Exhibit 10.4
Diamond Offshore Management Company
Supplemental Executive Retirement Plan
IMPORTANT NOTE
This document has not been approved by the Department of Labor, Internal Revenue
Service or any other governmental entity. An adopting Employer must determine
whether the Plan is subject to the Federal securities laws and the securities
laws of the various states. An adopting Employer may not rely on this document
to ensure any particular tax consequences or to ensure that the Plan is
“unfunded and maintained primarily for the purpose of providing deferred
compensation to a select group of management or highly compensated employees”
under Title I of the Employee Retirement Income Security Act of 1974, as
amended, with respect to the Employer’s particular situation. Fidelity
Investments Institutional Operations Company, Inc., its affiliates and employees
cannot provide you with legal advice in connection with the execution of this
document. This document should be reviewed by the Employer’s attorney prior to
execution.
October 2006

 

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TABLE OF CONTENTS
PREAMBLE

      ARTICLE 1 – GENERAL
1.1
  Plan
1.2
  Effective Dates
1.3
  Grandfathering of Amounts Not Subject to Code Section 409A
 
    ARTICLE 2 – DEFINITIONS
2.1
  Account
2.2
  Administrator
2.3
  Adoption Agreement
2.4
  Beneficiary
2.5
  Board or Board of Directors
2.6
  Bonus
2.7
  Change in Control
2.8
  Code
2.9
  Compensation
2.10
  Director
2.11
  Disabled
2.12
  Eligible Employee
2.13
  Employer
2.14
  ERISA
2.15
  Identification Date
2.16
  Key Employee
2.17
  Participant
2.18
  Plan
2.19
  Plan Sponsor
2.20
  Plan Year
2.21
  Related Employer
2.22
  Retirement
2.23
  Separation from Service
2.24
  Unforeseeable Emergency
2.25
  Valuation Date
2.26
  Years of Service
 
    ARTICLE 3 – PARTICIPATION
3.1
  Participation
3.2
  Termination of Participation

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      ARTICLE 4 – PARTICIPANT CONTRIBUTIONS
 
   
4.1
  Deferral Agreement
4.2
  Amount of Deferral
4.3
  Timing of Election to Defer
4.4
  Election of Payment Schedule and Form of Payment
4.5
  2005 Transitional Rules
4.6
  2006 Transitional Rule
4.7
  2007 Transitional Rule
 
    ARTICLE 5 – EMPLOYER CONTRIBUTIONS
5.1
  Matching Contributions
5.2
  Other Contributions
 
    ARTICLE 6 – ACCOUNTS AND CREDITS
6.1
  Establishment of Account
6.2
  Credits to Account
 
    ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS
7.1
  Investment Options
7.2
  Adjustment of Accounts
 
    ARTICLE 8 – RIGHT TO BENEFITS
8.1
  Vesting
8.2
  Death
8.3
  Disability
 
    ARTICLE 9 – DISTRIBUTION OF BENEFITS
9.1
  Amount of Benefits
9.2
  Method and Timing of Distributions
9.3
  Unforeseeable Emergency
9.4
  Termination Before Retirement
9.5
  Cashouts of Amounts Not Exceeding Stated Limit
9.6
  Key Employees
9.7
  Change in Control
9.8
  Permissible Delays in Payment

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      ARTICLE 10 – AMENDMENT AND TERMINATION
10.1
  Amendment by Plan Sponsor
10.2
  Plan Termination Following Change in Control or Corporate Dissolution
10.3
  Other Plan Terminations
 
    ARTICLE 11 – THE TRUST
11.1
  Establishment of Trust
11.2
  Grantor Trust
11.3
  Investment of Trust Funds
 
    ARTICLE 12 – PLAN ADMINISTRATION
12.1
  Powers and Responsibilities of the Administrator
12.2
  Claims and Review Procedures
12.3
  Plan Administrative Costs
 
    ARTICLE 13 – MISCELLANEOUS
13.1
  Unsecured General Creditor of the Employer
13.2
  Employer’s Liability
13.3
  Limitation of Rights
13.4
  Anti-Assignment
13.5
  Facility of Payment
13.6
  Notices
13.7
  Tax Withholding
13.8
  Indemnification
13.9
  Permitted Acceleration of Payment
13.10
  Governing Law

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PREAMBLE
The Plan is intended to be a “plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees” within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended, and is further intended to conform with the
requirements of Internal Revenue Code Section 409A and shall be implemented and
administered in a manner consistent therewith.

 

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ARTICLE 1 – GENERAL

1.1   Plan. The Plan will be referred to by the name specified in the Adoption
Agreement.   1.2   Effective Dates.

  (a)   Original Effective Date. The Original Effective Date is the date as of
which the Plan was initially adopted.     (b)   Amendment Effective Date. The
Amendment Effective Date is the date specified in the Adoption Agreement as of
which the Plan is amended and restated.     (c)   Special Effective Date. A
Special Effective Date may apply to any given provision if so specified in
Appendix C of the Adoption Agreement. A Special Effective Date will control over
the Original Effective Date or Amendment Effective Date, whichever is
applicable, with respect to such provision of the Plan.

1.3   Grandfathering of Amounts Not Subject to Code Section 409A       Amounts
deferred before January 1, 2005 that are earned and vested on December 31, 2004
will be separately accounted for and administered in accordance with the terms
of the Plan as in effect on December 31, 2004, except as otherwise provided in
this Plan document. A summary of the grandfathered provisions is set forth in
Appendix B of the Adoption Agreement.

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ARTICLE 2 – DEFINITIONS
Pronouns used in the Plan are in the masculine gender but include the feminine
gender unless the context clearly indicates otherwise. Wherever used herein, the
following terms have the meanings set forth below, unless a different meaning is
clearly required by the context:

2.1   “Account” means an account established for the purpose of recording
amounts credited on behalf of a Participant and any income, expenses, gains,
losses or distributions included thereon. The Account shall be a bookkeeping
entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant pursuant to the Plan.  
2.2   “Administrator” means the person or persons designated by the Plan Sponsor
in Section 1.05 of the Adoption Agreement to be responsible for the
administration of the Plan. If no Administrator is designated in the Adoption
Agreement, the Administrator is the Plan Sponsor.   2.3   “Adoption Agreement”
means the agreement adopted by the Plan Sponsor that establishes the Plan.   2.4
  “Beneficiary” means the persons, trusts, estates or other entities entitled
under Section 8.2 to receive benefits under the Plan upon the death of a
Participant.   2.5   “Board” or “Board of Directors” means the Board of
Directors of the Plan Sponsor.   2.6   “Bonus” means an amount of incentive
remuneration payable by the Employer to a Participant.   2.7   “Change in
Control” means the occurrence of an event involving the Plan Sponsor that is
described in Section 9.7.   2.8   “Code” means the Internal Revenue Code of
1986, as amended.   2.9   “Compensation” has the meaning specified in
Section 3.01 of the Adoption Agreement.   2.10   “Director” means a non-employee
member of the Board who has been designated by the Employer as eligible to
participate in the Plan.

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2.11   “Disabled” means a determination by the Administrator that the
Participant is either (a) unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (b) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or last for a continuous period of not less than twelve months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Employer. A Participant will
be considered Disabled if he is determined to be totally disabled by the Social
Security Administration.   2.12   “Eligible Employee” means an employee of the
Employer who is determined by the Administrator to be a member of a select group
of management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and who satisfies the
requirements in Section 2.01 of the Adoption Agreement.   2.13   “Employer”
means the Plan Sponsor and any other entity which is authorized by the Plan
Sponsor to participate in and, in fact, does adopt the Plan.   2.14   “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.   2.15  
“Identification Date” means the date as of which Key Employees are determined
which is specified in Section 1.06 of the Adoption Agreement.   2.16   “Key
Employee” means an employee who satisfies the conditions set forth in
Section 9.6.   2.17   “Participant” means an Eligible Employee or Director who
commences participation in the Plan in accordance with Article 3.   2.18  
“Plan” means the unfunded plan of deferred compensation set forth herein,
including the Adoption Agreement and any trust agreement, as adopted by the Plan
Sponsor and as amended from time to time.   2.19   “Plan Sponsor” means the
entity identified in Section 1.03 of the Adoption Agreement.   2.20   “Plan
Year” means the period identified in Section 1.02 of the Adoption Agreement.

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2.21   “Related Employer” means the Employer and (a) any corporation that is a
member of a controlled group of corporations as defined in Section 414(b) of the
Code that includes the Employer and (b) any trade or business that is under
common control as defined in Section 414(c) of the Code that includes the
Employer.   2.22   “Retirement” has the meaning specified in 6.01(f) of the
Adoption Agreement.   2.23   “Separation from Service” means the date that the
Participant dies, retires or otherwise has a termination of employment with
respect to all entities comprising the Related Employer. A Separation from
Service does not occur if the Participant is on military leave, sick leave or
other bona fide leave of absence if the period of leave does not exceed six
months or such longer period during which the Participant’s right to
re-employment is provided by statute or contract. If the period of leave exceeds
six months and the Participant’s right to re-employment is not provided either
by statute or contract, a Separation from Service will be deemed to have
occurred on the first day following the six-month period.       Whether a
termination of employment has occurred is based on the facts and circumstances.
Where an employee continues to provide services to the Related Employer at an
annual rate that is less than twenty percent of the services he rendered, on
average, during the immediately preceding three full calendar years of
employment (or, if employed less than three years, such lesser period) and the
annual remuneration he receives for such services is less than twenty percent of
the average annual remuneration he earned during his final three full calendar
years of employment (or, if less, such lesser period), the employee will be
treated as having incurred a Separation from Service. Where an employee
continues to provide services to the Related Employer in a capacity other than
as an employee, a Separation from Service will not be deemed to have occurred if
the former employee provides services at an annual rate that is fifty percent or
more of the services he rendered, on average, during the immediately preceding
three full calendar years of employment (or, if employed less than three years,
such lesser period) and the annual remuneration he receives for such services is
fifty percent or more of the annual remuneration he earned during his final
three full calendar years of employment for the Related Employer. For purposes
of the foregoing, the annual rate of providing services is determined based upon
the measurement used to determine the service provider’s base compensation. An
independent contractor is considered to experience a Separation of Service from
the Related Employer upon the expiration of the contract (or contracts) under
which services are performed for the Related Employer if the expiration
constitutes a good faith and complete termination of the contractual
relationship. An expiration does not constitute a good faith and complete
termination of the contractual

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    relationship if the Related Employer anticipates a renewal of a contractual
relationship or the independent contractor becoming an employee. The Related
Employer will be considered to anticipate the renewal of the contractual
relationship with an independent contractor if it intends to contract again for
the services provided under the expired contract and neither the Related
Employer nor the independent contractor has eliminated the independent
contractor as a possible provider of services under any such new contract. A
Related Employer is considered to intend to contract again for the services
provided under an expired contract if the Related Employer’s doing so is
conditioned only upon incurring a need for the services, the availability of
funds, or both. All determinations of whether a Separation from Service has
occurred will be made in a manner consistent with Code Section 409A.   2.24  
“Unforeseeable Emergency” means a severe financial hardship of the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, or the Participant’s dependent (as defined in Code Section 152(a)); loss
of the Participant’s property due to casualty; or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant.   2.25   “Valuation Date” means each business day of the
Plan Year.   2.26   “Years of Service” means each one year period for which the
Participant receives service credit in accordance with the provisions of
Section 7.01(d) of the Adoption Agreement.

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ARTICLE 3 – PARTICIPATION

3.1   Participation. The Participants in the Plan shall be those Directors and
those “management” or “highly compensated” employees of the Employer within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA who satisfy the
requirements of Section 2.01 of the Adoption Agreement.   3.2   Termination of
Participation. The Administrator may terminate a Participant’s participation in
the Plan in a manner consistent with Code Section 409A.

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ARTICLE 4 – PARTICIPANT CONTRIBUTIONS

4.1   Deferral Agreement. Each Eligible Employee and Director may elect to defer
his Compensation within the meaning of Section 3.01 of the Adoption Agreement by
executing in writing or electronically, a deferral agreement in accordance with
rules and procedures established by the Administrator and the provisions of this
Article 4.       A new deferral agreement must be timely executed for each Plan
Year during which the Eligible Employee or Director desires to defer
Compensation. An Eligible Employee or Director who does not timely execute a
deferral agreement shall be deemed to have elected zero deferrals of
Compensation for such Plan Year.       If an Eligible Employee or Director fails
to have an executed deferral agreement in effect for a Plan Year during which an
Employer contribution pursuant to Article 5 is made on his behalf, the Eligible
Employee or Director will be deemed to have elected to receive a lump sum
distribution upon Separation from Service.       A deferral agreement may be
changed or revoked during the period specified by the Administrator. Except as
provided in Section 9.3 or in Section 4.01(c) of the Adoption Agreement, a
deferral agreement becomes irrevocable at the close of the specified period.  
4.2   Amount of Deferral. An Eligible Employee or Director may elect to defer
Compensation in any amount permitted by Section 4.01(a) of the Adoption
Agreement.   4.3   Timing of Election to Defer. Each Eligible Employee or
Director who desires to defer Compensation otherwise payable during a Plan Year
must execute a deferral agreement within the period preceding the Plan Year
specified by the Administrator. Each Eligible Employee who desires to defer
Compensation that is a Bonus must execute a deferral agreement within the period
preceding the Plan Year during which the Bonus is earned that is specified by
the Administrator, except that if the Bonus can be treated as performance based
compensation as described in Code Section 409A(a)(4)(B)(iii), the deferral
agreement may be executed within the period specified by the Administrator,
which period, in no event, shall end after the date which is six months prior to
the end of the period during which the Bonus is earned.

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    Except as otherwise provided below, an employee who is classified or
designated as an Eligible Employee during a Plan Year or a Director who is
designated as eligible to participate during a Plan Year may elect to defer
Compensation otherwise payable during the remainder of such Plan Year in
accordance with the rules of this Section 4.3 by executing a deferral agreement
within the thirty (30) day period beginning on the date the employee is
classified or designated as an Eligible Employee or the date the Director is
designated as eligible, whichever is applicable, if permitted by Section 2.01 of
the Adoption Agreement. If Compensation is based on a specified performance
period that begins before the Eligible Employee or Director executes his
deferral agreement, the election will be deemed to apply to the portion of such
Compensation equal to the total amount of Compensation for the performance
period multiplied by the ratio of the number of days remaining in the
performance period after the election over the total number of days in the
performance period. The rules of this paragraph shall not apply if the Eligible
Employee or Director has ever participated or is participating in a “Plan”
within the meaning of Prop. Reg. Sec. 1.409A-1(c) sponsored by the Employer.  
4.4   Election of Payment Schedule and Form of Payment.       At the time an
Eligible Employee or Director completes a deferral agreement, the Eligible
Employee or Director must elect a distribution event (which includes a specified
time) and a form of payment for the Compensation subject to the deferral
agreement from among the options the Administrator has made available for this
purpose and which are specified in 6.01(b) of the Adoption Agreement.   4.5  
2005 Transitional Rules       If elected by the Plan Sponsor in Section 13.01 of
the Adoption Agreement, one or more of the following transitional rules set
forth in Notice 2005-1 shall apply during calendar year 2005. Each transitional
rule that applies during calendar year 2005 will be implemented in accordance
with rules and procedures established by the Administrator.

  (a)   New Payment Elections.         A Participant may make new payment
elections with respect to amounts subject to Code Section 409A provided the
elections are made no later than December 31, 2005. The new payment elections
may apply to amounts deferred before the date of the election and can be made
without regard to Code Sections 409A(a)(3) and (4) and any inconsistent
provisions in the Plan to the contrary. A Participant who fails to make a new
payment election in accordance with this Section 4.5(a) with respect any

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      amount subject to Code Section 409A for which a valid payment election was
not made in accordance with the Plan and the requirements of Code Section 409A
will be deemed to have made the default elections provided in Section 13.01(a)
of the Adoption Agreement.         If the Plan Sponsor elects not to permit new
payment elections in accordance with this Section 4.5(a), the default elections
specified in Section 13.01(a) of the Adoption Agreement will apply to all
amounts subject to Code Section 409A that were deferred prior to December 31,
2005 for which a valid payment election was not made in accordance with the Plan
and the requirements of Code Section 409A.     (b)   Elections to terminate
participation or cancel an outstanding election.         A Participant may elect
to terminate participation or cancel a deferral election with respect to amounts
subject to Code Section 409A. An election made pursuant to this Section 4.5(b)
may apply: (i) to all or part of calendar year 2005; (ii) to elective and/or
nonelective deferred compensation under the Plan; (iii) to all or any portion of
the Plan; and/or (iv) to one or more outstanding deferral elections with regard
to amounts subject to Code Section 409A. An election made pursuant to this
Section 4.5(b) includes a termination or cancellation that results in a lower
amount of deferral for the period without a complete elimination of deferrals.
Any election made pursuant to this Section 4.5(b) may be made without regard to
Code Sections 409A(a)(2), (3) and (4) and any inconsistent provisions in the
Plan to the contrary.     (c)   Prospective Deferral Elections.         A
Participant may make a deferral election with respect to Compensation that has
not yet been paid or become payable at the time of the election, provided the
election is made no later than March 15, 2005. The prospective deferral election
may be made without regard to Code Section 409A(a)(4) and any inconsistent
provisions in the Plan to the contrary.

4.6   2006 Transitional Rule       If elected by the Plan Sponsor in accordance
with Section 13.02 of the Adoption Agreement, the following transitional rule
will apply during calendar year 2006. The rule will be implemented in accordance
with rules and procedures established by the Administrator.

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    A Participant may make new payment elections with respect to amounts subject
to Code Section 409A provided: (a) the elections are made no later than
December 31, 2006 and, (b) a Participant cannot in 2006 change payment elections
with respect to payments that would otherwise have become payable in 2006 or
cause payments to be made in 2006.       A Participant who fails to make a new
payment election in accordance with amount subject to Code Section 409A for
which a valid payment election was not made in accordance with the Plan and the
requirements of Code Section 409A will be deemed to have made the default
elections provided in Section 13.01(a) of the Adoption Agreement.       If the
Plan Sponsor elects not to permit new payment elections in accordance with this
Section 4.6, the default elections in Section 13.01(a) of the Adoption Agreement
will apply to all amounts subject to Code Section 409A for which a valid payment
election was not made in accordance with the Plan and the requirements of Code
Section 409A.   4.7   2007 Transitional Rule       If elected by the Plan
Sponsor in accordance with Section 13.03 of the Adoption Agreement, the
following transitional rule will apply during calendar year 2007. The rule will
be implemented in accordance with rules and procedures established by the
Administrator.       A Participant may make new payment elections with respect
to amounts subject to Code Section 409A provided: (a) the elections are made no
later than December 31, 2007 and, (b) a Participant cannot in 2007 change
payment elections with respect to payments that would otherwise have become
payable in 2007 or cause payments to be made in 2007.       A Participant who
fails to make a new payment election in accordance with amount subject to Code
Section 409A for which a valid payment election was not made in accordance with
the Plan and the requirements of Code Section 409A will be deemed to have made
the default elections provided in Section 13.01(a) of the Adoption Agreement.  
    If the Plan Sponsor elects not to permit new payment elections in accordance
with this Section 4.7, the default elections in Section 13.01(a) of the Adoption
Agreement will apply to all amounts subject to Code Section 409A for which a
valid payment election was not made in accordance with the Plan and the
requirements of Code Section 409A.

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ARTICLE 5 – EMPLOYER CONTRIBUTIONS

5.1   Matching Contributions. If elected by the Plan Sponsor in Section 5.01(a)
of the Adoption Agreement, the Employer will credit the Participant’s Account
with a matching contribution determined in accordance with the formula specified
in Section 5.01(a) of the Adoption Agreement. The matching contribution will be
credited to the Participant’s Account at the time specified in
Section 5.01(a)(iii) of the Adoption Agreement.   5.2   Other Contributions. If
elected by the Plan Sponsor in Section 5.01(b) of the Adoption Agreement, the
Employer will credit the Participant’s Account with a contribution determined in
accordance with the formula or method specified in Section 5.01(b) of the
Adoption Agreement. The contribution will be credited to the Participant’s
Account at the time specified in Section 5.01(b)(iii) of the Adoption Agreement.

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ARTICLE 6 – ACCOUNTS AND CREDITS

6.1   Establishment of Account. For accounting and computational purposes only,
the Administrator will establish and maintain an Account for each Participant
which will reflect the credits made pursuant to Section 6.2 along with the
earnings, expenses, gains and losses allocated thereto, attributable to the
hypothetical investments made with the amounts in the Participant’s Account as
provided in Article 7. The Administrator will establish and maintain such other
records and accounts, as it decides in its discretion to be reasonably required
or appropriate to discharge its duties under the Plan.   6.2   Credits to
Account. A Participant’s Account will be credited for each Plan Year with the
amount of his elective deferrals under Section 4.1 at the time the amount
subject to the deferral election would otherwise have been payable to the
Participant and the amount of Employer contributions made on his behalf under
Article 5. Such amounts will be credited to the Participant’s Account at the
times specified, respectively, in Sections 5.01(a)(iii) and 5.01(b)(iii) of the
Adoption Agreement.

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ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS

7.1   Investment Options. The amount in a Participant’s Account shall be treated
as invested in the investment options designated for this purpose by the
Administrator and set forth in Appendix A to the Adoption Agreement.   7.2  
Adjustment of Accounts. The amount in a Participant’s Account shall be adjusted
for hypothetical investment earnings, expenses, gains or losses in an amount
equal to the earnings, expenses, gains or losses attributable to the investment
options selected by the party designated in Section 9.01 of the Adoption
Agreement from among the investment options provided in Section 7.1. If
permitted by Section 9.01 of the Adoption Agreement, a Participant may, in
accordance with rules and procedures established by the Administrator, select
the investments from among the options provided in Section 7.1 to be used for
the purpose of calculating future hypothetical investment adjustments to the
Participant’s Account or to future credits to the Account under Section 6.2
effective as the Valuation Date coincident with or next following notice to the
Administrator. The Account of each Participant shall be adjusted as of each
Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains and
losses described above; (b) amounts credited pursuant to Section 6.2; and
(c) distributions or withdrawals. In addition, the Account of each Participant
may be adjusted for its allocable share of the hypothetical costs and expenses
associated with the maintenance of the hypothetical investments provided in
Section 7.1.

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ARTICLE 8 – RIGHT TO BENEFITS

8.1   Vesting. A Participant, at all times, has the 100% nonforfeitable interest
in the amounts credited to his Account attributable to his elective deferrals
made in accordance with Section 4.1.       A Participant’s right to the amounts
credited to his Account attributable to Employer contributions made in
accordance with Article 5 shall be determined in accordance with the relevant
schedule specified in Section 7.01 of the Adoption Agreement.   8.2   Death. The
balance or remaining balance credited to a Participant’s vested Account shall be
paid to his Beneficiary at the time specified in Section 6.01(a) of the Adoption
Agreement in a single lump sum payment following the date of death, unless
additional forms of payment have been made available for this purpose in
Section 6.01(b) of the Adoption Agreement and the Participant has made a valid
election (or valid elections) of a form of payment in accordance with the
provisions of Article 4. If additional forms have been made available, payment
to the Beneficiary shall be made at the time specified in Section 6.01(a) of the
Adoption Agreement in the form elected by the Participant in accordance with the
provisions of Article 4. If multiple Beneficiaries have been designated, each
Beneficiary shall receive payment of his specified portion of the Account at the
time specified in Section 6.01(a) of the Adoption Agreement in the form elected
by the Participant.       A Participant may designate a Beneficiary or
Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries
in accordance with rules and procedures established by the Administrator.      
A copy of the death notice or other sufficient documentation must be filed with
and approved by the Administrator. If upon the death of the Participant there
is, in the opinion of the Administrator, no designated Beneficiary for part or
all of the Participant’s vested Account, such amount will be paid to his estate
(such estate shall be deemed to be the Beneficiary for purposes of the Plan) in
a single lump sum payment.

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8.3   Disability. The balance or remaining balance credited to a Participant’s
vested Account shall be paid to the Participant at the time specified in
Section 6.01(a) of the Adoption Agreement in a single lump sum cash payment
following the date a Participant incurs a Disability as defined in Section 2.11,
unless additional forms of payment have been made available for this purpose in
Section 6.01(b) of the Adoption Agreement and the Participant has made a valid
election of a different form of payment. If additional forms have been made
available, payment shall be made at the time specified in Section 6.01(a) of the
Adoption Agreement and in the form elected by the Participant in accordance with
the provisions of Article 4. The Administrator, in its sole discretion, shall
determine whether a Participant has experienced a disability for purposes of
this Section 8.3.

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ARTICLE 9 – DISTRIBUTION OF BENEFITS

9.1   Amount of Benefits. The vested amount credited to a Participant’s Account
as determined under Articles 6, 7 and 8 shall determine and constitute the basis
for the value of benefits payable to the Participant under the Plan.   9.2  
Method and Timing of Distributions. Except as otherwise provided in this
Article 9, distributions under the Plan shall be made in accordance with the
elections made by the Participant under Article 4. Distributions following a
payment event shall commence at the time specified in Section 6.01(a) of the
Adoption Agreement. If permitted by Section 6.01(g) of the Adoption Agreement, a
Participant may elect, at least twelve months before a scheduled distribution
event, to delay the payment date for a minimum period of sixty months from the
originally scheduled date of payment. The re-deferral election must be made in
accordance with procedures and rules established by the Administrator. The
Participant may, at the same time the date of payment is deferred, change the
form of payment but such change in the form of payment may not effect an
acceleration of payment in violation of Section 409A of the Code. For purposes
of this Section 9.2, a series of installment payments is always treated as a
single payment and not as a series of separate payments.   9.3   Unforeseeable
Emergency. A Participant may request a distribution due to an Unforeseeable
Emergency if the Plan Sponsor has elected to permit Unforeseeable Emergency
withdrawals under Section 8.01(a) of the Adoption Agreement. The request must be
in writing and must be submitted to the Administrator along with evidence that
the circumstances constitute an Unforeseeable Emergency. The Administrator has
the discretion to require whatever evidence it deems necessary to determine
whether a distribution is warranted. Whether a Participant has incurred an
Unforeseeable Emergency will be determined by the Administrator on the basis of
the relevant facts and circumstances in its sole discretion, but, in no event,
will an Unforeseeable Emergency be deemed to exist if the hardship can be
relieved: (a) through reimbursement or compensation by insurance or otherwise,
(b) by liquidation of the Participant’s assets to the extent such liquidation
would not itself cause severe financial hardship, or (c) by cessation of
deferrals under the Plan. A distribution due to an Unforeseeable Emergency must
be limited to the amount reasonably necessary to satisfy the emergency need and
may include any amounts necessary to pay any federal, state or local income tax
penalties reasonably anticipated to result from the distribution. The
distribution will be made in the form of a single lump sum cash payment. If
permitted by Section 8.01(b) of the Adoption Agreement, a Participant’s deferral

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    elections for the remainder of the Plan Year will be cancelled upon a
withdrawal due to Unforeseeable Emergency.   9.4   Termination Before
Retirement. If the Plan Sponsor has elected a Separation from Service override
in accordance with Section 6.01(d) of the Adoption Agreement, the following
provisions apply. A Participant who experiences a Separation from Service before
Retirement for any reason other than death shall receive the vested amount
credited to his Account at the time specified in Section 6.01(a) of the Adoption
Agreement in a single lump sum payment following such termination or cessation
of service regardless of whether the Participant had made different elections of
time or form of payment as to the vested amounts credited to his Account or
whether the Participant was receiving installment payouts at the time of such
termination.   9.5   Cashouts Of Amounts Not Exceeding Stated Limit. If the
vested amount credited to the Participant’s Account does not exceed the limit
established for this purpose by the Plan Sponsor in Section 6.01(e) of the
Adoption Agreement at the time he separates from service with the Employer for
any reason, the Employer shall distribute such amount to the Participant at the
time specified in Section 6.01(a) of the Adoption Agreement in a single lump sum
cash payment following such termination regardless of whether the Participant
had made different elections of time or form of payment as to the vested amount
credited to his Account or whether the Participant was receiving installments at
the time of such termination. A Participant’s Account, for purposes of this
Section 9.5, shall include any amounts described in Section 1.3.   9.6   Key
Employees. In no event shall a distribution made to a Key Employee due to
Separation from Service (or Retirement, if applicable) occur before the date
which is six months after the date of his Separation from Service (or
Retirement, if applicable) with the Employer. For purposes of this Section 9.6,
a Key Employee means an employee of an Employer any of whose stock is publicly
traded on an established securities market or otherwise who satisfies the
requirements of Section 416(i)(1)(A)(i), (ii) or (iii), of the Code, determined
without regard to Section 416(i)(5) of the Code, at any time during the
twelve-month period ending on the Identification Date. An employee who is
determined to be a Key Employee on an Identification Date shall be treated as a
Key Employee for purposes of the six-month delay in distributions set forth in
this Section 9.6 for the twelve-month period beginning on the first day of the
fourth month following the Identification Date. Whether any stock of the
Employer is traded on an established securities market or otherwise is
determined on the date a Participant experiences a Separation from Service.
Installment distributions to a Key Employee that are delayed due to the
application of the requirements of this Section 9.6 shall commence as of the
earliest

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    date permitted by Code Section 409A.   9.7   Change in Control. If the Plan
Sponsor has elected to permit distributions upon a Change in Control, the
following provisions shall apply. A distribution made upon a Change in Control
will be made at the time specified in Section 6.01(a) of the Adoption Agreement
in the form elected by the Participant in accordance with the procedures
described in Article 4. Alternatively, if the Plan Sponsor has elected in
accordance with Section 11.02 of the Adoption Agreement to require distributions
upon a Change in Control, the Participant’s remaining vested Account shall be
paid to the Participant or the Participant’s Beneficiary at the time specified
in Section 6.01(a) of the Adoption Agreement as a single lump sum payment. A
Change in Control, for purposes of the Plan, will occur upon a change in the
ownership of the Plan Sponsor, a change in the effective control of the Plan
Sponsor or a change in the ownership of a substantial portion of the assets of
the Plan Sponsor, but only if elected by the Plan Sponsor in Section 11.03 of
the Adoption Agreement. The Plan Sponsor, for this purpose, includes any
corporation identified in this Section 9.7.       If a Participant continues to
make deferrals in accordance with Article 4 after he has received a distribution
due to a Change in Control, the residual amount payable to the Participant shall
be paid at the time and in the form specified in the elections he makes in
accordance with Article 4 or upon his Death or Disability as provided in
Article 8.       Whether a Change in Control has occurred will be determined by
the Administrator in accordance with the rules and definitions set forth in this
Section 9.7. A distribution to the Participant will be treated as occurring upon
a Change in Control if the Plan Sponsor terminates the Plan in accordance with
Section 10.02 and distributes the Participant’s benefits within twelve months of
a Change in Control as provided in Section 10.3.

  (a)   Relevant Corporations. To constitute a Change in Control for purposes of
the Plan, the event must relate to (i) the corporation for whom the Participant
is performing services at the time of the Change in Control, (ii) the
corporation that is liable for the payment of the Participant’s benefits under
the Plan (or all corporations liable if more than one corporation is liable), or
(iii) a corporation that is a majority shareholder of a corporation identified
in (i) or (ii), or any corporation in a chain of corporations in which each
corporation is a majority corporation of another corporation in the chain,
ending in a corporation identified in (i) or (ii). A majority shareholder is
defined as a shareholder owning more than fifty percent (50%) of the total fair
market value and voting power of such corporation.

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  (b)   Stock Ownership. Code Section 318(a) applies for purposes of determining
stock ownership. Stock underlying a vested option is considered owned by the
individual who owns the vested option (and the stock underlying an unvested
option is not considered owned by the individual who holds the unvested option).
If, however, a vested option is exercisable for stock that is not substantially
vested (as defined by Treasury Regulation Section 1.83-3(b) and (j)) the stock
underlying the option is not treated as owned by the individual who holds the
option. Mutual and cooperative corporations are treated as having stock for
purposes of this Section 9.7.     (c)   Change in the Ownership of a
Corporation. A change in the ownership of a corporation occurs on the date that
any one person or more than one person acting as a group, acquires ownership of
stock of the corporation that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of such corporation. If any one person or more
than one person acting as a proxy is considered to own more than fifty percent
(50%) of the total fair market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of the corporation (or to
cause a change in the effective control of the corporation as discussed below in
Section 9.7(d)). An increase in the percentage of stock owned by any one person,
or persons acting as a group, as a result of a transaction in which the
corporation acquires its stock in exchange for property will be treated as an
acquisition of stock. Section 9.7(c) applies only when there is a transfer of
stock of a corporation (or issuance of stock of a corporation) and stock in such
corporation remains outstanding after the transaction. For purposes of this
Section 9.7(c), persons will not be considered to be acting as a group solely
because they purchase or own stock of the same corporation at the same time or
as a result of a public offering. Persons will, however, be considered to be
acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the corporation. If a person, including an entity, owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of
stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in a corporation prior to the transaction giving
rise to the change and not with respect to the ownership interest in the other
corporation.     (d)   Change in the effective control of a corporation. A
change in the effective control of a corporation occurs on the date that either
(i) any one person, or more than one person acting as a group, acquires (or

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      has acquired during the twelve month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the
corporation possessing thirty-five (35%) or more of the total voting power of
the stock of such corporation, or (ii) a majority of members of the
corporation’s board of directors is replaced during any twelve month period by
directors whose appointment or election is not endorsed by a majority of the
members of the corporation’s board of directors prior to the date of the
appointment or election, provided that for purposes of this paragraph (ii), the
term corporation refers solely to the relevant corporation identified in
Section 9.7(a) for which no other corporation is a majority shareholder for
purposes of Section 9.7(a). In the absence of an event described in
Section 9.7(d)(i) or (ii), a change in the effective control of a corporation
will not have occurred. A change in effective control may also occur in any
transaction in which either of the two corporations involved in the transaction
has a change in the ownership of such corporation as described in Section 9.7(c)
or a change in the ownership of a substantial portion of the assets of such
corporation as described in Section 9.7(e). If any one person, or more than one
person acting as a group, is considered to effectively control a corporation
within the meaning of this Section 9.7(d), the acquisition of additional control
of the corporation by the same person or persons is not considered to cause a
change in the effective control of the corporation or to cause a change in the
ownership of the corporation within the meaning of Section 9.7(c). For purposes
of this Section 9.7(d), persons will or will not be considered to be acting as a
group in accordance with rules similar to those set forth in Section 9.7(c) with
the following exception. If a person, including an entity, owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of
stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in a corporation only with respect to the
ownership in that corporation prior to the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation.     (e)
  Change in the ownership of a substantial portion of a corporation’s assets. A
change in the ownership of a substantial portion of a corporation’s assets
occurs on the date that any one person, or more than one person acting as a
group (as determined in accordance with rules similar to those set forth in
Section 9.7(d)), acquires (or has acquired during the twelve month period ending
on the date of the most recent acquisition by such person or persons) assets
from the corporation that have a total gross fair market value equal to or more
than forty percent (40%) of the total gross fair market value of all of the
assets of the corporation immediately prior to such acquisition or acquisitions.
For this purpose, gross fair market value means the value of the assets of the
corporation of the

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      value of the assets being disposed of determined without regard to any
liabilities associated with such assets. There is no Change in Control event
under this Section 9.7(e) when there is a transfer to an entity that is
controlled by the shareholders of the transferring corporation immediately after
the transfer. A transfer of assets by a corporation is not treated as a change
in ownership of such assets if the assets are transferred to (i) a shareholder
of the corporation (immediately before the asset transfer) in exchange for or
with respect to its stock, (ii) an entity, fifty percent (50%) or more of the
total value or voting power of which is owned, directly or indirectly, by the
corporation, (iii) a person, or more than one person acting as a group, that
owns, directly or indirectly, fifty percent (50%) or more of the total value or
voting power of all the outstanding stock of the corporation, or (iv) an entity,
at least fifty (50%) of the total value or voting power of which is owned,
directly or indirectly, by a person described in Section 9.7(e)(iii). For
purposes of the foregoing, and except as otherwise provided, a person’s status
is determined immediately after the transfer of assets.

9.8   Permissible Delays in Payment. Distributions may be delayed beyond the
date payment would otherwise occur in accordance with the provisions of Articles
8 and 9 in any of the following circumstances. The Employer may delay payment if
it reasonably anticipates that its deduction with respect to such payment would
be limited or eliminated by the application of Section 162(m) of the Code.
Payment must be made at the earliest date at which the Employer reasonably
anticipates that the deduction of the payment amount will not be eliminated or
limited by Section 162(m) of the Code or the calendar year in which the
Participant Separates from Service. The Employer may also delay payment if it
reasonably anticipates that the payment will violate a term of a loan agreement
or other similar contract to which the Employer is a party and such violation
will cause material harm to the Employer. Payment must be made at the earliest
date on which the Employer reasonably anticipates that the making of the payment
will not cause a violation or the violation will no longer cause material harm
to the Employer. Payment cannot be delayed if the facts and circumstances
indicate that the Employer entered into the loan agreement or similar contract
not for legitimate business reasons but to avoid the restrictions on deferral
elections and subsequent deferral elections under Section 409A of the Code. The
Employer may also delay payment if it reasonably anticipates that the making of
the payment will violate Federal Securities Laws or other applicable laws
provided payment is made at the earliest date on which the Employer reasonably
anticipates that the making of the payment will not cause such violation. The
Employer reserves the right to amend the Plan to provide for a delay in payment
upon such other events and conditions as the Secretary of the Treasury may
prescribe in generally applicable guidance published in the

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    Internal Revenue Bulletin. Once a provision permitting delay of payment is
applicable to an amount of deferred compensation, the failure to apply such
provision or the modification of the Plan to remove such provision will
constitute an acceleration of any payment to which such provision applied.

9-7

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ARTICLE 10 – AMENDMENT AND TERMINATION

10.1   Amendment by Plan Sponsor. The Plan Sponsor reserves the right to amend
the Plan (for itself and each Employer) through action of its Board of
Directors. No amendment can directly or indirectly deprive any current or former
Participant or Beneficiary of all or any portion of his Account which had
accrued prior to the amendment.   10.2   Plan Termination Following Change in
Control or Corporate Dissolution. If so elected by the in 11.01 of the Adoption
Agreement, the Plan Sponsor reserves the right to terminate the Plan and
distribute all amounts credited to all Participant Accounts within the 30 days
preceding or the twelve months following a Change in Control as determined in
accordance with the rules set forth in Section 9.7. For this purpose, the Plan
will be treated as terminated only if all substantially similar arrangements
sponsored by the Plan Sponsor are terminated so that all participants under the
Plan and all similar arrangements are required to receive all amounts deferred
under the terminated arrangements within twelve months of the date of
termination of the arrangements. In addition, the Plan Sponsor reserves the
right to terminate the Plan within twelve months of a corporate dissolution
taxed under Section 331 of the Code or with the approval of a bankruptcy court
pursuant to United States Code Section 503(b)(1)(A) provided that amounts
deferred under the Plan are included in the gross incomes of Participants in the
latest of (a) the calendar year in which the termination occurs, (b) the
calendar year in which the amount is no longer subject to a substantial risk of
forfeiture, or (c) the first calendar year in which payment is administratively
practicable.   10.3   Other Plan Terminations. The Plan Sponsor retains the
discretion to terminate the Plan if (a) all arrangements sponsored by the Plan
Sponsor that would be aggregated with any terminated arrangement under Prop.
Reg. Section 1.409A-1(c) are terminated, (b) no payments other than payments
that would be payable under the terms of the arrangements if the termination had
not occurred are made within twelve months of the termination of the
arrangements, (c) all payments are made within twenty-four months of the
termination of the arrangements, (d) the Plan Sponsor does not adopt a new
arrangement that would be aggregated with any terminated arrangement under Prop.
Reg. Section 1.409A-1(c) at any time within the five year period following the
date of termination of the arrangement. The Plan Sponsor also reserves the right
to amend the Plan to provide that termination of the Plan will occur under such
conditions and events as may be prescribed by the Secretary of the Treasury in
generally applicable guidance published in the Internal Revenue Bulletin.

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ARTICLE 11 – THE TRUST
11.1 Establishment of Trust. The Plan Sponsor may but is not required to
establish a trust to hold amounts which the Plan Sponsor may contribute from
time to time to correspond to some or all amounts credited to Participants under
Section 6.2. If the Plan Sponsor elects to establish a trust in accordance with
Section 10.01 of the Adoption Agreement, the provisions of Sections 11.2 and
11.3 shall become operative.
11.2  Grantor Trust. Any trust established by the Plan Sponsor shall be between
the Plan Sponsor and a trustee pursuant to a separate written agreement under
which assets are held, administered and managed, subject to the claims of the
Plan Sponsor’s creditors in the event of the Plan Sponsor’s insolvency, until
paid to the Participant and/or his Beneficiaries specified in the Plan. The
trust is intended to be treated as a grantor trust under the Code, and the
establishment of the trust shall not cause the Participant to realize current
income on amounts contributed thereto. The Plan Sponsor must notify the trustee
in the event of a bankruptcy or insolvency.
11.3  Investment of Trust Funds. Any amounts contributed to the trust by the
Plan Sponsor shall be invested by the trustee in accordance with the provisions
of the trust and the instructions of the Administrator. Trust investments need
not reflect the hypothetical investments selected by Participants under
Section 7.1 for the purpose of adjusting Accounts and the earnings or investment
results of the trust shall not affect the hypothetical investment adjustments to
Participant Accounts under the Plan.

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ARTICLE 12 – PLAN ADMINISTRATION

12.1   Powers and Responsibilities of the Administrator. The Administrator has
the full power and the full responsibility to administer the Plan in all of its
details, subject, however, to the applicable requirements of ERISA. The
Administrator’s powers and responsibilities include, but are not limited to, the
following:

  (a)   To make and enforce such rules and procedures as it deems necessary or
proper for the efficient administration of the Plan;         (b)   To interpret
the Plan, its interpretation thereof to be final on all persons claiming
benefits under the Plan;         (c)   To decide all questions concerning the
Plan and the eligibility of any person to participate in the Plan;         (d)  
To administer the claims and review procedures specified in Section 12.2;      
  (e)   To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the provisions
of the Plan;         (f)   To determine the person or persons to whom such
benefits will be paid;         (g)   To authorize the payment of benefits;      
  (h)   To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;         (i)   To appoint such agents, counsel,
accountants, and consultants as may be required to assist in administering the
Plan;         (j)   By written instrument, to allocate and delegate its
responsibilities, including the formation of an Administrative Committee to
administer the Plan.

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12.2   Claims and Review Procedures.

  (a)   Claims Procedure.         If any person believes he is being denied any
rights or benefits under the Plan, such person may file a claim in writing with
the Administrator. If any such claim is wholly or partially denied, the
Administrator will notify such person of its decision in writing. Such
notification will contain (i) specific reasons for the denial, (ii) specific
reference to pertinent Plan provisions, (iii) a description of any additional
material or information necessary for such person to perfect such claim and an
explanation of why such material or information is necessary, and (iv) a
description of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the person’s right to bring a civil
action following an adverse decision on review. Such notification will be given
within 90 days after the claim is received by the Administrator (or within 180
days, if special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is given to
such person within the initial 90-day period). If such notification is not given
within such period, the claim will be considered denied as of the last day of
such period and such person may request a review of his claim.     (b)   Review
Procedure.         Within 60 days after the date on which a person receives a
written notification of denial of claim (or, if written notification is not
provided, within 60 days of the date denial is considered to have occurred),
such person (or his duly authorized representative) may (i) file a written
request with the Administrator for a review of his denied claim and of pertinent
documents and (ii) submit written issues and comments to the Administrator. The
Administrator will notify such person of its decision in writing. Such
notification will be written in a manner calculated to be understood by such
person and will contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. The notification will explain that the
person is entitled to receive, upon request and free of charge, reasonable
access to and copies of all pertinent documents and has the right to bring a
civil action following an adverse decision on review. The decision on review
will be made within 60 days after the request for review is received by the
Administrator (or within 120 days, if special circumstances require an extension
of time for processing the request, such as an election by the

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      Administrator to hold a hearing, and if written notice of such extension
and circumstances is given to such person within the initial 60-day period). If
the decision on review is not made within such period, the claim will be
considered denied.

12.3   Plan Administrative Costs. All reasonable costs and expenses (including
legal, accounting, and employee communication fees) incurred by the
Administrator in administering the Plan shall be paid by Plan to the extent not
paid by the Employer.

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ARTICLE 13 – MISCELLANEOUS

13.1   Unsecured General Creditor of the Employer. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or equitable
rights, interests or claims in any property or assets of the Employer. For
purposes of the payment of benefits under the Plan, any and all of the
Employer’s assets shall be, and shall remain, the general, unpledged,
unrestricted assets of the Employer. Each Employer’s obligation under the Plan
shall be merely that of an unfunded and unsecured promise to pay money in the
future.   13.2   Employer’s Liability. Each Employer’s liability for the payment
of benefits under the Plan shall be defined only by the Plan and by the deferral
agreements entered into between a Participant and the Employer. An Employer
shall have no obligation or liability to a Participant under the Plan except as
provided by the Plan and a deferral agreement or agreements. An Employer shall
have no liability to Participants employed by other Employers.   13.3  
Limitation of Rights. Neither the establishment of the Plan, nor any amendment
thereof, nor the creation of any fund or account, nor the payment of any
benefits, will be construed as giving to the Participant or any other person any
legal or equitable right against the Employer, the Plan or the Administrator,
except as provided herein; and in no event will the terms of employment or
service of the Participant be modified or in any way affected hereby.   13.4  
Anti-Assignment. Except as may be necessary to fulfill a domestic relations
order within the meaning of Section 414(p) of the Code, none of the benefits or
rights of a Participant or any Beneficiary of a Participant shall be subject to
the claim of any creditor. In particular, to the fullest extent permitted by
law, all such benefits and rights shall be free from attachment, garnishment, or
any other legal or equitable process available to any creditor of the
Participant and his or her Beneficiary. Neither the Participant nor his or her
Beneficiary shall have the right to alienate, anticipate, commute, pledge,
encumber, or assign any of the payments which he or she may expect to receive,
contingently or otherwise, under the Plan, except the right to designate a
Beneficiary to receive death benefits provided hereunder. Notwithstanding the
preceding, the benefit payable from a Participant’s Account may be reduced, at
the discretion of the administrator, to satisfy any debt or liability to the
Employer.   13.5   Facility of Payment. If the Administrator determines, on the
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may

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    direct the Employer to disburse such payments to a person or institution
designated by a court which has jurisdiction over such recipient or a person or
institution otherwise having the legal authority under State law for the care
and control of such recipient. The receipt by such person or institution of any
such payments therefore, and any such payment to the extent thereof, shall
discharge the liability of the Employer, the Plan and the Administrative
Committee for the payment of benefits hereunder to such recipient.

13.6   Notices. Any notice or other communication to the Employer or
Administrator in connection with the Plan shall be deemed delivered in writing
if addressed to the Plan Sponsor at the address specified in Section 1.03 of the
Adoption Agreement and if either actually delivered at said address or, in the
case or a letter, 5 business days shall have elapsed after the same shall have
been deposited in the United States mails, first-class postage prepaid and
registered or certified.
  13.7   Tax Withholding. If the Employer concludes that tax is owing with
respect to any deferral or payment hereunder, the Employer shall withhold such
amounts from any payments due the Participant, as permitted by law, or otherwise
make appropriate arrangements with the Participant or his Beneficiary for
satisfaction of such obligation. Tax, for purposes of this Section 13.7 means
any federal, state, local or any other governmental income tax, employment or
payroll tax, excise tax, or any other tax or assessment owing with respect to
amounts deferred, any earnings thereon, and any payments made to Participants
under the Plan.   13.8   Indemnification. Each Employer shall indemnify and hold
harmless each employee, officer, or director of an Employer to whom is delegated
duties, responsibilities, and authority with respect to the Plan against all
claims, liabilities, fines and penalties, and all expenses reasonably incurred
by or imposed upon him (including but not limited to reasonable attorney fees)
which arise as a result of his actions or failure to act in connection with the
operation and administration of the Plan to the extent lawfully allowable and to
the extent that such claim, liability, fine, penalty, or expense is not paid for
by liability insurance purchased or paid for by an Employer. Notwithstanding the
foregoing, an Employer shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Employer
consents in writing to such settlement or compromise. Indemnification under this
Section 13.8 shall not be applicable to any person if the cost, loss, liability,
or expense is due to the person’s gross negligence, fraud or willful misconduct
or if the person refuses to assist in the defense of the claim against him.

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13.9   Permitted Acceleration of Payment. The Plan may permit acceleration of
the time or schedule of any payment or amount scheduled to be paid pursuant to a
payment under the Plan as provided in Section 10.2 or 10.3 and this
Section 13.9. The Plan may permit acceleration of payment (a) to an individual
other than the Participant as may be necessary to fulfill a domestic relations
order within the meaning of Section 414(p)(1)(B) of the Code, (b) to comply with
a certificate of divestiture as defined in Section 1043(b)(2) of the Code,
(c) to pay the Federal Insurance Contributions Act (FICA) tax imposed under
Sections 3101, 3121(a) and 3121(v)(2) of the Code on compensation deferred under
the Plan, (d) to pay the income tax under Section 3401 of the Code or the
corresponding withholding provisions of the applicable state, local or foreign
tax laws as a result of the payment of any FICA tax described in (c) and to pay
the additional income tax at source on wages attributable to the pyramiding
Section 3401 of the Code, wages and taxes, and (e) to pay the amount required to
be included in gross income as a result of the failure of the Plan to comply
with the requirements of Section 409A of the Code. The total payment under
(c) or (d) shall, in no event, exceed the aggregate of the FICA tax and the
income tax withholding related to such FICA tax. The total payment under
(e) shall, in no event, exceed the amount required to be included in income as a
result of the failure to comply with requirements of Section 409A of the Code.  
13.10   Governing Law. The Plan will be construed, administered and enforced
according to the laws of the State specified by the Plan Sponsor in
Section 12.01 of the Adoption Agreement.

13-3

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ADOPTION AGREEMENT

              1.01   PREAMBLE
 
                By the execution of this Adoption Agreement the Plan Sponsor
hereby [complete (a) or (b)]
 
           
 
  (a)   o   adopts a new plan as of
                                        [month, day, year]
 
           
 
  (b)   þ   amends and restates its existing plan as of 01/01/2007 which is the
Amendment Restatement Date.
 
           
 
          Original Effective Date: 01/01/1996
 
           
 
          Pre-409A Grandfathering: þ Yes o No [If yes, complete Appendix B,
“Summary of Grandfathered Provisions”]
 
           

1.02   PLAN       Plan Name: Diamond Offshore Management Company Supplemental
Executive Retirement Plan (formerly known as the Diamond Offshore Management
Company Deferred Compensation and Supplemental Executive Retirement Plan)      
Plan Year: January 1 through December 31.

             
 
           
1.03
  PLAN SPONSOR        
 
           
 
  Name:   Diamond Offshore Management Company

 
   
 
  Address:   15415 Katy Freeway, Suite 100, Houston TX 77094-1810

 
   
 
  Phone # :   281-492-5300

 
   
 
  EIN:   13-3560049

 
   
 
  Fiscal Yr:   01/01 through 12/31

 
   
 
  Form of Entity:   Corporation

 
   
 
                If Plan Sponsor is a Corporation is stock publicly traded?
 
           
 
  þ Yes         oNo    
 
           

1.04   EMPLOYER       The following entities have been authorized by the Plan
Sponsor to participate in and have adopted the Plan:

                  Entity   Publicly Traded Corporation
 
           
 
      Yes   No
 
           
 
  Diamond Offshore Management Company   þ   o
 
 
 
  o   o
 
 
 
  o   o
 
 
 
  o   o
 
 
 
       

October 2006
-1-

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1.05   ADMINISTRATOR       The Plan Sponsor has designated the following party
or parties to be responsible for the administration of the Plan:       Committee
appointed by the Board of Directors.

         
 
  Note:   The Administrator is the person or persons designated by the Plan
Sponsor to be responsible for the administration of the Plan. This is not
Fidelity Investments Institutional Operations Company, Inc. nor any other
Fidelity affiliate.

1.06   IDENTIFICATION DATE       The Employer has designated 09/30 as the
Identification Date for purposes of determining Key Employees.       In the
absence of a designation, the Identification Date is December 31.

October 2006
-2-

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                    2.01   PARTICIPATION        
 
                        (a)   Employees [complete (i), (ii) or (iii)]
 
                   
 
      (i)   þ   Eligible Employees are selected by the Employer.      
 
      (ii)   o   Eligible Employees are those employees of the Employer who
satisfy the following criteria:    
 
                   
 
             
 
   
 
             
 
   
 
             
 
   
 
             
 
   
 
             
 
   
 
      (iii)   o   Employees are not eligible to participate.    
 
                        (b)   Directors [complete (i), (ii) or (iii)]
 
                   
 
      (i)   o   All Directors are eligible to participate.      
 
      (ii)   o   Only Directors selected by the Employer are eligible to
participate.      
 
      (iii)   o   Directors are not eligible to participate.    

October 2006
-3-

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              3.01   COMPENSATION    
 
                For purposes of determining Participant contributions under
Article 4 and Employer contributions under Article 5, Compensation shall be
defined in the following manner [complete (a) or (b) and select (c) and/or (d),
if applicable]:  
 
  (a)   þ   Compensation is defined as:
 
           
 
          Base salary
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
 
  (b)   o   Compensation as defined in                      [insert name of
qualified plan] without regard to the limitation captured in Section 401(a)(17)
of the Code for such Plan Year:
 
           
 
  (c)   o   Director Compensation is defined as:
 
           
 
           
 
           
 
           
 
           
 
             
 
  (d)   o   Compensation shall, for all Plan purposes, be limited to
$                    .
 
           
 
  (e)   o   Not Applicable.
 
            3.02   BONUSES    
 
                Compensation, as defined in Section 3.01 of the Adoption
Agreement, includes the following type of bonuses:

                      Will be treated as Performance Type   Based Compensation
 
  Yes   No
 
    o       o                    
 
    o       o                    
 
    o       o                    
 
    o       o                    
 
    o       o                    
 
               
 
               
o Not Applicable.
               

October 2006
 

- 4 -

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4.01   PARTICIPANT CONTRIBUTIONS       If Participant contributions are
permitted, complete (a), (b), and (c). Otherwise complete (d).

  (a)   Amount of Deferrals         A Participant may elect within the period
specified in Section 4.01(b) of the Adoption Agreement to defer the following
amounts of remuneration. For each type of remuneration listed, complete “dollar
amount” or “percentage amount” but not both.

(i) Compensation Other than Bonuses [do not complete if you complete (iii)]

                                                  Dollar Amount   % Amount      
    Type of Remuneration   Min   Max   Min   Max  
Increment
  (a)                                           (b)                            
              (c)                                          

Note: The increment is required to determine the permissible deferral amounts.
For example, a minimum of 0% and maximum of 20% with a 5% increment would allow
an individual to defer 0%, 5%, 10%, 15% or 20%.
(ii) Bonuses [do not complete if you complete (iii)]

                                                  Dollar Amount   % Amount      
    Type of Bonus   Min   Min   Min   Max  
Increment
  (a)                                           (b)                            
              (c)                                          

(iii) Compensation [do not complete if you completed (i) and (ii)]

                                          Dollar Amount   % Amount           Min
  Max   Min   Max  
Increment
                                         

(iv) Director Compensation

                                                  Dollar Amount   % Amount      
    Type of Compensation   Min   Min   Min   Max  
Increment
  Annual Retainer                                           Meeting Fees        
                                  Other:                                        
  Other:                                          

October 2006
 

- 5 -

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(b)   Election Period

  (i)   Performance Based Compensation         A special election period        
o Does                     o Does Not         apply to each eligible type of
performance based compensation referenced in Section 3.02 of the Adoption
Agreement.         The special election period, if applicable, will be
determined by the Employer.     (ii)   Newly Eligible Participants         An
employee who is classified or designated as an Eligible Employee during a Plan
Year         o May                     o May Not         elect to defer
Compensation otherwise payable during the remainder of the Plan Year by
completing a deferral agreement within the 30 day period beginning on the date
he is eligible to participate in the Plan.

(c)   Revocation of Deferral Agreement       A Participant’s deferral agreement
      o Will       o Will Not       be cancelled for the remainder of any Plan
Year during which he receives a hardship distribution of elective deferrals from
a qualified cash or deferred arrangement maintained by the Employer.   (d)   No
Participant Contributions       þ Participant contributions are not permitted
under the Plan.

October 2006
 

- 6 -

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5.01   EMPLOYER CONTRIBUTIONS       If Employer contributions are permitted,
complete (a) and/or (b). Otherwise complete (c).

  (a)   Matching Contributions

                          (i)   Amount        
 
                            For each Plan Year, the Employer shall make a
Matching Contribution on behalf of each Participant who satisfies the
requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete
one]:
 
                            (A)   þ   6% of the Compensation for the Plan Year
in excess of the IRC 401(a)(17) limit
 
                            (B)   o   An amount determined by the Employer in
its sole discretion
 
                            (C)   o   Matching Contributions for each
Participant shall be limited to $                      and/or
                     % of Compensation.
 
                   
 
      (D)   o   Other:    
 
                   
 
                                                                                
           
 
                   
 
                                                            
                               
 
                            (E)   o   Not Applicable [Proceed to
Section 5.01(b)]
 
                        (ii)   Eligibility for Matching Contribution    
 
                            A Participant shall receive an allocation of
Matching Contributions determined in accordance with Section 5.01(a)(i) provided
he satisfies the following requirements [complete the ones that are applicable]:
 
                            (A)   þ   Describe requirements:
 
                                    Receives Compensation in excess of the IRC
401(a)(17) compensation limit for the Plan Year and has elected to make elective
deferrals to the Diamond Offshore 401(k) Plan by the last day of the Plan Year.
 
                            (B)   þ   Is selected by the Employer in its sole
discretion to receive an allocation of Matching Contributions
 
                            (C)   o   No requirements

October 2006
 

- 7 -

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                          (iii)   Time of Allocation
 
                            Matching Contributions, if made, shall be treated as
allocated [select one]:
 
                            (A)   þ   As of the last day of the Plan Year
 
                            (B)   o   At such times as the Employer shall
determine in it sole discretion
 
                            (C)   o   At the time the Compensation on account of
which the Matching Contribution is being made would otherwise have been paid to
the Participant
 
                            (D)   o   Other:
 
                                                                        
                                                               
                                                                   
 
                                                                        
                                                               
                                                                   
 
                    (b)   Other Contributions  
 
                   
 
  (i)   Amount            
 
                            The Employer shall make a contribution on behalf of
each Participant who satisfies the requirements of Section 5.01(b)(ii) equal to
[complete one]:
 
                            (A)   þ   An amount equal to 5% of the Participant’s
Compensation in excess of the 401(a)(17) limit
 
                            (B)   o   An amount determined by the Employer in
its sole discretion
 
                            (C)   o   Contributions for each Participant shall
be limited to $                     
 
                            (D)   o   Other:
 
                                                                        
                                                               
                                                                   
 
                                                                        
                                                               
                                                                   
 
                                                                        
                                                               
                                                                   
 
                            (E)   o   Not Applicable [Proceed to Section 6.01]

October 2006
 

- 8 -

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  (ii)   Eligibility for Other Contributions

A Participant shall receive an allocation of other Employer contributions
determined in accordance with Section 5.01(b)(i) for the Plan Year if he
satisfies the following requirements [complete the one that is applicable]:

             
(A)
  o   Describe requirements:    
 
           
 
           
 
           
 
           
 
            (B)   þ   Is selected by the Employer in its sole discretion to
receive an allocation of other Employer contributions
 
           
(C)
  o   No requirements    

  (iii)   Time of Allocation

Employer contributions, if made, shall be treated as allocated [select one]:

             
(A)
  þ   As of the last day of the Plan Year    
 
            (B)   o   At such time or times as the Employer shall determine in
its sole discretion
 
           
(C)
  o   Other:    
 
           
 
           
 
           
 
           
 
           
 
           

          (c)   No Employer Contributions
 
       
 
  o   Employer contributions are not permitted under the Plan

October 2006
 

- 9 -

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6.01   DISTRIBUTIONS

The timing and form of payment of distributions made from the Participant’s
vested Account shall be made in accordance with the elections made in this
Section 6.01 of the Adoption Agreement except when Section 9.6 of the Plan
requires a six month delay for certain distributions to Key Employees of
publicly traded companies.

  (a)   Timing of Distributions

                              (i)       All distributions shall commence in
accordance with the following [choose one]:        
 
                                (A)   þ   As of the distribution event     (B)  
o   Monthly on specified day                     [insert day]     (C)   o  
Annually on specified month and day                     [insert month and day]  
  (D)   o   Calendar quarter on specified day                     [insert day]
 
                            (ii)       The timing of distributions as determined
in Section 6.01(a)(i) shall be modified by the adoption of:        
 
                                (A)   o   Event Delay — Distribution events
other than those based on Specified Date or Specified Age will be treated as not
having occurred for 30 days.       (B)   o   Hold Until Next Year — Distribution
events other than those based on Specified Date or Specified Age will be treated
as not having occurred for twelve months from the date of the event.       (C)  
o   Immediate Processing — The timing method selected by the Plan Sponsor under
Section 6.01(a)(i) shall be overridden for the following distribution events
[insert events]:  
 
                           
 
                           
 
                           

October 2006
 

- 10 -

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(b)   Distribution Events       If multiple events are selected, the earliest to
occur will trigger payment.

                              Lump                 Sum   Installments
 
               
(i)
  o   Specified Date                                               years to
                     years
 
               
(ii)
  o   Specified Age                                               years to
                     years
 
               
(iii)
  þ   Separation from Service   X   2 years to 15 years
 
               
(iv)
  o   Separation from Service plus 6 months                         
                     years to                      years
 
               
(v)
  o   Separation from Service plus                      months [not to
exceed                     months]                                              
years to                      years
 
               
(vi)
  o   Retirement                                               years to
                     years
 
               
(vii)
  o   Retirement plus 6 months                                              
years to                      years
 
               
(viii)
  o   Retirement plus                     months [not to exceed
                     months]                                               years
to                      years
 
               
(ix)
  o   Later of Separation from Service or Specified Age                         
                     years to                      years
 
               
(x)
  o   Later of Separation from Service or Specified Date                       
                       years to                      years
 
               
(xi)
  o   Later of Retirement or Specified Age                         
                     years to                      years
 
               
(xii)
  o   Later of Retirement or Specified Date                         
                     years to                      years
 
               
(xiii)
  o   Disability                                               years to
                     years
 
               
(xiv)
  o   Death                                               years to
                     years
 
               
(xv)
  o   Change in Control                                               years
to                     years

If payment is made due to Disability, payment shall be made at the time and in
the form elected by the Participant for payment in the event of Separation from
Service.
Installments may be paid [select each that applies]

     
o
  Monthly
o
  Quarterly
þ
  Annually

(c)   Specified Date and Specified Age elections may not extend beyond age
                     [insert age].

October 2006
 

- 11 -

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(d)   Separation from Service Override       A Separation from Service override

  o   Shall apply. [If this is elected, “Separation from Service” cannot be
selected as a distribution event in Section 6.01(b)]     þ   Shall not apply.

A Separation from Service override provides that a Participant, whose Separation
from Service occurs before Retirement, shall receive the vested amount credited
to his Account as a lump sum payment.

(e)   Involuntary Cashouts

  o   If the Participant’s vested Account at the time of his Separation from
Service does not exceed $__  (insert dollar amount) distribution of the vested
Account shall automatically be made in the form of a single lump sum in
accordance with Section 9.5 of the Plan.     þ   There are no involuntary
cashouts.

(f)   Retirement

             
 
  o   Retirement shall be defined as a Separation from Service that occurs on or
after the Participant [insert description of requirements]:    
 
           
 
           
 
           
 
           
 
           
 
  þ   No special definition of Retirement applies.    

(g)   Redeferrals       A Participant

  o   Shall     þ   Shall Not

be permitted to modify a scheduled distribution date and/or payment option in
accordance with Section 9.2 of the Plan.
A Participant shall generally be permitted to elect such modification
                     number of times.
Administratively, allowable distribution events will be modified to reflect all
options necessary to fulfill the redeferrals provision.
October 2006
 

- 12 -

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7.01   VESTING

  (a)   Matching Contributions         The Participant’s vested interest in the
amount credited to his Account attributable to Matching Contributions shall be
based on the following schedule:

          Years of Service   Vesting %    
0
         100          (insert ‘100’ if there is immediate vesting)
1
                          
2
                          
3
                          
4
                          
5
                          
6
                          
7
                          
8
                          
9
                          

o   Not applicable.

  (b)   Other Employer Contributions         The Participant’s vested interest
in the amount credited to his Account attributable to Employer contributions
other than Matching Contributions shall be based on the following schedule:

          Years of Service   Vesting %    
0
         100          (insert ‘100’ if there is immediate vesting)
1
                          
2
                          
3
                          
4
                          
5
                          
6
                          
7
                          
8
                          
9
                          

o   Not applicable.

October 2006
 

- 13 -

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                      (c)   Acceleration of Vesting
 
                        A Participant’s vested interest in his Account will
automatically be 100% upon the occurrence of the following events: [select the
ones that are applicable]:
 
                        (i)   o   Death
 
                        (ii)   o   Disability
 
                        (iii)   o   Change in Control
 
                        (iv)   o   Eligibility for Retirement
 
                   
 
  (v)   o   Other:        
 
                   
 
                   
 
                   
 
                        (vi)   þ   Not applicable.
 
                    (d)   Years of Service    
 
                        (i)   A Participant’s Years of Service shall include all
service performed for the Employer and
 
                   
 
      o   Shall                 o   Shall Not
 
                            include service performed for the Related Employer.
 
                        (ii)   Years of Service shall also include service
performed for the following entities:
 
                             
 
                             
 
                             
 
                             
 
                             
 
                                  (iii) Years of Service shall be determined in
accordance with (select one)    
 
                                    (A) o   The elapsed time method in Treas.
Reg. Se(c) 1.410(a)(7)
 
                                  (B) o   The general method in DOL Reg. Se(c)
2530.200b-1 through b-4
 
                                    (C) o   The Participant’s Years of Service
credited under [insert
 
          name of plan]                
 
                           
 
                                                     
 
                           
 
      (D) o   Other:                
 
         
 
           
 
                           
 
         
 
           
 
                           
 
         
 
           
 
                           
 
  (iv)   þ   Not applicable.                

October 2006
 

- 14 -

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              8.01   UNFORESEEABLE EMERGENCY
 
                (a)   A withdrawal due to an Unforeseeable Emergency as defined
in Section 2.24:
 
           
 
       þ   Will
 
       o   Will Not [if Unforeseeable Emergency withdrawals are not permitted,
proceed to Section 9.01]
 
                    be allowed.
 
                (b)   Upon a withdrawal due to an Unforeseeable Emergency, a
Participant’s deferral election for the remainder of the Plan Year:
 
           
 
       o   Will
 
       o   Will not
 
       þ   Not applicable
 
                    be cancelled.

October 2006
 

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              9.01   INVESTMENT DECISIONS
 
                Investment decisions regarding the hypothetical amounts credited
to a Participant’s Account shall be made by [select one]:
 
           
 
  (a)   o   The Participant or his Beneficiary
 
           
 
  (b)   þ   The Employer
 
                Investment options are set forth in Appendix (A)

October 2006
 

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              10.01   GRANTOR TRUST
 
                The Employer [select one]:
 
           
 
   o   Does          þ   Does Not
 
                intend to establish a grantor trust in connection with the Plan.

October 2006
 

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              11.01   TERMINATION UPON CHANGE IN CONTROL
 
                The Plan Sponsor
 
                þ   Reserves     o   Does Not Reserve
 
                the right to terminate the Plan and distribute all vested
amounts credited to Participant Accounts upon a Change in Control as described
in Section 9.7.
 
            11.02   AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL
 
                Distribution of the remaining vested balance of each
Participant’s Account
 
           
 
      o   Shall
 
      þ   Shall Not
 
                automatically be paid as a lump sum payment upon the occurrence
of a Change in Control as provided in Section 9.7.

              11.03   CHANGE IN CONTROL
 
                A Change in Control for Plan purposes includes the following:
 
           
 
  (a)   þ   A change in the ownership of the Employer as described in
Section 9.7(c) of the Plan.
 
           
 
  (b)   þ   A change in the effective control of the Employer as described in
Section 9.7(d) of the Plan.
 
           
 
  (c)   þ   A change in the ownership of a substantial portion of the assets of
the Employer as described in Section 9.7(e) of the Plan.

October 2006
 

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12.01   GOVERNING STATE LAW       The laws of Texas shall apply in the
administration of the Plan to the extent not preempted by ERISA.

October 2006
 

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13.01   2005 TRANSITIONAL RULES

The Plan Sponsor has made the following elections regarding the 2005
Transitional Rules set forth in Section 4.5. The Plan Sponsor must specify
default payment elections in 13.01(a) whether or not the new payment elections
are permitted.

                        (a)   New Payment Elections described in Section 4.5(a)
of the Plan    
 
                        þ   Will Be Permitted until 12/31/2006 as described in
Appendix B.     o   Will Not Be Permitted
 
                        The default payment elections will be:           Lump
sum upon separation from service.                          
 
                    (b)   Elections to terminate participation or cancel an
outstanding election as described in Section 4.5(b) of the Plan    
 
                   
 
  o   Will            
 
  þ   Will Not            
 
                        be permitted.    
 
                    (c)   Prospective Deferral Elections as described in
Section 4.5(c) of the Plan    
 
                   
 
  o   Will            
 
  þ   Will Not            
 
                        be permitted.    
 
                        Only a plan in existence on or before December 31, 2004
may offer Prospective Deferral Elections.    

13.02   2006 TRANSITIONAL RULE

New payment elections as described in Section 4.6 of the Plan

     
þ
  Will Be Permitted until 12/31/2006 as described in Appendix B.
o
  Will Not Be Permitted

October 2006
 

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EXECUTION PAGE
The Plan Sponsor has caused this Adoption Agreement to be executed this
14th day of December, 2006.

             
 
  PLAN SPONSOR:  
Diamond Offshore Management Company
   
 
           
 
  By:  
/s/ William C. Long
   
 
           
 
  Title:  
Vice President
   

October 2006
 

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APPENDIX A
INVESTMENT OPTIONS

       
 
 
 
 
Fund Name
 
 
Fund Number
     
Ø Interest Credit Fund
    Ø UN2X
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
    Ø
 
 
 
 
Ø
 
 
Ø

     
Note:
  Participant Accounts in the Interest Credit Fund maintained for the Plan shall
be adjusted to reflect hypothetical interest during each Plan Year based on the
Moody’s Aa Long Term Corporate Bond Yield Average as of the last business day of
the month of November of the immediately preceding Plan Year.

     
 
  Date Effective:

October 2006
 

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APPENDIX B
SUMMARY OF GRANDFATHERED PROVISIONS
Notwithstanding any other provision of the Plan, amounts described in
Section 1.3 of the Base Plan Document that are earned and vested on December 31,
2004 shall be grandfathered under the pre-409A provisions of the Diamond
Offshore Management Company Deferred Compensation and Supplemental Executive
Retirement Plan through December 31, 2006. On and after January 1, 2007 amounts
that were earned and vested on December 31, 2004 and earnings thereon shall no
longer be grandfathered and shall be subject to new payment elections as to time
and form of payment that are to be made by December 31, 2006 in accordance with
transition relief provided by IRS in proposed regulations issued September 29,
2005 and later amended. A single election as to time and form of payment shall
be applicable with respect to the amounts deferred prior to December 31, 2004
together with amounts deferred during 2005, and amounts deferred during 2006,
and all earnings thereon.
October 2006
 

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APPENDIX C
SPECIAL EFFECTIVE DATES
October 2006
 

- 24 -