EXECUTION COPY HEWLETT-PACKARD COMPANY 2005 EXECUTIVE DEFERRED COMPENSATION PLAN

children, in equal shares; (iii) if neither a spouse nor children are living, then his living parents, in equal shares; (iv) if neither spouse, nor children, nor parents are living, then his living brothers and sisters, in equal shares; and (v) if none of the individuals described in (i) through (iv) are living, to his estate.  A person’s domestic partner shall be considered a person’s spouse for purposes of this paragraph.  The Company shall determine a person’s status as a domestic partner in a uniform and nondiscriminatory manner.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the HR and Compensation Committee of the Company’s Board of Directors, its delegate(s) or such other committee as may be appointed by the Board of Directors from time to time.

 

“Company” means Hewlett-Packard Company or any successor corporation or other entity.

 

“CPB Plan” means the Hewlett-Packard Company Performance Bonus Plan, as amended from time to time.

 

“Deferral Form” means a written or electronic form provided by the Company pursuant to which an Eligible Employee may elect to defer amounts under the Plan.

 

“Director” means the title for an employee who has a job grade of E4 or S4 and above.

 

“Eligible Employee” means an individual who is an Employee on November 1 preceding the calendar years within which deferrals are to be made and whose job position has a title of Director (or whose job function is, in the sole and absolute discretion of the Company, equivalent to a “Director” position) or above.

 

“Eligible Income” means Base Pay and Incentive Awards.

 

“Employee” means an individual who is a regular employee on the U.S. payroll of the Company or its Affiliates, other than a temporary or intermittent employee.  The term “Employee” shall not include a person hired as an independent contractor, leased employee, consultant, or a person otherwise designated by the Company or an Affiliate as not eligible to participate in the Plan, even if such person is determined to be an “employee” of the Company or an Affiliate by any governmental or judicial authority.

 

“EPfR Plan” means the Hewlett-Packard Company Executive Pay-for-Results Plan, as amended from time-to-time.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“H1 Bonus” means a bonus arising from the performance period defined by the first half of the Company’s fiscal year (November 1 through April 30), as defined in the EPfR Plan, PfR

 

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Plan and the CPB Plan. The term “H1 Bonus” also relates to any other bonus payable to a Participant under a Company approved variable pay plan, which is intended to be an alternative variable pay plan to the EPfR Plan, PfR Plan and CPB Plan and that is on the same cycle as such plans, i.e., with a performance period defined by the first half of the Company’s fiscal year (November 1 through April 30).

 

“H2 Bonus” means a bonus arising from the performance period defined by the second half of the Company’s fiscal year (May 1 through October 31), as defined in the EPfR Plan, PfR Plan and CPB Plan. The term “H2 Bonus” also relates to any other bonus payable to a Participant under a Company approved variable pay plan, which is intended to be an alternative variable pay plan to the EPfR Plan, PfR Plan and CPB Plan and that is on the same cycle as such plans, i.e., with a performance period defined by the second half of the Company’s fiscal year (May 1 through October 31).

 

“Incentive Award” means an amount payable to an Eligible Employee under a cash bonus or incentive compensation plan of the Company or an Affiliate that the Committee has deemed eligible for deferral, including H1 and H2 Bonuses.

 

“Investment Options” means the investment options, as determined from time to time by the Company, used to credit earnings, gains and losses on Account balances.

 

“Key Employee” means an Employee treated as a “specified employee” under Code section 409A(a)(2)(B)(i), i.e., a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof) of a corporation any stock in which is publicly traded on an established securities market or otherwise.  Notwithstanding the foregoing, the Committee has the discretion to define “Key Employee” as a group larger than the requirements of Code section 416(i), as long of such group includes the employees defined in Code section 416(i).

 

“Participant” means an Eligible Employee who elects or has elected to defer amounts under the Plan.

 

“PfR Plan” means the Hewlett-Packard Company Pay-for-Results Short-Term Bonus Plan, as amended from time to time.

 

“Plan” means this Hewlett-Packard Company 2005 Executive Deferred Compensation Plan, as set forth herein and as amended from time to time.

 

“Plan Year” means January 1 through December 31.

 

“Retirement Date” means the date on which a Participant has completed at least 15 years of service and has attained age 55, or as the Company otherwise determines in its discretion.

 

“Rollover Participant” means an individual with an Account in the Plan transferred from a Rollover Plan in accordance with the provisions of Article VIII.  The term Rollover Participant may also refer to an individual who has previously been a Participant in the Plan, or an existing Participant at the time of transfer.

 

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“Rollover Plan” means either (1) a nonqualified deferred compensation plan of a business entity acquired by the Company or an Affiliate through acquisition of a majority of the voting interest in, or substantially all of the assets of, such entity, or (2) any plan or program of the Company or an Affiliate pursuant to the termination of which an Account is established for a Participant or Rollover Participant.

 

“Termination of Employment” or “Terminates Employment” means the cessation of an Employee’s employment with the Company and its Affiliates.

 

 

ARTICLE II

 

PARTICIPATION

 

Participation in the Plan shall be limited to Eligible Employees.  The Company shall notify any Employee of his status as an Eligible Employee at such time and in such manner as the Company shall determine.  An Eligible Employee shall become a Participant by making a deferral election under Article III.

 

 

ARTICLE III

 

PARTICIPANT ACCOUNTS

 

3.1           Deferral Elections.  Deferrals may be made by an Eligible Employee with respect to the following types of Eligible Income, as permitted by the Company:

 

(a)           Base Pay.

 

(i)            An Eligible Employee whose Base Pay, as of the first day of November preceding the Plan Year within which the deferral is to be made, equals or exceeds the sum of:

 

(1)           the amount specified under Code section 401(a)(17) in effect on January 1 of the Plan Year to which the deferral election pertains, and

 

(2)           $6,000,

 

may elect to defer a portion of his Base Pay.  In order to elect to defer Base Pay earned during a Plan Year, an Eligible Employee shall submit an irrevocable Deferral Form with the Company before the beginning of such Plan Year.

 

(ii)           The portion of his Base Pay that an Eligible Employee elects to defer for a Plan Year shall be stated as a whole dollar amount.  The minimum amount of Base Pay

 

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that an Eligible Employee may elect to defer in a Plan Year is $6,000, and the maximum amount is equal to the amount of Base Pay exceeding the amount specified under Code section 401(a)(17) in effect on January 1 of the Plan Year to which the deferral election pertains.  If the Internal Revenue Service does not publish the Code section 401(a)(17) limit for the Plan Year prior to enrollment, the Company has the discretion to determine eligibility to defer Base Pay; provided, however, if a Participant is determined to be ineligible to defer Base Pay under paragraph (i) above on January 1 of the Plan Year, any Base Pay deferrals the Participant elected for the Plan Year shall be void.

 

(iii)          The deferral amount designated by an Eligible Employee will be deducted in equal installments over the twenty-four (24) pay periods falling within the Plan Year to which the election pertains.

 

(b)           Incentive Awards.  An Eligible Employee may elect to defer any portion of an Incentive Award up to 95%, expressed as whole percentage points.  In order to elect to defer an Incentive Award, an Eligible Employee shall submit an irrevocable Deferral Form with the Company before the beginning of the calendar year in which the performance period to which Incentive Award pertains, in accordance with procedures that the Company determines in its discretion.  Notwithstanding the foregoing, if the Committee determines that an Incentive Award qualifies as “performance-based compensation” under Code section 409A, an Eligible Employee may elect to defer a portion of the Incentive Award by filing an irrevocable Deferral Form at such later time as permitted by the Committee.

 

3.2           Crediting of Deferrals.  Eligible Income deferred by a Participant under the Plan shall be credited to the Participant’s Account as soon as administratively practicable after the amounts would have otherwise been paid to the Participant.

 

3.3           Vesting.  A Participant shall at all times be 100% vested in any amounts credited to his Account.