--------------------------------------------------------------------------------

Exhibit 10.1
 
KBR, INC.
 
2006 STOCK AND INCENTIVE PLAN
(As Amended June 27, 2007)

I.           PURPOSE
 
The purpose of the KBR, Inc. 2006 Stock and Incentive Plan (the “Plan”) is to
provide a means whereby KBR, Inc., a Delaware corporation (the “Company”), and
its Subsidiaries may attract, motivate and retain highly competent employees and
to provide a means whereby selected employees can acquire and maintain stock
ownership and receive cash awards, thereby strengthening their concern for the
long-term welfare of the Company.  The Plan is also intended to provide
employees with additional incentive and reward opportunities designed to enhance
the profitable growth of the Company over the long term.  A further purpose of
the Plan is to allow awards under the Plan to Non-employee Directors in order to
enhance the Company’s ability to attract and retain highly qualified
Directors.  Accordingly, the Plan provides for granting Incentive Stock Options,
Options which do not constitute Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Restricted Stock Unit Awards, Performance
Awards, Stock Value Equivalent Awards, or any combination of the foregoing, as
is best suited to the circumstances of the particular employee or Non-employee
Director as provided herein.  The Plan is effective as of the closing date of
the IPO as defined later in this document.
 
II.           DEFINITIONS
 
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
 
 
(a)
“Award” means, individually or collectively, any Option, Stock Appreciation
Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or
Stock Value Equivalent Award.

 
 
(b)
“Award Document” means the relevant award agreement or other document containing
the terms and conditions of an Award.

 
 
(c)
“Beneficial Owners” shall have the meaning set forth in Rule 13d-3 promulgated
under the Exchange Act.

 
 
(d)
“Board” means the Board of Directors of KBR, Inc.

 
 
(e)
“Change of Control Value” means, for the purposes of Paragraph (f) of Article
XIII, the amount determined in Clause (i), (ii) or (iii), whichever is
applicable, as follows: (i) the per share price offered to stockholders of the
Company in any merger, consolidation, sale of assets or dissolution transaction,
(ii) the per share price offered to stockholders of the Company in any tender
offer or exchange offer whereby a Corporate Change takes place or (iii) if a
Corporate Change occurs other than as described in Clause (i) or Clause (ii),
the fair market value per share determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of an
Award.  If the consideration offered to stockholders of the Company in any
transaction described in this Paragraph (e) consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of
the consideration offered which is other than cash.

 
-1-

--------------------------------------------------------------------------------

 
 
(f)
“Code” means the Internal Revenue Code of 1986, as amended.  Reference in the
Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations under such section.

 
 
(g)
“Committee” means, prior to the closing date of the IPO, the committee selected
by the board of directors of Halliburton to administer the Plan in accordance
with Paragraph (a) of Article IV of the Plan and on and after the closing date
of the IPO, the committee selected by the Board to administer the Plan in
accordance with Paragraph (a) of Article IV of the Plan.

 
 
(h)
“Common Stock” means the Common Stock, par value $0.001 per share, of the
Company.

 
 
(i)
“Company” means KBR, Inc., a Delaware corporation.

 
 
(j)
“Corporate Change” shall conclusively be deemed to have occurred on a Corporate
Change Effective Date if an event set forth in any one of the following
paragraphs shall have occurred:

 
 
(i)
any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its affiliates)
representing 20% or more of the combined voting power of the Company’s then
outstanding securities (the “Outstanding Company Voting Securities”) provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Corporate Change:  (1) an acquisition of securities
effected in connection with a distribution of any class of common stock of the
Company to shareholders of Halliburton in a transaction (including any
distribution in exchange for shares of capital stock or other securities of
Halliburton) intended to qualify as a tax-free distribution under Section 355 of
the Code (a “Tax-Free Spin Off”), (2) any acquisition by Halliburton Company or
any of its affiliates excluding the Company and its Subsidiaries (collectively,
“Halliburton Companies”), (3) any acquisition from Halliburton Companies
pursuant to a public offering of securities registered under a registration
statement filed with the Securities and Exchange Commission, or (4) any
acquisition immediately following which Halliburton Companies have beneficial
ownership of at least 50% or more of the Outstanding Company Voting Securities;
provided that any such acquisition that, but for this clause (4), would
otherwise constitute a Corporate Change under this Section II.(j)(i) shall be
deemed to be a Corporate Change at the time that Halliburton Companies no longer
have beneficial ownership of at least 50% or more of the Outstanding Company
Voting Securities, if such individual, entity or group that made such
acquisition continues to own 20% or more of the Outstanding Company Voting
Securities following such time that Halliburton Companies no longer have such
beneficial ownership; or

 
-2-

--------------------------------------------------------------------------------

 
(ii)
the following individuals cease for any reason to constitute a majority of the
number of Directors then serving: individuals who, on the date hereof,
constitute the Board and any new Director (other than a Director whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of Directors of the Company) whose appointment
or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the Directors then still in office who either were Directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended (the “Incumbent Board); provided, however, that for
purposes of this Section II.(j)(ii), any individual becoming a Director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by either (a) a vote of at least a majority
of the Directors then comprising the Incumbent Board or (b) Halliburton, shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
either Halliburton or the Board; or

 
 
(iii)
there is consummated a merger or consolidation of the Company or any direct or
indirect Subsidiary of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, at least
50% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or any of its affiliates other
than in connection with the acquisition by the Company or any of its affiliates
of a business) representing 20% or more of the combined voting power of the
Company’s then outstanding securities; or

 
-3-

--------------------------------------------------------------------------------

 
(iv)
the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company, other than in connection with the transfer of all or
substantially all of the assets of the Company to the Halliburton Companies, or
there is consummated an agreement for the sale, disposition, lease or exchange
by the Company of all or substantially all of the Company’s assets, other than a
sale, disposition, lease or exchange by the Company of all or substantially all
of the Company’s assets to the Halliburton Companies or to an entity, at least
50% of the combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

 
Notwithstanding the foregoing, a “Corporate Change” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
Common Stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
 
 
(k)
“Corporate Change Effective Date” shall mean:

 
 
(i)
the first date that the direct or indirect ownership of 20% or more combined
voting power of the Company’s outstanding securities results in a Corporate
Change as described in clause (i) of such definition above; or

 
 
(ii)
the date of the election of Directors that results in a Corporate Change as
described in clause (ii) of such definition; or

 
 
(iii)
the date of the merger or consideration that results in a Corporate Change as
described in clause (iii) of such definition; or

 
 
(iv)
the date of stockholder approval that results in a Corporate Change as described
in clause (iv) of such definition.

 
 
(l)
“Director” means an individual serving as a member of the Board.

 
 
(m)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 
 
(n)
“Fair Market Value” means, as of any specified date, the closing price of the
Common Stock on the New York Stock Exchange (or, if the Common Stock is not then
listed on such exchange, such other national securities exchange on which the
Common Stock is then listed) on that date, or if no prices are reported on that
date, on the last preceding date on which such prices of the Common Stock are so
reported or, in the sole discretion of the Committee for purposes of determining
the Fair Market Value of the Common Stock at the time of exercise of an Option
or a Stock Appreciation Right, such Fair Market Value shall be the prevailing
price of the Common Stock as of the time of exercise.   If the Common Stock is
not then listed or quoted on any national securities exchange but is traded over
the counter at the time a determination of its Fair Market Value is required to
be made hereunder, its Fair Market Value shall be deemed to be equal to the
average between the reported high and low sales prices of Common Stock on the
most recent date on which Common Stock was publicly traded.  If the Common Stock
is not publicly traded at the time a determination of its value is required to
be made hereunder, the determination of its Fair Market Value shall be made by
the Committee in such manner as it deems appropriate.

 
-4-

--------------------------------------------------------------------------------

 
 
(o)
“Halliburton” means Halliburton Company, a Delaware corporation.

 
 
(p)
“Holder” means an employee or Non-employee Director of the Company who has been
granted an Award.

 
 
(q)
“IPO” means the first registered underwritten public offering of shares of
Common Stock of the Company.

 
 
(r)
“Immediate Family” means, with respect to a particular Holder, the Holder’s
spouse, parent, brother, sister, children and grandchildren (including adopted
and step children and grandchildren).

 
 
(s)
“Incentive Stock Option” means an Option within the meaning of Section 422 of
the Code.

 
 
(t)
“Minimum Criteria” means a Restriction Period that is not less than three (3)
years from the date of grant of a Restricted Stock Award or Restricted Stock
Unit Award.

 
 
(u)
“Non-employee Director” means a member of the Board who is not an employee or
former employee of the Company or its Subsidiaries.

 
 
(v)
“Option” means an Award granted under Article VII of the Plan and includes both
Incentive Stock Options to purchase Common Stock and Options which do not
constitute Incentive Stock Options to purchase Common Stock.

 
 
(w)
“Option Agreement” means a written agreement between the Company and a Holder
with respect to an Option.

 
 
(x)
“Optionee” means a Holder who has been granted an Option.

 
 
(y)
“Parent Corporation” shall have the meaning set forth in Section 424(e) of the
Code.

 
 
(z)
“Performance Award” means an Award granted under Article XI of the Plan.

-5-

--------------------------------------------------------------------------------

 
 
(aa)
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) Halliburton or its subsidiaries or the Company or any of
its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of Halliburton, or the Company or any of their affiliates,
(iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of Halliburton or the Company in substantially the same proportions
as their ownership of stock of the Halliburton or the Company.

 
 
(bb)
“Plan” means the KBR, Inc. 2006 Stock and Incentive Plan.

 
 
(cc)
“Restricted Stock Award” means an Award granted under Article IX of the Plan.

 
 
(dd)
“Restricted Stock Award Agreement” means a written agreement between the Company
and a Holder with respect to a Restricted Stock Award.

 
 
(ee)
“Restricted Stock Unit” means a unit evidencing the right to receive one share
of Common Stock or an equivalent value equal to the Fair Market Value of a share
of Common Stock (as determined by the Committee) that is restricted or subject
to forfeiture provisions.

 
 
(ff)
“Restricted Stock Unit Award” means as Award granted under Article X of the
Plan.

 
 
(gg)
“Restricted Stock Unit Award Agreement” means a written agreement between the
Company and a Holder with respect to a Restricted Stock Unit Award.

 
 
(hh)
“Restriction Period” means a period of time beginning as of the date upon which
a Restricted Stock Award or Restricted Stock Unit Award is made pursuant to the
Plan and ending as of the date upon which the Common Stock subject to such Award
is issued (if not previously issued), no longer restricted or subject to
forfeiture provisions.

 
 
(ii)
“Spread” means, in the case of a Stock Appreciation Right, an amount equal to
the excess, if any, of the Fair Market Value of a share of Common Stock on the
date such right is exercised over the exercise price of such Stock Appreciation
Right.

 
 
(jj)
“Stock Appreciation Right” means an Award granted under Article VIII of the
Plan.

 
 
(kk)
“Stock Appreciation Rights Agreement” means a written agreement between the
Company and a Holder with respect to an Award of Stock Appreciation Rights.

 
 
(ll)
“Stock Value Equivalent Award” means an Award granted under Article XII of the
Plan.

-6-

--------------------------------------------------------------------------------

 
(mm)
“Subsidiary” means a company (whether a corporation, partnership, joint venture
or other form of entity) in which the Company or a corporation in which the
Company owns a majority of the shares of capital stock, directly or indirectly,
owns a greater than 50% equity interest, except that with respect to the
issuance of Incentive Stock Options the term “Subsidiary” shall have the same
meaning as the term “subsidiary corporation” as defined in Section 424(f) of the
Code.

 
 
(nn)
“Successor Holder” shall have the meaning given such term in Paragraph (f) of
Article XV.

 
III.           EFFECTIVE DATE AND DURATION OF THE PLAN
 
The Plan shall be effective as of the closing date of the IPO.  Subject to the
provisions of Article XIII, the Plan shall remain in effect until all Options
and Stock Appreciation Rights granted under the Plan have been exercised or
expired by reason of lapse of time, all restrictions imposed upon Restricted
Stock Awards and Restricted Stock Unit Awards have lapsed and all Performance
Awards and Stock Value Equivalent Awards have been satisfied; provided, however,
that, notwithstanding any other provision of the Plan, Awards shall not be
granted under the Plan after November 20, 2016.
 
IV.           ADMINISTRATION
 
 
(a)
Composition of Committee.  The Plan shall be administered by the Committee.

 
 
(b)
Powers.  The Committee shall have authority, in its discretion, to determine
which eligible individuals shall receive an Award, the time or times when such
Award shall be made, whether an Incentive Stock Option, nonqualified Option or
Stock Appreciation Right shall be granted, the number of shares of Common Stock
which may be issued under each Option, Stock Appreciation Right, Restricted
Stock Award and Restricted Stock Unit Award, and the value of each Performance
Award and Stock Value Equivalent Award.  The Committee shall have the authority,
in its discretion, to establish the terms and conditions applicable to any
Award, subject to any specific limitations or provisions of the Plan.  In making
such determinations the Committee may take into account the nature of the
services rendered by the respective individuals, their responsibility level,
their present and potential contribution to the Company’s success and such other
factors as the Committee in its discretion shall deem relevant.

 
 
(c)
Additional Powers.  The Committee shall have such additional powers as are
delegated to it by the other provisions of the Plan.  Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective Award Documents executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan.  The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any Award Document relating to an Award in the
manner and to the extent the Committee shall deem expedient to carry the Award
into effect.  The determinations of the Committee on the matters referred to in
this Article IV shall be conclusive.

 
-7-

--------------------------------------------------------------------------------

 
(d)
Delegation of Authority.  The Committee may delegate some or all of its power to
the Chief Executive Officer of the Company as the Committee deems appropriate;
provided, however, that (i) the Committee may not delegate its power with regard
to the grant of an Award to any person who is a “covered employee” within the
meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is
likely to be a covered employee at any time during the period an Award to such
employee would be outstanding; (ii) the Committee may not delegate its power
with regard to the selection for participation in the Plan of an officer or
other person subject to Section 16 of the Exchange Act or decisions concerning
the timing, pricing or amount of an Award to such an officer or other person and
(iii) any delegation of the power to grant Awards shall be permitted by
applicable law.

 
 
(e)
Engagement of an Agent.  The Company may, in its discretion, engage an agent to
(i) maintain records of Awards and Holders’ holdings under the Plan, (ii)
execute sales transactions in shares of Common Stock at the direction of
Holders, (iii) deliver sales proceeds as directed by Holders, and (iv) hold
shares of Common Stock owned without restriction by Holders, including shares of
Common Stock previously obtained through the Plan that are transferred to the
agent by Holders at their discretion.  Except to the extent otherwise agreed by
the Company and the agent, when an individual loses his or her status as an
employee or Non-employee Director of the Company, the agent shall have no
obligation to provide any further services to such person and the shares of
Common Stock previously held by the agent under the Plan may be distributed to
the person or his or her legal representative.

 
V.           GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK
AWARDS, RESTRICTED STOCK UNIT AWARDS, PERFORMANCE AWARDS AND STOCK VALUE
EQUIVALENT AWARDS; SHARES SUBJECT TO THE PLAN
 
 
(a)
Award Limits.  The Committee may from time to time grant Awards to one or more
individuals determined by it to be eligible for participation in the Plan in
accordance with the provisions of Article VI.  The aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed 10,000,000
shares, of which no more than 3,500,000 may be issued in the form of Restricted
Stock Awards or Restricted Stock Unit Awards, or pursuant to Performance
Awards.  Notwithstanding anything contained herein to the contrary, the number
of Option shares or Stock Appreciation Rights, singly or in combination,
together with shares or share equivalents under Performance Awards granted to
any Holder in any one calendar year, shall not in the aggregate exceed
500,000.  The cash value determined as of the date of grant of any Performance
Award not denominated in Common Stock granted to any Holder for any one calendar
year shall not exceed $10,000,000.  Any shares which remain unissued and which
are not subject to outstanding Options or Awards at the termination of the Plan
shall cease to be subject to the Plan, but, until termination of the Plan, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of the Plan.  Shares shall be deemed to have been issued under the
Plan only to the extent actually issued and delivered pursuant to an Award.  To
the extent that an Award lapses or the rights of its Holder terminate or the
Award is paid in cash, any shares of Common Stock subject to such Award shall
again be available for the grant of an Award.  The aggregate number of shares
which may be issued under the Plan shall be subject to adjustment in the same
manner as provided in Article XIII with respect to shares of Common Stock
subject to Options then outstanding.  The 500,000-share limit on Stock Options,
Stock Appreciation Rights Awards and Performance Awards denominated in shares to
a Holder in any calendar year shall be subject to adjustment in the same manner
as provided in Article XIII.  Separate stock certificates shall be issued by the
Company for those shares acquired pursuant to the exercise of an Incentive Stock
Option and for those shares acquired pursuant to the exercise of any Option
which does not constitute an Incentive Stock Option.  The Committee may from
time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate.

 
-8-

--------------------------------------------------------------------------------

 
(b)
Stock Offered.  The stock to be offered pursuant to the grant of an Award may be
authorized but unissued Common Stock or Common Stock previously issued and
reacquired by the Company.

 
VI.           ELIGIBILITY
 
Awards made pursuant to the Plan may be granted to individuals who, at the time
of grant, are employees of the Company or any Parent Corporation or Subsidiary
of the Company or are Non-employee Directors.  An Award may also be granted to a
person who has agreed to become an employee of the Company or any Parent
Corporation or Subsidiary of the Company within the subsequent three (3)
months.  An Award made pursuant to the Plan may be granted on more than one
occasion to the same person, and such Award may include an Incentive Stock
Option, an Option which is not an Incentive Stock Option, an Award of Stock
Appreciation Rights, a Restricted Stock Award, a Restricted Stock Unit Award, a
Performance Award, a Stock Value Equivalent Award or any combination
thereof.  Each Award shall be evidenced in such manner and form as may be
prescribed by the Committee.
 
VII.           STOCK OPTIONS
 
 
(a)
Stock Option Agreement.  Each Option shall be evidenced by an Option Agreement
between the Company and the Optionee which shall contain such terms and
conditions as may be approved by the Committee.  The terms and conditions of the
respective Option Agreements need not be identical.  Specifically, an Option
Agreement may provide for the payment of the option price, in whole or in part,
by the delivery of a number of shares of Common Stock (plus cash if necessary)
having a Fair Market Value equal to such option price.

 
-9-

--------------------------------------------------------------------------------

 
 
(b)
Option Period.  The term of each Option shall be as specified by the Committee
at the date of grant; provided that, in no case, shall the term of an Option
exceed ten (10) years.

 
 
(c)
Limitations on Exercise of Option.  An Option shall be exercisable in whole or
in such installments and at such times as determined by the Committee.

 
 
(d)
Option Price.  The purchase price of Common Stock issued under each Option shall
be determined by the Committee, but such purchase price shall not be less than
the Fair Market Value of Common Stock subject to the Option on the date the
Option is granted.

 
 
(e)
Options and Rights in Substitution for Stock Options Granted by Other
Corporations.  Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options and Stock Appreciation
Rights held by employees of corporations who become, or who became prior to the
effective date of the Plan, employees of the Company or of any Subsidiary as a
result of a merger or consolidation of the employing corporation with the
Company or such Subsidiary, or the acquisition by the Company or a Subsidiary of
all or a portion of the assets of the employing corporation, or the acquisition
by the Company or a Subsidiary of stock of the employing corporation with the
result that such employing corporation becomes a Subsidiary.

 
 
(f)
Repricing Prohibited.  Except for adjustments pursuant to Article XIII, the
purchase price of Common Stock for any outstanding Option granted under the Plan
may not be decreased after the date of grant nor may an outstanding Option
granted under the Plan be surrendered to the Company as consideration for the
grant of a new Option with a lower purchase price.  Any other action that is
deemed to be a repricing under any applicable rule of the New York Stock
Exchange shall be prohibited.

 
VIII.                      STOCK APPRECIATION RIGHTS
 
 
(a)
Stock Appreciation Rights.  A Stock Appreciation Right is the right to receive
an amount equal to the Spread with respect to a share of Common Stock upon the
exercise of such Stock Appreciation Right.  Stock Appreciation Rights may be
granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares under the Option as to which
the Stock Appreciation Rights were exercised.  Alternatively, Stock Appreciation
Rights may be granted independently of Options in which case each Award of Stock
Appreciation Rights shall be evidenced by a Stock Appreciation Rights Agreement
between the Company and the Holder which shall contain such terms and conditions
as may be approved by the Committee.  The terms and conditions of the respective
Stock Appreciation Rights Agreements need not be identical.  The Spread with
respect to a Stock Appreciation Right may be payable either in cash, shares of
Common Stock with a Fair Market Value equal to the Spread or in a combination of
cash and shares of Common Stock.  Upon the exercise of any Stock Appreciation
Rights granted hereunder, the number of shares reserved for issuance under the
Plan shall be reduced only to the extent that shares of Common Stock are
actually issued in connection with the exercise of such Right.

 
-10-

--------------------------------------------------------------------------------

 
(b)
Exercise Price.  The exercise price of each Stock Appreciation Right shall be
determined by the Committee, but such exercise price shall not be less than the
Fair Market Value of a share of Common Stock on the date the Stock Appreciation
Right is granted.

 
 
(c)
Exercise Period.  The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant; provided that, in no case,
shall the term of a Stock Appreciation Right exceed ten (10) years.

 
 
(d)
Limitations on Exercise of Stock Appreciation Right.  A Stock Appreciation Right
shall be exercisable in whole or in such installments and at such times as
determined by the Committee.

 
 
(e)
Repricing Prohibited.  Except for adjustments pursuant to Article XIII, the
exercise price of a Stock Appreciation Right may not be decreased after the date
of grant nor may an outstanding Stock Appreciation Right granted under the Plan
be surrendered to the Company as consideration for the grant of a new Stock
Appreciation Right with a lower exercise price.  Any other action that is deemed
to be a repricing under any applicable rule of the New York Stock Exchange shall
be prohibited.

 
IX.           RESTRICTED STOCK AWARDS
 
 
(a)
Restricted Period To Be Established by the Committee.  At the time a Restricted
Stock Award is made, the Committee shall establish the Restriction Period
applicable to such Award; provided, however, that, except as set forth below and
as permitted by Paragraph (b) of this Article IX, such Restriction Period shall
not be less than the Minimum Criteria.  An Award which provides for the lapse of
restrictions on shares applicable to such Award in equal annual installments
over a period of at least three (3) years from the date of grant shall be deemed
to meet the Minimum Criteria.  The foregoing notwithstanding, with respect to
Restricted Stock Awards and Restricted Stock Unit Awards of up to an aggregate
of 500,000 shares (subject to adjustment as set forth in Article XIII), the
Minimum Criteria shall not apply and the Committee may establish such lesser
Restriction Periods applicable to such Awards as it shall determine in its
discretion.  Subject to the foregoing, each Restricted Stock Award may have a
different Restriction Period, in the discretion of the Committee.  The
Restriction Period applicable to a particular Restricted Stock Award shall not
be changed except as permitted by Paragraph (b) of this Article or by Article
XIII.

 
-11-

--------------------------------------------------------------------------------

 
 
(b)
Other Terms and Conditions.  Common Stock awarded pursuant to a Restricted Stock
Award shall be represented by a stock certificate registered in the name of the
Holder of such Restricted Stock Award or, at the option of the Company, in the
name of a nominee of the Company.  The Holder shall have the right to receive
dividends during the Restriction Period, to vote the Common Stock subject
thereto and to enjoy all other stockholder rights, except that (i) the Holder
shall not be entitled to possession of the stock certificate until the
Restriction Period shall have expired, (ii) the Company shall retain custody of
the stock during the Restriction Period, (iii) the Holder may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the stock during
the Restriction Period, and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Award shall cause
a forfeiture of the Restricted Stock Award.  At the time of such Award, the
Committee may, in its sole discretion, prescribe additional terms, conditions or
restrictions relating to Restricted Stock Awards, including, but not limited to,
rules pertaining to the termination of a Holder’s service (by retirement,
disability, death or otherwise) prior to expiration of the Restriction Period as
shall be set forth in a Restricted Stock Award Agreement.

 
 
(c)
Payment for Restricted Stock.  A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except
to the extent otherwise required by law and except that the Committee may, in
its discretion, charge the Holder an amount in cash not in excess of the par
value of the shares of Common Stock issued under the Plan to the Holder.

 
 
(d)
Miscellaneous.  Nothing in this Article shall prohibit the exchange of shares
issued under the Plan (whether or not then subject to a Restricted Stock Award)
pursuant to a plan of reorganization for stock or securities in the Company or
another corporation a party to the reorganization, but the stock or securities
so received for shares then subject to the restrictions of a Restricted Stock
Award shall become subject to the restrictions of such Restricted Stock
Award.  Any shares of stock received as a result of a stock split or stock
dividend with respect to shares then subject to a Restricted Stock Award shall
also become subject to the restrictions of the Restricted Stock Award.

 
X.           RESTRICTED STOCK UNIT AWARDS
 
 
(a)
Restricted Period To Be Established by the Committee.  At the time a Restricted
Stock Unit Award is made, the Committee shall establish the Restriction Period
applicable to such Award; provided, however, that except as set forth below and
as permitted by Paragraph (b) of this Article X, such Restriction Period shall
not be less than the Minimum Criteria.  An Award which provides for the lapse of
restrictions applicable to such Award in equal annual installments over a period
of at least three (3) years from the date of grant shall be deemed to meet the
Minimum Criteria.  The foregoing notwithstanding, with respect to Restricted
Stock Awards and Restricted Stock Unit Awards of up to an aggregate of 500,000
shares (subject to adjustment as set forth in Article XIII), the Minimum
Criteria shall not apply and the Committee may establish such lesser Restriction
Periods applicable to such Awards as it shall determine in its
discretion.  Subject to the foregoing, each Restricted Stock Unit Award may have
a different Restriction Period, in the discretion of the Committee.  The
Restriction Period applicable to a particular Restricted Stock Unit Award shall
not be changed except as permitted by Paragraph (b) of this Article or by
Article XIII.

-12-

--------------------------------------------------------------------------------

 
 
(b)
Other Terms and Conditions.  At the time of a Restricted Stock Unit Award, the
Committee may, in its sole discretion, prescribe additional terms, conditions or
restrictions relating to the Restricted Stock Unit Award, including, but not
limited to, rules pertaining to the termination of a Holder’s service (by
retirement, disability, death or otherwise) prior to expiration of the
Restriction Period as shall be set forth in a Restricted Stock Unit Award
Agreement.  Cash dividend equivalents may be paid during, or may be accumulated
and paid at the end of, the Restriction Period with respect to a Restricted
Stock Unit Award, as determined by the Committee.  The Committee, in its sole
discretion, may provide for the deferral of a Restricted Stock Unit Award.  If a
payment of cash or issuance of Common Stock is to be made on a deferred basis,
the Committee shall establish whether interest or dividend equivalents shall be
credited on the deferred amounts and any other terms and conditions applicable
thereto.

 
 
(c)
Payment for Restricted Stock Unit.  A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Unit Award,
except to the extent otherwise required by law and except that the Committee
may, in its discretion, charge the Holder an amount in cash not in excess of the
par value of the shares of Common Stock issued under the Plan to the Holder.

 
 
(d)
Restricted Stock Units in Substitution for Units or Restricted Stock Granted by
Other Corporations.  Restricted Stock Unit Awards may be granted under the Plan
from time to time in substitution for restricted stock units or restricted stock
held by employees of corporations who become, or who became prior to the
effective date of the Plan, employees of the Company or of any Subsidiary as a
result of a merger or consolidation of the employing corporation with the
Company or such Subsidiary, or the acquisition by the Company or a Subsidiary of
all or a portion of the assets of the employing corporation, or the acquisition
by the Company or a Subsidiary of stock of the employing corporation with the
result that such employing corporation becomes a Subsidiary.

 
XI.     PERFORMANCE AWARDS
 
 
(a)
Performance Period.  The Committee shall establish, with respect to and at the
time of each Performance Award, a performance period over which the performance
applicable to the Performance Award of the Holder shall be measured.

 
 
(b)
Performance Awards.  Each Performance Award may have a maximum value established
by the Committee at the time of such Award.

 
-13-

--------------------------------------------------------------------------------

 
 
(c)
Performance Measures.  A Performance Award granted under the Plan that is
intended to qualify as qualified performance-based compensation under Section
162(m) of the Code shall be awarded contingent upon the achievement of one or
more performance measures.  The performance criteria for Performance Awards
shall consist of objective tests based on the following: earnings, cash flow,
cash value added performance, stockholder return and/or value, revenues,
operating profits (including EBITDA), net profits, earnings per share, stock
price, cost reduction goals, debt to capital ratio, financial return ratios,
profit return and margins, market share, working capital and customer
satisfaction.  The Committee may select one criterion or multiple criteria for
measuring performance.  Performance criteria may be measured on corporate,
subsidiary or business unit performance, or on a combination thereof.  Further,
the performance criteria may be based on comparative performance with other
companies or other external measure of the selected performance criteria.  A
Performance Award that is not intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be based on achievement of
such goals and be subject to such terms, conditions and restrictions as the
Committee or its delegate shall determine.

 
 
(d)
Payment.  Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, if any, based on the
achievement of the performance measures for such performance period, as
determined by the Committee in its sole discretion.  Payment of a Performance
Award (i) may be made in cash, Common Stock or a combination thereof, as
determined by the Committee in its sole discretion, (ii) shall be made in a lump
sum or in installments as prescribed by the Committee in its sole discretion,
and (iii) to the extent applicable, shall be based on the Fair Market Value of
the Common Stock on the payment date.  If a payment of cash or issuance of
Common Stock is to be made on a deferred basis, the Committee shall establish
whether interest or dividend equivalents shall be credited on the deferred
amounts and any other terms and conditions applicable thereto.

 
 
(e)
Termination of Service.  The Committee shall determine the effect of termination
of service during the performance period on a Holder’s Performance Award.

 
XII.    STOCK VALUE EQUIVALENT AWARDS
 
 
(a)
Stock Value Equivalent Awards.  Stock Value Equivalent Awards are rights to
receive an amount equal to the Fair Market Value of shares of Common Stock or
rights to receive an amount equal to any appreciation or increase in the Fair
Market Value of Common Stock over a specified period of time, which vest over a
period of time as established by the Committee, without payment of any amounts
by the Holder thereof (except to the extent otherwise required by law) or
satisfaction of any performance criteria or objectives.  Each Stock Value
Equivalent Award may have a maximum value established by the Committee at the
time of such Award.

-14-

--------------------------------------------------------------------------------

 
 
(b)
Award Period.  The Committee shall establish, with respect to and at the time of
each Stock Value Equivalent Award, a period over which the Award shall vest with
respect to the Holder.

 
 
(c)
Payment.  Following the end of the determined period for a Stock Value
Equivalent Award, the Holder of a Stock Value Equivalent Award shall be entitled
to receive payment of an amount, not exceeding the maximum value of the Stock
Value Equivalent Award, if any, based on the then vested value of the
Award.  Payment of a Stock Value Equivalent Award (i) shall be made in cash,
(ii) shall be made in a lump sum or in installments as prescribed by the
Committee in its sole discretion, and (iii) shall be based on the Fair Market
Value of the Common Stock on the payment date.  Cash dividend equivalents may be
paid during, or may be accumulated and paid at the end of, the determined period
with respect to a Stock Value Equivalent Award, as determined by the
Committee.  If payment of cash is to be made on a deferred basis, the Committee
shall establish whether interest shall be credited, the rate thereof and any
other terms and conditions applicable thereto.

 
 
(d)
Termination of Service.  The Committee shall determine the effect of termination
of service during the applicable vesting period on a Holder’s Stock Value
Equivalent Award.

 
XIII.    RECAPITALIZATION OR REORGANIZATION
 
 
(a)
After the closing date of the IPO, except as hereinafter otherwise provided, in
the event of any recapitalization, reorganization, merger, consolidation,
combination, exchange, stock dividend, stock split, extraordinary dividend or
divestiture (including a spin-off) or any other change in the corporate
structure or shares of Common Stock occurring after the date of the grant of an
Award, the Committee shall, in its discretion, make such adjustment as to the
number and price of shares of Common Stock or other consideration subject to
such Awards as the Committee shall deem appropriate in order to prevent dilution
or enlargement of rights of the Holders.

 
 
(b)
The existence of the Plan and the Awards granted hereunder shall not affect in
any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities having any
priority or preference with respect to or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.

 
 
(c)
The shares with respect to which Options, Stock Appreciation Rights or
Restricted Stock Units may be granted are shares of Common Stock as presently
constituted, but, after the closing date of the IPO, if, and whenever, prior to
the expiration of an Option, Stock Appreciation Rights or Restricted Stock Unit
Award, the Company shall effect a subdivision or consolidation of shares of
Common Stock or the payment of a stock dividend on Common Stock without receipt
of consideration by the Company, the number of shares of Common Stock with
respect to which such Award relates or may thereafter be exercised (i) in the
event of an increase in the number of outstanding shares shall be
proportionately increased, and, as applicable, the purchase price per share
shall be proportionately reduced, and (ii) in the event of a reduction in the
number of outstanding shares shall be proportionately reduced, and, as
applicable, the purchase price per share shall be proportionately increased.

 
-15-

--------------------------------------------------------------------------------

 
 
(d)
After the closing date of the IPO, if the Company recapitalizes or otherwise
changes its capital structure, thereafter upon any exercise of an Option or
Stock Appreciation Rights or payment in settlement of a Restricted Stock Unit
Award theretofore granted, the Holder shall be entitled to purchase or receive,
as applicable, under such Award, in lieu of the number of shares of Common Stock
as to which such Award relates or shall then be exercisable, the number and
class of shares of stock and securities and the cash and other property to which
the Holder would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to such recapitalization, the Holder had
been the holder of record of the number of shares of Common Stock then covered
by such Award (or, if a cash payment would otherwise be payable, an amount
determined by reference to the value attributable thereto).

 
 
(e)
In the event of a Corporate Change, unless an Award Document otherwise provides,
as of the Corporate Change Effective Date (i) any outstanding Options and Stock
Appreciation Rights shall become immediately vested and fully exercisable, (ii)
any restrictions on Restricted Stock Awards or Restricted Stock Unit Awards
shall immediately lapse, (iii) all performance measures upon which an
outstanding Performance Award is contingent shall be deemed achieved and the
Holder shall receive a payment equal to the maximum amount of the Award he or
she would have been entitled to receive, prorated to the Corporate Change
Effective Date, and (iv) any outstanding cash Awards including, but not limited
to, Stock Value Equivalent Awards shall immediately vest and be paid based on
the vested value of the Award.

 
 
(f)
In the relevant Award Document, the Committee may provide that, no later than
two (2) business days prior to any Corporate Change referenced in Clause (ii),
(iii) or (iv) of the definition thereof or ten (10) business days after any
Corporate Change referenced in Clause (i) of the definition thereof, the
Committee may, in its sole discretion, (i) require the mandatory surrender to
the Company by all or selected Optionees of some or all of the outstanding
Options held by such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date (before or after a
Corporate Change) specified by the Committee, in which event the Committee shall
thereupon cancel such Options and pay to each Optionee an amount of cash per
share equal to the excess, if any, of the Change of Control Value of the shares
subject to such Option over the exercise price(s) under such Options for such
shares, (ii) require the mandatory surrender to the Company by all or selected
Holders of Stock Appreciation Rights of some or all of the outstanding Stock
Appreciation Rights held by such Holders (irrespective of whether such Stock
Appreciation Rights are then exercisable under the provisions of the Plan) as of
a date (before or after a Corporate Change) specified by the Committee, in which
event the Committee shall thereupon cancel such Stock Appreciation Rights and
pay to each Holder an amount of cash equal to the Spread (if any) with respect
to such Stock Appreciation Rights with the Fair Market Value of the Common Stock
at such time to be deemed to be the Change of Control Value, or (iii) require
the mandatory surrender to the Company by selected Holders of Restricted Stock
Awards, Restricted Stock Unit Awards or Performance Awards of some or all of the
outstanding Awards held by such Holder (irrespective of whether such Awards are
vested under the provisions of the Plan) as of a date (before or after a
Corporate Change) specified by the Committee, in which event the Committee shall
thereupon cancel such Awards and pay to each Holder an amount of cash equal to
the Change of Control Value of the shares, if the Award value is determined by
the full value of shares of Common Stock, or an amount of cash equal to the
value of the Award at such time, if the Award is not determined on that basis.

-16-

--------------------------------------------------------------------------------

 
 
(g)
Except as hereinbefore expressly provided, the issuance by the Company of shares
of stock of any class or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Awards theretofore granted, the purchase price
per share of Common Stock subject to Options or the calculation of the Spread
with respect to Stock Appreciation Rights.

 
XIV.    AMENDMENT OR TERMINATION OF THE PLAN
 
The Board in its discretion may terminate the Plan or alter or amend the Plan or
any part thereof from time to time; provided that no change in the Plan may be
made which would impair the rights of the Holder in any Award theretofore
granted without the consent of the Holder, and provided, further, that the Board
may not, without approval of the stockholders, amend the Plan to effect a
“material revision” of the Plan, where a “material revision” includes, but is
not limited to, a revision that: (a) materially increases the benefits accruing
to a Holder under the Plan, (b) materially increases the aggregate number of
securities that may be issued under the Plan, (c) materially modifies the
requirements as to eligibility for participation in the Plan, (d) changes the
types of awards available under the Plan, or (e) amends or deletes the
provisions that prevent the Committee from amending the terms and conditions of
an outstanding Option or Stock Appreciation Rights to alter the exercise price.
 
-17-

--------------------------------------------------------------------------------

 
XV.    OTHER
 
 
(a)
No Right To An Award.  Neither the adoption of the Plan nor any action of the
Board or of the Committee shall be deemed to give an employee or a Non-employee
Director any right to be granted an Award or any other rights hereunder except
as may be evidenced by an Award Document duly executed on behalf of the Company,
and then only to the extent of and on the terms and conditions expressly set
forth therein.  The Plan shall be unfunded.  The Company shall not be required
to establish any special or separate fund or to make any other segregation of
funds or assets to assure the payment of any Award.

 
 
(b)
No Employment Rights Conferred.  Nothing contained in the Plan or in any Award
made hereunder shall:

 
 
(i)
confer upon any employee any right to continuation of employment with the
Company or any Subsidiary; or

 
 
(ii)
interfere in any way with the right of the Company or any Subsidiary to
terminate his or her employment at any time.

 
 
(c)
No Rights to Serve as a Director Conferred.  Nothing contained in the Plan or in
any Award made hereunder shall confer upon any Director any right to continue
their position as a Director of the Company.

 
 
(d)
Other Laws; Withholding.  The Company shall not be obligated to issue any Common
Stock pursuant to any Award granted under the Plan at any time when the offering
of the shares covered by such Award has not been registered under the Securities
Act of 1933, such other state and federal laws, rules or regulations, and
non-U.S. laws, rules, or regulations as the Company or the Committee deems
applicable and, in the opinion of legal counsel for the Company, there is no
exemption from the registration requirements of such laws, rules or regulations
available for the issuance and sale of such shares.  No fractional shares of
Common Stock shall be delivered, nor shall any cash in lieu of fractional shares
be paid.  The Company shall have the right to deduct in connection with all
Awards any taxes required by law to be withheld and to require any payments
necessary to enable it to satisfy its withholding obligations.  The Committee
may permit the Holder of an Award to elect to surrender, or authorize the
Company to withhold, shares of Common Stock (valued at their Fair Market Value
on the date of surrender or withholding of such shares) in satisfaction of the
Company’s withholding obligation, subject to such restrictions as the Committee
deems appropriate.

 
 
(e)
No Restriction on Corporate Action.  Nothing contained in the Plan shall be
construed to prevent the Company or any Subsidiary from taking any corporate
action which is deemed by the Company or such Subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan.  No Holder, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action.

 
-18-

--------------------------------------------------------------------------------

 
 
(f)
Restrictions on Transfer.  Except as otherwise provided herein, an Award shall
not be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated by a Holder other than by will or the laws of descent and
distribution or pursuant to a “qualified domestic relations order” as defined by
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, and shall be exercisable during the lifetime of the Holder only by such
Holder, the Holder’s guardian or legal representative, a transferee under a
qualified domestic relations order or a transferee as described below.  The
Committee may prescribe and include in the respective Award Documents hereunder
other restrictions on transfer.  Any attempted assignment or transfer in
violation of this section shall be null and void.  Upon a Holder’s death, the
Holder’s personal representative or other person entitled to succeed to the
rights of the Holder (the “Successor Holder”) may exercise such rights as are
provided under the applicable Award Document.  A Successor Holder must furnish
proof satisfactory to the Company of his or her rights to exercise the Award
under the Holder’s will or under the applicable laws of descent and
distribution.  Notwithstanding the foregoing, the Committee shall have the
authority, in its discretion, to grant (or to sanction by way of amendment to an
existing grant) Awards (other than Incentive Stock Options) which may be
transferred by the Holder for no consideration to or for the benefit of the
Holder’s Immediate Family, to a trust solely for the benefit of the Holder and
his Immediate Family, or to a partnership or limited liability company in which
the Holder and members of his Immediate Family have at least 99% of the equity,
profit and loss interest, in which case the Award Document shall so state.  A
transfer of an Award pursuant to this Paragraph (f) shall be subject to such
rules and procedures as the Committee may establish.  In the event an Award is
transferred as contemplated in this Paragraph (f), such Award may not be
subsequently transferred by the transferee except by will or the laws of descent
and distribution, and such Award shall continue to be governed by and subject to
the terms and limitations of the Plan and the relevant written instrument for
the Award and the transferee shall be entitled to the same rights as the Holder
under Articles XIII and XIV hereof as if no transfer had taken place.  No
transfer shall be effective unless and until written notice of such transfer is
provided to the Committee, in the form and manner prescribed by the
Committee.  The consequences of termination of employment shall continue to be
applied with respect to the original Holder, following which the Awards shall be
exercised by the transferee only to the extent and for the periods specified in
the Plan and the related Award Document.  The Option Agreement, Stock
Appreciation Rights Agreement, Restricted Stock Award Agreement, Restricted
Stock Unit Award Agreement or other Award Document shall specify the effect of
the death of the Holder on the Award.

 
 
(g)
Governing Law.  This Plan shall be construed in accordance with the laws of the
State of Texas, except to the extent that it implicates matters which are the
subject of the General Corporation Law of the State of Delaware which matters
shall be governed by the latter law.

 
-19-

--------------------------------------------------------------------------------

 
 
(h)
Foreign Awardees.  The Committee may, without amending the Plan, grant Awards to
eligible persons who are foreign nationals on such terms and conditions
different from those specified in the Plan as may, in the judgment of the
Committee, be necessary or desirable to foster and promote achievement of the
purposes of the Plan and, in furtherance of such purposes, the Committee may
make such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with the provisions of laws and regulations in
other countries or jurisdictions in which the Company or its Subsidiaries
operate.

 
 
(i)
Section 409A.  Notwithstanding anything in this Plan to the contrary, if any
Plan provision or Award under the Plan, or any deferral permitted under the
Plan, would result in the imposition of an applicable tax under Section 409A of
the Code and related regulations and Treasury pronouncements (“Section 409A”),
that Plan provision or Award will be reformed, and that deferral provision will
be structured, to avoid imposition of the applicable tax and no action taken to
comply with Section 409A shall be deemed to adversely affect the Participant’s
rights with respect to an Award.

 
 
-20-

--------------------------------------------------------------------------------