Exhibit 10.3
EAGLE MATERIALS INC.
INCENTIVE PLAN
     1. Plan. This Eagle Materials Inc. Incentive Plan (the “Plan”) constitutes
an amendment and restatement in its entirety of the Centex Construction
Products, Inc. Incentive Plan originally effective January 8, 2004, as
thereafter amended (the “Existing Plan”). The Existing Plan was a combined
amendment and restatement of the Centex Construction Products, Inc. Amended and
Restated Stock Option Plan and the Centex Construction Products, Inc. 2000 Stock
Option Plan (the “Prior Plans”) which were adopted by the Corporation to reward
certain key Employees of the Corporation and its Affiliates and Nonemployee
Directors of the Corporation by enabling them to acquire shares of Common Stock
of the Corporation. The number of shares referenced throughout the Plan has been
adjusted, effective on the 24th day of February, 2006, to reflect the
Corporation’s 3-for-1 stock split in the form of a 200% stock dividend that was
payable to the Corporation’s shareholders on February 24, 2006. The Plan has
also been amended to reflect the reclassification of the Corporation’s Class A
and Class B common stock into a single new class of Common Stock as approved by
the Corporation’s shareholders on April 11, 2006.
     2. Objectives. The purpose of this Plan is to further the interests of the
Corporation and its shareholders by providing incentives in the form of Awards
to key Employees and Nonemployee Directors who can contribute materially to the
success and profitability of the Corporation and its Affiliates. Such Awards
will recognize and reward outstanding performances and individual contributions
and give Participants in the Plan an interest in the Corporation parallel to
that of the shareholders, thus enhancing the proprietary and personal interest
of such Participants in the Corporation’s continued success and progress. This
Plan will also enable the Corporation and its Affiliates to attract and retain
such Employees and Nonemployee Directors.
     3. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:
          “Affiliate” means a Subsidiary or Joint Venture.
          “Authorized Officer” means the Chief Executive Officer of the
Corporation (or any other senior officer of the Corporation to whom he or she
shall delegate the authority to execute any Award Agreement, where applicable).
          “Award” means an Employee Award or a Director Award.
          “Award Agreement” means a written agreement setting forth the terms,
conditions and limitations applicable to an Award, to the extent the Committee
determines such agreement is necessary.
          “Board” means the Board of Directors of the Corporation.
          “Cash Award” means an award denominated in cash.
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time.
          “Committee” means the independent Compensation Committee of the Board
as is designated by the Board to administer the Plan.

 

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          “Common Stock” means the Common Stock, par value $.01 per share, of
Eagle Materials Inc.
          “Corporation” means Eagle Materials Inc., a Delaware corporation,
formerly known as Centex Construction Products, Inc., or any successor thereto.
          “Director” means an individual who is a member of the Board.
          “Director Award” means any Nonqualified Options or Stock Award
granted, whether singly, in combination or in tandem, to a Participant who is a
Nonemployee Director pursuant to such applicable terms, conditions and
limitations as the Committee may establish in order to fulfill the objectives of
the Plan.
          “Disability” means a disability that renders the Participant unable to
engage in any occupation in accordance with the terms of the Long Term
Disability Plan of Eagle Materials Inc.
          “Dividend Equivalents” means, with respect to Stock Units or shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.
          “Employee” means an employee of the Corporation or any of its
Affiliates and an individual who has agreed to become an Employee of the
Corporation or any of its Affiliates and actually becomes such an Employee
within the following six months.
          “Employee Award” means any Option, SAR, Stock Award, Cash Award, or
Performance Award granted, whether singly, in combination or in tandem, to a
Participant who is an Employee pursuant to such applicable terms, conditions and
limitations (including treatment as a Performance Award) as the Committee may
establish in order to fulfill the objectives of the Plan.
          “Employee Director” means an individual serving as a member of the
Board who is an Employee of the Corporation or any of its Affiliates.
          “Equity Award” means any Option, SAR, Stock Award, or Performance
Award (other than a Performance Award denominated in cash) granted to a
Participant under the Plan.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Fair Market Value” of a share of Common Stock means, as of a
particular date, (i) (A) if Common Stock is listed on a national securities
exchange, the mean between the highest and lowest sales price per share of the
Common Stock on the consolidated transaction reporting system for the principal
national securities exchange on which shares of Common Stock are listed on that
date, or, if there shall have been no such sale so reported on that date, on the
last preceding date on which such a sale was so reported, or, at the discretion
of the Committee, the price prevailing on the exchange at the time of exercise,
(B) the mean between the highest and lowest sales price per share of such Common
Stock reported on the consolidated transaction reporting system for The Nasdaq
Stock Market, Inc. or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was reported, (C) if
Common Stock is not so listed or quoted, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available, as
reported by The Nasdaq Stock Market, Inc., or, if not reported by The Nasdaq
Stock Market, Inc., by the National Quotation Bureau Incorporated or (D) if

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Common Stock is not publicly traded, the most recent value determined by an
independent appraiser appointed by the Corporation for such purpose, or (ii) if
applicable, the price per share as determined in accordance with the procedures
of a third party administrator retained by the Corporation to administer the
Plan.
          “Grant Date” means the date an Award is granted to a Participant
pursuant to the Plan. The Grant Date for a substituted award is the Grant Date
of the original award.
          “Grant Price” means the price at which a Participant may exercise his
or her right to receive cash or Common Stock, as applicable, under the terms of
an Award.
          “Incentive Stock Option” means an Option that is intended to comply
with the requirements set forth in Section 422 of the Code.
          “Joint Venture” means any joint venture or partnership in which the
Corporation has at least 50% ownership, voting, capital or profit interests (in
whatever form) and which is a subsidiary of the Corporation within the meaning
of the Securities Act of 1933, as amended.
          “Non-Employee Director” means an individual serving as a member of the
Board who is not an Employee of the Corporation or any of its Affiliates.
          “Non-Qualified Stock Option” means an Option that is not an Incentive
Stock Option.
          “Option” means a right to purchase a specified number of shares of
Common Stock at a specified Grant Price, which may be an Incentive Stock Option
or a Nonqualified Stock Option.
          “Participant” means an Employee or Nonemployee Director to whom an
Award has been granted under this Plan.
          “Performance Award” means an Award made pursuant to this Plan that is
subject to the attainment in the future of one or more Performance Goals.
          “Performance Goal” means a standard established by the Committee, to
determine in whole or in part whether a Qualified Performance Award shall be
earned.
          “Qualified Performance Award” means a Performance Award made to a
Participant who is an Employee that is intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as described in
Section 8(a)(v)(B) of the Plan.
          “Restricted Stock” means Common Stock that is restricted or subject to
forfeiture provisions.
          “Restriction Period” means a period of time beginning as of the Grant
Date of an Award of Restricted Stock and ending as of the date upon which the
Common Stock subject to such Award is no longer restricted or subject to
forfeiture provisions.
          “Stock Appreciation Right” or “SAR” means a right to receive a
payment, in cash, Common Stock or a combination of cash and Common Stock, equal
to the excess of the Fair Market Value or other specified valuation of a
specified number of shares of Common Stock on the date the right is exercised
over a specified Grant Price, in each case, as determined by the Committee.

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          “Stock Award” means an Award in the form of shares of Common Stock or
Stock Units, including an award of Restricted Stock.
          “Stock Unit” means a unit evidencing the right to receive in specified
circumstances one share of Common Stock (as determined by the Committee) granted
to either an Employee or a Nonemployee Director.
          “Subsidiary” means any corporation, partnership, limited liability
company or other business venture or entity of which the Corporation directly or
indirectly owns 50% or more of the ownership interest in such entity, as
determined by the Committee in its sole and absolute discretion (such
determination by the Committee to be conclusively established by the grant of an
Award by the Committee to an officer or employee of such an entity).
     4. Eligibility.

  (a)   Employees. Employees eligible for the grant of Employee Awards under
this Plan are those Employee Directors and Employees who hold positions of
responsibility and whose performance, in the judgment of the Committee, can have
a significant effect on the success of the Corporation and its Affiliates.    
(b)   Directors. Members of the Board eligible for the grant of Director Awards
under this Plan are those who are Nonemployee Directors.

     5. Common Stock Available for Awards. Subject to the provisions of
paragraph 16 hereof, there shall be available for Awards under this Plan granted
or payable wholly or partly in Common Stock (including rights or Options that
may be exercised for or settled in Common Stock) an aggregate of 4,484,634
shares of Common Stock as of the close of business on April 11, 2006. This
number of shares of Common Stock represents the number of shares of Common Stock
originally approved by the shareholders on January 8, 2004 (1,685,954 less the
number of shares issued pursuant to outstanding Awards after the date of Board
approval of the Plan and before shareholder approval of the Plan), as adjusted
to reflect: (i) the special cash dividend of $6.00 per share paid on January 30,
2004; (ii) the 3-for-1 stock split in the form of a stock dividend paid on
February 25, 2006; and (iii) the number of shares issued on or after January 8,
2004 through April 11, 2006 under the terms of any Awards made under the Plan or
Prior Plans. All of the shares authorized for issuance may be issued pursuant to
Incentive Options, Nonqualified Stock Options or any combination thereof. All
shares are available for issuance pursuant to Stock Awards (including Stock
Awards that are granted as Performance Awards).
          The number of shares of Common Stock that are the subject of Awards
under this Plan that are forfeited or terminated, expire unexercised, are
settled in cash in lieu of Common Stock or otherwise in a manner such that all
or some of the shares covered by an Award are not issued to a Participant or are
exchanged for Awards that do not involve Common Stock, shall not be counted
against the aggregate plan maximum or any sublimit set forth above and shall
again immediately become available for Awards hereunder. If the tax withholding
obligation resulting from the settlement of any Award is satisfied by
withholding shares of Common Stock, only the number of shares of Common Stock
issued net of the shares of Common Stock withheld shall be deemed delivered for
purposes of determining usage of shares against the maximum number of shares of
Common Stock available for delivery under the Plan or any sublimit set forth
above. Shares of Common Stock delivered under the Plan as an Award or in
settlement of an Award issued or made (a) upon the assumption, substitution,
conversion or replacement of outstanding awards under a plan or arrangement of
an entity acquired in a merger or other acquisition or (b) as a post-transaction
grant under such a plan or arrangement of an acquired

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entity shall not reduce or be counted against the maximum number of shares of
Common Stock available for delivery under the Plan, to the extent that the
exemption for transactions in connection with mergers acquisitions from the
shareholder approval requirements of the New York Stock Exchange for equity
compensation plans applies. The Committee may from time to time adopt and
observe such rules and procedures concerning the counting of shares against the
Plan maximum or any sublimit as it may deem appropriate, including rules more
restrictive than those set forth above to the extent necessary to satisfy the
requirements of any national stock exchange on which the Common Stock is listed
or any applicable regulatory requirement. The Board and the appropriate officers
of the Corporation are authorized to take from time to time whatever actions are
necessary, and to file any required documents with governmental authorities,
stock exchanges and transaction reporting systems to ensure that shares of
Common Stock are available for issuance pursuant to Awards.
     6. Administration.

  (a)   This Plan shall be administered by the Committee except as otherwise
provided herein.     (b)   Subject to the provisions hereof, the Committee shall
have full and exclusive power and authority to administer this Plan and to take
all actions that are specifically contemplated hereby or are necessary or
appropriate in connection with the administration hereof. The Committee shall
also have full and exclusive power to interpret this Plan and to adopt such
rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Corporation and in keeping with the objectives of this Plan.
The Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions applicable to an
Award, waive any restriction or other provision of this Plan (insofar as such
provision relates to Awards) or an Award or otherwise amend or modify an Award
in any manner that is either (i) not adverse to the Participant to whom such
Award was granted or (ii) consented to by such Participant. Notwithstanding
anything herein to the contrary, without the prior approval of the Corporation’s
stockholders, Options issued under the Plan will not be repriced, replaced or
regranted through cancellation or by decreasing the exercise price of a
previously granted Option. The Committee may make an Award to an individual who
it expects to become an Employee of the Corporation or any of its Affiliates
within the next six months, with such award being subject to the individual’s
actually becoming an Employee within such time period, and subject to such other
terms and conditions as may be established by the Committee. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in this
Plan or in any Award in the manner and to the extent the Committee deems
necessary or desirable to further the Plan purposes. Any decision of the
Committee, with respect to Awards, in the interpretation and administration of
this Plan shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned.     (c)   No member of the
Committee or officer of the Corporation to whom the Committee has delegated
authority in accordance with the provisions of paragraph 7 of this Plan shall be
liable for anything done or omitted to be done by him or her, by any member of
the Committee or by any officer of the Corporation in

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      connection with the performance of any duties under this Plan, except for
his or her own willful misconduct or as expressly provided by statute.

     7. Delegation of Authority. Following the authorization of a pool of cash
or shares of Common Stock to be available for Awards, the Committee may
authorize the Chief Executive Officer of the Corporation or a committee
consisting solely of members of the Board to grant individual Employee Awards
from such pool pursuant to such conditions or limitations as the Committee may
establish. The Committee may also delegate to the Chief Executive Officer and to
other executive officers of the Corporation its administrative duties under this
Plan (excluding its granting authority) pursuant to such conditions or
limitations as the Committee may establish. The Committee may engage or
authorize the engagement of a third party administrator to carry out
administrative functions under the Plan.
     8. Awards.

  (a)   The Committee shall determine the type or types of Awards to be made
under this Plan and shall designate from time to time the Participants who are
to be the recipients of such Awards. Each Award may, in the discretion of the
Committee, be embodied in an Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its sole
discretion and, if required by the Committee, shall be signed by the Participant
to whom the Award is granted and by an Authorized Officer for and on behalf of
the Corporation. Awards may consist of those listed in this paragraph 8(a) and
may be granted singly, in combination or in tandem. Awards may also be granted
in combination or in tandem with, in replacement of (subject to paragraph 14),
or as alternatives to, grants or rights under this Plan or any other plan of the
Corporation or any of its Affiliates, including the plan of any acquired entity.
An Award may provide for the grant or issuance of additional, replacement or
alternative Awards upon the occurrence of specified events. All or part of an
Award may be subject to conditions established by the Committee, which may
include, but are not limited to, continuous service with the Corporation and its
Affiliates, achievement of specific business objectives, increases in specified
indices, attainment of specified growth rates, as referenced in clause
(v) below, and other comparable measurements of performance. Upon the
termination of employment by a Participant who is an Employee, any unexercised,
deferred, unvested or unpaid Employee Awards shall be treated as set forth in
the applicable Award Agreement or as otherwise specified by the Committee.

  (i)   Option. An Employee Award or Director Award may be in the form of an
Option; provided that Options granted as Director Awards are not Incentive Stock
Options. The Grant Price of an Option shall be not less than the Fair Market
Value of Common Stock subject to such Option on the Grant Date. Notwithstanding
anything contrary contained in this Plan, in no event shall the term of the
Option extend more than ten (10) years after the Grant Date. Options may not
include provisions that “reload” the option upon exercise. Subject to the
foregoing provisions, the terms, conditions and limitations applicable to any
Options awarded to Participants pursuant to this Plan, including the Grant
Price, the term of the Options, the number of shares subject to the Option and
the date or dates upon which they become exercisable, shall be determined by the
Committee.

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  (ii)   Stock Appreciation Rights. An Employee Award may be in the form of an
SAR. On the Grant Date, the Grant Price of an SAR shall be not less than the
Fair Market Value of Common Stock subject to such SAR. The holder of a tandem
SAR may elect to exercise either the option or the SAR, but not both. The
exercise period for an SAR shall extend no more than 10 years after the Grant
Date. Subject to the foregoing provisions, the terms, conditions and limitations
applicable to any SARs awarded pursuant to this Plan, including the Grant Price,
the term of any SARs and the date or dates upon which they become exercisable,
shall be determined by the Committee.     (iii)   Stock Award. An Employee Award
or Director Award may be in the form of a Stock Award. The terms, conditions and
limitations applicable to any Stock Awards granted to Participants pursuant to
this Plan shall be determined by the Committee; provided that any Stock Award
granted as an Employee Award which is not a Performance Award shall have a
minimum Restriction Period of three years from the Grant Date, provided that
(i) the Committee may provide for earlier vesting upon the occurrence of certain
events as set forth in the applicable Award Agreement or as otherwise specified
by the Committee, (ii) such three-year minimum Restriction Period shall not
apply to a Stock Award that is granted in lieu of salary or bonus, and
(iii) vesting of a Stock Award may occur incrementally over the three-year
minimum Restricted Period.     (iv)   Cash Award. An Employee Award may be in
the form of a Cash Award. The terms, conditions and limitations applicable to
any Cash Awards granted pursuant to this Plan shall be determined by the
Committee.     (v)   Performance Award. Without limiting the type or number of
Employee Awards or Director Awards that may be made under the other provisions
of this Plan, an Employee Award or Director Award may be in the form of a
Performance Award. The terms, conditions and limitations applicable to any
Performance Awards granted to Participants pursuant to this Plan shall be
determined by the Committee; provided that any Stock Award granted as an
Employee Award which is a Performance Award shall have a minimum Restriction
Period of one year from the Grant Date, provided that the Committee may provide
for earlier vesting upon the occurrence of certain events as set forth in the
applicable Award Agreement or as otherwise specified by the Committee. The
Committee shall set Performance Goals in its discretion which, depending on the
extent to which they are met, will determine the value and/or amount of
Performance Awards that will be paid out to the Participant and/or the portion
of an Award that may be exercised.

  (A)   Nonqualified Performance Awards. Performance Awards granted to Employees
or Directors that are not intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be based on achievement of
such goals and be subject to such terms, conditions and restrictions as the
Committee or its delegate shall determine.

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  (B)   Qualified Performance Awards. Performance Awards granted to Employees
under the Plan that are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code shall be paid, vested or otherwise
deliverable solely on account of the attainment of one or more pre-established,
objective Performance Goals established by the Committee prior to the earlier to
occur of (x) 90 days after the commencement of the period of service to which
the Performance Goal relates and (y) the lapse of 25% of the period of service
(as scheduled in good faith at the time the goal is established), and in any
event while the outcome is substantially uncertain. A Performance Goal is
objective if a third party having knowledge of the relevant facts could
determine whether the goal is met. Such a Performance Goal may be based on one
or more business criteria that apply to the Employee, one or more business
units, divisions, or sectors of the Corporation, or the Corporation as a whole,
and if so desired by the Committee, by comparison with a peer group of
companies. A Performance Goal may include one or more of the following: Stock
price measures (including but not limited to growth measures and total
shareholder return); Earnings per share (actual or targeted growth); Earnings
before interest, taxes, depreciation, and amortization (“EBITDA”); Economic
value added (“EVA”); Net income measures (including but not limited to income
after capital costs and income before or after taxes); Operating income; Cash
flow measures; Return measures (including but not limited to return on average
assets, risk-adjusted return on capital, and return on average equity);
Operating measures (including sales volumes, production volumes and production
efficiency); Expense measures (including but not limited to overhead cost and
general and administrative expense); Margins; and corporate values measures
(including ethics compliance, environmental, and safety).         Unless
otherwise stated, such a Performance Goal need not be based upon an increase or
positive result under a particular business criterion and could include, for
example, maintaining the status quo or limiting economic losses (measured, in
each case, by reference to specific business criteria). In interpreting Plan
provisions applicable to Performance Goals and Qualified Performance Awards, it
is the intent of the Plan to conform with the standards of Section 162(m) of the
Code and Treasury Regulation §1.162-27(e)(2)(i), as to grants to those Employees
whose compensation is, or is likely to be, subject to Section 162(m) of the
Code, and the Committee in establishing such goals and interpreting the Plan
shall be guided by such provisions. Prior to the payment of any compensation
based on the achievement of Performance Goals, the Committee must certify in
writing that applicable Performance Goals and any of the material terms thereof
were, in fact, satisfied. Subject to the foregoing provisions,

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      the terms, conditions and limitations applicable to any Qualified
Performance Awards made pursuant to this Plan shall be determined by the
Committee.

  (b)   Notwithstanding anything to the contrary contained in this Plan, the
following limitations shall apply to any Employee Awards made hereunder:

  (i)   no Participant may be granted, during any fiscal year, Employee Awards
consisting of Options or SARs (including Options or SARs that are granted as
Performance Awards) that are exercisable for more than 600,000 shares of Common
Stock;     (ii)   no Participant may be granted, during any fiscal year,
Employee Awards consisting of Stock Awards (including Stock Awards that are
granted as Performance Awards) covering or relating to more than 300,000 shares
of Common Stock (the limitation set forth in this clause (ii), together with the
limitation set forth in clause (i) above and (c)(i) and (ii) below, being
hereinafter collectively referred to as the “Stock Based Awards Limitations”);
and     (iii)   no Participant may be granted Employee Awards under this Plan
consisting of cash (including Awards that are granted as Performance Awards) in
respect of any fiscal year having a value determined on the Grant Date in excess
of $3,000,000.

  (c)   Notwithstanding anything to the contrary contained in this Plan the
following limitations shall apply to any Director Awards made hereunder:

  (i)   no Participant may be granted, during any fiscal year, Director Awards
consisting of Options that are exercisable for more than 75,000 shares of Common
Stock and     (ii)   no Participant may be granted, during any fiscal year,
Director Awards consisting of Stock Awards covering or relating to more than
45,000 shares of Common Stock.

  (d)   Prior to the effective date of this amendment and restatement, certain
awards on shares of Common Stock (the “Prior Awards”) had been granted under the
Prior Plans as in effect from time to time. As of the effective date of the
Existing Plan, each Prior Award continued to be outstanding and the shares of
Common Stock that are the subject of such Prior Awards shall be subject to
adjustment in accordance with Section 16 and to the other provisions of the
Plan.

     9. Change in Control under Prior Plans. Unless otherwise expressly provided
in the applicable award agreement, the change in control provisions under the
Prior Plans shall govern the awards previously granted thereunder.
     10. Non-United States Participants. The Committee may grant awards to
persons outside the United States under such terms and conditions as may, in the
judgment of the Committee, be necessary or advisable to comply with the laws of
the applicable foreign jurisdictions and, to that end, may

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establish sub-plans, modified option exercise procedures and other terms and
procedures. Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate the Exchange Act,
the Code, any securities law, any governing statute, or any other applicable
law.
     11. Payment of Awards.

  (a)   General. Payment made to a Participant pursuant to an Award may be made
in the form of cash or Common Stock, or a combination thereof, and may include
such restrictions as the Committee shall determine, including, in the case of
Common Stock, restrictions on transfer and forfeiture provisions. If such
payment is made in the form of Restricted Stock, the Committee shall specify
whether the underlying shares are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are to be
issued at the beginning of the Restriction Period, the certificates evidencing
such shares (to the extent that such shares are so evidenced) shall contain
appropriate legends and restrictions that describe the terms and conditions of
the restrictions applicable thereto. In the event that shares of Restricted
Stock are to be issued at the end of the Restricted Period, the right to receive
such shares shall be evidenced by book entry registration or in such other
manner as the Committee may determine.     (b)   Deferral. With the approval of
the Committee, amounts payable in respect of Awards may be deferred and paid
either in the form of installments or as a lump-sum payment. The Committee may
permit selected Participants to elect to defer payments of some or all types of
Awards or any other compensation otherwise payable by the Corporation in
accordance with procedures established by the Committee and may provide that
such deferred compensation may be payable in shares of Common Stock. Any
deferred payment pursuant to an Award, whether elected by the Participant or
specified by the Award Agreement or the terms of the Award or by the Committee,
may be forfeited if and to the extent that the Award Agreement or the terms of
the Award so provide.     (c)   Dividends, Earnings and Interest. Rights to
dividends or Dividend Equivalents may be extended to and made part of any Stock
Award, subject to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for the
crediting of interest or other earnings on deferred cash payments and Dividend
Equivalents for Stock Awards.     (d)   Substitution of Awards. Subject to
paragraphs 14 and 16, at the discretion of the Committee, a Participant who is
an Employee may be offered an election to substitute an Employee Award for
another Employee Award or Employee Awards of the same or different type.

     12. Option Exercise. The Grant Price shall be paid in full at the time of
exercise in cash or, if permitted by the Committee and elected by the optionee,
the optionee may purchase such shares by means of tendering Common Stock or
surrendering another Award, including Restricted Stock, valued at Fair Market
Value on the date of exercise, or any combination thereof. The Committee shall
determine acceptable methods for Participants to tender Common Stock or other
Awards provided that any Common Stock that is or was the subject of an Award may
be so tendered only if it has been held by the Participant for six months. The
Committee may provide for procedures to permit the exercise or

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purchase of such Awards by use of the proceeds to be received from the sale of
Common Stock issuable pursuant to an Award. Unless otherwise provided in the
applicable Award Agreement, in the event shares of Restricted Stock are tendered
as consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of Restricted
Stock used as consideration therefor, shall be subject to the same restrictions
as the Restricted Stock so submitted as well as any additional restrictions that
may be imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this
paragraph.
          An optionee desiring to pay the Grant Price of an Option by tendering
Common Stock using the method of attestation may, subject to any such conditions
and in compliance with any such procedures as the Committee may adopt, do so by
attesting to the ownership of Common Stock of the requisite value in which case
the Corporation shall issue or otherwise deliver to the optionee upon such
exercise a number of shares of Common Stock subject to the Option equal to the
result obtained by dividing (a) the excess of the aggregate Fair Market Value of
the shares of Common Stock subject to the Option for which the Option (or
portion thereof) is being exercised over the Grant Price payable in respect of
such exercise by (b) the Fair Market Value per share of Common Stock subject to
the Option, and the optionee may retain the shares of Common Stock the ownership
of which is attested.
     13. Taxes. The Corporation or its designated third party administrator
shall have the right to deduct applicable taxes from any Employee Award payment
and withhold, at the time of delivery or vesting of cash or shares of Common
Stock under this Plan, an appropriate amount of cash or number of shares of
Common Stock or a combination thereof for payment of taxes or other amounts
required by law or to take such other action as may be necessary in the opinion
of the Corporation to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Corporation of shares of Common Stock theretofore owned by the holder of the
Employee Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.
The Committee may provide for loans, to the extent not otherwise prohibited by
law, on either a short term or demand basis, from the Corporation to a
Participant who is an Employee to permit the payment of taxes required by law.
     14. Amendment, Modification, Suspension or Termination of the Plan. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Corporation to the extent such approval is
required by applicable legal requirements or the requirements of the securities
exchange on which the Corporation’s Common Stock is listed.
     15. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement or the terms of the Award, no Award or any other
benefit under this Plan shall be assignable or otherwise transferable except by
will, by beneficiary designation or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder. In
the event that a beneficiary designation conflicts with an assignment by will,
the beneficiary designation will prevail. The Committee may prescribe and
include in applicable Award Agreements or the terms of the Award other

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restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this paragraph 15 shall be null and
void.
     16. Adjustments.

  (a)   The existence of outstanding Awards shall not affect in any manner the
right or power of the Corporation or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
capital stock of the Corporation or its business or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred or prior
preference stock (whether or not such issue is prior to, on a parity with or
junior to the existing Common Stock) or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding of any kind, whether or not
of a character similar to that of the acts or proceedings enumerated above.    
(b)   In the event of any subdivision or consolidation of outstanding shares of
Common Stock, declaration of a dividend payable in shares of Common Stock or
other stock split, then (i) the number of shares of Common Stock reserved under
this Plan and available for issuance pursuant to specific types of Awards as
described in paragraph 5, (ii) the number of shares of Common Stock covered by
outstanding Awards, (iii) the Grant Price or other price in respect of such
Awards, (iv) the appropriate Fair Market Value and other price determinations
for such Awards, and (v) the Stock Based Awards Limitations shall each be
proportionately adjusted by the Board as appropriate to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Corporation, any consolidation or merger of the
Corporation with another corporation or entity, the adoption by the Corporation
of any plan of exchange affecting Common Stock or any distribution to holders of
Common Stock of securities or property (including special cash dividends but not
normal cash dividends or dividends payable in Common Stock), the Board shall
make appropriate adjustments to (x) the number of shares of Common Stock
reserved under this Plan and (y)(i) the number of shares of Common Stock covered
by Awards, (ii) the Grant Price or other price in respect of such Awards, (iii)
the appropriate Fair Market Value and other price determinations for such
Awards, and (iv) the Stock Based Awards Limitations to reflect such transaction;
provided that such adjustments shall only be such as are necessary to maintain
the proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board shall be authorized (x) to assume under the Plan
previously issued compensatory awards, or to substitute new Awards for
previously issued compensatory awards, including Awards, as part of such
adjustment; (y) to cancel Awards that are Options or SARs and give the
Participants who are the holders of such Awards notice and opportunity to
exercise for 30 days prior to such cancellation; or (z) to cancel any such
Awards and to deliver to the Participants cash in an amount that the Committee
shall determine in its sole discretion is equal to the fair market value of such
Awards on the date of such event, which in

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      the case of Options or SARs shall be the excess of the Fair Market Value
of Common Stock on such date over the exercise or strike price of such Award.

     17. Restrictions. No Common Stock or other form of payment shall be issued
with respect to any Award unless the Corporation shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws. Certificates evidencing shares of Common
Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop 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 securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
     18. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience, including
bookkeeping accounts established by a third party administrator retained by the
Corporation to administer the Plan. The Corporation shall not be required to
segregate any assets for purposes of this Plan or Awards hereunder, nor shall
the Corporation, the Board or the Committee be deemed to be a trustee of any
benefit to be granted under this Plan. Any liability or obligation of the
Corporation to any Participant with respect to an Award under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan
and any Award Agreement or the terms of the Award, and no such liability or
obligation of the Corporation shall be deemed to be secured by any pledge or
other encumbrance on any property of the Corporation. Neither the Corporation
nor the Board nor the Committee shall be required to give any security or bond
for the performance of any obligation that may be created by this Plan.
     19. Right to Employment. Nothing in the Plan or an Award Agreement shall
interfere with or limit in any way the right of the Corporation to terminate any
Participant’s employment or other service relationship at any time, nor confer
upon any Participant any right to continue in the capacity in which he or she is
employed or otherwise serves the Corporation.
     20. Successors. All obligations of the Corporation under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Corporation, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Corporation.
     21. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Texas.
     22. Effectiveness and Term. The Existing Plan was amended and restated in
its entirety effective as of July 27, 2004 and further amended effective
April 11, 2006 as set forth herein. No Award shall be made ten years after
January 8, 2004.

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