a severe financial hardship
to the Participant resulting from any of the following:

	 	(A)	 	An illness or accident of the Participant or
the illness or accident of the Participant’s spouse or dependent (as
defined in Code Section 152(a));
	 
	 	(B)	 	Loss of the Participant’s property due to
casualty; or
	 
	 	(C)	 	Other similar extraordinary and unforeseeable
circumstance arising as a result of events beyond the Participant’s
control.

Any determination of Unforeseeable Financial Emergency under this Subsection
(2) shall be made in accordance with the requirements of Code Section 409A
and any guidance issued thereunder.

	 	(ii)	 	Valuation Dates: Each day the NASDAQ is open for business.
	 
	 	(jj)	 	Vested Interest: The percentage of a Participant’s Accounts that,
pursuant to Article VI, is vested.

	1.2	 	Number and Gender. Wherever appropriate herein, words used in the singular shall be
considered to include the plural, and words used in the plural shall be considered to include
the singular. The masculine gender, where appearing in the Plan, shall be deemed to include
the feminine gender.
	 
	1.3	 	Headings. The headings of Articles and Sections herein are included solely for
convenience, and if there is any conflict between such headings and the text of the Plan, the
text shall control.

ARTICLE II.

Participation

	2.1	 	Participation.

	 	(a)	 	Prior to the first day of each Plan Year, the Committee, in its sole
discretion, shall select and notify those Employees who are newly eligible to become
Participants as

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of the first day of the immediately following Plan Year. Any such
eligible Employee may become a Participant on the first day of the immediately
following Plan Year or on the first day of any subsequent Plan Year (with respect to
Base Salary deferrals) or as of the first day of any subsequent Bonus Year (with
respect to Bonus deferrals) by executing and filing with the Committee, prior to the
applicable Election Date, the enrollment form prescribed by the Committee in accordance
with Article III.

	 	(b)	 	Notwithstanding Subsection (a) above, if an individual is designated by the
Committee as an Employee following the first day of a Plan Year (with respect to Base
Salary deferrals) or following the first day of a Bonus Year and prior to the Election
Date for a Bonus Year (with respect to Bonus deferrals), such eligible Employee may
elect to become a Participant as follows:

	 	(1)	 	With respect to Base Salary Deferrals, by filing a deferral
election with the Committee during the thirty (30)-day period commencing on the
date of such designation, with such election to be effective with respect to
Base Salary earned after his initial Base Salary Deferral election is
effective; or prior to the Election Date for any subsequent Plan Year, with
such election to be effective with respect to Base Salary earned in such
subsequent Plan Year; and
	 
	 	(2)	 	With respect to Bonus Deferrals, by filing a deferral election
with the Committee during the thirty (30)-day period commencing on the date of
such designation, with such election to be effective with respect to a Bonus
attributable to services performed in the Bonus Year that contains such
Election Date. If the Bonus deferral election is filed within the first six
months of the Bonus Year, such election shall apply to the entire Bonus paid
for the Bonus Year. If the Bonus deferral election is filed after the end of
the first six months of the Bonus Year, the Bonus deferral election shall apply
to a portion of the Participant’s Bonus which is earned following the date such
election is filed. This amount shall be determined by multiplying the total
amount of such Bonus by the ratio of: (i) the number of days remaining in the
computation period (following the date the election is filed, and (ii) the
total number of days in the computation period (typically 365 for annual
bonuses (366 in any year that computation period that includes April during a
year that is classified as a “leap year)).

	 	(c)	 	Once an individual has been designated as an Employee and commences Plan
participation, he shall remain a Participant eligible to participate in the Plan each
Plan Year or Bonus Year until his participation is terminated in accordance with
Section 2.2 or the Committee terminates his designation as an Employee under this Plan.

	2.2	 	Termination of Participation. Notwithstanding any provision herein to the contrary,
an individual who has become or is entitled to become a Participant of the Plan shall
cease to be or entitled to be a Participant effective
as of the earliest to occur of the following: (i) the
date the Participant is no longer employed by an
Employer, (ii) the first day of the Plan Year

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	 	 	following the date on which the Participant elects to terminate
his deferral elections as permitted under the Plan’s
terms or (iii) the first day of the Plan Year following
the date on which the Committee determines that the
Participant is no longer eligible to participate in
the Plan.
	 
	2.3	 	Reemployment of a Participant.

	 	(a)	 	A Participant who terminates employment with an Employer and is subsequently
rehired by an Employer shall not be entitled to commence or continue participation in
the Plan unless and until he is again eligible to become a Participant in accordance
with Section 2.1. In the case of such a rehired Participant, his recommencement of Plan
participation, if any, shall be considered as his initial commencement of participation
for purposes of the Plan. If the Participant is rehired within twenty four months
following his termination of employment, such individual shall not be eligible for
reenrollment in the Plan until the next annual enrollment period.
	 
	 	(b)	 	A Participant whose employment is transferred to an Affiliate that is not a
Participating Employer, or to a position that causes such individual to be ineligible
to participate in the Plan, and whose employment is subsequently transferred to a
Participating Employer, or to a position that causes such individual to be eligible to
participate in the Plan, shall be permitted to recommence Plan participation. If the
Participant becomes eligible to participate in the Plan within twenty four months
following the date he ceased to be eligible to participate in the Plan, such individual
shall not be eligible for reenrollment in the Plan until the next annual enrollment
period.

ARTICLE III.

Contributions

	3.1	 	Participant Compensation Deferrals. Each Participant may elect to defer a portion of
his Compensation in accordance with this Section. Compensation not deferred by a Participant
pursuant to this Section shall, for purposes of this Plan, be received by such Participant in
cash.

	 	(a)	 	Base Salary Deferrals.

	 	(1)	 	Each Participant may elect to defer receipt of an integral
percentage from one percent (1%) to fifty percent (50%) of his Base Salary for
any Plan Year under the Plan as a Base Salary Deferral. Notwithstanding the
preceding, the Committee may, by resolution, provide that the maximum deferral
limit for certain groups of Participants shall be less than fifty percent (50%)
with such determination, if any, to be effective as of the first day of the
following Plan Year. Such election must be made in the form and within the time
period required by the Committee.
	 
	 	(2)	 	A Participant’s election to defer Base Salary for any Plan Year
under the Plan must be made prior to the Election Date for Base Salary
Deferrals and shall be irrevocable for such Plan Year.

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	 	(3)	 	If an Employee becomes initially eligible under the Plan
following an Election Date, he may make an election to defer Base Salary, which
election shall, as provided in Paragraph (4) below, apply to amounts earned
after the election is filed.
	 
	 	(4)	 	A Participant’s election to make Base Salary deferrals shall
become effective as of the Election Date next following the date such
Participant executes and files with the Committee the form described in
Paragraph (1) above. Notwithstanding the foregoing, if an Employee is
designated as initially eligible under the Plan following an Election Date,
such Employee’s election to make Base Salary deferrals shall become effective
as soon as administratively feasible following the date such election is
received by the Committee provided the election is made within 30 days of being
designated an eligible Employee; provided, however, that such election shall
apply no earlier than the first day of the payroll period coincident with or
next following such date.
	 
	 	(5)	 	The reduction of a Participant’s Base Salary pursuant to this
election shall be effected by Base Salary reductions as of each payroll period
within the Plan Year.
	 
	 	(6)	 	A Participant shall be deemed to have elected the same Base
Salary Deferral percentage and the same form of distribution pursuant to this
Subsection for a Plan Year that was in effect for the immediately preceding
Plan Year unless such Participant elects a new deferral percentage or a new
form of distribution for the Plan Year in accordance Paragraph (1) above or
elects to terminate his deferral election under the Plan effective as of the
first day of the immediately following Plan Year.

	 	(b)	 	Bonus Deferrals.

	 	(1)	 	Each Participant may elect to defer receipt of an integral
percentage of from 1% to 100% of his Bonus for any Bonus Year under the Plan as
a Bonus Deferral. Such election must be made in the form and within the time
period required by the Committee. Notwithstanding any provision hereof, the
portion of a Participant’s Bonus which is deferred pursuant to this Subsection
shall be subject to withholding for applicable payroll taxes (i.e., amounts
required to be withheld under Code Section 3121(v)) and such taxes shall be
netted from the portion of his Bonus deferred hereunder.
	 
	 	(2)	 	A Participant’s election to defer a Bonus under the Plan must
be made on or prior to the Election Date for Bonus Deferrals, and such election
shall be irrevocable for such Bonus Year.
	 
	 	(3)	 	If an Employee becomes initially eligible under the Plan
following an Election Date for Bonus Deferrals, he shall be eligible to make a
Bonus Deferral Election for such Bonus Year as provided in Section 2.1(b)(2).

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	 	(4)	 	The reduction of a Participant’s Bonus pursuant to this
election shall be effected at the time such Bonus is paid to such Participant
in one lump sum deferral.
	 
	 	(5)	 	A Participant’s election to defer a Bonus during a Bonus Year
shall not apply to a Bonus paid during any subsequent Bonus Year.

	 	(c)	 	Cancellation of Base Salary Deferral Election. A Participant may not
cancel or modify his Base Salary Deferral election applicable to a Plan Year at any
time during a Plan Year.
	 
	 	(d)	 	Cancellation of Bonus Deferral Election. A Participant may not cancel
or modify his Bonus Deferral election applicable to a Bonus Year after such election is
submitted to the Committee.
	 
	 	(e)	 	Crediting of Deferrals. Compensation Deferrals made by a Participant
shall be credited to such Participant’s Compensation Deferrals Account as of a date
determined in accordance with procedures established from time to time by the
Committee.

	3.2	 	Company Credits. As of any date or dates selected by the Company, the Company may
credit a Participant’s Account with an amount, if any, as the Company in its sole discretion
shall determine. Such credits may be made on behalf of some Participants but not others, and
such credits may vary in amount among individual Participants. Each Participant’s Account
shall be further divided into separate investment fund subaccounts corresponding to the
investment fund elected by the Participant pursuant to Article V.

ARTICLE IV.

Allocations to Participant Accounts

	4.1	 	Individual Accounts. The Committee shall create and maintain adequate records to
disclose the interest hereunder of each Participant, former Participant and Beneficiary. Such
records shall be in the form of an Individual Account (including applicable subaccounts)
reflecting all credits and debits made to such Account in the manner herein described. This
Account shall be constituted as follows:

	 	(a)	 	Amounts attributable to Compensation Deferrals shall be credited to the
Participant’s Compensation Deferral Portion of his Account.
	 
	 	(b)	 	Amounts attributable to Company Credits shall be credited to the Participant’s
Company Credits Portion of his Account.
	 
	 	(c)	 	The Account shall be segregated into subaccounts for Grandfathered Benefits and
409A Benefits and accounted for separately.
	 
	 	(d)	 	The subaccount attributable to Grandfathered Benefits shall be credited with
the Participant’s Compensation Deferral Portion of the Account as well as the Company

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	 	 	 	Credits Portion of the Account, as applicable, which was 100% vested as of December 31,
2004.
	 
	 	(e)	 	The subaccount attributable to 409A Benefits shall be credited with the
Participant’s Compensation Deferral Portion of the Account and Company Credits portion
of the Account, as applicable, which was not vested as of December 31, 2004, and with
all subsequent amounts credited to the Participant’s Individual Account for Plan Years
beginning on and after January 1, 2005, whether or not 100% vested.
	 
	 	(f)	 	For each subaccount holding 409A Benefits, the Committee shall establish a
separate subaccount for each Plan Year beginning on and after January 1, 2005, to which
shall be credited the total of the Participant’s Compensation Deferrals and Company
Credits for the applicable Plan Year.

	4.2	 	Investment of Accounts. The Committee shall credit allocable earnings and losses to
each Participant’s Individual Account according to the hypothetical investments made by a
Participant pursuant to the terms of Article V.
	 
	4.3	 	Allocation of Net Income or Loss and Changes in Value.

	 	(a)	 	As of each Valuation Date, the Committee shall determine the fair market value
and the net income (or net loss) of each Investment Fund for the period elapsed since
the next preceding Valuation Date. The net income (or net loss) of each Investment Fund
since the next preceding Valuation Date shall be ascertained by the Committee in such
manner as it deems appropriate, which may include expenses, if any, of administering
the Investment Fund, the Trust, and the Plan.
	 
	 	(b)	 	For purposes of crediting allocable net income (or net loss), each
Participant’s Individual Account shall be divided into subaccounts to reflect the
hypothetical investment of such Participant’s Account in a particular Investment Fund
or Investment Funds pursuant to Article V. As of each Valuation Date, the net income
(or net loss) of each Investment Fund, separately and respectively, shall be allocated
among the corresponding subaccounts of the Participants who had such corresponding
subaccounts invested in such Investment Fund since the next preceding Valuation Date,
and each such corresponding subaccount shall be credited with (or debited for) that
portion of such net income (or net loss) that the value of each such corresponding
subaccount on such next preceding Valuation Date was of the value of all such
corresponding subaccounts on such date; provided, however, that the value of such
subaccounts as of the next preceding Valuation Date shall be reduced by the amount of
any distributions made therefrom since the next preceding Valuation Date.
	 
	 	(c)	 	So long as there is a balance credited to any Account, such Account shall
continue to share in earnings (or loss) allocations pursuant to this Section.

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ARTICLE V.

Hypothetical Investment of Accounts

	5.1	 	Hypothetical Investment of Accounts. The Committee shall from time to time select,
add, and/or delete Investment Funds for purposes of the hypothetical investment of
Participants’ Account. For purposes of crediting allocable earnings and losses and valuation
of each Participant’s Individual Account, each Participant’s Account shall be deemed to be
invested in the Investment Funds. The Committee shall designate which Investment Fund or Funds
the Participant’s Account shall be deemed to be invested. The preceding notwithstanding, the
Committee may, in its discretion, permit one or more Participants, or any group of
Participants, to direct the hypothetical investment of all or any portion of their Account in
accordance with Section 5.2.
	 
	5.2	 	Designation of Investment Funds.

	 	(a)	 	Each Participant shall designate, in accordance with the procedures established
from time to time by the Committee, the manner in which the amounts credited to his
Account over which he has been given investment discretion by the Committee shall be
deemed to be invested from among the Investment Funds. Such Participant may designate
one of such Investment Funds for the hypothetical investment of all the amounts
credited to such Account, or he may split the hypothetical investment of the amounts
credited to such Accounts between such Investment Funds in such increments as the
Committee may prescribe. If a Participant fails to make a proper designation, then his
Account shall be deemed to be invested in the Investment Fund or Investment Funds
designated by the Committee from time to time.
	 
	 	(b)	 	A Participant may change his hypothetical investment designation for future
amounts to be credited to the portion of his Account over which he has been given
investment discretion by the Committee. Any such change shall be made in accordance
with the procedures established by the Committee, and the frequency of such changes may
be limited by the Committee.
	 
	 	(c)	 	If the Committee elects to establish a hypothetical
investment fund that holds shares of the Company’s common stock, a Participant may elect to invest his Account in
such fund. The Committee may in its sole discretion refuse to recognize Participant
elections that it determines may cause the Participant’s Account to become subject to
the short-swing profit provisions of Section 16b of the Securities Exchange Act of 1934
and establish special election procedures for Participants subject to Section 16 of
such Act.
	 
	 	(d)	 	A Participant’s hypothetical investment selections pursuant to the immediately
preceding paragraph shall be made solely for purposes of crediting earnings and/or
losses to his Accounts under Section 4.3 of this Plan. The Committee shall not, in
any way, be bound to actually invest any amounts set aside pursuant to Article X
below to satisfy its obligations under this Plan in accordance with such selections.

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ARTICLE VI.

Vested Interest

	6.1	 	Vesting of Compensation Deferrals Account. A Participant shall have a 100% Vested
Interest in his Compensation Deferrals Account at all times.
	 
	6.2	 	Vesting of Company Credits Account.

	 	(a)	 	A Participant shall acquire a Vested Interest in his Company Credits Account as
such Participant completes Years of Vesting Service (defined below) in accordance with
the following schedule:

	 	 	 
	Years of Vesting Service	 	Vested Interest
	 	 	 
	Less than 1 year
	 	0%
	1 year
	 	20%
	2 years
	 	40%
	3 years
	 	60%
	4 years
	 	80%
	5 years or more
	 	100%

	 	(b)	 	Notwithstanding Subsection (a) above, a Participant shall have a 100% Vested
Interest in his Company Credits Account upon the earliest to occur of (i) the
attainment of such Participant’s Retirement Date while employed by the Company, (ii)
the death of such Participant while employed by the Company, (iii) the date such
Participant becomes Disabled while employed by the Company, or (iv) any earlier date
designated by the Committee in its sole discretion.
	 
	 	(c)	 	For purposes of this Article VI, a “Year of Vesting Service” means 365 days of
Service. An Employee shall receive credit for the aggregate of all time periods
commencing on an Employee’s Employment Commencement Date, including the Re-Employment
Commencement Date, and ending on the date a Break in Service begins. An Employee also
shall receive credit for any Period of Severance of less than 365 days. Fractional
periods of a year shall be expressed in terms of days. In computing an Employee’s Years
of Vesting Service, the following rules shall apply:

	 	(1)	 	For a Participant who terminates employment with the Employer
and all Related Employers at a time when he has a Vested Interest in his
Employer Contribution Account of more than 0% but less than 100% and who
subsequently is re-employed after incurring five (5) consecutive Breaks in
Service, Years of Vesting Service earned by the Participant after the Break in
Service shall not be taken into account for purposes of determining the
Nonforfeitable percentage of the Participant’s Account Balance derived from
Employer Contributions which accrued before the Break in Service.
	 
	 	(2)	 	For a Participant who terminates employment with the Employer
and all Related Employers at a time when he has a 0% Vested Interest in his
Employer Contribution Account and who is re-employed after a Break in Service,
service before the Break in Service shall not be taken into account if the
number of consecutive Breaks in Service equals or exceeds the greater of

-15-

 

(A) five (5), or (B) the aggregate number of Years of Vesting Service before the
Break in Service. If the Participant has made any Salary Reduction
Contributions to the 401(k) Plan, Service before the Break in Service shall not
be disregarded under the immediately preceding sentence.

	 	(3)	 	Years of Vesting Service shall include all Years of Vesting
Service of the Employee with any Predecessor Employer (as defined in the 401(k)
Plan); provided, however, that the number of years credited under this
provision shall not exceed five (5).
	 
	 	(4)	 	Years of Vesting Service with the Employer before a Participant
enters the Plan shall be considered for purposes of vesting.
	 
	 	(5)	 	Years of Vesting Service shall include Service with any
Affiliate.
	 
	 	(6)	 	For purposes of determining Years of Vesting Service, the
following definitions shall apply:

	 	(A)	 	Break in Service means a continuous period of
365 days time during which an Employee is not employed by the Employer,
and (ii) begins on the date an Employee retires, quits, is discharged,
or dies, or, if earlier, the twelve (12) month anniversary of the date
on which the Employee was otherwise first absent from work.
	 
	 	(B)	 	Period of Severance means the period of time
commencing on the Severance from Employment Date and ending on the date
on which the Employee again performs an hour of service for the
Employer.
	 
	 	(C)	 	Re-Employment Commencement Date means the first
date, following a Period of Severance which is not required to be
considered under the Service rules, on which the Employee performs an
hour of service for the Employer.
	 
	 	(D)	 	Severance from Employment Date means the date
on which occurs the earlier of: (i) the date on which an Employee
quits, retires, is discharged or dies; or (ii) the first anniversary of
the first date of a period in which an Employee remains absent from
Service, with or without pay, with the Employer for any other reason,
such as vacation, holiday, sickness, disability, leave of absence or
layoff. However, with respect to the timing of any distributions that include
Salary Reduction Contributions, Severance from Employment Date shall
have the same meaning set forth in Section 6.2(b).

	 	(7)	 	The Committee, in its discretion, may credit an individual with
“pre-participation service” (within the meaning of Treas. Reg. §
1.401(a)(4)-11(d)(3)(ii)(A)), but only if (i) such pre-participation service
would not otherwise be credited as Service and (ii) such crediting of Service
(A) has a legitimate business reason, (B) does not by design or operation
discriminate

-16-

 

	 	 	 	significantly in favor of Highly Compensated Employees, and (C) is
applied to all similarly situated employees. Moreover, the Committee, in its
discretion, may credit an individual with “imputed service” (within the meaning
of Treas. Reg. § 1.401(a)(4)-11(d)(3)(ii)(B)), but only if (i) such imputed
service would not otherwise be credited as Service, (ii) such crediting of
Service (A) has a legitimate business reason, (B) does not by design or
operation discriminate significantly in favor of Highly Compensated Employees,
and (C) is applied to all similarly situated employees, and (iii) the
individual has not permanently ceased to perform services as an Employee of the
Employer or a Related Employer, provided that clause (iii) of this sentence
shall not apply if (A) the individual is not performing services for the
Employer or a Related Employer because of a Disability, (B) the individual is
performing services for another employer which is being treated under the Plan
as actual service with the Employer or a Related Employer.
	 
	 	(8)	 	A Participant or Former Participant who was a former employee
of Dell Financial Services, L.P. shall receive credit for vesting purposes for
Service with Dell Financial Services, L.P., provided, however, that such
Participant became an Employee of the Employer or a Related Employer on the
date next following the date of his termination of employment with Dell
Financial Services, L.P.

	6.3	 	Forfeitures. A Participant who terminates employment with the Company and its
Affiliates with a Vested Interest in his Company Credits Account that is less than 100% shall
forfeit to the Company the nonvested portion of such Account as of the date of such
termination.

ARTICLE VII.

In-Service Withdrawals

	7.1	 	Rules Governing Grandfathered Benefits.

	 	(a)	 	Unforeseeable Financial Emergency With Respect to Grandfathered
Benefits. Consistent with the Plan’s prior terms and operation, in the event that
the Committee, upon written petition of the Participant, determines in its sole
discretion that the Participant has suffered an Unforeseeable Financial Emergency as
such term is defined with respect to Grandfathered Benefits, the Participant shall be entitled to
withdraw from the portion of his Individual Account attributable to Grandfathered
Benefits an amount not to exceed the amount determined by the Committee as necessary
to meet the Participant’s needs created by the Unforeseeable Financial Emergency.
This distribution shall be paid in a single lump sum cash payment as soon as
administratively practicable after the Committee has made its determination with
respect to the availability and amount of such withdrawal. If the Participant’s
Account is deemed to be invested in more than one Investment Fund, such withdrawal
shall be made pro rata from each Investment Fund in which such Account is deemed to
be invested. This Subsection shall not be applicable to the Participant following
his termination of employment with an Employer, and in the

-17-

 

	 	 	 	event of such termination, the amounts credited to the Participant’s Individual Accounts
attributable to Grandfathered Benefits shall be payable to him only in accordance
with Article VIII.
	 
	 	(b)	 	Fixed Schedule In-Service Distributions with Respect to Grandfathered
Benefits.

	 	(1)	 	Consistent with the Plan’s prior terms and operation, a
Participant may at any time make an irrevocable election, effective as of the
first day of the next Plan Year, to have all or a portion of his Individual
Accounts attributable to Grandfathered Benefits, determined as of the date his
election is made, paid to him (i) on a fixed date, or (ii) pursuant to a two-
to five-year annual installment schedule specified in such election. Payments
under the preceding sentence shall commence at least one (1) year following
the date that such election is submitted to the Committee in writing.
	 
	 	(2)	 	The amount of the payment pursuant to an election under this
Subsection shall be stated in the election, shall be a fixed dollar amount and
shall not be adjusted for earnings or losses.
	 
	 	(3)	 	Once an in-service distribution election has been filed with
the Committee, such election may be modified by the Participant to provide that
the date on which distribution is to be made or commence shall be a subsequent
date; provided, however, that a Participant may not elect to extend the date on
which distribution is to be made or commence during the two (2) year period
immediately preceding the designated date on which distribution is to be made
or commence.
	 
	 	(4)	 	A Participant may have only one fixed schedule in-service
distribution election under this Subsection outstanding at any time.
	 
	 	(5)	 	If a Participant separates from service prior to the date on
which payment is to be made or commence or, in the case of installment
payments, prior to the distribution of all such payments, his election shall be
terminated and his Individual Account shall be distributed as provided in
Section 8.2 below.

	 	(c)	 	Involuntary Distributions at the Committee’s Direction.
Notwithstanding anything contained in the Plan to the contrary, if at any time any
Participant is finally determined by the Internal Revenue Service or the U.S.
Department of Labor not to qualify as a member of a select group of “management or
highly compensated employees” as such term is used in ERISA Section 401(a)(1), the
Committee may, in its sole discretion, immediately distribute in one lump sum cash
payment to such Participant the balance of his Individual Account to attributable to
Grandfathered Benefits. A final determination of the Internal Revenue Service or the
U.S. Department of Labor shall be deemed to have occurred when a decision rendered by
the Internal Revenue Service or the U.S. Department of Labor is no longer subject to
administrative appeal within such agency. In addition, the Committee may, in its
exclusive and sole discretion, cause the Plan to make a distribution to a Participant

-18-

 

	 	 	 	during a Plan Year of that portion of his Individual Account attributable to
Grandfathered Benefits in order to cause the Participant to have sufficient taxable
Compensation to satisfy the annual additions requirements of Code Section 415 with
respect to any qualified retirement plans maintained by the Company during such Plan
Year.

	7.2	 	Rules Governing 409A Benefits.

	 	(a)	 	Unforeseeable Financial Emergency with Respect to 409A Benefits. In the
event that the Committee, upon written petition of the Participant, determines that the
Participant has suffered an Unforeseeable Financial Emergency as such term is defined
with respect to 409A Benefits, the Participant shall be entitled to withdraw from the
Compensation Deferrals portion of his Account attributable to 409A Benefits an amount
that may not exceed the amount necessary to satisfy such Emergency, plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution, after
taking into account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance, or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not itself
cause severe financial hardship). If the Participant’s Account is deemed to be invested
in more than one Investment Fund, such withdrawal shall be made pro rata from each
Investment Fund in which such Account is deemed to be invested. This Subsection shall
not apply to a Participant following his Separation From Service with an Employer, and
in the event of such Separation, the amounts credited to the Participant’s Account
shall be payable to him only in accordance with Article VIII.
	 
	 	(b)	 	Scheduled In-Service Distributions with Respect to 409A Benefits.

	 	(1)	 	At the time a Participant makes his deferral election for a
Plan Year, the Participant may also file an irrevocable election to have all or
a portion of his Vested Interest in amounts attributable to 409A Benefits that
will be credited to his Individual Account for such Plan Year paid directly to
him:

	 	(A)	 	In a single lump sum cash payment on a
designated date; or
	 
	 	(B)	 	In annual cash payments extending over a period
of two to five years, which the Participant shall specify in his
election.

	 	(2)	 	The Participant’s election shall specify whether the
distribution is for a fixed dollar amount or the entire amount credited to the
Participant’s Account for such Plan Year. This election shall be irrevocable
as of the date the election is made.
	 
	 	(3)	 	Distributions under this Subsection may not commence until at
least one (1) full year has elapsed following the date that such election is
submitted to the Committee in writing. The amount of the payment pursuant to
this irrevocable election shall be stated in the election and shall be a fixed
dollar

-19-

 

	 	 	 	amount and shall not be adjusted for earnings or losses following the election date.
	 
	 	(4)	 	An in-service distribution election may be modified by the
Participant to provide that the date on which distribution is to be made or
commence shall be a date subsequent to the date payment would otherwise be made
or commence; provided, however, that the following requirements are also met:

	 	(A)	 	The Participant must submit this election at
least twelve (12) months prior to the date the payment is scheduled to
be made (or the installment payments are scheduled to commence)
pursuant to the existing distribution election.
	 
	 	(B)	 	The new election will not be effective until
twelve (12) months have elapsed after the date on which the new
election is filed with the Committee.
	 
	 	(C)	 	The new election provides that payment will not
be made or commence for at least five (5) years from the date payment
would otherwise have been made or commenced.
	 
	 	(D)	 	No more than two (2) postponements may be filed
for any scheduled in-service distribution.

Solely for purposes of applying the election modification restrictions
described in this Paragraph, a Participant’s election under this Section to
receive an in-service distribution in the form of installment payments over
a fixed period of time shall be treated as an election of a single payment
to be made on the date the installment payments are to commence.

	 	(5)	 	A Participant may have only one (1) fixed schedule in-service
distribution election outstanding under this Section at any time.
	 
	 	(6)	 	If a Participant Separates From Service prior to the date on
which an in-service payment is scheduled to be made under this Subsection, his
election shall be terminated and his Individual Account shall be distributed as
provided in Section 8.3 below.

ARTICLE VIII.

Benefit Distributions

	8.1	 	General Rules.

	 	(a)	 	Benefit Amount. A Participant’s Plan benefit shall be the value of his
Vested Interest in his Individual Account determined as of the Valuation Date
immediately preceding the time of payment of such Account in accordance with Section
8.2 or Section 8.3, as applicable.

-20-

 

	 	(b)	 	Triggering Events. A Participant’s benefit shall become payable upon
the earliest to occur of the following events, each of which shall be classified as a
“Triggering Event”:

	 	(1)	 	A Participant’s Separation From Service with an Employer for
any reason;
	 
	 	(2)	 	The death of the Participant;
	 
	 	(3)	 	A determination by the Committee that the Participant has a
Disability; or
	 
	 	(4)	 	A Change of Control.

Notwithstanding the preceding sentence, with respect solely to 409A Benefits, if a
Participant is a Specified Employee and Separates From Service for a reason other
than death, distribution of the portion of such Participant’s Individual Account
attributable to 409A Benefits shall commence six (6) months from the date of his
Separation From Service.

	8.2	 	Rules Governing Form and Timing of Payment of Grandfathered Benefits .

	 	(a)	 	Commencement of Payments. The portion of a Participant’s Individual
Account attributable to Grandfathered Benefits shall be paid, or payments shall
commence, as soon as administratively practicable following a Triggering Event. A
Participant’s benefit shall be paid to the Participant, unless the Triggering Event is
the death of the Participant, in which case the Participant’s benefit shall be paid to
the Participant’s designated beneficiary as provided in Section 8.4.
	 
	 	(b)	 	Form of Payment. A Participant’s Individual Account attributable to
Grandfathered Benefits shall be paid in cash in one of the following forms:

	 	(1)	 	A single lump sum payment; or
	 
	 	(2)	 	Monthly, quarterly or annual installment payments for a term
certain not to exceed ten (10) years payable to such Participant or, in the
event of such Participant’s death prior to the end of such term certain, to his
designated beneficiary as provided in Section 8.4.

	 	(c)	 	Time and Applicability of Election. A Participant must elect one of the
forms of payment listed in Subsection (b) above on or before the date he first becomes
a Participant in the Plan pursuant to Article II. Except as provided in Subsection (d)
below, such election shall be irrevocable by the Participant, shall remain in effect
for all periods of a Participant’s participation in the Plan and shall be effective
with respect to all Grandfathered Benefits. In the event a Participant fails to timely
elect the form in which payment of his Grandfathered Benefits is to be made, the
Participant shall be deemed to have elected of a single lump sum cash payment.
	 
	 	(d)	 	Change in the Form of Payment. Solely with respect to his Grandfathered
Benefits, a Participant shall be entitled to change his elected form of benefit payment
at any

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	 	 	 	time, to be effective as of the next following January 1st. If a
Triggering Event occurs during a Plan Year following the Committee’s receipt of the
Participant’s written election to change the form of distribution, such election shall
be deemed to be null and void and the immediately preceding election on file with the
Committee shall continue to apply to the form of distribution of the Participant’s
Grandfathered Benefits. A Participant shall receive his distribution in the form
specified in the most recent election form filed with the Committee.
	 
	 	(e)	 	Death of Participant. If a Participant dies prior to the date the
payment of his Grandfathered Benefits begins or, if applicable, is completed, such
benefit, or the remaining unpaid installments that constitute such benefit, as the case
may be, shall be paid to such Participant’s beneficiary designated in accordance with
Section 8.4 in a single lump sum cash payment, notwithstanding any other form of
payment elected by such Participant.
	 
	 	(f)	 	Distribution following Change of Control. The preceding Subsections
notwithstanding, if the Section 8.1(b) event triggering payment of a Participant’s
Grandfathered Benefits is a Change of Control, such Grandfathered Benefits shall be
paid to the Participant in a single lump sum cash payment as soon as administratively
practicable following the Change of Control.
	 
	 	(g)	 	Involuntary Distributions. Notwithstanding any provision of the Plan
to the contrary, the Committee may, in its sole and absolute discretion, distribute a
Participant’s Grandfathered Benefits in the form of a single lump sum cash payment
notwithstanding any other form of distribution elected by the Participant.

	8.3	 	Rules Governing Form and Timing of Payment of 409A Benefits.

	 	(a)	 	Commencement of Payments. The portion of a Participant’s Individual
account attributable to 409A Benefits shall be paid, or payment shall commence, as soon
as administratively practicable following the Triggering Event, subject to the
mandatory six (6) month suspension period that applies to 409A Benefits payable to
any Participant who is classified as a Specified Employee and who Separates From
Service for a reason other than death. The Participant’s Individual Account
attributable to 409A Benefits shall be paid directly to the Participant, unless the
Triggering Event is the death of the Participant, in which case such amounts shall
be paid to the Participant’s designated beneficiary as provided in Section 8.4.
	 
	 	(b)	 	Form of Payment. The portion of a Participant’s Individual Account
attributable to 409A Benefits shall be paid to the Participant in one of the following
forms:

	 	(1)	 	In a single lump sum cash payment; or
	 
	 	(2)	 	In cash payments in monthly, quarterly or annual installments
for a term certain not to exceed ten (10) years payable to such Participant or,
in the event of such Participant’s death prior to the end of such term certain,
to his designated beneficiary as provided in Section 8.4. This form of payment
will

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	 	 	 	apply only if the value of the Participant’s Vested Interest in his
Individual Accounts attributable to 409A Benefits is not less than $40,000. If
such value is less than $40,000 on the date a Triggering Event occurs, the
Participant shall receive distribution in the form of a lump sum cash payment.

	 	(c)	 	Time and Applicability of Election. With respect to 409A Benefits, a
Participant must elect one of the forms of payment listed in Subsection (b) above at
the time the deferral election that applies to such 409A Benefits is made. Except as
provided in Subsection (d) below, such election shall be effective solely with respect
to the amounts deferred pursuant to the election, shall be irrevocable by the
Participant except as provided in Section (d), and shall remain in effect for all
periods of a Participant’s participation in the Plan. In the event a Participant fails
to timely elect the form in which amounts attributable to 409A Benefits is to be paid,
the Participant shall be deemed to have elected payment of such amounts in the form of
a single lump sum cash payment.
	 
	 	(d)	 	Change in the Form of Payment. With respect to 409A Benefits, a
modification of a Participant’s previous election related to the form of distribution
with respect to such amounts shall not be effective unless all of the following
requirements are satisfied:

	 	(A)	 	The modified election shall not be effective for at least
twelve (12) months following the date on which the modified election is filed
with the Committee.
	 
	 	(B)	 	Except in the case of modified elections relating to
distributions on account of death, Disability, or Unforeseeable Emergency, the
modified election must provide that payment will not be made or commence for at
least five (5) years from the date payment would otherwise have been made or
commenced.
	 
	 	(C)	 	A modified election relating to a distribution to be made on a
specified future date or under a fixed payment schedule shall be filed at least
twelve (12) months prior to the date of the first otherwise scheduled payment.
	 
	 	(D)	 	A modified election shall not accelerate the time or schedule
of any payment under the Plan, except as may be permitted pursuant to
applicable Treasury Regulations.

Solely for purposes of applying the election modification restrictions described in
this Subsection (d), a Participant’s election to be paid in installment payments
shall be treated as an election of a single lump sum cash payment to be made on the
date the installment payments are scheduled to commence.

	 	(e)	 	Death of Participant. If a Participant dies prior to the date on which
the payment of 409A Benefits begins or is completed, such benefit, or the remaining
unpaid portion of such benefit, as the case may be, shall be paid to such Participant’s
beneficiary designated in accordance with Section 8.4 in a single lump sum cash
payment, notwithstanding any other form of payment elected by such Participant.

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	 	(f)	 	Distribution following Change of Control. The preceding Subsections
notwithstanding, if the Section 8.1(b) event triggering payment of a Participant’s
Individual Account attributable to 409A Benefits is a Change of Control, such benefits
shall be paid to the Participant in a single lump sum cash payment as soon as
administratively practicable following the Change of Control; provided, however, that
in no event will such benefits be paid within thirty (30) days following the Change of
Control.
	 
	 	(g)	 	Small Account Distribution. Notwithstanding the preceding provisions of
this Section, if at any time the combined value of a Participant’s Vested Interest in
his Individual Account attributable to 409A Benefits in the Plan and any other
non-qualified, defined contribution plan sponsored by an Employer in which the
Participant participates is equal to the dollar amount described in Code Section
402(g)(1) or less, the Committee may distribute such interest to the Participant in a
single lump sum cash payment, provided the following requirements are also satisfied:

	 	(1)	 	The payment is equal to the Participant’s total vested benefits
in the Plan, and all similar plans or arrangements that would constitute a
nonqualified deferred compensation plan under Proposed Treasury Regulation
Section 1.409A-1(c);
	 
	 	(2)	 	The payment is made on or before the later of December 31 of
the calendar year in which the Participant separates from service or the 15th
day of the third month following the Participant’s separation from service; and
	 
	 	(3)	 	The Participant is not provided with an election with respect
to receipt of the payment.

	8.4	 	Designation of Beneficiaries.

	 	(a)	 	Each Participant shall have the right to designate the beneficiary or
beneficiaries to receive payment of his benefit in the event of his death. Each such
designation shall be made by executing the beneficiary designation form prescribed by
the Committee and filing such form with the Committee during the life of such
Participant. Any such beneficiary designation may be changed at any time by execution
and filing of a new designation in accordance with this Subsection. The preceding
notwithstanding, (i) if a Participant has designated his spouse as his beneficiary,
such designation shall be void and of no effect upon the divorce of the Participant and
such spouse, unless the Participant notifies the Committee to the contrary in writing
after the date of such divorce, and (ii) if a Participant who is married on the date of
his death has designated an individual or entity other than his surviving spouse as his
beneficiary, such designation shall not be valid unless (a) such surviving spouse has
consented thereto in writing, and such consent (1) acknowledges the effect of such
specific designation, (2) either consents to the specific designated beneficiary (which
designation may not subsequently be changed by the Participant without spousal consent)
or expressly permits such designation by the Participant without the

-24-

 

	 	 	 	requirement of further consent by such spouse, and (3) is witnessed by a Plan representative (other
than the Participant) or a notary public, or (b) the consent of such spouse cannot be
obtained because such spouse cannot be located or because of other circumstances that
the Committee in its discretion determines warrants a waiver of such consent. Any such
consent by such surviving spouse shall be irrevocable.
	 
	 	(b)	 	If at the time of the death of the Participant no beneficiary designation form
is on file with the Committee, or such beneficiary designation form is not valid or
effective for any reason as determined by the Committee, then the designated
beneficiary or beneficiaries to receive such benefit shall be as follows and in the
same priority:

	 	(1)	 	If a Participant has a surviving spouse at the time of such
Participant’s death, his designated beneficiary shall be such surviving spouse;
	 
	 	(2)	 	If a Participant has no surviving spouse at the time of such
Participant’s death, his designated beneficiary shall be such Participant’s
executor or administrator of such Participant’s estate; or
	 
	 	(3)	 	If there is no administrator of such Participant’s estate, his
heirs at law.

	8.5	 	Payments Pursuant to a Qualified Domestic Relations Order. To the extent that a
Participant’s benefits are partitioned under a Qualified Domestic Relations Order (“QDRO”)
pursuant to Section 13.2 hereof, the “alternate payee’s” benefits shall be paid in cash, in a
single lump sum, as soon as administratively practicable following the later of (i) the date
the QDRO is approved by the Committee, or (ii) the date the alternate payee’s right to receive
a distribution of his Participant’s Company Credits Account is fully vested as provided in
Section 7.2 above. In the event that an alternate payee dies prior to the date that his
benefits are eligible for distribution hereunder, his benefits shall be fully vested and shall be paid to the
alternate payee’s designated beneficiary as soon as administratively feasible following his
date of death. Payments made to an alternate payee, or an alternate payee’s beneficiary,
shall be in the form of a single lump sum cash payment.
	 
	8.6	 	Payer of Benefits. To the extent the Trust Fund has sufficient assets, the Trustee
shall pay benefits to Participants or their beneficiaries, except to the extent an Employer
pays the benefits directly. To the extent the Trustee does not or cannot pay benefits out of
the Trust Fund, the benefits shall be paid by an Employer. Any benefit payments made to a
Participant or for his benefit pursuant to any provision of the Plan shall be debited to such
Participant’s Individual Account. All benefit payments shall be made in cash.
	 
	8.7	 	Unclaimed Benefits. In the case of a benefit payable to or on behalf of a
Participant, if the Committee after a reasonable search is unable to locate the Participant or
beneficiary to whom such benefit is payable, upon the Committee’s determination thereof, such
benefit shall be forfeited to the Company. The Committee shall adopt procedures concerning the
process that will be followed to locate a Participant or beneficiary under this Section.
Notwithstanding the foregoing, if subsequent to any such forfeiture the Participant or
beneficiary to whom such benefit is payable makes a valid claim for such benefit within a

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	 	 	reasonable (as determined by and in the discretion of the Committee) period of time following
the date such benefit became payable, such forfeited benefit shall be payable pursuant to the
Plan provisions.

ARTICLE IX.

Transition Rules

	9.1	 	Deferral Elections for Plan Years 2005 through 2008. After enactment of Code Section
409A and pending the issuance of the Treasury Regulations pursuant to such Code Section,
deferral elections were administered in the following manner:

	 	(a)	 	Participants were required to make an election to defer Base Salary related to
services performed in 2005 before December 31, 2004. Newly hired employees who were
eligible to participate in the Plan and individuals who were promoted to a level of
seniority that made them eligible to participate in the Plan were permitted to file an
election to defer Base Salary in a manner consistent with IRS Notice 2005-1.
	 
	 	(b)	 	Participants were required to make an election to defer a Bonus related to
services performed in 2005 before December 31, 2004. Newly hired employees who were
eligible to participate in the Plan and individuals who were promoted to a level of
seniority that made them eligible to participate in the Plan were permitted to file an
election to defer Bonuses in a manner consistent with IRS Notice 2005-1.
	 
	 	(c)	 	Participants were required to make an election to defer Base Salary and Bonuses
related to services performed in 2006 before December 31, 2005. Newly hired
employees who were eligible to participate in the Plan and individuals who were
promoted to a level of seniority that made them eligible to participate in the Plan
were permitted to file an election to defer Base Salary and Bonuses in a manner
consistent with the Proposed Regulations issued under Code Section 409A.
	 
	 	(d)	 	Participants were required to make an election to defer Base Salary and Bonuses
related to services performed in 2007 before December 31, 2006. Newly hired employees
who were eligible to participate in the Plan and individuals who were promoted to a
level of seniority that made them eligible to participate in the Plan were permitted to
file an election to defer Base Salary and Bonuses in a manner consistent with the
Treasury Regulations issued under Code Section 409A.
	 
	 	(e)	 	Participants were required to make an election to defer Base Salary and Bonuses
related to services performed in 2008 before December 31, 2007. Newly hired employees
who were eligible to participate in the Plan and individuals who were promoted to a
level of seniority that made them eligible to participate in the Plan were permitted to
file an election to defer Base Salary and Bonuses in a manner consistent with the
Proposed Regulations issued under Code Section 409A. In addition, during December 2008
designated Participants were permitted to make elections to receive in service
distributions on designated distribution dates during the calendar year ending December
31, 2009, provided such amounts were not

-26-

 

otherwise payable during the calendar year ending December 31, 2008, subject to the terms and conditions of such elections.

	9.2	 	Distribution Elections.

	 	(a)	 	With respect solely to Grandfathered Benefits, Distribution elections
applicable to Grandfathered Benefits have been consistently administered as filed by
the Participant. Such elections have been modified only as permitted under the Plan’s
terms as applicable prior to the adoption of Code Section 409A.
	 
	 	(b)	 	With respect to 409A Benefits. Effective with respect to the Plan Years
beginning on and after January 1, 2005, at the time a Participant made an election to
defer an amount attributable to 409A Benefits, the Participant was required to make an
election as to the form of distribution of such amount, as provided in Section 8.3(c)
hereof. If no such election was made, the distribution of such amount will be in the
form of a single lump sum cash payment. For periods prior to January 1, 2008, elections
under Section 7.2(b)(4)(A) were made only during the Plan’s annual open enrollment
period.

ARTICLE X.

Administration of Plan

	10.1	 	Appointment of Committee. The general administration of the Plan shall be vested in
the Committee, which shall be appointed by the Leadership Development and Compensation
Committee of the Company’s Board of
Directors and shall consist of one or more persons. Any individual, whether or not an
employee of the Company, is eligible to become a member of the Committee.
	 
	10.2	 	Term, Vacancies, Resignation, and Removal. Each member of the Committee shall serve
until he resigns, dies, or is removed by the Leadership Development and Compensation Committee
of the Company’s Board of Directors. At any time during his term of office, a member of the
Committee may resign by giving written notice to the Directors and the Committee, such
resignation to become effective upon the appointment of a substitute member or, if earlier,
the lapse of thirty (30) days after such notice is given as herein provided. At any time
during his term of office, and for any reason, a member of the Committee may be removed by the
Directors with or without cause, and the Directors may in their discretion fill any vacancy
that may result therefrom. Any member of the Committee who is an employee of an Employer shall
automatically cease to be a member of the Committee as of the date he ceases to be employed by
an Employer.
	 
	10.3	 	Self-Interest of Committee Members. No member of the Committee shall have any right
to vote or decide upon any matter relating solely to himself under the Plan (including,
without limitation, Committee decisions under Article II) or to vote in any case in which his
individual right to claim any benefit under the Plan is particularly involved. In any case in
which a Committee member is so disqualified to act and the remaining members cannot agree, the
Directors shall appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.

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	10.4	 	Committee Powers and Duties. The Committee shall administer and enforce the Plan
according to the terms and provisions hereof and shall have all powers necessary to accomplish
these purposes, including, but not by way of limitation, the complete and absolute discretion
to construe all provisions of the Plan and make all factual determinations and the right,
power, authority, and duty:

	 	(a)	 	To make rules, regulations, and bylaws for the administration of the Plan that
are not inconsistent with the terms and provisions hereof, and to enforce the terms of
the Plan and the rules and regulations promulgated thereunder by the Committee;
	 
	 	(b)	 	To construe in its sole discretion all terms, provisions, conditions, and
limitations of the Plan;
	 
	 	(c)	 	To correct any defect or to supply any omission or to reconcile any
inconsistency that may appear in the Plan in such manner and to such extent as it shall
deem in its discretion expedient to effectuate the purposes of the Plan;
	 
	 	(d)	 	To employ and compensate such accountants, attorneys, investment advisors, and
other agents, employees, and independent contractors as the Committee may deem
necessary or advisable for the proper and efficient administration of the Plan;
	 
	 	(e)	 	To determine in its sole discretion all questions relating to eligibility;
	 
	 	(f)	 	To establish or designate Investment Funds as provided in Article V;
	 
	 	(g)	 	To determine whether and when there has been a termination of a Participant’s
employment with an Employer, and the reason for such termination;
	 
	 	(h)	 	To make a determination in its sole discretion as to the right of any person to
a benefit under the Plan and to prescribe procedures to be followed by distributees in
obtaining benefits hereunder; and
	 
	 	(i)	 	To receive and review reports from the Trustee as to the financial condition of
the Trust Fund, including its receipts and disbursements.

Notwithstanding the preceding, with respect to amounts attributable to 409A Benefits and
with respect to administration of the Plan on and after January 1, 2005, the Committee shall
act to administer and interpret the Plan in compliance with Code Section 409A and all
related guidance issued pursuant to such Code Section.

	10.5	 	Claims Review.

	 	(a)	 	In any case in which a claim for Plan benefits of a Participant or beneficiary
is denied or modified, the Committee shall furnish written notice to the claimant
within ninety (90) days (or within 180 days if additional information requested by the
Committee necessitates an extension of the ninety-day period and, in which case, the
claimant shall be informed of such extension prior to the end of the initial ninety
(90)-day period), which notice shall:

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	 	(1)	 	State the specific reason or reasons for the denial or
modification;
	 
	 	(2)	 	Provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
	 
	 	(3)	 	Provide a description of any additional material or information
necessary for the Participant, his beneficiary, or representative to perfect
the claim and an explanation of why such material or information is necessary;
and
	 
	 	(4)	 	Explain the Plan’s claim review procedure as contained herein.

	 	(b)	 	In the event a claim for Plan benefits is denied or modified, if the
Participant, his beneficiary, or a representative of such Participant or beneficiary
desires to have such denial or modification reviewed, he must, within sixty (60) days
following receipt of the notice of such denial or modification, submit a written
request for review by the Committee of its initial decision. In connection with such
request, the Participant, his beneficiary, or the representative of such Participant or
beneficiary may review any pertinent documents upon which such denial or modification
was based and may submit issues and comments in writing. Within sixty (60) days
following such request for review the Committee shall, after providing a full and fair
review, render its final decision in writing to the Participant, his beneficiary, or
the representative of such Participant or beneficiary stating specific reasons for such
decision and making specific references to pertinent Plan provisions upon which the decision is based.
If special circumstances require an extension of such sixty-day period, the
Committee’s decision shall be rendered as soon as possible, but not later than 120
days after receipt of the request for review. If an extension of time for review is
required, written notice of the extension shall be furnished to the Participant,
beneficiary, or the representative of such Participant or beneficiary prior to the
commencement of the extension period.
	 
	 	(c)	 	Compliance with the claims review procedures set forth in this Section shall be
a condition precedent to the filing of a lawsuit by a Participant, his beneficiary, or
any person claiming through a participant or beneficiary in connection with a Plan
benefit, and a failure to timely exhaust the administrative remedies set forth herein
shall bar any such proceeding in federal or state court.

	10.6	 	Employer to Supply Information. An Employer shall supply full and timely information
to the Committee, including, but not limited to, information relating to each Participant’s
Compensation, age, retirement, death, or other cause of separation from service and such other
pertinent facts as the Committee may require. When making a determination in connection with
the Plan, the Committee shall be entitled to rely upon the aforesaid information furnished by
an Employer.
	 
	10.7	 	Indemnity. To the extent permitted by applicable law, the Company and each
Participating Employer shall indemnify and hold harmless each member of the Committee and
other employees of an Employer to whom Plan administrative functions have been delegated by
the Committee against any and all expenses and liabilities arising out of such individual’s

-29-

 

	 	 	administrative functions or fiduciary responsibilities under or incident to the Plan,
including any expenses and liabilities that are caused by or result from an act or omission
constituting the negligence of such individual in the performance of such functions or
responsibilities, but excluding expenses and liabilities that are caused by or result from
such individual’s own gross negligence or willful misconduct. Expenses against which such
individual shall be indemnified hereunder shall include, without limitation, the amounts of
any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought or settlement thereof.

ARTICLE XI.

Purpose and Unfunded Nature of the Plan

	11.1	 	Purpose of Plan. The Company, as Plan sponsor, intends and desires by the adoption
and maintenance of the Plan to recognize the value to the Company of the past and present
services of employees covered by the Plan and to encourage and ensure their continued service
with the Company and Participating Employers by making more adequate provision for their
future retirement security.
	 
	11.2	 	Unfunded Nature of Plan. The Plan is intended to constitute an unfunded, unsecured
plan of deferred compensation for a select group of management or highly compensated employees
of an Employer. Further, it is the intention of the Company, as Plan sponsor, that
the Plan be “unfunded” for purposes of the Code
and Title I of ERISA. The Plan constitutes a
mere promise by an Employer to make benefit
payments in the future. Plan benefits herein
provided are to be paid out of an Employer’s
general assets, and Participants shall have the
status of general unsecured creditors of an Employer.
	 
	11.3	 	Funding of Obligation.

	 	(a)	 	The adoption of this Plan and any setting aside of amounts by the Employers
with which to discharge their obligations hereunder shall not be deemed to create a
trust; legal and equitable title to any funds so set aside shall remain with the
Employers, and any recipient of benefits hereunder shall have no security or other
interest in such funds. Any and all funds so set aside shall remain subject to the
claims of the general creditors of the Employers, present and future. This provision
shall not require the Employers to set aside any funds, but the Employers may set aside
funds if they choose to do so.
	 
	 	(b)	 	The Company, in its capacity as Plan sponsor and in its sole discretion, may
establish the Trust and enter into the Trust Agreement. Any such Trust, and any assets
held by such Trust, to assist the Company and Participating Employers in meeting their
obligations under the Plan shall be a “rabbi trust.” The Employers may transfer money
or other property to the Trustee, and the Trustee shall pay Plan benefits to
Participants and their beneficiaries out of the Trust Fund unless otherwise paid by the
Company. In such event, the Company shall remain the owner of all assets in the Trust
Fund, and the assets held in the Trust Fund shall be subject to the claims of Company
creditors if the Company becomes “insolvent” as described in

-30-

 

	 	 	 	Subsection (c) below. No Participant or beneficiary shall have any preferred claim to, or any beneficial
ownership interest in, any assets of the Trust Fund.
	 
	 	(c)	 	The Company shall be considered “insolvent” if (i) the Company is unable to pay
its debts as they become due or (ii) the Company is subject to a pending proceeding as
a debtor under the United Sates Bankruptcy Code (or any successor federal statute).
	 
	 	(d)	 	The chief executive officer of the Company and the Directors shall each have
the duty to inform the Trustee in writing if the Company becomes insolvent. Such notice
given under the preceding sentence by any one party shall satisfy each party’s duty to
give notice. When so informed, the Trustee shall suspend payments to the Participants
and beneficiaries and hold the assets for the benefit of the Company’s general
creditors. If the Trustee receives a written allegation that the Company is insolvent,
the Trustee shall suspend payments to the Participants and beneficiaries and hold the
Trust Fund for the benefit of the Company’s general creditors and shall determine
within the period specified in the Trust Agreement, or, in the absence of a specified
period, within a reasonable period of time, whether the Company is insolvent. If the
Trustee determines that the Company is not insolvent, the Trustee shall resume payments
to the Participants and beneficiaries. In the case of insolvency of the Company or any
Affiliate designated to participate in the Plan pursuant to Section 11.1, only the
assets contributed to the Trust, if any, by the Company or such
Affiliate, whichever is insolvent, shall be subject to the claims of such insolvent entity.
	 
	 	(e)	 	All expenses incident to the administration of the Plan and Trust, including
but not limited to, legal, accounting, Trustee fees, and expenses of the Committee, may
be paid by the Company and, if not so paid, shall be paid by the Trustee from the Trust
Fund, if any.
	 
	 	(f)	 	All income, profits, recoveries, contributions, forfeitures and any and all
moneys, securities, and properties of any kind at any time received or held by the
Trustee, if any, shall be held for investment purposes as a commingled Trust Fund
pursuant to the terms of the Trust Agreement. The Committee shall maintain Accounts in
the name of each Participant, but the maintenance of Accounts designated as Accounts of
a Participant shall not mean that such Participant shall have a greater or lesser
interest than that due him under the terms of the Plan and shall not be considered as
segregating any funds or property from any other funds or property contained in the
commingled fund.

ARTICLE XII.

Participating Entities

	12.1	 	Designation of Participating Employers.

	 	(a)	 	The Committee may designate any Employer as eligible to participate in the Plan
by written instrument delivered to the Company and the designated Employer. Such
written instrument shall specify the effective date of such designated participation,
may incorporate specific provisions relating to the operation of the Plan that apply to

-31-

 

	 	 	 	the designated Employer only, and shall become, as to such designated Employer and its
employees, a part of the Plan. Each designated Employer shall be conclusively presumed
to have consented to its designation and to have agreed to be bound by the terms of the
Plan and any and all amendments thereto upon its submission of information to the
Committee required by the terms of or with respect to the Plan; provided, however, that
the terms of the Plan may be amended so as to increase the obligations of an Employer
only with the consent of such Employer, which consent shall be conclusively presumed to
have been given by such Employer upon its submission, after receipt of notice of any
such amendment, of any information to the Committee required by the terms of or with
respect to the Plan.
	 
	 	(b)	 	Except as modified by the Committee in the written instrument described in
Subsection (a) above, the provisions of this Plan shall be applicable with respect to
each Participating Employer separately, and amounts payable hereunder for or on behalf
of a Participant shall be paid by the Participating Employer that employs such
Participant.
	 
	 	(c)	 	Any Participating Employer may, by appropriate action of its officers without
the need for approval of its board of directors or noncorporate counterpart or the
Committee, the Company, or the Directors, terminate its participation in the Plan.
Moreover, the Committee may, in its discretion, terminate a Participating Employer’s
participation in the Plan at any time by giving written notice to such Participating
Employer and the Company.

ARTICLE XIII.

Miscellaneous

	13.1	 	Not Contract of Employment. The adoption and maintenance of the Plan shall not be
deemed to be a contract between the Company and any person or to be consideration for the
employment of any person. Nothing herein contained shall be deemed to give any person the
right to be retained in the employ of the Company or to restrict the right of the Company to
discharge any person at any time, nor shall the Plan be deemed to give the Company the right
to require any person to remain in the employ of the Company or to restrict any person’s right
to terminate his employment at any time.
	 
	13.2	 	Alienation of Interest Forbidden. The interest of a Participant or his beneficiary or
beneficiaries hereunder may not be sold, transferred, assigned, or encumbered in any manner,
either voluntarily or involuntarily, and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be null and void, nor shall the
benefits hereunder be liable for or subject to the debts, contracts, liabilities, engagements,
or torts of any person to whom such benefits or funds are payable, nor shall they be an asset
in bankruptcy or subject to garnishment, attachment, or other legal or equitable proceedings.
The preceding notwithstanding, the Committee shall comply with the terms and provisions of a
QDRO as defined in ERISA Section 206(d).
	 
	13.3	 	Withholding. All Compensation Deferrals, Company Credits, and benefit payments
provided for hereunder shall be subject to applicable withholding and other deductions as

-32-

 

	 	 	shall be required of an Employer under any applicable local, state, or federal law as such
laws are interpreted by the Company.
	 
	13.4	 	Amendment and Termination.

	 	(a)	 	Amendment and Termination with Respect to Grandfathered Benefits. This
paragraph applies solely with respect to Grandfathered Benefits. The Directors have the
absolute and unconditional right to amend the portion of the Plan that affects
Grandfathered Benefits at any time and may from time to time, in their discretion,
amend, in whole or in part, any or all of the provisions of the Plan relating to
Grandfathered Benefits; provided, however, that any amendments to the Plan that do not
have a significant cost impact on the Company, whether or not retroactive, may be made
by the Committee; and provided, further, that no amendment may be made that would
reduce a Participant’s Vested Interest in the amounts credited to his Individual
Accounts as of the date of adoption of such amendment. The Directors have the absolute
and unconditional right to terminate the Plan solely with respect to Grandfathered
Benefits at any time on behalf of the Company and each Participating Employer. In the
event that the Plan is so terminated, notwithstanding any other form
of benefit elected by the Participant, the balance of each Participant’s
Grandfathered Benefits shall be paid to such Participant or his designated
beneficiary in the manner selected by the Committee in its discretion
(notwithstanding any other form of benefit elected by such Participant), which may
include the payment of a single lump sum cash payment, in full satisfaction of all
of such Participant’s or beneficiary’s Grandfathered Benefits hereunder.
	 
	 	(b)	 	Amendment and Termination with Respect to 409A Benefits. The Company
may amend or terminate the portion of the Plan that is subject to Code Section 409A
upon occurrence of any one of the following events:

	 	(1)	 	Within twelve (12) months of the Company’s dissolution, taxed
under Code Section 331 or with the approval of a bankruptcy court pursuant to
11 U.S.C. Section 503(b)(1)(A), provided that the amounts deferred under the
Plan are included in the Participants’ gross income in the latest of:

	 	(A)	 	The calendar year in which Plan termination
occurs;
	 
	 	(B)	 	The calendar year in which such amounts are no
longer subject to a substantial risk of forfeiture; or
	 
	 	(C)	 	The first calendar year in which payment of
such amounts is administratively practicable.

	 	(2)	 	Within the thirty (30) days preceding or the twelve (12) months
following a Change of Control, provided all substantially similar arrangements
(within the meaning of Code Section 409A and related guidance issued
thereunder) sponsored by the Company are also terminated, so that the
Participant and all participants under substantially similar arrangements are
required to receive

-33-

 

	 	 	 	all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the date of termination of the
arrangements.
	 
	 	(3)	 	At the discretion of the Company, provided that all of the
following requirements are satisfied:

	 	(A)	 	All arrangements sponsored by the Company that
would be aggregated with any terminated arrangement under Treasury
Regulation Section 1.409A-1(c), if the same Participant participated in
all of the arrangements, are terminated;
	 
	 	(B)	 	No payments other than payments that would be
payable under the terms of the arrangements if the termination had not
occurred are made within twelve (12) months of the termination of the
arrangements;
	 
	 	(C)	 	All payments are made within twenty-four (24)
months of the termination of the arrangements; and
	 
	 	(D)	 	The Company does not adopt a new arrangement
that would be aggregated with any terminated arrangement under Treasury
Regulation Section 1.409A-1(c), if the same Participant participated in
both arrangements, at any time within three (3) years following the
date of termination of the arrangement.

	 	(4)	 	Such other events and conditions as the Commissioner of
Internal Revenue may prescribe in generally applicable guidance published in
the Internal Revenue Bulletin.

	13.5	 	Severability. If any provision of the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining provisions hereof;
instead, each provision shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.
	 
	13.6	 	Governing Laws. All provisions of the Plan shall be construed in accordance with the
laws of the State of Texas except to the extent preempted by federal law.

Executed this      10th      day of December, 2008.

	 	 	 	 	 
	 	DELL INC.

 	 
	 	By:  	/s/  Kathleen O. Angel
 	 
	 	Name:  	Kathleen O. Angel 	 
	 	Title:  	Director, Global Benefits 	 
	 

-34-exv10w8

Exhibit 10.8

Dell Inc.

Deferred Compensation Plan

For Non-Employee Directors

Amended and Restated

Effective as of January 1, 2005

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 
	 	 	 	 	 	 
	Article I.	 	Definitions and Construction	 	 	1	 
	 	 	1.1

	 	Definitions
	 	 	1	 
	 	 	1.2

	 	Number and Gender
	 	 	6	 
	 	 	1.3

	 	Headings
	 	 	6	 
	 	 	 
	 	 	 	 	 	 
	Article II.	 	Contributions	 	 	7	 
	 	 	2.1

	 	General
	 	 	7	 
	 	 	2.2

	 	Deferral(s)
	 	 	7	 
	 	 	2.3

	 	Deferral Election
	 	 	7	 
	 	 	2.4

	 	Crediting of Deferral(s)
	 	 	7	 
	 	 	 
	 	 	 	 	 	 
	Article III.	 	Allocations to Member Accounts	 	 	7	 
	 	 	3.1

	 	Individual Accounts
	 	 	7	 
	 	 	3.2

	 	Investment of Accounts
	 	 	8	 
	 	 	3.3

	 	Allocation of Net Income or Loss and Changes in Value
	 	 	8	 
	 	 	 
	 	 	 	 	 	 
	Article IV.	 	Hypothetical Investment of Accounts	 	 	8	 
	 	 	4.1

	 	Investment of Accounts
	 	 	8	 
	 	 	4.2

	 	Designation of Investment Funds
	 	 	9	 
	 	 	 
	 	 	 	 	 	 
	Article V.	 	Vested Interest	 	 	9	 
	 	 	5.1

	 	Vesting of Compensation Deferrals Account
	 	 	9	 
	 	 	 
	 	 	 	 	 	 
	Article VI.	 	Unforeseeable Financial Emergency	 	 	9	 
	 	 	6.1

	 	Rules Governing Grandfathered Benefits
	 	 	9	 
	 	 	6.2

	 	Rules Governing 409A Benefits
	 	 	10	 
	 	 	 
	 	 	 	 	 	 
	Article VII.	 	Benefit Distributions	 	 	10	 
	 	 	7.1

	 	General Rules
	 	 	10	 
	 	 	7.2

	 	Rules Governing Form and Timing of Payment of
Grandfathered Benefits
	 	 	11	 
	 	 	7.3

	 	Rules Governing Form and Timing of Payment of 409A Benefits
	 	 	12	 
	 	 	7.4

	 	Payments Pursuant to a Qualified Domestic Relations Order
	 	 	13	 
	 	 	7.5

	 	Payer of Benefits
	 	 	14	 
	 	 	7.6

	 	Unclaimed Benefits
	 	 	14	 
	 	 	 
	 	 	 	 	 	 
	Article VIII.	 	Transition Rules	 	 	14	 
	 	 	8.1

	 	Deferral Elections for Plan Years 2005 and 2006
	 	 	14	 
	 	 	8.2

	 	Distribution Elections
	 	 	15	 

 i 

 

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 
	 	 	 	 	 	 
	Article IX.	 	Administration of Plan	 	 	15	 
	 	 	9.1

	 	Appointment of Committee
	 	 	15	 
	 	 	9.2

	 	Term, Vacancies, Resignation, and Removal
	 	 	15	 
	 	 	9.3

	 	Self-Interest of Committee Members
	 	 	15	 
	 	 	9.4

	 	Committee Powers and Duties
	 	 	15	 
	 	 	9.5

	 	Claims Review
	 	 	17	 
	 	 	9.6

	 	Company to Supply Information
	 	 	18	 
	 	 	9.7

	 	Indemnity
	 	 	18	 
	 	 	 
	 	 	 	 	 	 
	Article X.	 	Purpose and Unfunded Nature of the Plan	 	 	18	 
	 	 	10.1

	 	Purpose of Plan
	 	 	18	 
	 	 	10.2

	 	Unfunded Nature of Plan
	 	 	18	 
	 	 	10.3

	 	Funding of Obligation
	 	 	19	 
	 	 	 
	 	 	 	 	 	 
	Article XI.	 	Miscellaneous	 	 	20	 
	 	 	11.1

	 	Limitation of Rights
	 	 	20	 
	 	 	11.2

	 	Alienation of Interest Forbidden
	 	 	20	 
	 	 	11.3

	 	Minor or Legally Incompetent Distributee
	 	 	20	 
	 	 	11.4

	 	Withholding
	 	 	20	 
	 	 	11.5

	 	Amendment and Termination
	 	 	21	 
	 	 	11.6

	 	Severability
	 	 	22	 
	 	 	11.7

	 	Governing Laws
	 	 	22	 

 ii 

 

 

DELL INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

     Dell Inc., a corporation organized and existing under the laws of the State of Delaware (the
“Company”), hereby restates the Dell Computer Corporation Deferred Compensation Plan For
Non-Employee Directors, to be retitled as the Dell Inc. Deferred Compensation Plan For Non-Employee
Directors (the “Plan”), for the benefit of its non-employee directors, in recognition of their
services rendered to the Company; such restatement to be effective as of January 1, 2005, except as
otherwise provided herein;

W I T N E S S E T H:

     WHEREAS, it is intended that the Plan be “unfunded” for purposes of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) and not be construed to provide income to any
Member or Beneficiary under the Internal Revenue Code of 1986, as amended (the “Code”) prior to
actual receipt of benefits hereunder;

     WHEREAS, the Plan’s terms for the period between May 20, 1994 and December 31, 2004 have been
documented under the terms of the prior plan documents, summary plan descriptions, administrative
forms, administrative rules, summaries and other documentation as have been previously used by the
Company and the Committee to administer the Plan, which terms are expressly intended to continue to
apply to all Grandfathered Benefits (defined below); and

     WHEREAS, the Company desires to amend and restate the Plan, effective January 1, 2005, except
as otherwise provided herein, to revise the Plan’s terms to satisfy the applicable requirements of
Code Section 409A with regard to amounts that are not classified as Grandfathered Benefits and
intends that the Plan be interpreted and administered in accordance with Code Section 409A and any
guidance issued thereunder; and

     NOW THEREFORE, the Plan is hereby restated in its entirety as follows with no interruption in
time, effective as of January 1, 2005, except as otherwise indicated herein:

ARTICLE I.

Definitions and Construction

	1.1	 	Definitions. Where the following words and phrases appear in the Plan, they shall
have the respective meanings set forth below, unless their context clearly indicates to the
contrary.

-1-

 

	 	(a)	 	Account: A Member’s Deferral(s) Account, as adjusted to reflect
income, gains, losses and other credits or charges attributable thereto. The amounts
credited to the account shall be segregated and separately accounted for as follows:

	 	(1)	 	Grandfathered Benefits. The portion of a Member’s
Account, which holds amounts credited to such account for Plan Years beginning
prior to January 1, 2005.
	 
	 	(2)	 	409A Benefits. The portion of a Member’s Account,
which holds amounts credited to such account for Plan Years beginning on and
after January 1, 2005. At the direction of the Committee, the Plan shall
establish a subaccount for each Plan Year beginning on and after January 1,
2005, which shall hold the total of amounts credited to a Member’s Account for
the applicable Plan Year.

	 	(b)	 	Annual Compensation: The annual retainer payable by the Company to a
member following the Company’s annual shareholder meeting (typically July or August) of
each year.
	 
	 	(c)	 	Beneficiary: The person or trust that a Member, in his most recent
designation filed with the Committee, shall have designated to receive his benefit
under the Plan in the event of his death; provided that, if the Member has failed to
make a designation or if no person designated shall be alive or if no trust shall have
been established by the Member, and no successor Beneficiary shall have been designated
and be alive, any death benefit payable hereunder on behalf of such Member shall be
paid to the legal representative of such deceased Member’s estate. Changes in
designations of Beneficiaries may be made upon notice to the Committee in any form as
the Committee may prescribe and the Committee shall immediately notify the Trustee, in
writing, of any designation or change in designation.
	 
	 	(d)	 	Board of Directors: The Board of Directors of the Company
	 
	 	(e)	 	Change of Control:

	 	(1)	 	With Respect to Grandfathered Benefits: With respect to
Grandfathered Benefits, a Change of Control occurs upon the earliest to occur
of any of the following:

	 	(A)	 	The acquisition by any person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934 (“Exchange Act”)) of 20% or more of
either (i) the then outstanding shares of stock, or (ii) the combined
voting power of the then outstanding voting securities of the Company;
provided, however, that for purposes of this Paragraph (A), the
following acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan

-2-

 

	 	 	 	(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (iv) any acquisition by Mr.
Michael S. Dell, his “affiliates” (as defined in Rule 12b-2
promulgated under the Exchange Act) or “associates” (as defined in
Rule 12b-2 promulgated under the Exchange Act), his heirs, or any
trust or foundation to which he has transferred or may transfer stock
(collectively, “Michael Dell”), or (v) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii), and (ii) of Paragraph (C) of this Section 1.1(c); or
	 
	 	(B)	 	Individuals who constitute the Incumbent Board
(as later defined) cease for any reason to constitute at least a
majority of the Directors; or
	 
	 	(C)	 	Approval by the stockholders of the Company of
a reorganization, merger, or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company,
or the acquisition of assets of another corporation (a “Business
Combination”), unless following such Business Combination (i) all or
substantially all of the persons who were the beneficial owners,
respectively, of the outstanding stock and outstanding voting
securities of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the outstanding stock and
outstanding voting securities of the Corporation, as the case may be,
(ii) no person (excluding any employee benefit plan (or related trust)
of the Company, such corporation resulting from such Business
Combination, and Michael Dell) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares
of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (iii) at least a
majority of the members of the Board of Directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business
Combination; or

-3-

 

	 	(D)	 	Approval by the stockholders of the Company of
a complete liquidation or dissolution of the Company.

	 	 	 	For purposes of this Subsection (1), “Incumbent Board” shall mean the
individuals who, as of the Effective Date, constitute the Board of
Directors; provided, however, that any individual becoming a Director,
subsequent to such date whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
Board of Directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Directors.
	 
	 	(2)	 	With Respect to 409A Benefits: With respect to 409A
Benefits, the occurrence of any event or transaction constituting a “change in
ownership or effective control” within the meaning of Treasury Regulations or
other Internal Revenue Service guidance promulgated pursuant to Code Section
409A(a)(2)(A)(v). The occurrence of a Change of Control will be determined and
certified by the Committee strictly in accordance with the foregoing sentence;
the Committee may not exercise discretion in applying the requirements of
relevant Internal Revenue Service guidance in the determination of the
occurrence of a Change of Control. For purposes of this provision, the
following acquisitions of stock by the Company shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, (iv) any acquisition by Mr. Michael S. Dell.

	 	(f)	 	Code: The Internal Revenue Code of 1986, as amended from time to time.
	 
	 	(g)	 	Committee: The Compensation Committee of the Board of Directors, which
may act through its delegate.
	 
	 	(h)	 	Company: Dell Inc., a corporation organized and existing under the
laws of the State of Delaware, or its successor or successors.
	 
	 	(i)	 	Deferral(s): A contribution by a Member pursuant to Section 2.2 of this
Plan.
	 
	 	(j)	 	Effective Date: January 1, 2005, except as otherwise provided herein.
The Plan was originally effective with respect to the Company on May 20, 1994.
	 
	 	(k)	 	ERISA: Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as amended from time to time.

-4-

 

	 	(l)	 	Investment Fund(s): The investment fund(s) designated by the Committee
from time to time for the hypothetical investment of a Member’s Accounts pursuant to
Article V.
	 
	 	(m)	 	Member: Any non-employee director of the Corporation who has become a
Member in the Plan, for as long as his benefit under the Plan has not been fully
distributed pursuant to the provisions of the Plan.
	 
	 	(n)	 	Normal Retirement Date: The date on which the Member attains age
sixty-five (65) years old.
	 
	 	(o)	 	Plan: The Dell Inc. Deferred Compensation Plan for Non-Employee
Directors, as amended from time to time.
	 
	 	(p)	 	Plan Year: The twelve (12)-consecutive month period commencing January
1 of each year.
	 
	 	(q)	 	Retirement: Termination of a Member’s service as a non-employee
director with the Company on or after his Normal Retirement Date.
	 
	 	(r)	 	Retirement Date: The first day of the month subsequent to a Member’s
Normal Retirement Age on which he actually terminates service as a non-employee
Director with the Company.
	 
	 	(s)	 	Trust Fund: All assets of whatsoever kind or nature held from time to
time by the Trustee pursuant to the Trust Agreement and forming a part of this Plan,
without distinction as to income and principal and without regard to source, i.e.
Member contributions or earnings. The Trust Fund shall constitute an unfunded
arrangement and shall not affect the status of the Plan as an unfunded plan for tax
purposes and for purposes of Title I of the Employee Retirement Income Security Act of
1974, as amended.
	 
	 	(t)	 	Trust Agreement: That certain trust agreement established pursuant to
the Plan between the Company and the Trustee or any trust agreement that forms a part
of this Plan, hereafter established, the provisions of which are incorporated herein by
reference.
	 
	 	(u)	 	Trustee: The corporation, individual or individuals appointed by the
Board of Directors to administer the Trust Fund in accordance with the terms of the
Trust Agreement.
	 
	 	(v)	 	Unforeseeable Financial Emergency:

	 	(1)	 	With Respect to Grandfathered Benefits: With respect
to Grandfathered Benefits, an Unforeseeable Financial Emergency is an
unexpected need of the Member for cash as a result of a “severe financial
hardship”, which includes (i) Medical expenses described in Code Section 213(d)
incurred by the Member, the Member’s spouse, or any dependents of the Member

-5-

 

	 	 	 	(as defined in Code Section 152), or necessary to obtain such medical care,
(ii) purchase of a principal residence for the Member, but excluding
mortgage payments, (iii) Payment of tuition, related educational fees, and
room and board expenses for the next twelve (12) months of post-secondary
education for the Member, the Member’s spouse, the Member’s children, or the
Member’s dependents; or (iv) the need to prevent the (A) eviction of the
Member from his principal residence, or (B) foreclosure on the mortgage of
the Member’s principal residence.
	 
	 	 	 	A withdrawal may be treated as necessary to satisfy a “severe financial
hardship” if the Member represents to the Committee that the need cannot be
relieved through (i) reimbursement or compensation by insurance or
otherwise, (ii) reasonable liquidation of the Member’s assets, to the extent
such liquidation would not itself cause an immediate and heavy financial
need; (iii) cessation of contributions under this Plan; or (iv) other
distributions or nontaxable (at the time of the loan) loans from plans
maintained by the Company or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
	 
	 	(2)	 	With Respect to 409A Benefits: With respect to 409A
Benefits, an Unforeseeable Financial Emergency is a severe financial hardship
to the Member resulting from any of the following:

	 	(A)	 	An illness or accident of the Member or the
illness or accident of the Member’s spouse or dependent (as defined in
Code Section 152(a)) without regard to Code Section 152(b)(1), (b)(2),
and (d)(1)(B);
	 
	 	(B)	 	Loss of the Member’s property due to casualty;
or
	 
	 	(C)	 	Other similar extraordinary and unforeseeable
circumstance arising as a result of events beyond the Member’s control.

Any determination of Unforeseeable Financial Emergency under this Subsection
(2) shall be made in accordance with the requirements of Code Section 409A
and any guidance issued thereunder.

	 	(w)	 	Valuation Dates: Each day of the Plan Year the NASDAQ is open for
business.

	1.2	 	Number and Gender. Wherever appropriate herein, words used in the singular shall be
considered to include the plural, and words used in the plural shall be considered to include
the singular. The masculine gender, where appearing in the Plan, shall be deemed to include
the feminine gender.
	 
	1.3	 	Headings. The headings of Articles and Sections herein are included solely for
convenience, and if there is any conflict between such headings and the text of the Plan, the
text shall control.

-6-

 

ARTICLE II.

Contributions

	2.1	 	General. Participation in the Plan shall be made available to all non-employee
directors of the Company.
	 
	2.2	 	Deferral(s). For any Plan Year, each Member may elect to defer a portion of his
Annual Compensation in accordance with this Article II. Any such Deferral(s) shall be in
whole percentages of the Member’s Annual Compensation, as specified in the Member’s
participation agreement. Contributions of amounts deferred shall be made by the Company
directly to the Trust. Annual Compensation not deferred by a Member pursuant to this Section
shall, for purposes of this Plan, be paid to the Member in such form as is otherwise provided
by the Company.
	 
	2.3	 	Deferral Election. A Member’s election to defer Annual Compensation for any Plan
Year under the Plan must be made by execution of a participation agreement prior to the first
day of the Plan Year. A Member may not change his or her deferral election during the Plan
Year. Any change in a Member’s deferral election shall be effective for the next Plan Year.
	 
	2.4	 	Crediting of Deferral(s). Deferrals made by a Member shall be credited to such
Member’s Account as soon as administratively feasible following the date such amounts would
have been paid to the Member. All payments from an Account shall be charged against the
Account as soon as administratively feasible.

ARTICLE III.

Allocations to Member Accounts

	3.1	 	Individual Accounts. The Committee shall create and maintain adequate records to
disclose the interest hereunder of each Member and Beneficiary. Such records shall be in the
form of an individual Account (including applicable subaccounts) reflecting all credits and
debits made to such Account in the manner herein described. This individual Account shall be
constituted as follows:

	 	(a)	 	Deferrals shall be credited to the Member’s Account.
	 
	 	(b)	 	The Account shall be segregated into subaccounts for Grandfathered Benefits and
409A Benefits and accounted for separately.
	 
	 	(c)	 	The subaccount attributable to Grandfathered Benefits shall be credited with
the Member’s Account balance as of December 31, 2004.
	 
	 	(d)	 	The subaccount attributable to 409A Benefits shall be credited with all
subsequent amounts credited to the Member’s Account for Plan Years beginning on and
after January 1, 2005.
	 
	 	(e)	 	For the subaccount holding 409A Benefits, the Committee shall establish a
separate subaccount for each Plan Year beginning on and after January 1, 2005, to

-7-

 

	 	 	 	which shall be credited the total of the Member’s Deferrals for the applicable Plan Year.

	3.2	 	Investment of Accounts. The Committee shall credit allocable earnings and losses to
each Member’s Account according to the hypothetical investments made by a Member pursuant to
the terms of Article IV.
	 
	3.3	 	Allocation of Net Income or Loss and Changes in Value.

	 	(a)	 	As of each Valuation Date, the Committee shall determine the fair market value
and the net income (or net loss) of each Investment Fund for the period elapsed since
the next preceding Valuation Date. The net income (or net loss) of each Investment
Fund since the next preceding Valuation Date shall be ascertained by the Committee in
such manner as it deems appropriate, which may include expenses, if any, of
administering the Investment Fund, the Trust Fund, and the Plan.
	 
	 	(b)	 	For purposes of crediting allocable net income (or net loss), each Member’s
Account shall be divided into subaccounts to reflect the hypothetical investment of
such Member’s Account in a particular Investment Fund or Investment Funds pursuant to
Article IV. As of each Valuation Date, the net income (or net loss) of each Investment
Fund, separately and respectively, shall be allocated among the corresponding
subaccounts of the Members who had such corresponding subaccounts invested in such
Investment Fund since the next preceding Valuation Date, and each such corresponding
subaccount shall be credited with (or debited for) that portion of such net income (or
net loss) that the value of each such corresponding subaccount on such next preceding
Valuation Date was of the value of all such corresponding subaccounts on such date;
provided, however, that the value of such subaccounts as of the next preceding
Valuation Date shall be reduced by the amount of any distributions made therefrom since
the next preceding Valuation Date.
	 
	 	(c)	 	So long as there is a balance credited to any Account, such Account shall
continue to share in earnings (or loss) allocations pursuant to this Section.
	 
	 	(d)	 	All payments from an Account shall be charged against the Account as soon as
administratively feasible.

ARTICLE IV.

Hypothetical Investment of Accounts

	4.1	 	Investment of Accounts. The Committee shall from time to time select, add, and/or
delete Investment Funds for purposes of the hypothetical investment of a Member’s Account. For
purposes of crediting allocable earnings and losses and valuation of
each Member’s Account, each Member’s Account shall be
deemed to be invested in the Investment Funds. Each
Member shall direct the hypothetical investment of all or
any portion of their Account in accordance with Section 4.2.

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	4.2	 	Designation of Investment Funds.

	 	(a)	 	Each Member, upon becoming a Member of the Plan, shall designate, in accordance
with the procedures established from time to time by the Committee, the manner in which
the amounts credited to his Account shall be deemed to be invested from among the
Investment Funds. Such Member must designate, in such minimum percentages as may be
prescribed by the Committee, that portion of his Account which the Member deems
invested in the Investment Fund. The designation will continue until changed by the
timely submission of a new designation, which change will be effective as soon as
administratively feasible. The Committee shall forward the investment designation to
the Trustee, who shall invest each member’s Account in accordance with such
designation. If a Member fails to make a proper designation, then his Account shall be
deemed to be invested in the Investment Fund or Investment Funds designated by the
Committee, in its sole and absolute discretion from time to time pursuant to the
provisions of the Trust.
	 
	 	(b)	 	A Member may change his hypothetical investment designation as of any Valuation
Date for future amounts to be credited to the portion of his Account by the timely
submission of a new designation. Any such change shall be made in accordance with the
procedures established by the Committee, and will be effective as soon as
administratively feasible.
	 
	 	(c)	 	In no event may a Member designate the investment of his Account in stock or
other securities of the Company.

ARTICLE V.

Vested Interest

	5.1	 	Vesting of Compensation Deferrals Account. A Member shall have a 100% vested interest
in his Account at all times.

ARTICLE VI.

Unforeseeable Financial Emergency 

	6.1	 	Rules Governing Grandfathered Benefits. Consistent with the Plan’s prior terms and
operation, in the event that the Committee, upon request of the Member, determines in its sole
discretion that the Member has suffered an Unforeseeable Financial Emergency as such term is
defined with respect to Grandfathered Benefits, the Member shall be entitled
to withdraw from the portion of his Individual Account attributable to Grandfathered
Benefits an amount not to exceed the amount required to meet the Unforeseeable Financial
Emergency that is not reasonably available from other resources of the Member. A withdrawal
may be treated as necessary to satisfy an Unforeseeable Financial Emergency if the Member
represents to the Committee that the need cannot be relieved through any of the following
resources: (i) through reimbursement or compensation by insurance or otherwise; (ii) by
reasonable liquidation of the Member’s assets, to the extent such liquidation would not
itself cause an immediate and heavy

-9-

 

	 	 	financial need; (iii) by cessation of contributions
under the Plan; or (iv) by other distributions or nontaxable (at the time of the loan )
loans from plans maintained by the Company or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms. This distribution shall be paid in a
single lump sum cash payment as soon as administratively practicable after the Committee has
made its determination with respect to the availability and amount of such withdrawal. If
the Member’s Account is deemed to be invested in more than one Investment Fund, such
withdrawal shall be made pro rata from each Investment Fund in which such Account is deemed
to be invested.
	 
	6.2	 	Rules Governing 409A Benefits. In the event that the Committee, upon written
petition of the Member, determines that the Member has suffered an Unforeseeable Financial
Emergency as such term is defined with respect to 409A Benefits, the Member shall be entitled
to withdraw from his Account attributable to 409A Benefits an amount that may not exceed the
amount necessary to satisfy such Emergency, plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the extent to which
such hardship is or may be relieved through reimbursement or compensation by insurance, or
otherwise or by liquidation of the Member’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). If the Member’s Account is deemed to
be invested in more than one Investment Fund, such withdrawal shall be made pro rata from each
Investment Fund in which such Account is deemed to be invested.

ARTICLE VII.

Benefit Distributions

	7.1	 	General Rules.

	 	(a)	 	Benefit Amount. A Member’s Plan benefit shall be made from the Trust
Fund in an amount equal to the entire value of his Account determined as of the
Valuation Date designated by the Committee for the purposes of valuing distributions
coinciding with or next following the Member’s termination of service as a non-employee
director with the Company.
	 
	 	(b)	 	Triggering Events. A Member’s benefit shall become payable upon the
earliest to occur of the following events, each of which shall be classified as a
“Triggering Event”:

	 	(1)	 	A Member’s termination of service as a non-employee director
for any reason;
	 
	 	(2)	 	The death of the Member;
	 
	 	(3)	 	A Change of Control.

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	7.2	 	Rules Governing Form and Timing of Payment of Grandfathered Benefits. 

	 	(a)	 	Commencement of Payments. The Member’s Account attributable to
Grandfathered Benefits shall be paid, as soon as administratively practicable following
a Triggering Event. A Member’s benefit shall be paid to the Member, unless the
Triggering Event is the death of the Member, in which case the Member’s benefit shall
be paid to the Member’s Beneficiary pursuant to Section 7.2(e).
	 
	 	(b)	 	Form of Payment. A Member’s Account attributable to Grandfathered
Benefits shall be paid in cash in one of the following forms:

	 	(1)	 	A single lump sum payment; or
	 
	 	(2)	 	Installment payments for a term certain not to exceed ten (10)
years, such method of payment to be elected by the member on his participation
agreement, payable to such Member or, in the event of such Member’s death prior
to the end of such term certain, to his Beneficiary.

	 	(c)	 	Time and Applicability of Election. A Member must elect one of the
forms of payment listed in Subsection (b) above on his participation agreement. Except
as provided in Subsection (d) below, such election shall be irrevocable by the Member,
shall remain in effect for all periods of a Member’s participation in the Plan and
shall be effective with respect to all Grandfathered Benefits. In the event a Member
fails to timely elect the form in which payment of his Grandfathered Benefits is to be
made, the Member shall be deemed to have elected of a single lump sum cash payment.
	 
	 	(d)	 	Change in the Form of Payment. Solely with respect to his Grandfathered
Benefits, a Member shall be entitled to change his elected form of benefit payment once
every five years. No such change will become effective if it was not made more than
two years prior to the date that benefits commence. If a Triggering Event occurs
during a Plan Year following the Committee’s receipt of the Member’s written election
to change the form of distribution, such election shall be deemed to be null and void
and the immediately preceding election on file with the Committee shall continue to
apply to the form of distribution of the Member’s Grandfathered Benefits.
	 
	 	(e)	 	Death of Member. If a Member’s benefit becomes payable as a result of
the death of the Member, then the following shall apply

	 	(1)	 	If a Member dies prior to the termination of his service as a
non-employee director with the Company, the Member’s Beneficiary shall be
entitled to the value of the Member’s Account.
	 
	 	(2)	 	Upon the death of a Member who, at the time of his death, had
previously terminated his service as a non-employee director with the Company,
the Member’s Beneficiary shall be entitled to receive the entire portion of the
Member’s Account.

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	 	(3)	 	If subsequent to the death of a Member, the Member’s
Beneficiary dies while entitled to receive benefits, the successor Beneficiary
of the Member, if any, shall be entitled to receive benefits of the Member.
However, if no successor Beneficiary was designated or is living, the benefits
shall be paid to the legal representative of the deceased Beneficiary’s estate
to be paid according to the deceased Beneficiary’s will, or if the deceased
Beneficiary has no will, by the laws of intestacy of the state in which the
deceased Beneficiary resided at the date of the deceased Beneficiary’s death.
	 
	 	(4)	 	Any benefit payable under this Section 7.2(e) shall be paid
pursuant to the Member’s election in his participation agreement, after receipt
by the Trustee from the Committee of notice of the death of the Member.

	 	(f)	 	Distribution following Change of Control. Notwithstanding a Member’s
elections hereunder, if the Section 7.1(b) “Triggering Event” of the Member’s
Grandfathered Benefits is a Change of Control, such Grandfathered Benefits shall be
paid to the Member in a single lump sum cash payment as soon as administratively
practicable following the Change of Control.

	7.3	 	Rules Governing Form and Timing of Payment of 409A Benefits.

	 	(a)	 	Commencement of Payments. The portion of a Member’s Account
attributable to 409A Benefits shall be paid, or payment shall commence, as soon as
administratively practicable following the “Triggering Event”. The Member’s Account
attributable to 409A Benefits shall be paid directly to the Member, unless the
“Triggering Event” is the death of the Member, in which case such amounts shall be paid
to the Member’s Beneficiary.
	 
	 	(b)	 	Form of Payment. The portion of a Member’s Individual Account
attributable to 409A Benefits shall be paid to the Member in one of the following
forms:

	 	(1)	 	In a single lump sum cash payment; or
	 
	 	(2)	 	In cash payments in monthly, quarterly or annual installments
for a term certain not to exceed ten (10) years payable to such Member or, in
the event of such Member’s death prior to the end of such term certain, to his
Beneficiary.

	 	(c)	 	Time and Applicability of Election. With respect to that portion of a
Member’s Account attributable to 409A Benefits, a Member must elect one of the forms of
payment listed in Section 7.3(b) above at the time the deferral election that applies
to such 409A Benefits is made. Except as provided in Section 7.3(d) below, such
election (i) shall be effective solely with respect to the amounts deferred pursuant to
the election, (ii) shall be irrevocable by the Member, and (iii) shall remain in effect
for all periods of a Member’s participation in the Plan. In the event a Member fails
to timely elect the form in which amounts attributable to 409A

-12-

 

	 	 	 	Benefits is to be paid, the Member shall be deemed to have elected payment of such amounts in the form of a
single lump sum cash payment.
	 
	 	(d)	 	Change in the Form of Payment. With respect to 409A Benefits, a
modification of a Member’s previous election related to the form of distribution with
respect to such amounts shall not be effective unless all of the following requirements
are satisfied:

	 	(A)	 	The modified election shall not be effective for at least
twelve (12) months following the date on which the modified election is filed
with the Committee.
	 
	 	(B)	 	Except in the case of modified elections relating to
distributions on account of death or Unforeseeable Emergency, the modified
election must provide that payment will not be made or commence for at least
five (5) years from the date payment would otherwise have been made or
commenced.
	 
	 	(C)	 	A modified election relating to a distribution to be made on a
specified future date or under a fixed payment schedule shall be filed at least
twelve (12) months prior to the date of the first otherwise scheduled payment.
	 
	 	(D)	 	A modified election shall not accelerate the time or schedule
of any payment under the Plan, except as may be permitted pursuant to the
applicable Treasury Regulations.

Solely for purposes of applying the election modification restrictions described in
this Section 7.3(d), a Member’s election to be paid in installment payments shall be
treated as an election of a single lump sum cash payment to be made on the date the
installment payments are scheduled to commence.

	 	(e)	 	Death of Member. If a Member dies prior to the date on which the
payment of 409A Benefits begins or is completed, such benefit, or the remaining unpaid
portion of such benefit, as the case may be, shall be paid to such Member’s
Beneficiary in a single lump sum cash payment, notwithstanding any other form of
payment elected by such Member.
	 
	 	(f)	 	Distribution following Change of Control. The preceding
notwithstanding, if the Section 7.3(b) “Triggering Event” of a Member’s Account
attributable to 409A Benefits is a Change of Control, such benefits shall be paid to
the Member in a single lump sum cash payment as soon as administratively practicable
following the Change of Control. In no event shall a distribution under this Section
7.3(f) be paid outside of the time period permitted under Code Section 409A and the
related Treasury Regulations.

	7.4	 	Payments Pursuant to a Qualified Domestic Relations Order. To the extent that a
Member’s benefits are partitioned under a Qualified Domestic Relations Order (“QDRO”) pursuant
to Section 11.2 hereof, the “alternate payee’s” benefits shall be paid

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	 	 	in cash, in a single lump sum, as soon as administratively practicable following the date the QDRO is approved by
the Committee. In the event that an “alternate payee” dies prior to the date that his
benefits are eligible for distribution hereunder, his benefits shall be paid to the “alternate
payee’s” Beneficiary as soon as administratively feasible following his date of death.
Payments made to an “alternate payee”, or an “alternate payee’s” Beneficiary, shall be in the
form of a single lump sum cash payment.
	 
	7.5	 	Payer of Benefits. To the extent the Trust Fund has sufficient assets, the Trustee
shall pay benefits to Members or their Beneficiaries. To the extent the Trustee does not or
cannot pay benefits out of the Trust Fund, the benefits shall be paid by the Company. Any
benefit payments made to a Member for his benefit pursuant to any provision of the Plan shall
be debited to such Member’s Account. All benefit payments shall be made in cash.
	 
	7.6	 	Unclaimed Benefits. In the case of a benefit payable to or on behalf of a Member, if
the Committee after a reasonable search is unable to locate the Member or Beneficiary to whom
such benefit is payable, upon the Committee’s determination thereof, such benefit shall be
forfeited to the Company. The Committee shall adopt procedures concerning the process that
will be followed to locate a Member or Beneficiary under this Section. Notwithstanding the
foregoing, if subsequent to any such forfeiture the Member or Beneficiary to whom such benefit
is payable makes a valid claim for such benefit within a reasonable (as determined by and in
the discretion of the Committee) period of time following the date such benefit became
payable, such forfeited benefit shall be payable pursuant to the Plan provisions.

ARTICLE VIII.

Transition Rules

	8.1	 	Deferral Elections for Plan Years 2005 and 2006. After enactment of Code Section
409A and pending the issuance of the Treasury Regulations pursuant to such Code Section,
deferral elections were administered in the following manner:

	 	(a)	 	Members were required to make an election to defer Annual Compensation in 2005
before December 31, 2004 in a manner consistent with the Proposed Regulations issued
under Code Section 409A.
	 
	 	(b)	 	Members were required to make an election to defer Annual Compensation in 2006
before December 31, 2005 in a manner consistent with the Proposed Regulations issued
under Code Section 409A.
	 
	 	(c)	 	Members were required to make an election to defer Annual Compensation in 2007
before December 31, 2006 in a manner consistent with the Treasury Regulations issued
under Code Section 409A.
	 
	 	(d)	 	Members were required to make an election to defer Annual Compensation in 2008
before December 31, 2007 in a manner consistent with the Proposed Regulations issued
under Code Section 409A.

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	8.2	 	Distribution Elections.

	 	(a)	 	With respect solely to Grandfathered Benefits, Distribution elections
applicable to Grandfathered Benefits have been consistently administered as filed by
the Member. Such elections have been modified only as permitted under the Plan’s terms
as applicable prior to the adoption of Code Section 409A.
	 
	 	(b)	 	With respect to 409A Benefits. Effective with respect to the Plan
Years beginning on and after January 1, 2005, at the time a Member made an election to
defer an amount attributable to 409A Benefits, the Member was required to make an
election as to the form of distribution of such amount, as provided in Section 7.3(b)
hereof. If no such election was made, the distribution of such amount will be in the
form of a single lump sum cash payment.

ARTICLE IX.

Administration of Plan

	9.1	 	Appointment of Committee. The general administration of the Plan shall be vested in
the Committee, which shall be appointed by the Company’s Board of Directors and shall consist
of one or more persons. Any individual, whether or not an employee of the Company, is
eligible to become a member of the Committee.
	 
	9.2	 	Term, Vacancies, Resignation, and Removal. Each member of the Committee shall serve
until he resigns, dies, or is removed by the Board of Directors. At any time during his term
of office, a member of the Committee may resign by giving written notice to the Board of
Directors and the Committee, such resignation to become effective upon the appointment of a
substitute member or, if earlier, the lapse of thirty (30) days after such notice is given as
herein provided. At any time during his term of office, and for any reason, a member of the
Committee may be removed by the Board of Directors with or without cause, and the Board of
Directors may in their discretion fill any vacancy that may result therefrom.
Any member of the Committee who is an employee of the Company shall automatically cease to
be a member of the Committee as of the date he ceases to be employed by the Company.
	 
	9.3	 	Self-Interest of Committee Members. No member of the Committee shall have any right
to vote or decide upon any matter relating solely to himself under the Plan or to vote in any
case in which his individual right to claim any benefit under the Plan is particularly
involved. In any case in which a Committee member is so disqualified to act and the remaining
members cannot agree, the Board of Directors shall appoint a temporary substitute member to
exercise all the powers of the disqualified member concerning the matter in which he is
disqualified.
	 
	9.4	 	Committee Powers and Duties. The Committee shall administer and enforce the Plan
according to the terms and provisions hereof and shall have all powers necessary to accomplish
these purposes, including, but not by way of limitation, the complete and absolute discretion
to construe all provisions of the Plan and make all factual determinations and the right,
power, authority, and duty:

-15-

 

	 	(a)	 	To perform any act which the Plan authorizes expressed by a vote at a meeting
or in a writing signed by a majority of the Committee without a meeting;
	 
	 	(b)	 	To designate, by a writing signed by a majority, any person constituting the
Committee as the person entitled to give notices on behalf of the Committee, and the
Trustee is entitled to rely upon any such writing until amended or superseded by a
subsequent similar writing;
	 
	 	(c)	 	To designate in writing other persons to carry out its responsibilities under
the Plan. The Committee may remove any person designated to carry out its
responsibilities under the plan by notice in writing to that person;
	 
	 	(d)	 	To employ persons to render advice with regard to any of its responsibilities.
Charges for all services rendered shall be directly paid by the Company but until paid
shall constitute a charge against the Trust;
	 
	 	(e)	 	Advise the Trustee with respect to all payments under the terms of the Plan and
shall direct the Trustee in writing to make payments from the Trust Fund;
	 
	 	(f)	 	To construe in its sole discretion all terms, provisions, conditions, and
limitations of the Plan;
	 
	 	(g)	 	To correct any defect or to supply any omission or to reconcile any
inconsistency that may appear in the Plan in such manner and to such extent as it shall
deem in its discretion expedient to effectuate the purposes of the Plan;
	 
	 	(h)	 	Establish rules, not contrary to the provisions of the Plan and the Trust
Agreement, for the administration of the Plan and the transaction of its business.
The Committee shall interpret the Plan in its sole and absolute discretion, and
shall determine all questions arising in the administration, interpretation, and
application of the Plan;
	 
	 	(i)	 	To establish or designate Investment Funds as provided in Article IV; and
	 
	 	(j)	 	To receive and review reports from the Trustee as to the financial condition of
the Trust Fund, including its receipts and disbursements.

All determinations of the Committee shall be conclusive and binding on all Members and
Beneficiaries. Notwithstanding the preceding, with respect to amounts attributable to 409A
Benefits and with respect to administration of the Plan on and after January 1, 2005, the
Committee shall act to administer and interpret the Plan in compliance with Code Section
409A and all related guidance issued pursuant to such Code Section.

Any action to be taken by the Company shall be taken by resolution adopted by its Board of
Directors, an executive committee thereof, or its governing body; provided however, that by
resolution such entity may delegate to any officer of the Company the authority to take any
action hereunder, other than the power to amend or terminate the Plan or the Trust or to
determine the basis of the Company’s contributions.

-16-

 

	9.5	 	Claims Review.

	 	(a)	 	In any case in which a claim for Plan benefits of a Member or Beneficiary is
denied or modified, the Committee shall furnish written notice to the claimant within
ninety (90) days (or within 180 days if additional information requested by the
Committee necessitates an extension of the ninety-day period and, in which case, the
claimant shall be informed of such extension prior to the end of the initial ninety
(90)-day period), which notice shall:

	 	(1)	 	State the specific reason or reasons for the denial or
modification;
	 
	 	(2)	 	Provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
	 
	 	(3)	 	Provide a description of any additional material or information
necessary for the Member, his beneficiary, or representative to perfect the
claim and an explanation of why such material or information is necessary; and
	 
	 	(4)	 	Explain the Plan’s claim review procedure as contained herein.

	 	(b)	 	In the event a claim for Plan benefits is denied or modified, if the Member,
his Beneficiary, or a representative of such Member or Beneficiary desires to have such
denial or modification reviewed, he must, within sixty (60) days following receipt of
the notice of such denial or modification, submit a written request for review by the
Committee of its initial decision. In connection with such request, the Member, his
Beneficiary, or the representative of such Member or Beneficiary may review any
pertinent documents upon which such denial or modification was
based and may submit issues and comments in writing. Within sixty (60) days
following such request for review the Committee shall, after providing a full and
fair review, render its final decision in writing to the Member, his Beneficiary, or
the representative of such Member or Beneficiary stating specific reasons for such
decision and making specific references to pertinent Plan provisions upon which the
decision is based. If special circumstances require an extension of such sixty-day
(60) period, the Committee’s decision shall be rendered as soon as possible, but not
later than one-hundred-twenty (120) days after receipt of the request for review.
If an extension of time for review is required, written notice of the extension
shall be furnished to the Member, Beneficiary, or the representative of such Member
or Beneficiary prior to the commencement of the extension period.
	 
	 	(c)	 	If, upon appeal, the Committee shall grant the relief requested by the
claimant, then, in addition, the Committee shall award to the claimant reasonable fees
and expenses of counsel, or any other duly authorized representative of claimant, which
shall be payable from the Trust Fund.
	 
	 	(d)	 	The Committee’s notice of denial of benefits shall identify the address to
which the claimant must forward his appeal.

-17-

 

	 	(e)	 	Compliance with the claims review procedures set forth in this Section shall be
a condition precedent to the filing of a lawsuit by a Member, his Beneficiary, or any
person claiming through a Member or Beneficiary in connection with a Plan benefit, and
a failure to timely exhaust the administrative remedies set forth herein shall bar any
such proceeding in federal or state court.

	9.6	 	Company to Supply Information. The Company shall supply full and timely information
to the Committee, including, but not limited to, information relating to each Member’s Annual
Compensation, age, retirement, death, or other cause of termination from service as a
non-employee director and such other pertinent facts as the Committee may require. When
making a determination in connection with the Plan, the Committee shall be entitled to rely
upon the aforesaid information furnished by the Company.
	 
	9.7	 	Indemnity. To the extent permitted by applicable law, the Company shall indemnify
and hold harmless each member of the Committee and other employees of the Company to whom Plan
administrative functions have been delegated by the Committee against any and all expenses and
liabilities arising out of such individual’s administrative functions or fiduciary
responsibilities under or incident to the Plan, including any expenses and liabilities that
are caused by or result from an act or omission constituting the negligence of such individual
in the performance of such functions or responsibilities, but excluding expenses and
liabilities that are caused by or result from such individual’s own gross negligence or
willful misconduct. Expenses against which such individual shall be indemnified hereunder
shall include, without limitation, the amounts of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a claim asserted or a
proceeding brought or settlement thereof.

ARTICLE X.

Purpose and Unfunded Nature of the Plan

	10.1	 	Purpose of Plan. The Company, as Plan sponsor, intends and desires by the adoption
and maintenance of the Plan to recognize the value to the Company of its non-employee
directors by making more adequate provision for their future retirement security.
	 
	10.2	 	Unfunded Nature of Plan. The Plan is intended to constitute an unfunded, unsecured
plan of deferred compensation for all non-employee directors of the Company. Further, it is
the intention of the Company, as Plan sponsor, that the Plan be “unfunded” for purposes of the
Code and Title I of ERISA. The Plan constitutes a mere promise by the Company to make benefit
payments in the future. Plan benefits herein provided are to be paid out of an Employer’s
general assets, and Members shall have the status of general unsecured creditors of an
Employer.

-18-

 

	10.3	 	Funding of Obligation.

	 	(a)	 	All benefits under the Plan shall be the unsecured obligations of the Company,
and, except for those assets which will be placed in the Trust Fund established in
connection with this Plan, no assets will be placed in the Trust Fund or otherwise
segregated from the general assets of the Company, for the payment of obligations
hereunder. Legal and equitable title to any funds so set aside shall remain with the
Company. To the extent that any person acquires a right to receive payments hereunder,
such right shall be no greater than the right of any unsecured general creditor of the
Company.
	 
	 	(b)	 	The Company, in its capacity as Plan sponsor and in its sole discretion, may
establish the Trust and enter into the Trust Agreement. Any such Trust, and any assets
held by such Trust, to assist the Company in meeting their obligations under the Plan
shall be a “rabbi trust.” The Employers may transfer money or other property to the
Trustee, and the Trustee shall pay Plan benefits to Members and their beneficiaries out
of the Trust Fund unless otherwise paid by the Company. In such event, the Company
shall remain the owner of all assets in the Trust Fund, and the assets held in the
Trust Fund shall be subject to the claims of Company creditors if the Company becomes
“insolvent” as described in Subsection (c) below. No Member or Beneficiary shall have
any preferred claim to, or any beneficial ownership interest in, any assets of the
Trust Fund.
	 
	 	(c)	 	The Company shall be considered “insolvent” if (i) the Company is unable to pay
its debts as they become due or (ii) the Company is subject to a pending proceeding as
a debtor under the United Sates Bankruptcy Code (or any successor federal statute).
	 
	 	(d)	 	The chief executive officer of the Company and the Board of Directors shall
each have the duty to inform the Trustee in writing if the Company becomes insolvent.
Such notice given under the preceding sentence by any one party shall satisfy each
party’s duty to give notice. When so informed, the Trustee shall suspend payments
to the Member and Beneficiaries and hold the assets for the benefit of the Company’s
general creditors. If the Trustee receives a written allegation that the Company is
insolvent, the Trustee shall suspend payments to the Members and beneficiaries and
hold the Trust Fund for the benefit of the Company’s general creditors and shall
determine within the period specified in the Trust Agreement, or, in the absence of
a specified period, within a reasonable period of time, whether the Company is
insolvent. If the Trustee determines that the Company is not insolvent, the Trustee
shall resume payments to the Members and beneficiaries. In the case of insolvency
of the Company, only the assets contributed to the Trust Fund, if any, by the
Company, whichever is insolvent, shall be subject to the claims of such insolvent
entity.
	 
	 	(e)	 	All expenses incident to the administration of the Plan and Trust Fund,
including but not limited to, legal, accounting, Trustee fees, and expenses of the
Committee,

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	 	 	 	may be paid by the Company and, if not so paid, shall be paid by the Trustee
from the Trust Fund, if any.
	 
	 	(f)	 	All income, profits, recoveries, contributions, forfeitures and any and all
moneys, securities, and properties of any kind at any time received or held by the
Trustee, if any, shall be held for investment purposes as a commingled Trust Fund
pursuant to the terms of the Trust Agreement. The Committee shall maintain Accounts in
the name of each Member, but the maintenance of Accounts designated as Accounts of a
Member shall not mean that such Member shall have a greater or lesser interest than
that due him under the terms of the Plan and shall not be considered as segregating any
funds or property from any other funds or property contained in the commingled fund.

ARTICLE XI.

Miscellaneous

	11.1	 	Limitation of Rights. The adoption and maintenance of the Plan shall not be deemed
to give any person any right except to the extent that the right is specifically provided
under the terms of the Plan. The establishment of the Plan shall not be deemed to give any
individual a right to the continued service of the Company as a non-employee director or as to
interfering with the right of the Company to terminate the service of any individual as a
non-employee director at any time.
	 
	11.2	 	Alienation of Interest Forbidden. The interest of a Member or his Beneficiary or
Beneficiaries hereunder may not be sold, transferred, assigned, or encumbered in any manner,
either voluntarily or involuntarily, and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be null and void, nor shall the
benefits hereunder be liable for or subject to the debts, contracts, liabilities, engagements,
or torts of any person to whom such benefits or funds are payable, nor shall they be an asset
in bankruptcy or subject to garnishment, attachment, or other legal or equitable proceedings. The preceding
notwithstanding, the Committee shall comply with the terms and provisions of a QDRO as
defined in ERISA Section 206(d).
	 
	11.3	 	Minor or Legally Incompetent Distributee. Whenever any benefit which shall be
payable under the Plan is to be paid to or for the benefit of any person who is then a minor
or determined by the Committee to be incompetent by qualified medical advice, the Committee
need not require the appointment of a guardian or custodian, but shall be authorized to cause
the same to be paid over to the person having custody of the minor or incompetent, or to cause
the same to be paid to the minor or incompetent without the intervention of a guardian or
custodian, or to cause the same to be paid to a legal guardian or custodian of the minor or
incompetent if one has been appointed or to cause the same to be used for the benefit of the
minor or incompetent.
	 
	11.4	 	Withholding. All Deferrals, and benefit payments provided for hereunder, shall be
subject to applicable withholding and other deductions as shall be required of the Company
under any applicable local, state, or federal law as such laws are interpreted by the Company.

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	11.5	 	Amendment and Termination.

	 	(a)	 	Amendment and Termination with Respect to Grandfathered Benefits. This
paragraph applies solely with respect to Grandfathered Benefits. The Board of Directors
have the absolute and unconditional right to terminate or amend, in whole or in part,
any or all of the provisions of the Plan that affects Grandfathered Benefits at any
time and may from time to time, in their discretion; provided, however, that any
amendments to the Plan that do not increase the duties or liabilities of the Trustee
without its written consent; and provided, further, that no amendments, whether or not
retroactive, change or deprive Members or Beneficiaries of rights already accrued under
the Plan without their consent. In the event that the Plan is so terminated,
notwithstanding any other form of benefit elected by the Member, the balance of each
Member’s Grandfathered Benefits shall be paid to such Member or his Beneficiary in the
manner selected by the Committee in its discretion (notwithstanding any other form of
benefit elected by such Member), which may include the payment of a single lump sum
cash payment, in full satisfaction of all of such Member’s or Beneficiary’s
Grandfathered Benefits hereunder. In the event that the Company shall change its name,
the Plan shall be deemed to be amended to reflect the name change without further
action of the Company, and the language of the Plan shall be changed accordingly.
	 
	 	(b)	 	Amendment and Termination with Respect to 409A Benefits. The Company
may amend or terminate the portion of the Plan that is subject to Code Section 409A
upon occurrence of any one of the following events:

	 	(1)	 	Within twelve (12) months of the Company’s dissolution, taxed
under Code Section 331 or with the approval of a bankruptcy court pursuant to
11 U.S.C. Section 503(b)(1)(A), provided that the amounts deferred under the
Plan are included in the Member’s gross income in the latest of:

	 	(A)	 	The calendar year in which Plan termination
occurs;
	 
	 	(B)	 	The calendar year in which such amounts are no
longer subject to a substantial risk of forfeiture; or
	 
	 	(C)	 	The first calendar year in which payment of
such amounts is administratively practicable.

	 	(2)	 	Within the thirty (30) days preceding or the twelve (12) months
following a Change of Control, provided all substantially similar arrangements
(within the meaning of Code Section 409A and related guidance issued
thereunder) sponsored by the Company are also terminated, so that the Member
and all Members under substantially similar arrangements are required to
receive all amounts of compensation deferred under the terminated arrangements
within twelve (12) months of the date of termination of the arrangements.

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	 	(3)	 	At the discretion of the Company, provided that all of the
following requirements are satisfied:

	 	(A)	 	All arrangements sponsored by the Company that
would be aggregated with any terminated arrangement under Treasury
Regulation Section 1.409A-1(c), if the same Member participated in all
of the arrangements, are terminated;
	 
	 	(B)	 	No payments other than payments that would be
payable under the terms of the arrangements if the termination had not
occurred are made within twelve (12) months of the termination of the
arrangements;
	 
	 	(C)	 	All payments are made within twenty-four (24)
months of the termination of the arrangements; and
	 
	 	(D)	 	The Company does not adopt a new arrangement
that would be aggregated with any terminated arrangement under Treasury
Regulation Section 1.409A-1(c), if the same Member participated in both
arrangements, at any time within three (3) years following the date of
termination of the arrangement.

	 	(4)	 	Such other events and conditions as the Commissioner of
Internal Revenue may prescribe in generally applicable guidance published in
the Internal Revenue Bulletin.

	11.6	 	Severability. If any provision of the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining provisions hereof;
instead, each provision shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.
	 
	11.7	 	Governing Laws. All provisions of the Plan shall be construed in accordance with the
laws of the State of Texas except to the extent preempted by federal law.

Executed this      10th      day of December, 2008.

	 	 	 	 	 
	 	DELL INC.

 	 
	 	By:  	/s/ Kathleen O. Angel
 	 
	 	Name:  	Kathleen O. Angel 	 
	 	Title:  	Director, Global Benefits 	 
	 

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