Hasbro, Inc. Nonqualified Deferred Compensation Plan

Employee Benefits Plan Agreement

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HASBRO INC

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Title: Hasbro, Inc. Nonqualified Deferred Compensation Plan
Governing Law: Rhode Island Date: 2/25/2009
Industry: Recreational Products Sector: Consumer Cyclical

Exhibit 10(aaa)

Hasbro, Inc.

Nonqualified Deferred Compensation Plan

Effective October 1, 1997

Amended and Restated Effective January 1, 2005

TABLE OF CONTENTS


		Page
Purpose			1

ARTICLE 1	Definitions		1

ARTICLE 2	Selection, Enrollment, Eligibility		7

2.1	Selection by Committee		7
2.2	Enrollment Requirements		7
2.3	Eligibility; Commencement of Participation		7
2.4	Termination of Participation and/or Deferrals		7

ARTICLE 3	Deferral Commitments/Company Matching/Crediting Taxes		8

3.1	Minimum Deferrals		8
3.2	Maximum Deferral		8
3.3	Election to Defer; Effect of Election Form		8
3.4	Withholding of Annual Deferral Amounts		9
3.5	Annual Company Matching Amount; Annual Company Discretionary Amount		9
3.6	Investment of Trust Assets		10
3.7	Vesting		10
3.8	Crediting/Debiting of Account Balances		11
3.9	FICA and Other Taxes		13
3.10	Distributions		13
3.11	Employer Deferral		13

ARTICLE 4	Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election		15
4.1	Short-Term Payout		15
4.2	Other Benefits Take Precedence Over Short-Term		15
4.3	Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies		15
4.4	Withdrawal Election		16
4.5	2005 Opt-Out Election		16

ARTICLE 5	Retirement Benefit		17

5.1	Retirement Benefit		17
5.2	Payment of Retirement Benefit		17
5.3	Death Prior to Completion of Retirement Benefit		18

ARTICLE 6	Pre-Retirement Survivor Benefit		19


		Page
6.1	Pre-Retirement Survivor Benefit		19
6.2	Payment of Pre-Retirement Survivor Benefit		19

ARTICLE 7	Termination Benefit		21

7.1	Termination Benefit		21
7.2	Payment of Termination Benefit		21

ARTICLE 8	Disability Waiver and Benefit		22

8.1	Disability Waiver		22
8.2	Continued Eligibility; Disability Benefit		22

ARTICLE 9	Beneficiary Designation		23

9.1	Beneficiary		23
9.2	Beneficiary Designation; Change		23
9.3	Acknowledgement		23
9.4	No Beneficiary Designation		23
9.5	Doubt as to Beneficiary		23
9.6	Discharge of Obligations		23

ARTICLE 10	Leave of Absence		24

10.1	Paid Leave of Absence		24
10.2	Unpaid Leave of Absence		24

ARTICLE 11	Termination, Amendment or Modification		25

11.1	Termination		25
11.2	Amendment		26
11.3	Plan Agreement		26
11.4	Effect of Payment		27

ARTICLE 12	Administration		28

12.1	Committee Duties		28
12.2	Agents		28
12.3	Binding Effect of Decisions		28
12.4	Indemnity of Committee		28
12.5	Employer Information		28
12.6	Multiple Committees		28

ARTICLE 13	Other Benefits and Agreements		29

13.1	Coordination with Other Benefits		29

ARTICLE 14	Claims Procedures		30

14.1	Presentation of Claim		30


		Page

14.2	Notification of Decision		30
14.3	Review of a Denied Claim		30
14.4	Decision on Review		31
14.5	Legal Action		31

ARTICLE 15	Trust		32

15.1	Establishment of the Trust		32
15.2	Interrelationship of the Plan and the Trust		32
15.3	Distributions From the Trust		32

ARTICLE 16	Miscellaneous		33

16.1	Status of Plan		33
16.2	Unsecured General Creditor		33
16.3	Employer’s Liability		33
16.4	Nonassignability		33
16.5	Not a Contract of Employment		34
16.6	Furnishing Information		34
16.7	Terms		34
16.8	Captions		34
16.9	Governing Law		34
16.10	Notice		34
16.11	Successors		35
16.12	Validity		35
16.13	Incompetent		35
16.14	Distribution in the Event of Taxation		35
16.15	Insurance		35
16.16	Legal Fees To Enforce Rights After Change in Control		36

Attachments	Schedule A		37

iii

HASBRO, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective October 1, 1997

Purpose

The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development and future business success of Hasbro, Inc., a Rhode Island corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE 1
Definitions

For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1		“Account Balance” shall mean, with respect to a Participant, a credit on the records of the Employer equal to the sum of (i) the Deferral Account balance and (ii) the Company Matching and Discretionary Account balance. The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

1.2		“Annual Bonus” shall mean any compensation, in addition to Base Annual Salary relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, payable to a Participant as an Employee under any Employer’s annual bonus and cash incentive plans, excluding stock options, holiday bonuses, retention bonuses, or any other discretionary or special bonus or awards.

1.3		“Annual Company Matching Amount” for any one Plan Year shall be the amount determined in accordance with Section 3.5.

1.4

“Annual Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary and Annual Bonus that a Participant elects to have, and is deferred, in accordance with Article 3, for any one Plan Year. In the event of a Participant’s Retirement, Disability (if deferrals cease in accordance with Section 8.1), death or a Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

1.5

“Annual Installment Method” shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: The Account Balance of the Participant shall be calculated as of the close of business three business days prior to the last business day of the year. The annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one, and the denominator of which is the remaining number of annual payments due the Participant. By way of example, if the Participant elects a 10-year Annual Installment Method, the first payment shall be 1/10 of the Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the Account Balance, calculated as described in this definition. Each annual installment shall be paid on or as soon as practicable after the last business day of the applicable year.

1.6

“Base Annual Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses of every type, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Annual Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee.

1.7

“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant.

1.8

“Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

1.9

“Board” shall mean the board of directors of the Company.

1.10		“Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, as defined in Section 409A of the Code and the rules and regulations issued hereunder.

1.11		“Claimant” shall have the meaning set forth in Section 14.1.

1.12		“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

1.13		“Committee” shall mean the committee described in Article 12.

1.14		“Company” shall mean Hasbro, Inc., a Rhode Island corporation, and any successor to all or substantially all of the Company’s assets or business.

1.15

“Company Matching and Discretionary Account” shall mean (i) the sum of all of a Participant’s Annual Company Matching Amounts and Annual Company Discretionary Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Company Matching and Discretionary Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Matching and Discretionary Account.

1.16

“Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If an Employer determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Employer may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 3.8 below. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Employer in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.

1.17

“Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus (ii) amounts credited in accordance with all the applicable crediting

		provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

1.18		“Disability” shall mean a period of disability during which a Participant (i) is unable to engage in any substantial gainful activity 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 12 months, or (ii) is, by reason of determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s Employer.

1.19

“Disability Benefit” shall mean the benefit set forth in Article 8.

1.20

“Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.

1.21

“Employee” shall mean a person who is an employee of any Employer.

1.22

“Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board or any authorized committee thereof to participate in the Plan.

1.23

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.24

“First Plan Year” shall mean the period beginning October 1, 1997 and ending December 31, 1997.

1.25

“401(k) Plan” shall mean that certain Hasbro, Inc. Retirement Savings Plan adopted by the Company.

1.26

“Maximum 401(k) Amount” with respect to a Participant, shall be the maximum amount of elective contributions that can be made by such Participant, consistent with Code Section 402(g) and the limitations of Code Section 401(k)(3), for a given plan year under the 401(k) Plan.

1.27

“Participant” shall mean any Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Plan Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Plan Agreement has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan

		as a result of applicable law or property settlements resulting from legal separation or divorce.

1.28		“Plan” shall mean the Company’s Nonqualified Deferred Compensation Plan, which shall be evidenced by this instrument and by each Plan Agreement, as they may be amended from time to time.

1.29

“Plan Agreement” shall mean a written agreement, as may be amended from time to time, which is entered into by and between an Employer and a Participant. Each Plan Agreement executed by a Participant and the Participant’s Employer shall provide for the entire benefit to which such Participant is entitled under the Plan; should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant, and any Plan Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Employer and the Participant.

1.30

“Plan Year” shall, except for the First Plan Year, mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

1.31

“Pre-2005 Deferral Amounts” shall mean the portion of the Participant’s Account Balance, if any, that was deferred, earned and vested before January 1, 2005 and earnings (whether actual or notational) thereon that are credited both before or after January 1, 2005.

1.32

“Post-2004 Deferral Amounts” shall mean the portion of the Participant’s Account Balance, if any, that was deferred, earned or became vested on or after January 1, 2005 and the earnings (whether actual or notational) thereon.

1.33

“Pre-Retirement Survivor Benefit” shall mean the benefit set forth in Article 6 for purposes of this Plan only.

1.34

“Retirement,” “Retire(s)” or “Retired” shall mean, with respect to an Employee, severance from employment from all Employers for any reason other than a leave of absence, death or Disability on or after the earlier of the attainment of age sixty-five (65) or age fifty-five (55) with ten (10) years of Credited Service (as defined in the Hasbro, Inc. Pension Plan). The definition in this Section 1.34 shall not have any effect on any other plan maintained by the Employer.

1.35		“Retirement Benefit” shall mean the benefit set forth in Article 5.

1.36		“Short-Term Payout” shall mean the payout set forth in Section 4.1.

1.37		“Termination Benefit” shall mean the benefit set forth in Article 7.

1.38

“Termination of Employment” shall mean the severing of employment with all Employers, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence.

1.39

“Trust” shall mean one or more trusts established pursuant to one or more trust agreements between the Company and the trustee named therein, as amended from time to time.

1.40

“Unforeseeable Financial Emergency” shall mean a severe financial hardship to the Participant resulting from (i) illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, (ii) loss of the participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

1.41

“Years of Plan Participation” shall mean the total number of full Plan Years a Participant has been a Participant in the Plan prior to his or her Termination of Employment (determined without regard to whether deferral elections have been made by the Participant for any Plan Year). Any partial year shall not be counted. Notwithstanding the previous sentence, a Participant’s first Plan Year of participation shall be treated as a full Plan Year for purposes of this definition, even if it is only a partial Plan Year of participation.

1.42

“Year of Service” shall mean a 365 day period (or 366 days in a leap year) that, for the first year of employment commences on the Employee’s date of hire and that, for any subsequent year, commences on an anniversary of that hiring date. A partial year of employment shall not be counted.

ARTICLE 2
Selection, Enrollment, and Eligibility

2.1

Selection by Committee . Participation in the Plan shall be limited to a select group of management and highly compensated Employees of the Employers, as determined by the Committee in its sole discretion. From that group, the Committee shall select, in its sole discretion, Employees to participate in the Plan.

2.2

Enrollment Requirements . As a condition to participation, each selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form, all within 30 days after he or she is selected to participate in the Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

2.3

Eligibility; Commencement of Participation . Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period, that Employee shall commence participation in the Plan on the first day of the month following the month in which the Employee completes all enrollment requirements. If an Employee fails to meet all such requirements within the period required, in accordance with Section 2.2, that Employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Committee of the required documents.

2.4

Termination of Participation and/or Deferrals . If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (i) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes, and (ii) prevent the Participant from making future deferral elections.

ARTICLE 3
Deferral Commitments/Company Matching/Crediting/Taxes

3.1

Minimum Deferrals .

(a)

Base Annual Salary and Annual Bonus . For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, part or all of the Participant’s Base Annual Salary, and/or Annual Bonus in the following minimum amounts for each deferral elected:


Deferral	Minimum Amount
Base Annual Salary		1	%
Annual Bonus		1	%

If an election is made for less than stated minimum amounts, or if no election is made, the amount deferred shall be zero.

3.2

Maximum Deferral .

(a)

Base Annual Salary and Annual Bonus . For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, part of the Participant’s Base Annual Salary and/or Annual Bonus up to the following maximum percentages for each deferral elected:


Deferral	Maximum Amount
Base Annual Salary		75	%
Annual Bonus		85	%

			Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the maximum Annual Deferral Amount, with respect to Base Annual Salary and/or Annual Bonus shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits a Plan Agreement and Election Form to the Committee for acceptance.

			An election to defer Base Annual Salary and/or Annual Bonus must be expressed as an election to defer a specific percentage.

3.3

Election to Defer; Effect of Election Form .

(a)

First Plan Year . If a Participant’s commencement of participation in the Plan is coincident with the Participant’s commencement of employment, the Participant shall, within 30 days after commencement of participation, make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the

			Committee deems necessary or desirable under the Plan. For these elections to be valid, the Election Form must be completed and signed by the Participant, timely delivered to the Committee (in accordance with Section 2.2 above) and accepted by the Committee. If a Participant’s commencement of participation begins after commencement of employment, the Participant may not make a deferral election until the Plan Year beginning after commencement of employment.

	(b)		Subsequent Plan Years . For each succeeding Plan Year, an irrevocable election to defer Base Annual Salary shall be made by timely delivery to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made, a new Election Form. An Election Form to defer an Annual Bonus, other than a bonus paid under a performance based compensation plan that meets the requirements of Section 409A of the Code, which is to be paid in a Plan Year shall be delivered to the Committee in accordance with the procedures described above, before the end of the Plan Year preceding the Plan Year in which the bonus is earned. An Election Form to defer an Annual Bonus paid under a performance based compensation plan that meets the requirements of Section 409A of the Code, shall be delivered to the Committee at least six months before the end of the Plan Year in which the bonus is earned. If no such Election Form is timely delivered for a Plan Year, the Annual Deferral Amount shall be zero for that Plan Year. Any other elections as the Committee deems necessary or advisable shall be made at such times as the Committee may designate.

3.4

Withholding of Annual Deferral Amounts . For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Annual Salary. The Annual Bonus portion of the Annual Deferral Amount shall be withheld at the time the Annual Bonus is or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. No withholding shall be permitted within six months after the Participant has received a hardship distribution from the 401(k) Plan.

3.5

Annual Company Matching Amount; Annual Company Discretionary Amount .

(a)

Annual Company Matching Amount . For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit an Annual Company Matching Amount to the Hasbro, Inc. Supplemental Benefit Retirement Plan account or to the Company Matching and Discretionary Account of any Participant who makes a contribution to the 401(k) Plan of the Maximum 401(k) Amount. A Participant’s Annual Company Matching Amount to this Plan for any Plan Year shall be equal to the matching contributions that would have been made to the 401(k) Plan on his behalf for the plan year of

			the 401(k) Plan that corresponds to the Plan Year if the Participant had made no deferral and had made a contribution to the 401(k) Plan of the Maximum 401(k) Amount for such plan year, reduced by the amount of any matching contributions that were actually made to the 401(k) Plan on his or her behalf for such plan year. If a Participant is not employed by an Employer as of the last day of a Plan Year other than by reason of his or her Retirement or death, the Annual Company Matching Amount for such Plan Year shall be zero. In the event of Retirement or death, a Participant shall be credited with the Annual Company Matching Amount for the Plan Year in which he or she Retires or dies.

	(b)		Annual Company Discretionary Amount . For each Plan year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Matching and Discretionary Account, which amount shall be for that Participant the Annual Company Discretionary Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger that the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive an Annual Company Discretionary Amount for that Plan Year. The Annual Company Discretionary Amount, if any, shall be credited to the Participant’s Annual Company Matching and Discretionary Account at any time during the Plan Year as determined by the Company. If a Participant is not employed by an Employer as of the day within the Plan Year the Annual Company Discretionary Amount is to be credited to the Participant’s Matching and Discretionary Account, other than by reason of his or her Retirement or death while employed, the Annual Company Discretionary Amount for that Plan Year for that Participant shall be zero. In the event of Retirement or death, a Participant shall be credited with the Annual Company Discretionary Amount for the Plan Year in which he or she Retires or dies.

	3.6		Investment of Trust Assets . The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee.

	3.7		Vesting .

	(a)		A Participant shall at all times be 100% vested in his or her Deferral Account.

	(b)		A Participant’s Company Matching and Discretionary Account shall vest on the January 1 next following the Participant’s completion of a Year of Service. A Participant’s Discretionary Account shall vest on the January 1 next following the Participant’s completion of a Year of Service, or on such

			other date or dates that may be set forth or incorporated in the specific corporate authorization, grant or award that provides for such Discretionary Amount.

	(c)		Notwithstanding anything to the contrary contained in this Section 3.7, in the event of a Change in Control, a Participant’s Company Matching and Discretionary Account shall immediately become 100% vested (if it is not already vested in accordance with the above vesting schedule).

3.8

Crediting/Debiting of Account Balances . In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

	(a)		Election of Measurement Funds . A Participant, in connection with his or her initial deferral election in accordance with Section 3.2(a) above, shall elect, on the Election form, one or more Measurement Fund(s) (as described in Section 3.8(c) below) to be used to determine the additional amounts to be credited to his or her Account Balance while the Participant participates in the Plan, unless changed in accordance with the next sentence. Commencing on April 1, 2002, the Participant may (but is not required to) elect on a daily basis, pursuant to such procedures as may be established by the Committee from time to time, to add or delete one or more Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply while the Participant participates in the Plan, unless changed in accordance with the previous sentence. Notwithstanding the preceding sentence, a Participant may only allocate a portion of his or her Account Balance to a Measurement Fund which reflects the performance of the Common Stock of the Company (the “Company Stock Fund”); additions to the Account Balance during a Plan Year may not be allocated to the Company Stock Fund during that Plan Year. An election by a Participant to allocate a portion of his or her Account to the Company Stock Fund may be made only once during the period beginning on October 25 and ending on November 5 of each Plan Year, such election to be effective as of January 1 of the next Plan Year. For the year the Company Stock Fund comes into effect, 1998, the reallocation period is from March 16 through March 25 and will be effective as of April 1, 1998. The Committee may in its sole discretion impose such additional restrictions on allocations to or from the Company Stock Fund as it deems necessary or advisable.

	(b)		Proportionate Allocation . In making any election described in Section 3.8(a) above, the Participant shall specify on the Election Form, in increments of one percentage point (1%), the percentage of his or her Account Balance to be allocated to a Measurement Fund (as if the

			Participant was making an investment in that Measurement Fund with that portion of his or her Account Balance).

	(c)		Measurement Funds . The Participant may elect one or more of the following measurement funds set forth on Schedule A. Such election may be changed by the Participant on a daily basis pursuant to such procedures as may be established by the Committee from time to time. As necessary, the Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each such action will take effect as of the first day of the calendar quarter that follows by thirty (30) days the day on which the Committee gives Participants advance written notice of such change.

	(d)		Crediting or Debiting Method . Subject to charges for administrative expenses as provided in Section 3.8(f), the performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its sole discretion, based on the performance of the Measurement Funds themselves. A Participant’s Account Balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages then applicable, (ii) the portion for the Annual Deferral Amount that was actually deferred during any calendar quarter were invested in the Measurement Fund(s) selected by the Participant, in the percentages then applicable, no later than the close of business on the third business day after the day on which such amounts are actually deferred from the Participant’s Base Annual Salary through reductions in his or her payroll, at the closing price on such date; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the percentages then applicable, no earlier than ten business days prior to the distribution, at the closing price on such date. The Participant’s Annual Company Matching Amount shall be credited to his or her Company Matching and Discretionary Account under this Plan for purposes of this Section 3.8(d) as of the close of business on the first business day in March of the Plan Year following the Plan Year to which it relates. In the case of an account for which the Company Stock Fund is a Measurement Fund, the equivalent of such cash dividends paid with respect to

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