Exhibit 10.2

FAR EAST ENERGY CORPORATION
2005 STOCK INCENTIVE PLAN

1. Purpose of the Plan

The purpose of the Plan is to (i) aid the Company and its Subsidiaries and
Affiliates in attracting, securing and retaining employees of outstanding
ability, (ii) attract members to the Board, (iii) attract consultants to provide
services to the Company and its Subsidiaries and Affiliates, as needed, and
(iv) motivate such persons to exert their best efforts on behalf of the Company
and its Affiliates by providing incentives through the granting of Awards. The
Company expects that it will benefit from the added interest, which such persons
will have in the welfare of the Company as a result of their proprietary
interest in the Company’s success.

2. Definitions

The following capitalized terms used in the Plan have the respective meanings
set forth in this Section:

(a) Act: The Securities Exchange Act of 1934, as amended, or any successor
thereto.

(b) Affiliate: Any entity (i) 20% or more of the voting equity of which is owned
or controlled directly or indirectly by the Company, or (ii) that had been a
business, division or subsidiary of the Company, the equity of which has been
distributed to the Company’s stockholders, even if the Company thereafter owns
less than 20% of the voting equity.

(c) Award: An Option, Stock Appreciation Right or Other Stock-Based Award
granted pursuant to the Plan.

(d) Award Agreement: Any written agreement, contract, or other instrument or
document evidencing an Award.

(e) Beneficial Owner or Beneficially Owned: As such term is defined in
Rule 13d-3 under the Act (or any successor rule thereto).

(f) Board: The Board of Directors of the Company.

(g) Change of Control: The occurrence of any of the following events:

(i) any Person becomes the Beneficial Owner, directly or indirectly, of more
than forty percent (40%) of the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
the following acquisitions shall not constitute a Change of Control: (A) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(B) any acquisition by an entity pursuant to a reorganization, merger or
consolidation, unless such reorganization, merger or consolidation constitutes a
Change of Control under clause (ii) of this Section 2(g);

(ii) the consummation of a reorganization, merger or consolidation, unless
following such reorganization, merger or consolidation sixty percent (60%) or
more of the combined voting power of the then-outstanding voting securities of
the entity resulting from such reorganization, merger or consolidation entitled
to vote generally in the election of directors is then Beneficially Owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the Beneficial Owners, respectively, of the Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation;

(iii) the (i) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or (ii) sale or other disposition (in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company and its Subsidiaries, unless the successor entity
existing immediately after such sale or disposition is then Beneficially Owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the Beneficial Owners, respectively, of the Outstanding
Company Voting Securities immediately prior to such sale or disposition;

(iv) during any period of twenty-four months (not including any period prior to
the Effective Date), individuals who at the beginning of such period constitute
the Board, and any new director (other than (A) a director nominated by a Person
who has entered into an agreement with the Company to effect a transaction
described in Sections 2(g)(i), (ii) or (iii) of the Plan, (B) a director whose
initial assumption of office occurs as a result of either an actual or
threatened election contest subject to Rule 14a-11 of Regulation 14A promulgated
under the Act or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board or (C) a director designated by
any Person who is the Beneficial Owner, directly or indirectly, of securities of
the Company representing 10% or more of the Outstanding Company Voting
Securities) whose election by the Board or nomination for election by the
Company’s stockholders was approved in advance by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof; or

(v) the Board adopts a resolution to the effect that, for purposes hereof, a
Change of Control has occurred.

Notwithstanding the foregoing, the definition of Change of Control for any Award
under the Plan that consists of deferred compensation subject to Section 409A of
the Code shall be deemed modified to the extent necessary to comply with
Section 409A of the Code.

(h) Code: The Internal Revenue Code of 1986, as amended, or any successor
thereto.

(i) Committee: The Compensation Committee of the Board, or any successor thereto
or other committee designated by the Board to assume the obligations of the
Committee hereunder, or if no such committee shall be designated or in office,
the Board.

(j) Company: Far East Energy Corporation, a Nevada corporation.

(k) Covered Employee: An employee of the Company or its Subsidiaries who may be
deemed to be a covered employee within the meaning of Section 162(m) of the
Code.

(l) Disability: Inability to engage in any substantial gainful activity by
reason of a 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. The determination whether a Participant has suffered
a Disability shall be made by the Committee based upon such evidence as it deems
necessary and appropriate. A Participant shall not be considered disabled unless
he or she furnishes such medical or other evidence of the existence of the
Disability as the Committee, in its sole discretion, may require.

(m) Effective Date: The date on which the Plan takes effect, as defined pursuant
to Section 27 of the Plan.

(n) Fair Market Value: On a given date, the arithmetic mean of the high and low
prices of the Shares as reported on such date on the Composite Tape of the
principal national securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for such national
securities exchange on such date, then on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of Securities Dealers
Automated Quotation System (or such market in which such prices are regularly
quoted), or, if there is no market on which the Shares are regularly quoted, the
Fair Market Value shall be the value established by the Committee in good faith.
If no sale of Shares shall have been reported on such Composite Tape or such
national securities exchange on such date or quoted on the National Association
of Securities Dealers Automated Quotation System on such date, then the
immediately preceding date on which sales of the Shares have been so reported or
quoted shall be used.

(o) ISO: An Option that is also an incentive stock option granted pursuant to
Section 7(d) of the Plan.

(p) LSAR: A limited stock appreciation right granted pursuant to Section 8(d) of
the Plan.

(q) Other Stock-Based Awards: Awards granted pursuant to Section 9 of the Plan.

(r) Option: A stock option granted pursuant to Section 7 of the Plan.

(s) Option Price: The purchase price per Share of an Option, as determined
pursuant to Section 7(a) of the Plan.

(t) Participant: An individual who is selected by the Committee to participate
in the Plan pursuant to Section 5 of the Plan.

(u) Performance-Based Awards: Other Stock-Based Awards granted pursuant to
Section 9(b) of the Plan.

(v) Person: As such term is used for purposes of Section 13(d)(3) or 14(d)(2) of
the Act (or any successor section thereto).

(w) Plan: The Far East Energy Corporation 2005 Stock Incentive Plan.

(x) Restricted Stock: Restricted stock granted pursuant to Section 9 of the
Plan.

(y) Restricted Stock Unit: A restricted stock unit representing a right to
acquire a fixed number of Shares at a future date, granted pursuant to Section 9
of the Plan.

(z) Securities Act: The Securities Act of 1933, as amended, or any successor
thereto.

(aa) Shares: Shares of common stock, par value $0.001 per Share, of the Company,
as adjusted pursuant to Section 10 of the Plan.

(bb) Stock Appreciation Right: A stock appreciation right granted pursuant to
Section 8 of the Plan.

(cc) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the
Code (or any successor section thereto).

(dd) Termination of Service: A Participant’s termination of service with the
Company, its Subsidiaries and Affiliates. A Termination of Service of an
employee of the Company or any Subsidiary shall not be deemed to have occurred
in the case of sick leave, military leave or any other leave of absence, in each
case approved by the Committee or in the case of transfers between locations of
the Company or its Subsidiaries. In the case of “specified employees” (as
described in Section 409A of the Code), distributions may not be made before the
date which is six months after the date of termination of service (or, if
earlier, the date of death of the participant). A specified employee is a “key
employee” as defined in Section 416(i) of the Code without regard to Paragraph
(5), but only if the Company has any stock which is publicly traded on an
established securities market or otherwise.

3. Shares Subject to the Plan

The maximum number of Shares with respect to which Awards may be granted under
the Plan shall be 3,500,000 (subject to adjustment in accordance with the
provisions of Section 10 hereof), whether pursuant to ISOs or otherwise. Of that
number, not more than 2,600,000 Shares (subject to adjustment in accordance with
the provisions of Section 10 hereof) will be available for grants under the Plan
of ISOs pursuant to Section 7(d) hereof, and not more than 900,000 Shares
(subject to adjustment in accordance with the provisions of Section 10 hereof)
will be available for grants under the Plan of unrestricted Shares, Restricted
Stock, Restricted Stock Units or any Other Stock-Based Awards pursuant to
Section 9 hereof. The maximum number of Shares with respect to which Awards of
any and all types may be granted during a calendar year to any Participant shall
be limited, in the aggregate, to 1,500,000 (subject to adjustment in accordance
with the provisions of Section 10 hereof). The Shares may consist, in whole or
in part, of authorized and unissued Shares or treasury Shares, including Shares
acquired by purchase in the open market or in private transactions. If any
Awards are forfeited, cancelled, terminated, exchanged or surrendered or such
Award is settled in cash or otherwise terminates without a distribution of
Shares to the Participant, any Shares counted against the number of Shares
reserved and available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, settlement, termination, cancellation, exchange
or surrender, again be available for Awards under the Plan.

4. Administration

(a) The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof. If necessary
to satisfy the requirements of Section 162(m) of the Code and/or Rule 16b-3
promulgated under the Securities Exchange Act of 1934, the Committee shall
consist solely of at least two individuals who are each “non-employee directors”
within the meaning of Rule 16b-3 under the Act (or any successor rule thereto),
“outside directors” within the meaning of Section 162(m) of the Code (or any
successor section thereto) and satisfy all applicable independence requirements
set forth in any applicable stock exchange or market or quotation system in
which the Shares are then traded, listed or quoted. Any action permitted to be
taken by the Committee may be taken by the Board, in its discretion; provided
however that, to the extent required by any stock exchange or market or
quotation system on which the Shares are traded, listed or quoted, any Award
approved by the Board shall also have been approved by a majority of the
Company’s independent directors (within the meaning of such exchange or market
or quotation system). The Committee may also delegate to a committee consisting
of employees of the Company the authority to authorize transfers, establish
terms and conditions upon which transfers may be made and establish classes of
options eligible to transfer options, as well as to make other determinations
with respect to option transfers.

(b) The Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, to make any other
determinations that it deems necessary or desirable for the administration of
the Plan, and to take the following actions, in each case subject to and
consistent with the provisions of the Plan:

(i) to select Participants to whom Awards may be granted;

(ii) to determine the type or types of Awards to be granted to each Participant;

(iii) to determine the type and number of Awards to be granted, the number of
Shares to which an Award may relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, any exercise price, grant
price, or purchase price, and any bases for adjusting such exercise, grant or
purchase price, any restriction or condition, any schedule for lapse of
restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waiver or accelerations thereof,
and waivers of performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;

(iv) to determine whether, to what extent, and under what circumstances an Award
may be settled, or the exercise price of an Award may be paid, in cash, Shares,
other Awards, or other property, or an Award may be cancelled, forfeited,
exchanged, or surrendered;

(v) to prescribe the form of each Award Agreement, which need not be identical
for each Participant;

(vi) to correct any defect or supply any omission or reconcile any inconsistency
in the Plan and to construe and interpret the Plan and any Award, rules and
regulations, Award Agreement, or other instrument hereunder, in each case, in
the manner and to the extent the Committee deems necessary or desirable; and

(vii) to make all other decisions and determinations as may be required under
the terms of the Plan or as the Committee may deem necessary or advisable for
the administration of the Plan.

(c) Any decision of the Committee in the interpretation and administration of
the Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including,
but not limited to, Participants and their beneficiaries or successors).
Determinations made by the Committee under the Plan need not be uniform and may
be made selectively among Participants, whether or not such Participants are
similarly situated.

(d) The Committee shall require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other taxes as a result of
the grant, vesting or the exercise of an Award. With the approval of the
Committee, the Participant may elect to pay a portion or all of such withholding
taxes by (i) delivery of Shares or (ii) having Shares withheld by the Company
from any Shares that would have otherwise been received by the Participant. The
number of Shares so delivered or withheld shall have an aggregate Fair Market
Value on the date of the exercise of an Award sufficient to satisfy the
applicable withholding taxes. In addition, with the approval of the Committee, a
Participant may satisfy any additional tax that the Participant elects to have
the Company withhold by delivering to the Company or its designated
representative Shares already owned by the Participant or, in the case of Shares
acquired through an employee benefit plan sponsored by the Company or its
Subsidiaries, Shares held by the Participant for more than six months.

(e) If the chief executive officer of the Company is a member of the Board, the
Board by specific resolution may constitute such chief executive officer as a
committee of one which shall have the authority to grant Awards of up to an
aggregate of 200,000 Shares (subject to adjustment in accordance with the
provisions of Section 10 hereof) in each calendar year to Participants who are
not subject to the rules promulgated under Section 16 of the Act (or any
successor section thereto) or Covered Employees; provided, however, that such
chief executive officer shall notify the Committee of any such grants made
pursuant to this Section 4.

5. Eligibility

Employees of the Company, its Subsidiaries and Affiliates and members of the
Board, who are from time to time responsible for, or contributes to, the
management, growth and protection of the business of the Company and its
Affiliates, and consultants to the Company and its Subsidiaries, are eligible to
be granted Awards under the Plan. Participants shall be selected from time to
time by the Committee, in its sole discretion, from among those eligible, and
the Committee shall determine, in its sole discretion, the number of Shares to
be covered by the Awards granted to each Participant. Notwithstanding any
provisions of the Plan to the contrary, an Award may be granted to an employee
or consultant, in connection with his or her hiring or retention prior to the
date the employee or consultant first performs services for the Company or a
Subsidiary; provided, however, that any such Award shall not become vested prior
to the date the employee or consultant first performs such services.

6. Limitations

No Award may be granted under the Plan after the tenth anniversary of the
Effective Date, but Awards theretofore granted may extend beyond that date.

7. Terms and Conditions of Options

Options granted under the Plan shall be, as determined by the Committee,
non-qualified, incentive or other stock options for federal income tax purposes,
as evidenced by the related Award Agreements, and shall be subject to the
foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:

(a) Option Price. The Option Price per Share shall be determined by the
Committee, but shall not be less than 100% of the Fair Market Value of the
Shares on the date an Option is granted.

(b) Exercisability. Options granted under the Plan shall be exercisable at such
time and upon such terms and conditions as may be determined by the Committee,
but in no event shall an Option be exercisable more than ten years after the
date it is granted.

(c) Exercise of Options. Except as otherwise provided in the Plan or in an Award
Agreement, an Option may be exercised for all, or from time to time any part, of
the Shares for which it is then exercisable. For purposes of Section 7 of the
Plan, the exercise date shall be the date the Company receives a written notice
of exercise in accordance with the terms of the Award Agreement and full payment
for the Shares with respect to which the Option is exercised, together with
(i) any other agreements required by the terms of the Plan and/or Award
Agreement or as required by the Committee, and (ii) payment by the Participant
of all payroll, withholding or income taxes incurred in connection with such
Option exercise (or arrangements for the collection or payment of such tax
satisfactory to the Committee are made). The purchase price for the Shares as to
which an Option is exercised shall be paid to the Company in full at the time of
exercise at the election of the Participant (A) in cash, (B) in Shares having a
Fair Market Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that, such Shares have been held by the Participant for no
less than six months, (C) partly in cash and partly in such Shares, (D) through
the delivery of irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the aggregate Option Price for the Shares being
purchased, or (E) through such other means as shall be prescribed in the Award
Agreement.

(d) ISOs. The Committee may grant Options under the Plan that are intended to be
ISOs. Such ISOs shall comply with the requirements of Section 422 of the Code
(or any successor section thereto). Unless otherwise permitted under Section 422
of the Code (or any successor section thereto), no ISO may be granted to any
Participant who at the time of such grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company or of any
Subsidiary, unless (i) the Option Price for such ISO is at least 110% of the
Fair Market Value of a Share on the date the ISO is granted and (ii) the date on
which such ISO terminates is a date not later than the day preceding the fifth
anniversary of the date on which the ISO is granted. Any Participant who
disposes of Shares acquired upon the exercise of an ISO either (i) within two
years after the date of grant of such ISO or (ii) within one year after the
transfer of such Shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition. Notwithstanding
Section 5 of the Plan, ISOs may be granted solely to employees of the Company
and its Subsidiaries.

(e) Exercisability Upon Termination of Service by Death or Disability. Upon a
Termination of Service by reason of death or Disability, the Option may be
exercised within 180 days (or such other period of time not exceeding one year
as is determined by the Committee at the time of granting the Option) following
the date of death or Termination of Service due to Disability (subject to any
earlier termination of the Option as provided by its terms), by the Participant
in the case of Disability, or in the case of death, by the Participant’s estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but in any case only to the extent the Participant was entitled to
exercise the Option on the date of his or her Termination of Service by death or
Disability. To the extent that he or she was not entitled to exercise such
Option at the date of his or her Termination of Service by death or Disability,
or if he or she doe not exercise such Option (which he or she was entitled to
exercise) within the time specified herein, the Option shall terminate.
Notwithstanding anything to the contrary herein, the Committee may at any time
and from time to time prior to the termination of an Option, with the consent of
the Participant, extend the period of time during which the Participant may
exercise his or her Option following the date of Termination of Service due to
death or Disability; provided, however, that the maximum period of time during
which an Option shall be exercisable following the date of Termination of
Service due to death or Disability shall not exceed the original term of such
Option as set forth in the Award Agreement and that notwithstanding any
extension of time during which an Option may be exercised, such Option, unless
otherwise amended by the Committee, shall only be exercisable to the extent the
Participant was entitled to exercise the Option on the date of Termination of
Service due to death or Disability. Any such extension shall be designed to
conform to the requirements of Section 409A of the Code so as to avoid the
imposition of the additional income tax.

(f) Effect of Other Termination of Service. Upon a Termination of Service for
any reason (other than death or Disability), an unexercised Option may
thereafter be exercised during the period ending 90 days after the date of such
Termination of Service, but only to the extent to which such Option was vested
and exercisable at the time of such Termination of Service. Notwithstanding the
foregoing, the Committee may, in its sole discretion, either by prior written
agreement with the Participant or upon the occurrence of a Termination of
Service, accelerate the vesting of unvested Options held by a Participant if
such Participant’s Termination of Service is without “cause” (as such term is
defined by the Committee in its sole discretion) by the Company.

(g) Nontransferability of Stock Options. Except as otherwise provided in this
Section 7(g), an Option shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution, and during the lifetime
of a Participant an Option shall be exercisable only by the Participant. An
Option exercisable after the death of a Participant or a transferee pursuant to
the following sentence may be exercised by the legatees, personal
representatives or distributees of the Participant or such transferee. The
Committee may, in its discretion, authorize all or a portion of the Options
previously granted or to be granted to a Participant, other than ISOs, to be on
terms which permit irrevocable transfer for no consideration by such Participant
to any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, of the Participant, any trust in which these persons have more
than 50% of the beneficial interest, any foundation in which these persons (or
the Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than 50% of the voting interests
(“Eligible Transferees”), provided that (i) the Award Agreement pursuant to
which such options are granted must be approved by the Committee, and must
expressly provide for transferability in a manner consistent with this Section
7(g) and (ii) subsequent transfers of transferred Options shall be prohibited
except those in accordance with the first sentence of this Section 7(g). The
Committee may, in its discretion, amend the definition of Eligible Transferees
to conform to the coverage rules of Form S-8 under the Securities Act (or any
comparable or successor registration statement) from time to time in effect.
Following transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer. The
events of Termination of Service of Sections 7(e) and 7(f) hereof shall continue
to be applied with respect to the original Participant, following which the
options shall be exercisable by the transferee only to the extent, and for the
periods specified, in Sections 7(e) and 7(f).

8. Terms and Conditions of Stock Appreciation Rights

(a) Grants. The Committee also may grant a Stock Appreciation Right, independent
of an Option, with respect to Shares that are traded or listed on an established
stock exchange or market or quotation system.

(b) Terms. The exercise price per Share of a Stock Appreciation Right shall be
an amount determined by the Committee but in no event shall such amount be less
than the greater of (i) the Fair Market Value of a Share on the date the Stock
Appreciation Right is granted and (ii) an amount permitted by applicable laws,
rules, by-laws or policies of regulatory authorities or stock exchanges or
market or quotation systems. Each Stock Appreciation Right granted independent
of an Option shall entitle a Participant to exercise the Stock Appreciation
Right in whole or in part and, upon such exercise, to receive from the Company
an amount equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Share over (B) the exercise price per Share, times (ii) the number
of Shares covered by the portion of the Stock Appreciation Right so exercised.
The date a notice of exercise is received by the Company shall be the exercise
date. Payment shall be made in Shares. Stock Appreciation Rights may be
exercised from time to time upon actual receipt by the Company of written notice
of exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised.

(c) Limitations. The Committee may impose, in its discretion, such conditions
upon the exercisability or transferability of Stock Appreciation Rights as it
may deem fit.

(d) Limited Stock Appreciation Rights. The Committee may grant LSARs that are
exercisable upon the occurrence of specified contingent events. Such LSARs may
provide for a different method of determining appreciation, may specify that
payment will be made only in cash as soon as practicable after the occurrence of
the specified contingent event (but not later than March 15 of the year
following the year in which such contingent event occurs) and may provide that
any related Awards are not exercisable while such LSARs are exercisable. Unless
the context otherwise requires, whenever the term “Stock Appreciation Right” is
used in the Plan, such term shall include LSARs.

9. Other Stock-Based Awards

(a) Generally. The Committee, in its sole discretion, may grant Awards of
unrestricted Shares, Restricted Stock, Restricted Stock Units and other Awards
that are valued in whole or in part by reference to, or are otherwise based on
the Fair Market Value of, Shares (collectively, “Other Stock-Based Awards”).
Such Other Stock-Based Awards shall be in such form, and dependent on such
conditions, as the Committee shall determine, including, without limitation, the
right to receive one or more Shares (or the equivalent cash value of such
Shares) upon the completion of a specified period of service, the occurrence of
an event and/or the attainment of performance objectives. Other Stock-Based
Awards may be granted alone or in addition to any other Awards granted under the
Plan. Subject to the provisions of the Plan, the Committee shall determine
(i) to whom and when Other Stock-Based Awards will be made, (ii) the number of
Shares to be awarded under (or otherwise related to) such Other Stock-Based
Awards, (iii) whether such Other Stock-Based Awards shall be settled in cash,
Shares or a combination of cash and Shares, and (iv) all other terms and
conditions of such Awards (including, without limitation, the vesting provisions
thereof).

(b) Performance-Based Awards. Notwithstanding anything to the contrary herein,
certain Other Stock-Based Awards granted under this Section 9 may be granted to
Covered Employees in a manner that will enable the Company to deduct any amount
paid by the Company under Section 162(m) of the Code (or any successor section
thereto) (“Performance-Based Awards”). A Covered Employee’s Performance-Based
Award shall be determined based on the attainment of one or more
pre-established, objective performance goals established in writing by the
Committee, for a performance period established by the Committee, (i) at a time
when the outcome for that performance period is substantially uncertain and
(ii) not later than 90 days after the commencement of the performance period to
which the performance goal relates, but in no event after 25% of the relevant
performance period has elapsed. The performance goals shall be based upon one or
more of the following criteria: (i) earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization); (ii) net
income; (iii) operating income; (iv) earnings per Share; (v) book value per
Share; (vi) return on stockholders’ equity; (vii) expense management;
(viii) return on investment before or after the cost of capital;
(ix) improvements in capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvement of profit margins;
(xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs;
(xvi) cash flow; (xvii) working capital; (xviii) changes in net assets (whether
or not multiplied by a constant percentage intended to represent the cost of
capital); and (xix) return on assets. The foregoing criteria may relate to the
Company, one or more of its Affiliates, Subsidiaries or one or more of its
divisions, units, minority investments, partnerships, joint ventures, product
lines or products or any combination of the foregoing, and may be applied on an
absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to extraordinary items or accounting changes. The maximum amount of a
Performance-Based Award to any Covered Employee with respect to a fiscal year of
the Company shall be $1,000,000. The Committee shall determine whether, with
respect to a performance period, the applicable performance goals have been met
with respect to a given Covered Employee and, if they have, to so certify and
ascertain the amount of the applicable Performance-Based Award. No
Performance-Based Awards will be paid for such performance period until such
certification is made by the Committee. The amount of the Performance-Based
Award actually paid to a given Covered Employee may be less than the amount
determined by the applicable performance goal formula, at the discretion of the
Committee. The amount of the Performance-Based Award determined by the Committee
for a performance period shall be paid to the Covered Employee at such time as
determined by the Committee in its sole discretion after the end of such
performance period; provided, however, that a Covered Employee may, if and to
the extent permitted by the Committee and consistent with the provisions of
Sections 162(m) and 409A of the Code, elect to defer payment of a
Performance-Based Award.

(c) Terms and Conditions of Restricted Stock and Restricted Stock Units.

(i) Grant. Each grant of Restricted Stock and Restricted Stock Units shall be
evidenced by an Award Agreement in form approved by the Committee. The vesting
of a Restricted Stock Award or Restricted Stock Unit granted under the Plan may
be conditioned upon the completion of a specified period of employment with the
Company or a Subsidiary, upon attainment of specified performance goals, and/or
upon such other criteria as the Committee may determine in its sole discretion.

(ii) Receipt of Restricted Stock. As soon as practicable after an Award of
Restricted Stock has been made to a Participant, there shall be registered in
the name of such Participant or of a nominee the number of Shares of Restricted
Stock so awarded. Except as provided in the applicable Award Agreement, no
Shares of Restricted Stock may be assigned, transferred or otherwise encumbered
or disposed of by the Participant until such Shares have vested in accordance
with the terms of such Award Agreement. If and to the extent that the applicable
Award Agreement so provides, a Participant shall have the right to vote and
receive dividends on the Shares of Restricted Stock granted to him or her under
the Plan. Unless otherwise provided in the applicable Award Agreement, any
Shares received as a dividend on such Restricted Stock or in connection with a
stock split of the Shares of Restricted Stock shall be subject to the same
restrictions as the Restricted Stock.

(iii) Payments Pursuant to Restricted Stock Units. Restricted Stock Units may
not be assigned, transferred or otherwise encumbered or disposed of by the
Participant until such Restricted Stock Units have vested in accordance with the
terms of the applicable Award Agreement. Upon the vesting of the Restricted
Stock Unit, certificates for Shares shall be delivered to the Participant or his
legal representative on the last business day of the calendar quarter in which
such vesting event occurs or as soon thereafter as practicable (but not later
than March 15 of the calendar year following the year in which vesting occurs),
in a number equal to the Shares covered by the Restricted Stock Unit.

(iv) Effect of Termination of Service. Upon a Termination of Service for any
reason, the Participant shall only be entitled to the Restricted Stock or
Restricted Stock Units vested at the time of such Termination of Service, and
the Participant’s unvested Restricted Stock and Restricted Stock Units shall be
forfeited. Notwithstanding the foregoing, the Committee may, in its sole
discretion, either by prior written agreement with the Participant or upon the
occurrence of a Termination of Service, accelerate the vesting of unvested
Restricted Stock or Restricted Stock Units held by the Participant if such
Participant’s Termination of Service is without “cause” (as such term is defined
by the Committee in its sole discretion) by the Company.

10. Adjustments Upon Certain Events

Notwithstanding any other provisions in the Plan to the contrary, the following
provisions shall apply to all Awards granted under the Plan:

(a) Generally. Subject to any required action by the stockholders of the
Company, the number and type of Shares covered by each outstanding Award, and
the number and type of Shares which have been authorized for issuance under the
Plan but as to which no Awards have yet been granted or which have been returned
to the Plan upon cancellation, expiration or forfeiture of an Award, as well as
the exercise or purchase price per Share, as applicable, covered by outstanding
Awards, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split or
combination or the payment of a stock dividend (but only on the Company’s common
stock) or reclassification of the Company’s common stock or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company (other than increases pursuant to the issuance of
Other Stock-Based Awards under Section 9 of the Plan); provided, however, that
the conversion of any convertible securities of the Company shall not be deemed
to have been effected without the receipt of consideration. Any such adjustment
shall be determined in good faith by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, and the Committee’s determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to the Plan or an Award.

(b) Change of Control. In the event of a Change of Control, if the Committee
makes no provision for the assumption of outstanding Awards by the successor
corporation, then the Award Agreement shall provide whether (i) none, all or a
portion of each Award shall vest, (ii) any Option shall terminate as of a date
fixed by the Committee which is at least 30 days after the notice thereof to the
Participant and shall give each Participant the right to exercise his or her
Option as to all or any part of the Shares, including Shares as to which the
Option would not otherwise be exercisable, or (iii) cause any Award outstanding
as of the effective date of any such event to be cancelled in consideration of a
cash payment or grant of an alternative option or award (whether by the Company
or any entity that is a party to the transaction), or a combination thereof, to
the holder of the cancelled Award, provided that such payment and/or grant are
substantially equivalent in value to the fair market value of the cancelled
Award as determined by the Committee.

11. “Lockup” Agreement

The Committee may in its discretion specify upon granting an Award that upon
request of the Company or the underwriters managing any underwritten offering of
the Company’s securities, the Participant shall agree in writing that for a
period of time (not to exceed 180 days) from the effective date of any
registration of securities of the Company, the Participant will not sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any Shares issued pursuant to the exercise of such Award, without the
prior written consent of the Company or such underwriters, as the case may be.

12. Limitation of Liability

Each member of the Committee shall be entitled to, in good faith, rely or act
upon any report or other information furnished to him or her by any officer or
other employee of the Company or any Subsidiary or Affiliate, the Company’s
independent certified public accountants, or other professional retained by the
Company to assist in the administration of the Plan. No member of the Committee,
nor any officer or employee of the Company acting on behalf of the Committee,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Committee and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or interpretation.

13. Amendments or Termination

(a) The Board or the Committee may terminate or discontinue the Plan at any
time. The Board or the Committee may amend, modify or alter the Plan at any
time, but no amendment, modification or alteration shall be made which,
(a) without the approval of the stockholders of the Company, would (except as is
provided in Section 10 of the Plan), increase the total number of Shares
reserved for the purposes of the Plan, change the maximum number of Shares for
which Awards may be granted to any Participant or modify the Plan in any other
way to the extent stockholder approval is required by the rules of any stock
exchange or market or quotation system on which the Shares are traded, listed or
quoted, or (b) without the consent of a Participant, would impair any of the
rights or obligations under any Award theretofore granted to such Participant
under the Plan; provided, however, that the Board or the Committee may amend or
modify the Plan in such manner as it deems necessary to permit the granting of
Awards meeting the requirements of the Code (including, but not limited to,
Sections 162(m) to preserve the deductibility of Awards and 409A to comply with
its requirements so as to ensure any amounts paid or payable hereunder are not
subject to the additional 20% income tax thereunder) or other applicable laws.
Notwithstanding anything to the contrary herein, neither the Committee nor the
Board may amend, alter or discontinue the provisions relating to Section 10(b)
of the Plan after the occurrence of a Change of Control.

(b) Except as provided in Section 10 of the Plan or expressly provided under the
Plan, any amendment, modification, termination or discontinuance of the Plan
shall not affect Awards previously granted, and such Awards shall remain in full
force and effect as if the Plan had not been amended, modified, terminated or
discontinued, unless mutually agreed otherwise between the Participant and the
Company, which agreement shall be in writing and signed by the Participant and
the Company.

14. International Participants

The Committee may delegate to another committee, as it may appoint, the
authority to take any action consistent with the terms of the Plan, either
before or after an Award has been granted, which such other committee deems
necessary or advisable to comply with any government laws or regulatory
requirements of a foreign country, including but not limited to, modifying or
amending the terms and conditions governing any Awards, or establishing any
local country plans as sub-plans to the Plan. In addition, under all
circumstances, the Committee may make non-substantive administrative changes to
the Plan as to conform with or take advantage of governmental requirements,
statutes or regulations.

15. No Right to Continued Employment or Service

Neither the Plan nor the granting of an Award under the Plan shall impose any
obligation on the Company, a Subsidiary or any Affiliate to continue the
employment or service of a Participant or lessen or affect the Company’s,
Subsidiary’s or Affiliate’s right to terminate the employment or service of such
Participant.

16. Not Compensation for Benefit Plans

No Award payable under the Plan shall be deemed salary or compensation for the
purpose of computing benefits under any benefit plan or other arrangement of the
Company for the benefit of its employees or directors unless the Company shall
determine otherwise.

17. Unfunded Status of Awards

The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award shall give any
such Participant any rights that are greater than those of a general creditor of
the Company; provided, however, that the Committee may authorize the creation of
trusts or make other arrangements to meet the Company’s obligations under the
Plan to deliver cash, Shares, other Awards, or other property pursuant to any
Award, which trusts or other arrangements shall be consistent with the
“unfunded” status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant.

18. Nonexclusivity of the Plan

Neither the adoption of the Plan by the Board nor its submission to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of options
and other awards otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.

19. Successors and Assigns

The Plan shall be binding on all successors and assigns of the Company and a
Participant, including, without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

20. Nontransferability of Awards

Except as provided in Section 7(g) of the Plan, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. During the lifetime of a Participant, an Award
shall be exercisable only by such Participant. An Award exercisable after the
death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Notwithstanding anything to
the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 20 or any part thereof (except with respect to
ISOs) to the extent that this Section 20 or any part thereof is not required
under the rules promulgated under any law, rule or regulation applicable to the
Company.

21. No Rights to Awards, No Stockholder Rights

No Participant or employee shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Participants
and employees. No Award shall confer on any Participant any rights to dividends
or other rights of a stockholder with respect to Shares subject to an Award
unless and until Shares are duly issued or transferred to the Participant in
accordance with the terms of the Award and, if applicable, the satisfaction of
any other conditions imposed by the Committee pursuant to the Plan.

22. No Fractional Shares

No fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, including on account of any action under Section 10 of the Plan. In the
case of Awards to Participants, the Committee shall determine, in its
discretion, whether cash, other Awards, scrip certificates (which shall be in a
form and have such terms and conditions as the Committee in its discretion shall
prescribe) or other property shall be issued or paid in lieu of such fractional
Shares or whether such fractional Shares or any rights thereto shall be
forfeited or otherwise eliminated.

23. Compliance with Legal and Trading Requirements

The Plan, the granting and exercising of Awards thereunder, and the other
obligations of the Company under the Plan and any Award Agreement, shall be
subject to all applicable federal, state and foreign laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required. All certificates for Shares delivered under the Plan pursuant
to any Award shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange or market or quotation system upon which the Shares are then listed,
traded or quoted, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions. No Award granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Committee in its sole
discretion has determined that any such offer, if made, would comply with all
applicable requirements of the U.S. federal securities laws and any other laws
to which such offer, if made, would be subject. The Company, in its discretion,
may postpone the issuance or delivery of Shares under any Award until completion
of such stock exchange or market or quotation system listing or registration or
qualification of such Shares or other required action under any state, federal
or foreign law, rule or regulation as the Company may consider appropriate,
including the Securities Act and the Act, and may require any Participant to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Shares in compliance
with applicable laws, rules and regulations. No provisions of the Plan shall be
interpreted or construed to obligate the Company to register any Shares under
federal, state or foreign law.

24. Severability

If any provision of the Plan is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.

25. Choice of Law

The Plan and all Award Agreements shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts made and
to be performed in the State of Texas without regard to conflict of laws
principles.

26. Conflict

To the extent the provisions of the Plan conflicts with the terms and conditions
of any written agreement between the Company and a Participant, the terms and
conditions of such agreement shall control.

27. Effectiveness of the Plan; Term

The Plan shall be effective upon its approval by the stockholders at the 2005
Annual Meeting of stockholders of the Company. The Plan shall continue in effect
for a term of ten (10) years from the Effective Date unless sooner terminated
under Section 13 of the Plan.