Deferred Compensation Plan for Non-Employee Directors

1.   Eligible Directors .  The Directors of the Corporation eligible to make deferral elections under this Plan shall be those Directors who are not actively employed officers or employees of the Corporation or of any of its subsidiaries or affiliates (hereinafter referred to individually as a “Non-Employee Director” and collectively as the “Non-Employee Directors,” which includes such a person participating in the Plan after ceasing to be a Director of the Corporation).

2.   Deferrable Compensation .  A Non-Employee Director may elect to defer receipt of all, any part or none of the aggregate compensation payable by the Corporation for services rendered as a Director, including the annual base retainer, Committee Chairman annual retainer increment, attendance fees for board and committee meetings, and other fees for special services that are payable in cash (in the aggregate, the “Director’s Fees”).

3.   Election To Defer .  A Non-Employee Director who desires to defer receipt of all or a portion of his or her Director’s Fees earned in any calendar year shall so notify the Corporation’s Pension Committee in writing before the first day of the calendar year, specifying on a form supplied by the Committee (the “Deferral Election”) (a) the dollar amount or percentage of the Director’s Fees to be deferred, (b) the deferral period under Paragraph 7 and/or Paragraph 9(a), (c) the form of payment under Paragraph 7 and/or Paragraph 9(a), and (d) the notional investment direction under Paragraph 5(a).  A newly-appointed Non-Employee Director shall be eligible to defer payment of future Director’s Fees by filing a Deferral Election with the Pension Committee not later than 30 days of his or her appointment to the Board of Directors and such Deferral Election shall be effective only with regard to the amount of Director’s Fees earned during the calendar year following the filing of the Deferral Election as determined pursuant to the pro-ration method permitted under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  The Deferral Elections made pursuant to this Paragraph shall be irrevocable with respect to those Director’s Fees to which such elections pertain and shall also apply to Director’s Fees payable in future calendar years unless the Non-Employee Director terminates or modifies such Deferral Election with respect to a future calendar year by filing a new Deferral Election before the first day of the calendar year with respect to which the Deferral Election is to become effective.  Such new Deferral Election shall likewise continue in effect and apply to future calendar years until similarly changed.

4.   Non-Deferred Compensation .  Any Director’s Fees not deferred under this Plan shall be paid in accordance with normal Corporation policy.

5.   Deferred Compensation Accounts And Notional Investment Directions .

(a)   Accounts:  At the time a Non-Employee Director elects to defer the receipt of compensation pursuant to Paragraph 3 above, he shall also direct the amount of the deferral to be notionally invested in an Interest-Bearing Account and the amount to be notionally invested in a Harsco Stock Account.  Pursuant to such investment direction, the deferral amounts shall be credited to the appropriate accounts as set forth below:

(i)   Interest-Bearing Account:   To   the extent that a Non-Employee Director elects a notional investment in an Interest-Bearing Account, the Corporation shall credit an Interest-Bearing Account established in his or her name with the amount of the deferred Director’s Fees to be so invested.  This credit shall occur on a quarterly basis, as of each February 15, May 15, August 15 and November 15 for fees earned during the quarterly period ending on the day immediately preceding such crediting date.

(ii)   Harsco Stock Account:   To   the extent that a Non-Employee Director elects a notional investment in a Harsco Stock Account, the Corporation shall credit a Harsco Stock Account established in his or her name with units (including fractions), the number of which shall be obtained by dividing the amount of the deferred Director’s Fees for that period to be so invested, by the Fair Market Value of the Corporation’s common stock on the day immediately preceding the date such credit is to be made to the Account (i.e. February 14 for the February 15 credit date).  This credit shall occur on a quarterly basis, as of each February 15, May 15, August 15 and November 15, for fees earned during the quarterly period ending on the day immediately preceding such crediting date.  These units, thus calculated, are hereinafter referred to as “Stock Equivalents.”  For purposes of the Plan, Fair Market Value of a share of the Corporation’s common stock on any date shall be equal to the mean between the high and low prices at which such shares were traded (on a consolidated basis) on the New York Stock Exchange (“NYSE”) on such date, or, if no sales were quoted on such date, on the most recent preceding date on which sales were quoted.  In the event of any change in the common stock of the Corporation by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or a rights offering to purchase common stock at a price substantially below Fair Market Value, or of any similar change affecting the common stock, the value and attributes of each Stock Equivalent shall be appropriately adjusted consistent with such change to the same extent as if such Stock Equivalents were issued and outstanding shares of common stock of the Corporation.

(b)   Earnings:  The Corporation shall credit earnings to each account as follows:

(i)   Interest-Bearing Account:   As of each February 15, May 15, August 15 and November 15, the Corporation shall credit as earnings to each Interest-Bearing Account established on behalf of a Non-Employee Director an amount equal to the Five Year U.S. Treasury Note Percentage Rate multiplied by the average daily balance in such Interest-Bearing Account during such quarter.  Such Five Year U.S. Treasury Note Percentage Rate shall be equal to one twelfth (1/12) of the yield on U.S. Treasury Notes having a maturity date five (5) years hence as listed in The Wall Street Journal or any successor publication, as of market closing on the business day immediately preceding the day such credits are to be made (i.e., February 14 for the interest credit on February 15).

(ii)   Harsco Stock Account:   As of each quarterly dividend payment date, the Corporation shall credit as earnings to each Harsco Stock Account an amount equal to the cash dividends payable on such date with respect to that number of shares (including fractional shares) of its common stock equal to the number of Stock Equivalents credited to the Harsco Stock Account on the relevant dividend record date.  The amount so credited shall then be converted into additional Stock Equivalents in the manner described earlier using the dividend payment date as the valuation date.

(c)   Account Transfers:  A Non-Employee Director may transfer all or part of the amount in one account to the other account by irrevocable written notice to the Corporation’s Pension Committee.  Any such transfer will be effective upon the date that the Corporation receives the written notice, and the value of the Harsco Stock Account for purposes of the transfer shall be calculated using the Fair Market Value on the date of the transfer.  No Non-Employee Director may make a transfer between accounts within six months of any previous opposite way transfer by such Director or within six months of any other transaction in Corporation stock that could cause liability under Section 16(b) of the Securities Exchange Act of 1934, and any notice of transfer in contravention of this provision will be void.

(d)   A Non-Employee Director’s account(s) shall be further divided into the following subaccounts: (a) a “Pre-2005 Subaccount” for amounts deferred by a Non-Employee Director as of December 31, 2004 (and earnings and losses thereon) as determined under Treasury Regulation Section 1.409A-6(a) or any successor provision, and (b) a “Post-2004 Subaccount” for amounts deferred for purposes of Code Section 409A by a Non-Employee Director after December 31, 2004 (and earnings and losses thereon).   Amounts credited to the Pre-2005 Subaccounts, which are intended to qualify for “grandfathered” status, shall be subject to the terms and conditions specified in the Plan as in effect immediately prior to January 1, 2005.

6.   Deferral Period .  At the same time a Non-Employee Director makes a Deferral Election pursuant to Paragraph 3 above, he shall make a payment election (the “Payment Election”) with respect to the deferred amounts subject to such Deferral Election by specifying the year (the “Payment Year”) in which the deferred amounts are to be paid or to commence to be paid; provided, however, that in no event shall the Payment Year be later than the year following the year in which the Non-Employee Director will attain age 72.  A Payment Year may be specified as the year following the year of the Non-Employee Director’s separation from service.  Subject to Paragraph 8(d)(5), payments made in accordance with the Non-Employee Director’s Payment Election shall be paid or commence to be paid within 30 days following the first business day of the Payment Year.  Because a Non-Employee Director may make a new Deferral Election and corresponding Payment Election for Director’s Fees earned during each calendar year, deferred Director’s Fees under the Plan for different calendar years may have different specified Payment Years.

7.   Form Of Payment Of Deferred Compensation .  A Non-Employee Director’s Payment Election shall also specify whether the deferred Director’s Fees shall be paid in the

form of a single lump sum or installment payments.  Initial payments made under the Plan shall be based upon the aggregate balance in a Non-Employee Director’s account(s) determined on the first business day of the Payment Year.  The balance in the Non-Employee Director’s Interest-Bearing Account shall be the dollar amount credited to such account as of the first business day of the Payment Year.  The balance in the Non-Employee Director’s Stock Account shall be the dollar amount determined by multiplying the Stock Equivalents credited to such account on the first business day of the Payment Year by the Fair Market Value of a share of common stock of the Corporation on such date.  Subject to Paragraph 8(d)(5), the aggregate balance as thus determined shall be paid to him in cash either in a lump sum within 30 days following the first business day of the Payment Year or in up to ten (10) annual installments commencing with the Payment Year as specified in the Payment Election made pursuant to Paragraph 6 above.  Subject to Paragraph 8(d)(5), if a Payment Election to receive installment payments is made, the Non-Employee Director shall receive the first installment within 30 days following the first business day of the Payment Year in an amount equal to the aggregate balance in his or her account(s) divided by the number of years in the installment payment period.  Subsequent installments shall be computed and paid in similar fashion; provided, however, that pending distributions in the second through final years of the installment payment period, the aggregate balance in th