Dell Inc. Deferred Compensation Plan

Executive Compensation Plan Agreement

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DELL INC | Dell Computer Corporation

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Title: Dell Inc. Deferred Compensation Plan
Governing Law: Texas Date: 3/26/2009
Industry: Computer Hardware Sector: Technology

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

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

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 1 ^st through March 31 ^st .

	(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.

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