Exhibit 10.1
TESORO CORPORATION
2011 LONG-TERM INCENTIVE PLAN
 
1. Purpose
 
The purpose of the Tesoro Corporation 2011 Long-Term Incentive Plan (the
“Plan”) is to advance the interests of Tesoro Corporation (the “Company”) by
stimulating the efforts of employees, officers, non-employee directors and other
service providers, in each case who are selected to be participants, by
heightening the desire of such persons to continue working toward and
contributing to the success and progress of the Company.  The Plan supersedes
the existing Tesoro Corporation Amended and Restated 2006 Long-Term Incentive
Plan and the Tesoro Corporation 2006 Long-Term Stock Appreciation Rights Plan
with respect to future awards, and provides for the grant of Incentive and
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock and
Restricted Stock Units, any of which may be performance-based, and for Incentive
Bonuses, which may be paid in cash or stock or a combination thereof, as
determined by the Administrator.
 
2. Definitions
 
As used in the Plan, the following terms shall have the meanings set forth
below:
 
(a)           “2006 LTIP” means the Tesoro Corporation Amended and Restated 2006
Long-Term Incentive Plan.
 
(b)           “Administrator” means the Administrator of the Plan in accordance
with Section 18.
 
(c)           “Award” means an Incentive Stock Option, Nonqualified Stock
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit or
Incentive Bonus granted to a Participant pursuant to the provisions of the Plan,
any of which the Administrator may structure to qualify in whole or in part as a
Performance Award.
 
(d)           “Award Agreement” means a written or electronic agreement or other
instrument as may be approved from time to time by the Administrator
implementing the grant of each Award.  An Agreement may be in the form of an
agreement to be executed by both the Participant and the Company (or an
authorized representative of the Company) or certificates, notices or similar
instruments as approved by the Administrator.
 
(e)           “Board” means the board of directors of the Company.
 
(f)           “Cause” means, unless otherwise set forth in an Award Agreement or
other written agreement between the Company and the applicable Participant, a
finding by the Administrator that a Participant, before or after his Termination
of Employment (i) committed fraud, embezzlement, theft, felony or an act of
dishonesty in the course of his employment by the Company or an affiliate which
conduct damaged the Company or an affiliate or (ii) disclosed trade secrets of
the Company or an affiliate. The findings and decision of the Administrator with
respect to such matter, including those regarding the acts of the Participant
and the damage done to the Company, will be final for all purposes.  No decision
of the Administrator, however, will affect the finality of the discharge of the
individual by the Company or an affiliate.
 
 
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(g)           “Change in Control” means (i) there shall be consummated (A) any
consolidation or merger of Company in which Company is not the continuing or
surviving corporation or pursuant to which shares of Company's common stock
would be converted into cash, securities or other property, other than a merger
of Company where a majority of the board of directors of the surviving
corporation are, and for a one-year period after the merger continue to be,
persons who were directors of Company immediately prior to the merger or were
elected as directors, or nominated for election as director, by a vote of at
least two-thirds of the directors then still in office who were directors of
Company immediately prior to the merger, or (B) any sale, lease, exchange or
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of Company, or (ii) the shareholders of Company
shall approve any plan or proposal for the liquidation or dissolution of
Company, or (iii) (A) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934), other than Company or a
Subsidiary thereof or any employee benefit plan sponsored by Company or a
Subsidiary thereof, shall become the beneficial owner (within the meaning of
Rule 13c-3 under the Securities Exchange Act of 1934) of securities of Company
representing thirty-five percent (35%) or more of the combined voting power of
Company's then outstanding securities ordinarily (and apart from rights accruing
in special circumstances) having the right to vote in the election of directors,
as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, and (B) at any time during a period of
one-year thereafter, individuals who immediately prior to the beginning of such
period constituted the Board shall cease for any reason to constitute at least a
majority thereof, unless election or the nomination by the Board for election by
Company's shareholders of each new director during such period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.
 
(h)           “Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the rulings and regulations issues thereunder.
 
(i)           “Company” means Tesoro Corporation, a Delaware corporation.
 
(j)           “Disability” means, as determined by the Administrator in its
discretion exercised in good faith, a physical or mental condition of a
Participant that would entitle him or her to payment of disability income
payments under the Company’s long-term disability insurance policy or plan for
employees as then in effect; or in the event that a Participant is not covered,
for whatever reason under the Company’s long-term disability insurance policy or
plan for employees or in the event the Company does not maintain such a
long-term disability insurance policy, “Disability” means a permanent and total
disability as defined in section 22(e)(3) of the Code.  A determination of
Disability may be made by a physician selected or approved by the Administrator
and, in this respect, Participants shall submit to an examination by such
physician upon request by the Administrator.
 
(k)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
 
 
 
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(l)           “Fair Market Value” means, as of any given date, the closing sales
price on such date during normal trading hours (or, if there are no reported
sales on such date, on the last date prior to such date on which there were
sales) of the Shares on the New York Stock Exchange or, if not listed on such
exchange, on any other national securities exchange on which the Shares are
listed or on an inter-dealer quotation system, in any case, as reported in such
source as the Administrator shall select.  If there is no regular public trading
market for the Shares, the Fair Market Value of the Shares shall be determined
by the Administrator in good faith and in compliance with Section 409A of the
Code.
 
(m)           “Incentive Bonus” means a bonus opportunity awarded under
Section 9 pursuant to which a Participant may become entitled to receive an
amount based on satisfaction of such performance criteria as are specified in
the Award Agreement.
 
(n)           “Incentive Stock Option” means a stock option that is intended to
qualify as an “incentive stock option” within the meaning of Section 422 of the
Code.
 
(o)           “Nonemployee Director” means each person who is, or is elected to
be, a member of the Board and who is not an employee of the Company or any
Subsidiary.
 
(p)           “Nonqualified Stock Option” means a stock option that is not
intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code.
 
(q)           “Option” means an Incentive Stock Option and/or a Nonqualified
Stock Option granted pursuant to Section 6 of the Plan.
 
(r)           “Participant” means any individual described in Section 3 to whom
Awards have been granted from time to time by the Administrator and any
authorized transferee of such individual.
 
(s)           “Performance Award” means an Award, the grant, issuance,
retention, vesting or settlement of which is subject to satisfaction of one or
more performance criteria pursuant to Section 13.
 
(t)           “Person” shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a “group” as defined in Section 13(d).
 
(u)           “Plan” means the Tesoro Corporation 2011 Long-Term Incentive Plan
as set forth herein and as amended from time to time.
 
(v)            “Qualifying Performance Criteria” has the meaning set forth in
Section 13(b).
 
(w)           “Restricted Stock” means Shares granted pursuant to Section 8 of
the Plan.
 
(x)           “Restricted Stock Unit” means an Award granted to a Participant
pursuant to Section 8 pursuant to which Shares or cash in lieu thereof may be
issued in the future.
 
 
 
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(y)           “Retirement” means, unless otherwise set forth in an Award
Agreement or other written agreement between the Company and the applicable
Participant, (i) for employees: retirement from active employment with the
Company and its Subsidiaries: (A) at or after age 55 with 5 years of service
recognized by the Company or (B)  at or after age 50 with 80 points (with points
meaning the sum of the Participant’s age and years of service recognized by the
Company at the time of retirement).  The determination of the Administrator as
to an individual’s Retirement shall be conclusive on all parties, and (ii) for
Nonemployee Directors: retirement from active service with the Company after
having served as a Nonemployee Director for at least an aggregate of three full
years (excluding any service while a full-time employee of the Company).
 
(z)           “Share” means a share of the Company’s common stock, $0.161/2 par
value per share (or such other par value as may be designated by act of the
Company’s stockholders), subject to adjustment as provided in Section 12.
 
(aa)           “Stock Appreciation Right” means a right granted pursuant to
Section 7 of the Plan that entitles the Participant to receive, in cash or
Shares or a combination thereof, as determined by the Administrator, value equal
to or otherwise based on the excess of (i) the Fair Market Value of a specified
number of Shares at the time of exercise over (ii) the exercise price of the
right, as established by the Administrator on the date of grant.
 
(bb)           “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company where each of the
corporations in the unbroken chain other than the last corporation owns stock
possessing at least 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain, and if
specifically determined by the Administrator in the context other than with
respect to Incentive Stock Options, may include an entity in which the Company
has a significant ownership interest or that is directly or indirectly
controlled by the Company.
 
(cc)           “Substitute Awards” means Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, by a company acquired
by the Company or any Subsidiary or with which the Company or any Subsidiary
combines.
 
(dd)           “Termination of Employment” means ceasing to serve as an employee
of the Company and its Subsidiaries or, with respect to a Nonemployee Director
or other service provider, ceasing to serve as such for the Company, except that
with respect to all or any Awards held by a Participant (i) the Administrator
may determine that a leave of absence or employment on a less than full-time
basis is considered a “Termination of Employment,” (ii) the Administrator may
determine that a transition of employment to service with a partnership, joint
venture or corporation not meeting the requirements of a Subsidiary in which the
Company or a Subsidiary is a party is not considered a “Termination of
Employment,” (iii) service as a member of the Board shall constitute continued
employment with respect to Awards granted to a Participant while he or she
served as an employee and (iv) service as an employee of the Company or a
Subsidiary shall constitute continued employment with respect to Awards granted
to a Participant while he or she served as a member of the Board or other
service provider.  The Administrator shall determine whether any corporate
transaction, such as a sale or spin-off of a division or subsidiary that employs
a Participant, shall be deemed to result in a Termination of Employment with the
Company and its Subsidiaries for purposes of any affected Participant’s Awards,
and the Administrator’s decision shall be final and binding.
 
 
 
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3. Eligibility
 
Any person who is a current or prospective officer or employee (including any
director who is also an employee, in his or her capacity as such) or other
service provider of the Company or of any Subsidiary shall be eligible for
selection by the Administrator for the grant of Awards hereunder.  To the extent
provided by Section 5(d), any Nonemployee Director shall be eligible for the
grant of Awards hereunder as determined by the Administrator.  Options intending
to qualify as Incentive Stock Options may only be granted to employees of the
Company or any Subsidiary within the meaning of the Code, as selected by the
Administrator.
 
4. Effective Date and Termination of Plan
 
This Plan was adopted by the Board on February 23, 2011 and will become
effective upon approval by the Company’s stockholders (the “Effective Date”),
which approval must be obtained within twelve (12) months of the adoption of
this Plan by the Board.  The Plan shall remain available for the grant of Awards
until the tenth (10th) anniversary of the date of Board approval of the
Plan.  Notwithstanding the foregoing, the Plan may be terminated at such earlier
time as the Board may determine.  Termination of the Plan will not affect the
rights and obligations of the Participants and the Company arising under Awards
theretofore granted and then in effect.
 
5. Shares Subject to the Plan and to Awards
 
(a)           Aggregate Limits.  The aggregate number of Shares issuable
pursuant to all Awards under this Plan shall not exceed 6,700,000, plus any
Shares subject to outstanding awards under the 2006 LTIP that on or after the
Effective Date cease for any reason to be subject to such awards (other than by
reason of exercise or settlement of the awards to the extent they are exercised
for or settled in vested and nonforfeitable shares).  The aggregate number of
Shares available for grant under this Plan and the number of Shares subject to
outstanding Awards shall be subject to adjustment as provided in
Section 12.  The Shares issued pursuant to Awards granted under this Plan may be
shares that are authorized and unissued or shares that were reacquired by the
Company, including shares purchased in the open market.
 
(b)           Issuance of Shares.  For purposes of Section 5(a), the aggregate
number of Shares issued under this Plan at any time shall equal only the number
of Shares actually issued upon exercise or settlement of an Award under this
Plan.  Without limiting the foregoing, Shares subject to an Award under this
Plan shall not again be made available for issuance under this Plan if such
shares are: (i) shares that were subject to a stock-settled Stock Appreciation
Right and were not issued upon the net settlement or net exercise of such Stock
Appreciation Right, (ii) shares used to pay the exercise price of an Option,
(iii) shares delivered to or withheld by the Company to pay the withholding
taxes related to an Award, or (iv) shares repurchased on the open market with
the proceeds of an Option exercise.  In addition, Shares subject to Awards that
have been canceled, expired or forfeited and shares subject to Awards settled in
cash shall not count as shares issued under this Plan.
 
 
 
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(c)           Tax Code Limits.  The aggregate number of Shares subject to Awards
granted under this Plan during any calendar year to any one Participant shall
not exceed 750,000, which number shall be calculated and adjusted pursuant to
Section 12 only to the extent that such calculation or adjustment will not
affect the status of any Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code but which number shall not count
any tandem SARs (as defined in Section 7).  The aggregate number of Shares that
may be issued pursuant to the exercise of Incentive Stock Options granted under
this Plan shall not exceed 6,700,000, which number shall be calculated and
adjusted pursuant to Section 12 only to the extent that such calculation or
adjustment will not affect the status of any option intended to qualify as an
Incentive Stock Option under Section 422 of the Code.  The maximum cash amount
payable pursuant to that portion of an Incentive Bonus earned for any 12-month
period to any Participant under this Plan that is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of the
Code shall not exceed $10,000,000.
 
(d)           Director Awards.  The aggregate number of Shares subject to Awards
granted under this Plan during any calendar year to any one Nonemployee Director
shall not exceed 25,000; provided, however, that in the calendar year in which a
Nonemployee Director first joins the Board of Directors or is first designated
as Chairman of the Board of Directors or Lead Director, the maximum number of
shares subject to Awards granted to the Participant may be up to two hundred
percent (200%) of the number of shares set forth in the foregoing limits and the
foregoing limits shall not count any tandem SARs (as defined in Section 7).
 
(e)           Substitute Awards.  Substitute Awards shall not reduce the Shares
authorized for issuance under the Plan or authorized for grant to a Participant
in any calendar year. Additionally, in the event that a company acquired by the
Company or any Subsidiary, or with which the Company or any Subsidiary combines,
has shares available under a pre-existing plan approved by stockholders and not
adopted in contemplation of such acquisition or combination, the shares
available for grant pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination
to determine the consideration payable to the holders of common stock of the
entities party to such acquisition or combination) may be used for Awards under
the Plan and shall not reduce the Shares authorized for issuance under the Plan;
provided that Awards using such available shares shall not be made after the
date awards or grants could have been made under the terms of the pre-existing
plan, absent the acquisition or combination, and shall only be made to
individuals who were employees, directors or other service providers of such
acquired or combined company before such acquisition or combination.
 
6. Options
 
(a)           Option Awards.  Options may be granted at any time and from time
to time prior to the termination of the Plan to Participants as determined by
the Administrator.  No Participant shall have any rights as a stockholder with
respect to any Shares subject to Option hereunder until said Shares have been
issued.  Each Option shall be evidenced by an Award Agreement.  Options granted
pursuant to the Plan need not be identical but each Option must contain and be
subject to the terms and conditions set forth below.
 
 
 
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(b)           Price.  The Administrator will establish the exercise price per
Share under each Option, which, in no event will be less than the Fair Market
Value of the Shares on the date of grant; provided, however, that the exercise
price per Share with respect to an Option that is granted in connection with a
merger or other acquisition as a substitute or replacement award for options
held by optionees of the acquired entity may be less than 100% of the market
price of the Shares on the date such Option is granted if such exercise price is
based on a formula set forth in the terms of the options held by such optionees
or in the terms of the agreement providing for such merger or other
acquisition.  The exercise price of any Option may be paid in Shares, cash or a
combination thereof, as determined by the Administrator, including an
irrevocable commitment by a broker to pay over such amount from a sale of the
Shares issuable under an Option, the delivery of previously owned Shares and
withholding of Shares otherwise deliverable upon exercise.
 
(c)           No Repricing without Stockholder Approval.  Other than in
connection with a change in the Company’s capitalization (as described in
Section 12), at any time when the exercise price of an Option is above the Fair
Market Value of a Share, the Company shall not, without stockholder approval,
(i) reduce the exercise price of such Option, (ii) exchange such Option for
cash, another Award or a new Option or Stock Appreciation Right with a lower
exercise or base price or (iii) otherwise reprice such Option.
 
(d)           Provisions Applicable to Options.  The date on which Options
become exercisable shall be determined at the sole discretion of the
Administrator and set forth in an Award Agreement.  The Administrator shall
establish the term of each Option, which in no case shall exceed a period of ten
(10) years from the date of grant.
 
(e)           Termination of Employment:  Unless an Option earlier expires upon
the expiration date established pursuant to Section 6(d), upon the Participant’s
Termination of Employment, his or her rights to exercise an Option then held
shall be only as follows, unless the Administrator specifies otherwise (either
in an Award Agreement or otherwise):
 
(i)           General.  In general, any portion of any Option that is not vested
as of the date of a Participant’s Termination of Employment shall be forfeited
and returned to the Company; provided, however, that the Administrator may, in
its sole discretion, in the event of a Participant’s retirement or involuntary
Termination of Employment as the result of a  reduction in force program (as
approved by the Administrator in its sole discretion), provide for accelerated
vesting of unvested Options upon such terms and the Administrator deems
advisable (either in an Award Agreement or otherwise).
 
(ii)           Death.  Upon the death of a Participant while in the employ of
the Company or any Subsidiary or while serving as a member of the Board, the
Participant’s Options then held shall be exercisable by his or her estate, heir
or beneficiary at any time during the period ending on the earlier of the date
that is one (1) year after the date of the Participant’s death or the date the
Option would otherwise terminate, but only to the extent that the Options are
exercisable as of that date.  Any and all Options that are not exercised during
such period shall terminate as of the end of such period.
 
 
 
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If a Participant should die following his or her Termination of Employment, any
Options that remain outstanding on the date of the Participant’s death shall be
exercisable by his or her estate, heir or beneficiary at any time during the
period ending on the earlier of the date that is one (1) year after the date of
the Participant’s death or the date the Option would otherwise terminate, but
only to the extent that the Option was exercisable as  of the Participant’s
death.  Any and all of the deceased Participant’s Options that are not exercised
during the such period shall terminate as of the end of such period.  A
Participant’s estate shall mean his or her legal representative or other person
who so acquires the right to exercise the Option by bequest or inheritance or by
reason of the death of the Participant.
 
(iii)           Disability.  Upon Termination of Employment as a result of the
Participant’s Disability, the Participant’s Options then held shall be
exercisable during the period ending on the earlier of the date that is one
(1) year after the date of Participant’s Termination of Employment or the date
the Option would otherwise terminate, but only to the extent that the Options
are exercisable as of that date.  Any and all Options that are not exercised
during such period shall terminate as of the end of such period.
 
(iv)           Retirement.  Upon the Participant’s Termination of Employment by
reason of his or her Retirement, the Participant’s Options then held shall be
exercisable during the period ending on the earlier of the date that is three
(3) years after the date of the Participant’s Termination of Employment or the
expiration date of such Option, but only to the extent that the Options are
exercisable as of the date of the Participant’s Termination of Employment.  Any
and all Options that are not exercised during such period shall terminate as of
the end of such period.
 
(v)           Cause.  Upon the date of a Participant’s Termination of Employment
for Cause, any Option that is unexercised prior to the date of the Participant’s
Termination of Employment shall terminate as of such date.
 
(vi)           Other Reasons.  Upon the date of a Participant’s Termination of
Employment for any reason other than those stated above in Sections 6(e)(i),
(e)(ii), (e)(iii), (e)(iv) and (e)(v) or as described in Section 15, the
Participant’s Options then held shall be exercisable during the period ending on
the earlier of the date that is three (3) months after the date of the
Participant’s Termination of Employment or the expiration date of such Option,
but only to the extent that the Options are exercisable as of the date of the
Participant’s Termination of Employment.  Any and all Options that are not
exercised during such period shall terminate as of the end of such period.
 
(f)           Incentive Stock Options.  Notwithstanding anything to the contrary
in this Section 6, in the case of the grant of an Option intending to qualify as
an Incentive Stock Option:
(i) if the Participant owns stock possessing more than 10 percent of the
combined voting power of all classes of stock of the Company (a “10%
Shareholder”), the exercise price of such Option must be at least 110 percent of
the Fair Market Value of the Shares on the date of grant and the Option must
expire within a period of not more than five (5) years from the date of grant,
and
 
 
 
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(ii) Termination of Employment will occur when the person to whom an Award was
granted ceases to be an employee (as determined in accordance with
Section 3401(c) of the Code and the regulations promulgated thereunder) of the
Company and its Subsidiaries.  Notwithstanding anything in this Section 6 to the
contrary, options designated as Incentive Stock Options shall not be eligible
for treatment under the Code as Incentive Stock Options (and will be deemed to
be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair
Market Value of Shares (determined as of the time of grant) with respect to
which such Options are exercisable for the first time by the Participant during
any calendar year (under all plans of the Company and any Subsidiary) exceeds
$100,000, taking Options into account in the order in which they were granted,
or (b) such Options otherwise remain exercisable but are not exercised within
three (3) months of Termination of Employment (or such other period of time
provided in Section 422 of the Code).
 
7. Stock Appreciation Rights
 
Stock Appreciation Rights may be granted to Participants from time to time
either in tandem with or as a component of other Awards granted under the Plan
(“tandem SARs”) or not in conjunction with other Awards (“freestanding
SARs”) and may, but need not, relate to a specific Option granted under
Section 6.  The provisions of Stock Appreciation Rights need not be the same
with respect to each grant or each recipient.  Any Stock Appreciation Right
granted in tandem with an Award may be granted at the same time such Award is
granted or at any time thereafter before exercise or expiration of such
Award.  All freestanding SARs shall be granted subject to the same terms and
conditions applicable to Options as set forth in Section 6 and all tandem SARs
shall have the same exercise price, vesting, exercisability, forfeiture and
termination provisions as the Award to which they relate.  Subject to the
provisions of Section 6 and the immediately preceding sentence, the
Administrator may impose such other conditions or restrictions on any Stock
Appreciation Right as it shall deem appropriate.  Stock Appreciation Rights may
be settled in Shares, cash or a combination thereof, as determined by the
Administrator and set forth in the applicable Award Agreement.  Other than in
connection with a change in the Company’s capitalization (as described in
Section 12), at any time when the exercise price of a Stock Appreciation Right
is above the Fair Market Value of a Share, the Company shall not, without
stockholder approval, (i) reduce the exercise or base price of such Stock
Appreciation Right, (ii) exchange such Stock Appreciation Right for cash,
another Award or a new Option or Stock Appreciation Right with a lower exercise
or base price or (iii) otherwise reprice such Stock Appreciation Right.
 
8. Restricted Stock and Restricted Stock Units
 
(a)           Restricted Stock and Restricted Stock Unit Awards.  Restricted
Stock and Restricted Stock Units may be granted at any time and from time to
time prior to the termination of the Plan to Participants as determined by the
Administrator.  Restricted Stock is an award of Shares, the grant, issuance,
retention, vesting and/or transferability of which is subject during specified
periods of time to such conditions (including continued employment or
performance conditions) and terms as the Administrator deems
appropriate.  Restricted Stock Units are Awards denominated in units of Shares
under which the issuance of Shares is subject to such conditions (including
continued employment or performance conditions) and terms as the Administrator
deems appropriate.  Each grant of Restricted Stock and Restricted Stock Units
shall be evidenced by an Award Agreement.  Unless determined otherwise by the
Administrator, each Restricted Stock Unit will be equal to one Share and will
entitle a Participant to either the issuance of Shares or payment of an amount
of cash determined with reference to the value of Shares.  To the extent
determined by the Administrator, Restricted Stock and Restricted Stock Units may
be satisfied or settled in Shares, cash or a combination thereof.  Restricted
Stock and Restricted Stock Units granted pursuant to the Plan need not be
identical but each grant of Restricted Stock and Restricted Stock Units must
contain and be subject to the terms and conditions set forth below.
 
 
 
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(b)           Contents of Agreement.  Each Award Agreement shall contain
provisions regarding (i) the number of Shares or Restricted Stock Units subject
to such Award or a formula for determining such number, (ii) the purchase price
of the Shares, if any, and the means of payment, (iii) the performance criteria,
if any, and level of achievement versus these criteria that shall determine the
number of Shares or Restricted Stock Units granted, issued, retainable and/or
vested, (iv) such terms and conditions on the grant, issuance, vesting and/or
forfeiture of the Shares or Restricted Stock Units as may be determined from
time to time by the Administrator, (v) the term of the performance period, if
any, as to which performance will be measured for determining the number of such
Shares or Restricted Stock Units, and (vi) restrictions on the transferability
of the Shares or Restricted Stock Units.  Shares issued under a Restricted Stock
Award may be issued in the name of the Participant and held by the Participant
or held by the Company, in each case as the Administrator may provide.
 
(c)           Vesting and Performance Criteria.  The grant, issuance, retention,
vesting and/or settlement of shares of Restricted Stock and Restricted Stock
Units will occur when and in such installments as the Administrator determines
or under criteria the Administrator establishes, which may include Qualifying
Performance Criteria.  Other than with respect to Awards to Nonemployee
Directors, the grant, issuance, retention, vesting and/or settlement of Shares
under any such Award that is based on performance criteria and level of
achievement versus such criteria will be subject to a performance period of not
less than twelve months, and the grant, issuance, retention, vesting and/or
settlement of Shares under any Restricted Stock or Restricted Stock Unit Award
that is based solely upon continued employment and/or the passage of time may
not vest or be settled in full prior to the thirty-sixth month following its
date of grant, except that the Administrator may provide for the satisfaction
and/or lapse of all conditions under any such Award in the event of the
Participant’s death, disability, Retirement or in connection with a Change in
Control, and the Administrator may provide that any such restriction or
limitation will not apply in the case of a Restricted Stock or Restricted Stock
Unit Award that is issued in payment or settlement of compensation that has been
earned by the Participant.  In addition, the Administrator may grant awards of
Restricted Stock and/or Restricted Stock Units that result in issuing up to 5%
of the maximum aggregate number of Shares authorized for issuance under the Plan
(as set forth in Section 5(a)) without regard to the minimum vesting
requirements set forth in the preceding sentence.  Notwithstanding anything in
this Plan to the contrary, the performance criteria for any Restricted Stock or
Restricted Stock Unit that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code will be a
measure based on one or more Qualifying Performance Criteria selected by the
Administrator and specified when the Award is granted.
 
 
 
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(d)           Termination of Employment:  Upon the Participant’s Termination of
Employment, his or her rights to unvested Restricted Stock or Restricted Stock
Units then held shall be only as follows, unless the Administrator specifies
otherwise (either in an Award Agreement or otherwise):
 
(i)           Death, Disability, Retirement.  In the event of a Participant’s
Termination of Employment by reason of his or her death, Disability, or
Retirement, any portion of any Award of Restricted Stock and/or Restricted Stock
Units that is not vested as of the date of a Participant’s Termination of
Employment shall immediately be forfeited by the Participant; provided, however,
that the Administrator may, in its sole discretion, provide for accelerated
vesting of unvested Restricted Stock and/or Restricted Stock Units upon such
terms and the Administrator deems advisable (either in an Award Agreement or
otherwise).
 
(ii)           Other Reasons.  In the event of a Participant’s Termination of
Employment for any reason other than those stated above in Section 8(d)(i), any
portion of any Award of Restricted Stock and/or Restricted Stock Units that is
not vested as of the date of a Participant’s Termination of Employment shall
immediately be forfeited by the Participant; provided, however, that the
Administrator may, in its sole discretion, other than in the event of a
Termination of Employment for Cause and in a manner consistent with the
requirements of Section 8(c), provide for accelerated vesting of unvested
Restricted Stock and/or Restricted Stock Units upon such terms and the
Administrator deems advisable (either in an Award Agreement or otherwise).
 
(iii)           Performance Awards.  Notwithstanding anything in this
Section 8(d) to the contrary, with respect to any Performance Award granted
pursuant to this Section 8, in the event a Participant’s Termination of
Employment by reason of his or her death, Disability, Retirement, or involuntary
Termination of Employment by the Company without Cause during a performance
period (and, unless otherwise determined by the Administrator, in the case of a
termination by the Company without Cause, at least twelve (12) months after the
beginning of the performance), the Participant shall receive a prorated payout
of the Performance Award.  The prorated payout shall be determined by the
Administrator, in its sole discretion, and shall be based upon the length of
time that the Participant held the Performance Award during the performance
period and the Company’s actual results during the performance period as
compared to the performance criteria to which the Performance Award is subject.
 
(e)           Discretionary Adjustments and Limits.  Subject to the limits
imposed under Section 162(m) of the Code for Awards that are intended to qualify
as “performance-based compensation,” notwithstanding the satisfaction of any
performance goals, the number of Shares granted, issued, retainable and/or
vested under an Award of Restricted Stock or Restricted Stock Units on account
of either financial performance or personal performance evaluations may, to the
extent specified in the Award Agreement, be reduced, but not increased, by the
Administrator on the basis of such further considerations as the Administrator
shall determine.
 
(f)           Voting Rights.  Unless otherwise determined by the Administrator,
Participants holding shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those shares during the period of
restriction.  Participants shall have no voting rights with respect to Shares
underlying Restricted Stock Units unless and until such Shares are reflected as
issued and outstanding shares on the Company’s stock ledger.
 
 
 
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(g)           Dividends and Distributions.  Participants in whose name an Award
of Restricted Stock and/or Restricted Stock Units is granted shall be entitled
to receive all dividends and other distributions paid with respect to the Shares
underlying such Award, unless determined otherwise by the Administrator.  The
Administrator will determine whether any such dividends or distributions will be
automatically reinvested in additional Shares or will be payable in cash;
provided that such additional Shares and/or cash shall subject to the same
restrictions and vesting conditions as the Award with respect to which they were
distributed.  Notwithstanding anything herein to the contrary, in no event shall
dividends or dividend equivalents be currently payable with respect to unvested
or unearned Performance Awards.
 
9. Incentive Bonuses
 
(a)           General.  Each Incentive Bonus Award will confer upon the
Participant the opportunity to earn a future payment tied to the level of
achievement with respect to one or more performance criteria established for a
performance period of not less than one year.
 
(b)           Incentive Bonus Document.  The terms of any Incentive Bonus will
be set forth in an Award Agreement or other written document establishing the
terms and conditions of the Award.  Each such Award Agreement or other written
document shall contain provisions regarding (i) the threshold, target and
maximum amount payable to the Participant as an Incentive Bonus, (ii) the
performance criteria and level of achievement versus these criteria that shall
determine the amount of such payment, (iii) the term of the performance period
as to which performance shall be measured for determining the amount of any
payment, (iv) the timing of any payment earned by virtue of performance,
(v) restrictions on the alienation or transfer of the Incentive Bonus prior to
actual payment, (vi) forfeiture provisions and (vii) such further terms and
conditions, in each case not inconsistent with this Plan as may be determined
from time to time by the Administrator.
 
(c)           Performance Criteria.  The Administrator shall establish the
performance criteria and level of achievement versus these criteria that shall
determine the threshold, target and maximum amount payable under an Incentive
Bonus, which criteria may be based on financial performance and/or personal
performance evaluations.  The Administrator may specify the percentage of the
target Incentive Bonus that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the
Code.  Notwithstanding anything to the contrary herein, the performance criteria
for any portion of an Incentive Bonus that is intended by the Administrator to
satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall be a measure based on one or more Qualifying
Performance Criteria selected by the Administrator and specified at the time the
Incentive Bonus is granted.  The Administrator shall certify the extent to which
any Qualifying Performance Criteria has been satisfied, and the amount payable
as a result thereof, prior to payment of any Incentive Bonus that is intended to
satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code.
 
 
 
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(d)           Timing and Form of Payment.  The Administrator shall determine the
timing of payment of any Incentive Bonus.  Payment of the amount due under an
Incentive Bonus may be made in cash or in Shares, as determined by the
Administrator.  The Administrator may provide for or, subject to such terms and
conditions as the Administrator may specify, may permit a Participant to elect
for the payment of any Incentive Bonus to be deferred to a specified date or
event.
 
(e)           Discretionary Adjustments.  Notwithstanding satisfaction of any
performance goals the amount paid under an Incentive Bonus on account of either
financial performance or personal performance evaluations may, to the extent
specified in the Award Agreement or other written document establishing the
terms and conditions of the Award, be reduced or increased by the Administrator
on the basis of such further considerations as the Administrator shall
determine; provided, however, that with respect to Awards that are intended to
qualify as “performance-based compensation” under Section 162(m) of the Code,
the Administrator shall not have the discretion to increase the amount paid
under an Incentive Bonus.
 
10. Deferral of Gains
 
The Administrator may, in an Award Agreement or otherwise, provide for the
deferred delivery of Shares upon settlement, vesting or other events with
respect to Restricted Stock or Restricted Stock Units, or in payment or
satisfaction of an Incentive Bonus.  Notwithstanding anything herein to the
contrary, in no event will any deferral of the delivery of Shares or any other
payment with respect to any Award be allowed if the Administrator determines, in
its sole discretion, that the deferral would result in the imposition of the
additional tax under Section 409A(a)(1)(B) of the Code.  No Award shall provide
for deferral of compensation that does not comply with Section 409A of the Code,
unless the Board, at the time of grant, specifically provides that the Award is
not intended to comply with Section 409A of the Code.  The Company shall have no
liability to a Participant, or any other party, if an Award that is intended to
be exempt from, or compliant with, Section 409A of the Code is not so exempt or
compliant or for any action taken by the Board.
 
11. Conditions and Restrictions Upon Securities Subject to Awards
 
The Administrator may provide that the Shares issued upon exercise of an Option
or Stock Appreciation Right or otherwise subject to or issued under an Award
shall be subject to such further agreements, restrictions, conditions or
limitations as the Administrator in its discretion may specify prior to the
exercise of such Option or Stock Appreciation Right or the grant, vesting or
settlement of such Award, including without limitation, conditions on vesting or
transferability, forfeiture or repurchase provisions and method of payment for
the Shares issued upon exercise, vesting or settlement of such Award (including
the actual or constructive surrender of Shares already owned by the
Participant) or payment of taxes arising in connection with an Award.  Without
limiting the foregoing, such restrictions may address the timing and manner of
any resales by the Participant or other subsequent transfers by the Participant
of any Shares issued under an Award, including without limitation
(i) restrictions under an insider trading policy or pursuant to applicable law,
(ii) restrictions designed to delay and/or coordinate the timing and manner of
sales by Participant and holders of other Company equity compensation
arrangements, (iii) restrictions in connection with any underwritten public
offering by the Company of the Company’s securities pursuant to an effective
registration statement filed under the Securities Act of 1933, (iv) restrictions
as to the use of a specified brokerage firm for such resales or other transfers,
and (v) provisions requiring Shares to be sold on the open market or to the
Company in order to satisfy tax withholding or other obligations.
 
 
 
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12. Adjustment of and Changes in the Stock
 
The number and kind of Shares available for issuance under this Plan (including
under any Awards then outstanding), and the number and kind of Shares subject to
the individual limits set forth in Section 5 of this Plan, shall be equitably
adjusted by the Administrator as it determines appropriate to reflect any
reorganization, reclassification, combination of shares, stock split, reverse
stock split, spin-off, dividend or distribution of securities, property or cash
(other than regular, quarterly cash dividends), or any other event or
transaction that affects the number or kind of Shares of the Company
outstanding.  Such adjustment shall be designed to comply with Sections 409A and
424 of the Code or, except as otherwise expressly provided in Section 5(c) of
this Plan, may be designed to treat the Shares available under the Plan and
subject to Awards as if they were all outstanding on the record date for such
event or transaction or to increase the number of such Shares to reflect a
deemed reinvestment in Shares of the amount distributed to the Company’s
securityholders.  The terms of any outstanding Award shall also be equitably
adjusted by the Administrator as to price, number or kind of Shares subject to
such Award, vesting, and other terms to reflect the foregoing events, which
adjustments need not be uniform as between different Awards or different types
of Awards.
 
In the event there shall be any other change in the number or kind of
outstanding Shares, or any stock or other securities into which such Shares
shall have been changed, or for which it shall have been exchanged, by reason of
a Change in Control, other merger, consolidation or otherwise, then the
Administrator shall, in its sole discretion, determine the appropriate and
equitable adjustment, if any, to be effected.
 
No right to purchase fractional shares shall result from any adjustment in
Awards pursuant to this Section 12.  In case of any such adjustment, the Shares
subject to the Award shall be rounded down to the nearest whole share.  The
Company shall notify Participants holding Awards subject to any adjustments
pursuant to this Section 12 of such adjustment, but (whether or not notice is
given) such adjustment shall be effective and binding for all purposes of the
Plan.
 
Unless otherwise expressly provided in the Award Agreement or another contract,
including an employment agreement, or under the terms of a transaction
constituting a Change in Control, the Administrator may provide that any or all
of the following shall occur upon a Participant’s Termination of Employment
within twenty-four (24) months following a Change in Control: (a) in the case of
an Option or Stock Appreciation Right, the Participant shall have the ability to
exercise any portion of the Option or Stock Appreciation Right not previously
exercisable, (b) in the case of a Performance Award or Incentive Bonus, the
Participant shall have the right to receive a payment equal to the target amount
payable or, if greater, a payment based on performance through a date determined
by the Administrator prior to the Change in Control, and (c) in the case of
Shares issued in payment of an Incentive Bonus, and/or in the case of
outstanding Restricted Stock and/or Restricted Stock Units, all conditions to
the grant, issuance, retention, vesting or transferability of, or any other
restrictions applicable to, such Award shall immediately lapse.  Notwithstanding
anything herein to the contrary, in the event of a Change in Control in which
the acquiring or surviving company in the transaction does not assume or
continue outstanding Awards upon the Change in Control, immediately prior to the
Change in Control, all Awards that are not assumed or continued shall be treated
as follows effective immediately prior to the Change in Control: (a) in the case
of an Option or Stock Appreciation Right, the Participant shall have the ability
to exercise such Option or Stock Appreciation Right, including any portion of
the Option or Stock Appreciation Right not previously exercisable, (b) in the
case of a Performance Award or Incentive Bonus, the Participant shall have the
right to receive a payment equal to the target amount payable or, if greater, a
payment based on performance through a date determined by the Administrator
prior to the Change in Control, and (c) in the case of Shares issued in payment
of an Incentive Bonus, and/or in the case of outstanding Restricted Stock and/or
Restricted Stock Units, all conditions to the grant, issuance, retention,
vesting or transferability of, or any other restrictions applicable to, such
Award shall immediately lapse.
 
 
 
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13. Qualifying Performance-Based Compensation
 
(a)           General.  The Administrator may establish performance criteria and
level of achievement versus such criteria that shall determine the number of
Shares, units, or cash to be granted, retained, vested, issued or issuable under
or in settlement of or the amount payable pursuant to an Award, which criteria
may be based on Qualifying Performance Criteria or other standards of financial
performance and/or personal performance evaluations.  A Performance Award may be
identified as “Performance Share”, “Performance Equity”, “Performance Unit” or
other such term as chosen by the Administrator.  In addition, the Administrator
may specify that an Award or a portion of an Award is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of the
Code, provided that the performance criteria for such Award or portion of an
Award that is intended by the Administrator to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall be a
measure based on one or more Qualifying Performance Criteria selected by the
Administrator and specified at the time the Award is granted.  The Administrator
shall certify the extent to which any Qualifying Performance Criteria has been
satisfied, and the amount payable as a result thereof, prior to payment,
settlement or vesting of any Award that is intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the
Code.  Notwithstanding satisfaction of any performance goals, the number of
Shares issued under or the amount paid under an award may, to the extent
specified in the Award Agreement, be reduced, but not increased, by the
Administrator on the basis of such further considerations as the Administrator
in its sole discretion shall determine.
 
(b)           Qualifying Performance Criteria.  For purposes of this Plan, the
term “Qualifying Performance Criteria” shall mean any one or more of the
following performance criteria, or derivations of such performance criteria,
either individually, alternatively or in any combination, applied to either the
Company as a whole or to a business unit or Subsidiary, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison
group, in each case as specified by the Administrator: (i) cash flow (before or
after dividends), (ii) earning or earnings per share (including earnings before
interest, taxes, depreciation and amortization), (iii) stock price, (iv) return
on equity, (v) total stockholder return, (vi) return on capital or investment
(including return on total capital, return on invested capital, or return on
investment), (vii) return on assets or net assets, (viii) market capitalization,
(ix) economic value added, (x) debt leverage (debt to capital), (xi) revenue,
(xii) income or net income, (xiii) operating income, (xiv) operating profit or
net operating profit, (xv) operating margin or profit margin, (xvi) return on
operating revenue, (xvii) cash from operations, (xviii) operating ratio,
(xix) operating revenue, (xx) NSR and/or total backlog, (xxi) days sales
outstanding, (xxii) customer service, (xxiii) operational safety, reliability
and/or efficiency; (xxiv) environmental incidents.  To the extent consistent
with Section 162(m) of the Code, the Administrator (A) shall appropriately
adjust any evaluation of performance under a Qualifying Performance Criteria to
eliminate the effects of charges for restructurings, discontinued operations,
extraordinary items and all items of gain, loss or expense determined to be
extraordinary or unusual in nature or related to the acquisition or disposal of
a segment of a business or related to a change in accounting principle all as
determined in accordance with applicable accounting provisions, as well as the
cumulative effect of accounting changes, in each case as determined in
accordance with generally accepted accounting principles or identified in the
Company’s financial statements or notes to the financial statements, and (B) may
appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation, claims, judgments or
settlements, (iii) the effect of changes in tax law or other such laws or
provisions affecting reported results, (iv) accruals for reorganization and
restructuring programs and (v) accruals of any amounts for payment under this
Plan or any other compensation arrangement maintained by the Company.
 
 
 
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14. Transferability
 
Each Award may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated by a Participant other than by will or the laws of
descent and distribution, and each Option or Stock Appreciation Right shall be
exercisable only by the Participant during his or her lifetime.  Notwithstanding
the foregoing, to the extent permitted by the Administrator, the person to whom
an Award is initially granted (the “Grantee”) may transfer an Award to any
“family member” of the Grantee (as such term is defined in Section 1(a)(5) of
the General Instructions to Form S-8 under the Securities Act of 1933, as
amended (“Form S-8”)), to trusts solely for the benefit of such family members
and to partnerships in which such family members and/or trusts are the only
partners; provided that, (i) as a condition thereof, the transferor and the
transferee must execute a written agreement containing such terms as specified
by the Administrator, and (ii) the transfer is pursuant to a gift or a domestic
relations order to the extent permitted under the General Instructions to Form
S-8.  Except to the extent specified otherwise in the agreement the
Administrator provides for the Grantee and transferee to execute, all vesting,
exercisability and forfeiture provisions that are conditioned on the Grantee’s
continued employment or service shall continue to be determined with reference
to the Grantee’s employment or service (and not to the status of the
transferee) after any transfer of an Award pursuant to this Section 14, and the
responsibility to pay any taxes in connection with an Award shall remain with
the Grantee notwithstanding any transfer other than by will or intestate
succession.
 
 
 
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15. Suspension or Termination of Awards
 
Except as otherwise provided by the Administrator, if at any time (including
after a notice of exercise has been delivered or an award has vested) the Chief
Executive Officer or any other person designated by the Administrator (each such
person, an “Authorized Officer”) reasonably believes that a Participant may have
committed an Act of Misconduct as described in this Section 15, the Authorized
Officer, Administrator or the Board may suspend the Participant’s rights to
exercise any Option, to vest in an Award, and/or to receive payment for or
receive Shares in settlement of an Award pending a determination of whether an
Act of Misconduct has been committed.
 
If the Administrator or an Authorized Officer determines a Participant has
committed an act of embezzlement, fraud, dishonesty, nonpayment of any
obligation owed to the Company or any Subsidiary, breach of fiduciary duty,
violation of Company ethics policy or code of conduct, or deliberate disregard
of the Company or Subsidiary rules resulting in loss, damage or injury to the
Company or any Subsidiary, or if a Participant makes an unauthorized disclosure
of any Company or Subsidiary trade secret or confidential information, solicits
any employee or service provider to leave the employ or cease providing services
to the Company or any Subsidiary, breaches any intellectual property or
assignment of inventions covenant, engages in any conduct constituting unfair
competition, breaches any non-competition agreement, induces any Company or
Subsidiary customer to breach a contract with the Company or any Subsidiary or
to cease doing business with the Company or any Subsidiary, or induces any
principal for whom the Company or any Subsidiary acts as agent to terminate such
agency relationship (any of the foregoing acts, an “Act of Misconduct”), then
except as otherwise provided by the Administrator, (i) neither the Participant
nor his or her estate nor transferee shall be entitled to exercise any Option or
Stock Appreciation Right whatsoever, vest in or have the restrictions on an
Award lapse, or otherwise receive payment of an Award, (ii) the Participant will
forfeit all outstanding Awards and (iii) the Participant may be required, at the
Administrator’s sole discretion, to return and/or repay to the Company any then
unvested Shares previously issued under the Plan.  In making such determination,
the Administrator or an Authorized Officer shall give the Participant an
opportunity to appear and present evidence on his or her behalf at a hearing
before the Administrator or its designee or an opportunity to submit written
comments, documents, information and arguments to be considered by
the  Administrator.
 
16. Compliance with Laws and Regulations
 
This Plan, the grant, issuance, vesting, exercise and settlement of Awards
thereunder, and the obligation of the Company to sell, issue or deliver Shares
under such Awards, shall be subject to all applicable foreign, federal, state
and local laws, rules and regulations, stock exchange rules and regulations, and
to such approvals by any governmental or regulatory agency as may be
required.  The Company shall not be required to register in a Participant’s name
or deliver any Shares prior to the completion of any registration or
qualification of such shares under any foreign, federal, state or local law or
any ruling or regulation of any government body which the Administrator shall
determine to be necessary or advisable.  To the extent the Company is unable to
or the Administrator deems it infeasible to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, the
Company and its Subsidiaries shall be relieved of any liability with respect to
the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.  No Option shall be exercisable and no Shares
shall be issued and/or transferable under any other Award unless a registration
statement with respect to the Shares underlying such Option is effective and
current or the Company has determined that such registration is unnecessary.
 
 
 
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In the event an Award is granted to or held by a Participant who is employed or
providing services outside the United States, the Administrator may, in its sole
discretion, modify the provisions of the Plan or of such Award as they pertain
to such individual to comply with applicable foreign law or to recognize
differences in local law, currency or tax policy.  The Administrator may also
impose conditions on the grant, issuance, exercise, vesting, settlement or
retention of Awards in order to comply with such foreign law and/or to minimize
the Company’s obligations with respect to tax equalization for Participants
employed outside their home country.
 
17. Withholding
 
To the extent required by applicable federal, state, local or foreign law, a
Participant shall be required to satisfy, in a manner satisfactory to the
Company, any withholding tax obligations that arise by reason of an Option
exercise, the vesting of or settlement of an Award, an election pursuant to
Section 83(b) of the Code or otherwise with respect to an Award.  To the extent
a Participant makes an election under Section 83(b) of the Code, within ten days
of filing such election with the Internal Revenue Service, the Participant must
notify the Company in writing of such election.  The Company and its
Subsidiaries shall not be required to issue Shares, make any payment or to
recognize the transfer or disposition of Shares until all withholding tax
obligations are satisfied.  The Administrator may provide for or permit these
obligations to be satisfied through the mandatory or elective sale of Shares
and/or by having the Company withhold a portion of the Shares that otherwise
would be issued to him or her upon exercise of the Option or the vesting or
settlement of an Award, or by tendering Shares previously acquired.  In
addition, the Company shall be entitled to deduct from other compensation
payable to each Participant any withholding tax obligations that arise in
connection with an Award or require the Participant to pay such sums directly to
the Company in cash or by check.
 
18. Administration of the Plan
 
(a)           Administrator of the Plan.  The Plan shall be administered by the
Administrator who shall be the Compensation Committee of the Board or, in the
absence of a Compensation Committee, the Board itself.  Any power of the
Administrator may also be exercised by the Board, except to the extent that the
grant or exercise of such authority would cause any Award or transaction to
become subject to (or lose an exemption under) the short-swing profit recovery
provisions of Section 16 of the Securities Exchange Act of 1934 or cause an
Award designated as a Performance Award not to qualify for treatment as
performance-based compensation under Section 162(m) of the Code.  To the extent
that any permitted action taken by the Board conflicts with action taken by the
Administrator, the Board action shall control.  The Compensation Committee may
by resolution authorize one or more officers of the Company to perform any or
all things that the Administrator is authorized and empowered to do or perform
under the Plan, and for all purposes under this Plan, such officer or officers
shall be treated as the Administrator; provided, however, that the resolution so
authorizing such officer or officers shall specify the total number of Awards
(if any) such officer or officers may award pursuant to such delegated
authority.  No such officer shall designate himself or herself as a recipient of
any Awards granted under authority delegated to such officer.  In addition, the
Compensation Committee may delegate any or all aspects of the day-to-day
administration of  the Plan to one or more officers or employees of the Company
or any Subsidiary, and/or to one or more agents.
 
 
 
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(b)           Powers of Administrator.  Subject to the express provisions of
this Plan, the Administrator shall be authorized and empowered to do all things
that it determines to be necessary or appropriate in connection with the
administration of this Plan, including, without limitation: (i) to prescribe,
amend and rescind rules and regulations relating to this Plan and to define
terms not otherwise defined herein; (ii) to determine which persons are
Participants, to which of such Participants, if any, Awards shall be granted
hereunder and the timing of any such Awards; (iii) to grant Awards to
Participants and determine the terms and conditions thereof, including the
number of Shares subject to Awards and the exercise or purchase price of such
Shares and the circumstances under which Awards become exercisable or vested or
are forfeited or expire, which terms may but need not be conditioned upon the
passage of time, continued employment, the satisfaction of performance criteria,
the occurrence of certain events, or other factors; (iv) to establish and verify
the extent of satisfaction of any performance goals or other conditions
applicable to the grant, issuance, exercisability, vesting and/or ability to
retain any Award; (v) to prescribe and amend the terms of the agreements or
other documents evidencing Awards made under this Plan (which need not be
identical) and the terms of or form of any document or notice required to be
delivered to the Company by Participants under this Plan; (vi) to determine
whether, and the extent to which, adjustments are required pursuant to
Section 12; (vii) to interpret and construe this Plan, any rules and regulations
under this Plan and the terms and conditions of any Award granted hereunder, and
to make exceptions to any such provisions if the Administrator, in good faith,
determines that it is necessary to do so in light of extraordinary circumstances
and for the benefit of the Company; (viii) to approve corrections in the
documentation or administration of any Award; and (ix) to make all other
determinations deemed necessary or advisable for the administration of this
Plan.  The Administrator may, in its sole and absolute discretion, without
amendment to the Plan, waive or amend the operation of Plan provisions
respecting exercise after Termination of Employment or service to the Company or
an affiliate and, except as otherwise provided herein, adjust any of the terms
of any Award.
 
(c)           Determinations by the Administrator.  All decisions,
determinations and interpretations by the Administrator regarding the Plan, any
rules and regulations under the Plan and the terms and conditions of or
operation of any Award granted hereunder, shall be final and binding on all
Participants, beneficiaries, heirs, assigns or other persons holding or claiming
rights under the Plan or any Award.  The Administrator shall consider such
factors as it deems relevant, in its sole and absolute discretion, to making
such decisions, determinations and interpretations including, without
limitation, the recommendations or advice of any officer or other employee of
the Company and such attorneys, consultants and accountants as it may select.
 
(d)           Subsidiary Awards.  In the case of a grant of an Award to any
Participant employed by a Subsidiary, such grant may, if the Administrator so
directs, be implemented by the Company issuing Shares to the Subsidiary, for
such lawful consideration as the Administrator may determine, upon the condition
or understanding that the Subsidiary will transfer the Shares to the Participant
in accordance with the terms of the Award specified by the Administrator
pursuant to the provisions of the Plan.  Notwithstanding any other provision
hereof, such Award may be issued by and in the name of the Subsidiary and shall
be deemed granted on such date as the Administrator shall determine.
 
 
 
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19. Amendment of the Plan or Awards
 
The Board may amend, alter or discontinue this Plan and the Administrator may
amend, or alter any agreement or other document evidencing an Award made under
this Plan but, except as provided pursuant to the provisions of Section 12, no
such amendment shall, without the approval of the stockholders of the Company
amend the Plan in any manner requiring stockholder approval by law or under the
New York Stock Exchange listing requirements.
 
No amendment or alteration to the Plan or an Award or Award Agreement shall be
made which would impair the rights of the holder of an Award, without such
holder’s consent, provided that no such consent shall be required if the
Administrator determines in its sole discretion and prior to the date of any
Change in Control that such amendment or alteration either is required or
advisable in order for the Company, the Plan or the Award to satisfy any law or
regulation or to meet the requirements of or avoid adverse financial accounting
consequences under any accounting standard.
 
20. No Liability of Company
 
The Company and any Subsidiary or affiliate which is in existence or hereafter
comes into existence shall not be liable to a Participant or any other person as
to: (i) the non-issuance or sale of Shares as to which the Company has been
unable to obtain from any regulatory body having jurisdiction the authority
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder; and (ii) any tax consequence expected, but not
realized, by any Participant or other person due to the receipt, exercise or
settlement of any Award granted hereunder.
 
21. Non-Exclusivity of Plan
 
Neither the adoption of this Plan by the Board nor the submission of this Plan
to the stockholders of the Company for approval shall be construed as creating
any limitations on the power of the Board or the Administrator to adopt such
other incentive arrangements as either may deem desirable, including without
limitation, an arrangement not intended to qualify under Section 162(m) of the
Code, and such arrangements may be either generally applicable or applicable
only in specific cases.
 
22. Governing Law
 
This Plan and any agreements or other documents hereunder shall be interpreted
and construed in accordance with the laws of the Texas to the extent not
preempted by federal law.  Any reference in this Plan or in the agreement or
other document evidencing any Awards to a provision of law or to a rule or
regulation shall be deemed to include any successor law, rule or regulation of
similar effect or applicability.
 
 
 
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23. No Right to Employment, Reelection or Continued Service
 
Nothing in this Plan or an Award Agreement shall interfere with or limit in any
way the right of the Company, its Subsidiaries and/or its affiliates to
terminate any Participant’s employment, service on the Board or service for the
Company at any time or for any reason not prohibited by law, nor shall this Plan
or an Award itself confer upon any Participant any right to continue his or her
employment or service for any specified period of time.  Neither an Award nor
any benefits arising under this Plan shall constitute an employment contract
with the Company, any Subsidiary and/or its affiliates.  Subject to Sections 4
and 19, this Plan and the benefits hereunder may be terminated at any time in
the sole and exclusive discretion of the Board without giving rise to any
liability on the part of the Company, its Subsidiaries and/or its affiliates.
 
24. Unfunded Plan
 
The Plan is intended to be an unfunded plan.  Participants are and shall at all
times be general creditors of the Company with respect to their Awards.  If the
Administrator or the Company chooses to set aside funds in a trust or otherwise
for the payment of Awards under the Plan, such funds shall at all times be
subject to the claims of the creditors of the Company in the event of its
bankruptcy or insolvency.
 
25. Section 409A
 
It is intended that any Options, Stock Appreciation Rights, and Restricted Stock
issued pursuant to this Plan and any Award Agreement shall not constitute
“deferrals of compensation” within the meaning of Section 409A of the Code and,
as a result, shall not be subject to the requirements of Section 409A of the
Code.  It is further intended that any Restricted Stock Units and Incentive
Bonuses issued pursuant to this Plan and any Award Agreement or other written
document establishing the terms and conditions of the Award (which may or may
not constitute “deferrals of compensation,” depending on the terms of each
Award) shall avoid any “plan failures” within the meaning of Section 409A(a)(1)
of the Code.  The Plan and each Award Agreement or other written document
establishing the terms and conditions of an Award is to be interpreted and
administered in a manner consistent with these intentions.  However, no
guarantee or commitment is made that the Plan, any Award Agreement or any other
written document establishing the terms and conditions of an Award shall be
administered in accordance with the requirements of Section 409A of the Code,
with respect to amounts that are subject to such requirements, or that the Plan,
any Award Agreement or any other written document establishing the terms and
conditions of an Award shall be administered in a manner that avoids the
application of Section 409A of the Code, with respect to amounts that are not
subject to such requirements.
 
 
 
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26. Required Delay in Payment on Account of a Separation from Service
 
Notwithstanding any other provision in this Plan, any Award Agreement or any
other written document establishing the terms and conditions of an Award, if any
Award recipient is a “specified employee,” as defined in Treasury Regulations
Section 1.409A-1(i), as of the date of his or her “Separation from Service” (as
defined in authoritative IRS guidance under Section 409A of the Code), then, to
the extent required by Treasury Regulations Section 1.409A-3(i)(2), any payment
made to the Award recipient on account of his or her Separation from Service
shall not be made before a date that is six months after the date of his or her
Separation from Service.  The Administrator may elect any of the methods of
applying this rule that are permitted under Treasury Regulations section
1.409A-3(i)(2)(ii). 
 
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