Exhibit 10.7

CABOT OIL & GAS CORPORATION

DEFERRED COMPENSATION PLAN

(As Amended and Restated Effective January 1, 2009)

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TABLE OF CONTENTS

 

    Page ARTICLE I TITLE AND DEFINITIONS   1 1.1    Title   1 1.2    Definitions
  1

ARTICLE II PARTICIPATION

  6

ARTICLE III DEFERRAL ELECTIONS

  7 3.1    Amount of Deferrals   7 3.2    Procedure for Elections   7 3.3   
Investment Elections   8 3.4    Forms and Procedures   9

ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING

  10 4.1    Deferral Accounts   10 4.2    Company Discretionary Contribution
Account   10 4.3    Trust Funding   11

ARTICLE V VESTING

  12

ARTICLE VI DISTRIBUTIONS

  13 6.1    Distribution of Deferred Compensation and Discretionary Company
Contributions   13 6.2    Unforeseeable Emergency Distribution   14 6.3   
Forfeiture of Unvested Amounts   15 6.4    Inability to Locate Participant   15
6.5    Installment Payments Deemed to be Separate Payments   15 6.6    Earnings
  15

ARTICLE VII ADMINISTRATION

  16 7.1    Committee   16 7.2    Committee Action   16 7.3    Powers and Duties
of the Committee   16 7.4    Construction and Interpretation   17 7.5   
Information   17 7.6    Compensation, Expenses and Indemnity   17 7.7   
Quarterly Statements   17 7.8    Claims and Review Procedures   18

ARTICLE VIII MISCELLANEOUS

  20 8.1    Unsecured General Creditor   20 8.2    Restriction Against
Assignment   20 8.3    Withholding   20 8.4    Amendment, Modification,
Suspension or Termination   20 8.5    Governing Law   21 8.6    Receipt or
Release   21 8.7    Payments on Behalf of Persons Under Incapacity   21

 

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8.8      Limitation of Rights and Employment Relationship   21 8.9      Headings
  21 8.10    Section 409A   21

 

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CABOT OIL & GAS CORPORATION

DEFERRED COMPENSATION PLAN

WHEREAS, effective as of June 1, 1998, Cabot Oil & Gas Corporation (the
“Company”) established the Cabot Oil & Gas Corporation Deferred Compensation
Plan (the “Plan”) to provide supplemental retirement income benefits for a
select group of management and highly compensated employees of the Company and
certain of its subsidiary or related companies through deferrals of salary,
bonus, performance share awards, Company contributions of certain amounts which
cannot be made to the Company 401 (k) Plan due to Internal Revenue Code
limitations, amounts payable under any Supplemental Executive Retirement Plan
(“SERP”) Agreements to which a participant in this Plan is a party and certain
Company discretionary contributions; and

WHEREAS, the Company subsequently amended certain provisions of the Plan, as set
forth in the First and Second Amendments to the Plan; and

WHEREAS, the Company desires to amend the Plan to allow participants to defer
the receipt of certain benefits in order to provide a regular stream of income
during retirement in a manner that complies with Section 409A of the Internal
Revenue Code of 1986, as amended, and to make certain other changes deemed
necessary or appropriate, including prohibiting the deferral of performance
shares from and after January 1, 2009;

NOW, THEREFORE, effective as of January 1, 2009, the Plan is hereby amended and
restated, as follows:

ARTICLE I

TITLE AND DEFINITIONS

1.1 Title.

This Plan shall be known as Cabot Oil & Gas Corporation Deferred Compensation
Plan.

1.2 Definitions.

Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

(a) “Account” or “Accounts” shall mean a Participant’s Deferral Account and
Company Contribution Account.

(b) “Base Salary” shall mean a Participant’s annual base salary, excluding
bonus, incentive and all other remuneration for services rendered to the Company
and prior to reduction for any salary contributions to a plan established
pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of
the Code.

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(c) “Beneficiary” or “Beneficiaries” shall mean the person or persons, including
a trustee, personal representative or other fiduciary, last designated in
writing by a Participant in accordance with procedures established by the
Committee to receive the benefits specified hereunder in the event of the
Participant’s death. No beneficiary designation shall become effective until it
is filed with the Committee. Any designation shall be revocable at any time
through a written instrument filed by the Participant with the Committee with or
without the consent of the previous Beneficiary. If there is no such designation
or if there is no surviving designated Beneficiary, then the Beneficiary shall
be the Participant’s surviving spouse, if any, or, if there is no surviving
spouse, the Participant’s estate. Payment by the Company to the Beneficiary
identified pursuant to the terms of this Section 1.2(c) if no such designation
exists, of all benefits owed hereunder shall terminate any and all liability of
the Company.

(d) “Board of Directors” or “Board” shall mean the Board of Directors of Cabot
Oil & Gas Corporation.

(e) “Bonus” shall mean the bonus earned as of the last day of the Plan Year,
provided a Participant is in the employ of the Company on the date on which such
bonus is paid.

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(g) “Committee” shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article VII.

(h) “Company” shall mean Cabot Oil & Gas Corporation and any successor
corporations. “Company” shall include each corporation which is a member of a
controlled group of corporations (within the meaning of Section 414(b) of the
Code) of which Cabot Oil & Gas Corporation is a component member, if the Board
provides that such corporation shall participate in the Plan.

(i) “Company Contribution Account” shall mean the bookkeeping account maintained
by the Company for each Participant that, pursuant to Section 4.2, is credited
with an amount equal to the applicable of the following: the Company
Discretionary Contribution Amount, Matching Contributions, the Company DB SERP
Contribution Amount, and earnings and losses.

(j) “Company Discretionary Contribution Amount” shall mean, if contributed by
the Company for each Participant for a Plan Year, an additional discretionary
amount allocated to a Participant under this Plan as determined by the Company.
Such amount may differ from Participant to Participant both in amount, including
no contribution, and as a percentage of Compensation.

(k) “Company DB SERP Contribution Amount” shall mean the amount of the benefit
provided to the Participant under the terms of the supplemental employee
retirement plan (“DB SERP”) agreement between the Company and the Participant;
provided, however, that in no event shall a spousal death benefit payable under
the terms of such DB SERP agreement be deemed to be a Company DB SERP
Contribution Amount for purposes of this Plan.

 

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(l) “Compensation” shall mean the amount of the Base Salary and Bonus that the
Participant is entitled to receive for services rendered to the Company.

(m) “Deferral Account” shall mean the bookkeeping account maintained by the
Committee for each Participant that, pursuant to Section 4.1, is credited with
amounts equal to (i) the portion of Compensation that the Participant has
elected to defer, (ii) the portion of any Performance Share Award that was
credited to the Deferral Account prior to January 1, 2009 and (iii) earnings and
losses.

(n) “Deferral Election” shall mean a written, electronic or other form of
election permitted by the Committee pursuant to which a Participant may elect to
defer a portion of his Compensation under the Plan.

(o) “Distributable Amount” shall mean the vested balance in the Participant’s
Deferral Account and Company Contribution Account.

(p) “Effective Date” shall mean January 1, 2009.

(q) “Eligible Employee” shall mean members of the Company’s executive management
group who are designated by the Company as eligible to participate in this Plan.

(r) “401 (k) Plan” shall mean the retirement plan maintained by the Company on
the Effective Date that is intended to qualify under Sections 401(a) and 401(k)
of the Code and any successor or replacement plan.

(s) “Fund” or “Funds” shall mean one or more of the investment funds selected by
the Committee pursuant to Section 3.3(b).

(t) “Future Date Withdrawal” shall mean the distribution date elected by the
Participant for the withdrawal of all amounts of Compensation, vested Matching
Contributions and vested Company Discretionary Contribution Amounts deferred in
a given Plan Year, and earnings and losses attributable thereto, as set forth on
the election form for such Plan Year.

(u) “Interest” shall mean, for each Fund, an amount equal to the net rate of
gain or loss on the assets of such Fund, as calculated on a daily basis.

(v) “Investment Fund Subaccount” means one of the separate subaccounts into
which a Participant’s Deferral Account is divided pursuant to a Participant’s
election under Section 3.3(a).

(w) “Matching Contribution” means, for a given Plan Year, 6% of Compensation
minus the actual amount of matching contributions made to the Company’s 401(k)
Plan by the Company provided, however, that in no event shall the Matching
Contribution exceed the excess of the dollar limit imposed by Code
Section 402(g) over the actual amount of matching contribution made to the 401
(k) Plan by the Company.

(x) “Participant” shall mean any Eligible Employee who becomes a Participant in
this Plan in accordance with Article II.

 

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(y) “Payment Date” shall mean

(i) except as provided in Section 1.2(y)(ii), the 15th business day following
the earlier of (A) the date of Participant’s termination of employment or
(B) the Participant’s death; and

(ii) in the case of a Participant who is a Specified Employee on the Payment
Date otherwise applicable in Section 1.2(y)(i), the 15th business day following
the earlier of (A) the expiration of six months following the date such
Specified Employee separates from service or (B) the date of the Specified
Employee’s death.

(z) “Performance Share Award” shall mean the amount payable to a Participant
pursuant to the Performance Share Award Agreement between the Company and such
Participant. Effective as of January 1, 2009, Performance Share Awards may not
be deferred under the terms of this Plan.

(aa) “Plan” shall mean Cabot Oil & Gas Corporation Deferred Compensation Plan
set forth herein, now in effect, or as amended from time to time.

(bb) “Plan Year” shall mean the period of twelve consecutive months beginning on
each January 1 and ending on December 31.

(cc) “Retirement” shall mean the termination of employment by the Participant on
or after

(i) with respect to an individual who is an Eligible Employee or Participant as
of the Effective Date, the date of his attainment of age 55 with 10 years of
active service with the Company; and

(ii) with respect to all other individuals, the date designated by the Committee
at the time he is notified of his status as an Eligible Employee, which shall be
either (A) the date of his attainment of age 55 with 10 years of active service
with the Company or (B) the date of his attainment of age 65 with 5 years of
active service with the Company.

(dd) “Section 409A” shall mean Section 409A of the Code and all related
regulations and notices in effect thereunder.

(ee) “Specified Employee” shall mean a Participant who, on the date of his
termination of employment with the Company, is treated as a Specified Employee
by the Company in accordance with the requirements of Section 409A.

(ff) “Trust” shall mean Cabot Oil & Gas Corporation Deferred Compensation Plan
Trust.

 

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(gg) “Unforeseeable Emergency” shall mean a severe financial hardship to the
Participant resulting from:

(i) a sudden and unexpected illness or accident of the Participant or of his
spouse, beneficiary or dependent (as defined in Section 152 of the Code without
regard to Section 152(b)(1), Section 152(b)(2) and Section 152(d)(1)(B));

(ii) loss of a Participant’s property due to casualty and not otherwise covered
by insurance; or

(iii) such other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the Participant’s control.

Except as otherwise provided herein, “Unforeseeable Emergency” shall not include
the purchase of a home or the payment of college tuition.

The Committee shall have the sole authority and discretion to determine whether
a Participant has experienced an Unforeseeable Emergency and may require the
Participant to submit such documentary evidence as the Committee, in its sole
discretion, deems necessary to establish the existence or non-existence of an
Unforeseeable Emergency and/or the amount of such distribution. The Committee
shall have the sole discretion and authority to establish the time period within
which Participant must provide any such documentary evidence.

 

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ARTICLE II

PARTICIPATION

An Eligible Employee shall become a Participant when designated as such by the
Committee.

 

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ARTICLE III

DEFERRAL ELECTIONS

3.1 Amount of Deferrals.

The amount specified by any Deferral Election applicable to a Participant’s Base
Salary and/or Bonus shall be stated as a percentage that shall not exceed 100%
of the sum of Base Salary and Bonus of the Participant. The Committee, in its
sole and absolute discretion, may limit the total amount deferred by a
Participant in order to satisfy Social Security tax (including Medicare), income
tax and employee benefit plan withholding requirements. The minimum contribution
that may be made in any Plan Year by an Eligible Employee is $2,500, provided
that such minimum contribution can be satisfied from Base Salary and/or Bonus.

3.2 Procedure for Elections.

Subject to any modifications, additions or exceptions that the Committee, in its
sole discretion, deems necessary or appropriate, the following terms shall apply
to any Deferral Election:

(a) Timing of Election.

(i) Initial Deferral Election.

(A) Base Salary. An Eligible Employee who wishes to defer the receipt of all or
a portion of his Base Salary must submit a Deferral Election to the Committee
before December 15 of the Plan Year immediately preceding the Plan Year to which
the Deferral Election applies. Notwithstanding the previous sentence, an
Eligible Employee may elect to defer the receipt of all or a portion of his Base
Salary by submitting a Deferral Election to the Committee within 30 days of the
date on which he first becomes eligible to participate in the Plan. Each
Deferral Election shall only be effective with respect to Compensation earned
after the date of its submission to the Committee. If an Eligible Employee fails
to submit a Deferral Election in a timely manner, he shall be deemed by the
Committee to have elected not to defer any portion of his Base Salary under the
Plan for the applicable Plan Year.

(B) Bonus. An Eligible Employee who wishes to defer the receipt of any portion
of a Bonus that is contingent upon his attainment of written performance
criteria applicable to a performance period of at least 12 consecutive months
must submit a Deferral Election to the Committee on a date established by the
Committee that occurs no less than six months before the close of the
performance period applicable to such Bonus; provided, however, that (1) on the
date of such Deferral Election, the Eligible Employee is employed by the Company
and has been continuously employed by the Company since the later of (x) the
beginning of such performance period or (y) the date that the performance
criteria applicable to such Bonus are established in writing (which shall occur
within 90 days of the beginning of such performance period), and (2) in no event
shall any such Deferral Election be made after the time when the Eligible
Employee’s entitlement to the Bonus is readily ascertainable.

 

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(C) Matching Contribution. Notwithstanding the foregoing, the Company may, in
its discretion, direct that Matching Contributions shall be credited to
Participant’s Account without regard to the status of his Deferral Election.

(ii) Subsequent Deferral Election. An Eligible Employee who had not elected to
participate in the Plan at the time when he was initially eligible to do so may
make a subsequent Deferral Election with respect to his Compensation for a
subsequent Plan Year. Such Deferral Election must be made on or before
December 15 of the Plan Year immediately preceding the Plan Year for which he
desires to participate and shall apply only to Compensation in respect of
services performed in the Plan Year following the Plan Year in which the
Deferral Election is made.

(b) Term. Each Participant’s Deferral Election shall remain in effect for
Compensation paid during the current and all future Plan Years until the
earliest of (i) the date the Participant separates from service, (ii) the first
day of the next succeeding Plan Year following the date the Participant revokes
such Deferral Election or makes a subsequent Deferral Election but only with
respect to Compensation for services performed in the future Plan Years or
(iii) the first day of the next succeeding Plan Year after which the Committee
determines that such Participant’s Deferral Contributions shall cease. The
deferral of a DB SERP amount shall be separate from and independent of any other
Deferral Election under this Plan as to time and form of payment.

(c) DB SERP Deferral. An Eligible Employee who becomes entitled to a Company DB
SERP Contribution Amount shall be deemed to have deferred 100% of such amount
under the terms of this Plan.

(d) Cessation and Recommencement of Deferral Elections. A Participant who has
previously terminated a Deferral Election may only elect to recommence the
deferral of his Compensation under this Plan, by filing a new Deferral Election
with respect to the deferral of Compensation during the next Plan Year. Such
Deferral Election must be made on a form provided by the Committee and shall be
subject to the terms and provisions of Section 3.1.

3.3 Investment Elections.

(a) At the time a Participant makes a Deferral Election, the Participant shall
designate the types of Funds the Participant’s Account will be deemed to be
invested in for purposes of determining the amount of Interest to be credited to
that Account. In making the designation pursuant to this Section 3.3, the
Participant may specify that all or any multiple of his Account in whole
percentage increments (equal to or greater than 1%) be deemed to be invested in
one or more of the types of Funds provided under the Plan as communicated from
time to time by the Committee. A Participant may change the designation made
under this Section 3.3 effective as of the next following business day, by
following the procedures set forth by the Committee; provided, however, that the
portion of Participant’s Account that is subject to such change shall be at
least $250. If a Participant fails to designate a type of fund under this
Section 3.3, his Account shall be invested in a fund designated by the
Committee.

 

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(b) Although the Participant may designate the type of investments, the
Committee shall not be bound by such designation. The Committee, from time to
time, in its sole discretion, may designate commercially available investments
of each of the types communicated by the Committee to the Participant pursuant
to Section 3.3(a) above to be the Funds. The interest rate of each such
commercially available Fund shall be used to determine the amount of earnings or
losses to be credited to Participant’s Account under Article IV.

3.4 Forms and Procedures.

The Administrative Committee, in its sole discretion, shall determine the forms
and procedures regulating all Deferral Elections.

 

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ARTICLE IV

DEFERRAL ACCOUNTS AND TRUST FUNDING

4.1 Deferral Accounts.

The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant’s Deferral Account shall be further
divided into separate Investment Fund Subaccounts, each of which corresponds to
a Fund elected by the Participant pursuant to Section 3.3(a). A Participant’s
Deferral Account shall be credited as follows:

(a) As of each payroll date during each Plan Year, the Committee shall credit
the Investment Fund Subaccounts of the Participant’s Deferral Account with an
amount equal to the Compensation deferred by the Participant during such pay
period in accordance with the Participant’s designation under Section 3.3(a);
that is, the portion of the Participant’s deferred Compensation that the
Participant has elected to be deemed to be invested in a certain type of Fund
shall be credited to the Investment Fund Subaccount corresponding to that Fund;

(b) As of each payroll date during each Plan Year, each Investment Fund
Subaccount of a Participant’s Deferral Account shall be credited with Interest
in an amount equal to that determined by multiplying the balance credited to
such Investment Fund Subaccount immediately following the preceding payroll date
by the Interest Rate for the corresponding Fund selected by the Company pursuant
to Section 3.3(b); and

(c) In the event that a Participant elects for a given Plan Year’s deferral of
Compensation to have a Future Date Withdrawal, all amounts attributed to the
deferral of Compensation for such Plan Year shall be accounted for in a manner
which allows separate accounting for the deferral of Compensation and investment
gains and loses associated with such Plan Year’s deferral of Compensation.

4.2 Company Discretionary Contribution Account.

The Committee shall establish and maintain a Company Contribution Account for
each Participant under the Plan. Each Participant’s Company Contribution Account
shall be further divided into separate Investment Fund Subaccounts corresponding
to the Fund elected by the Participant pursuant to Section 3.3(a). A
Participant’s Company Contribution Account shall be credited as follows:

(a) As of each payroll date during each Plan Year, the Committee shall credit
the Investment Fund Subaccounts of the Participant’s Company Contribution
Account with an amount equal to the Matching Contribution Amount, if any,
applicable to that Participant in accordance with the designation made by such
Participant pursuant to Section 3.3(a);

(b) As of each payroll date during which a Company Discretionary Contribution
Amount, if any, is made, the Committee shall credit the Investment Fund
Subaccounts of the Participant’s Company Contribution Account with an amount
equal to the Company Discretionary Contribution Amount applicable to that
Participant in accordance with the designation made by such Participant pursuant
to Section 3.3(a);

 

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(c) As soon as practicable following the date of the termination of a
Participant’s employment for any reason other than death, the Committee shall
credit the Investment Fund Subaccounts of the Participant’s Company Contribution
Account with the Company DB SERP Contribution Amount, if any, applicable to that
Participant in accordance with the designation made by such Participant pursuant
to Section 3.3(a); and

(d) Each Investment Fund Subaccount of a Participant’s Company Contribution
Account shall be credited on a daily basis with Interest in an amount equal to
that determined by multiplying the balance credited to such Investment Fund
Subaccount as of the last day of the preceding month plus contributions during
the current month commencing on the date such contributions are credited to the
Investment Fund Subaccount by the interest rate for the Corresponding Fund
selected by the Company pursuant to Section 3.3(b).

4.3 Trust Funding.

The Company has created a Trust with respect to which Fidelity Management Trust
Company serves as Trustee. The Company may contribute to the Trust an amount
equal to the amount deferred by each Participant for the Plan Year. The Company
may also contribute such additional amounts as it shall deem necessary or
appropriate.

Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and, except as provided below,
shall be used exclusively for the uses and purposes of Plan Participants and
Beneficiaries as set forth therein, neither the Participants nor their
Beneficiaries shall have any preferred claim on, or any beneficial ownership in,
any assets of the Trust prior to the time such assets are paid to the
Participants or Beneficiaries as benefits and all rights created under this Plan
shall be unsecured contractual rights of Plan Participants and Beneficiaries
against the Company. Any assets held in the Trust will be subject to the claims
of Company’s general creditors under federal and state law in the event of
insolvency defined in the Trust.

Except as provided above, assets of the Plan and Trust shall never inure to the
benefit of the Company and the same shall be held for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and deferring
reasonable expenses of administering the Plan and Trust.

 

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ARTICLE V

VESTING

A Participant’s Deferral Account and the Company DB SERP Contribution allocated
to a Participant’s Company Contribution Account shall be 100% vested at all
times. The Matching Contributions allocated to a Participant’s Company
Contribution Account shall be vested in accordance with the vesting schedule
contained in the Company’s 401(k) Plan without regard to prior service credits.
The Company shall determine the vesting schedule for Company Discretionary
Contribution Amounts at the time each such contribution is made by the Company.

 

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ARTICLE VI

DISTRIBUTIONS

6.1 Distribution of Deferred Compensation and Discretionary Company
Contributions.

(a) Distribution Without Future Date Withdrawal.

(i) Except as provided in Section 6.1(a)(iv) below, if a Participant terminates
employment with the Company due to Retirement, the Distributable Amount (other
than amounts attributable to Company DB SERP Contributions) shall be paid to the
Participant in the form of benefit elected by the Participant at the time of his
initial Deferral Election, in accordance with procedures established by Company,
from among the following:

(A) A lump sum distribution on the Participant’s Payment Date.

(B) Substantially equal quarterly installments over five years beginning on the
Participant’s Payment Date.

(C) Substantially equal quarterly installments over ten years beginning on the
Participant’s Payment Date.

(D) Substantially equal quarterly installments over 20 years beginning on the
Participant’s Payment Date.

The amount of each installment payment shall be calculated by multiplying the
Account Balance on the date of such installment by a fraction, the numerator of
which is 1 and the denominator of which is the number of the remaining
installments including the current installment.

A Participant may modify the form of benefit that he or she has previously
elected, pursuant to this Section 6.1(a)(i); provided, however, that (A) such
modification occurs at least one year before the date the amount would otherwise
be distributable, (B) the modification may not accelerate the time of payment,
and (C) the delayed distributions shall not be made until at least five years
following the date on which the distribution would have been made absent the
modification.

(ii) Except as provided in Section 6.1(a)(iv) below, the portion of such
Distributable Amount that is attributable to Company DB SERP Contributions (“the
DB SERP Distributable Amount”) shall be distributed in 20 substantially equal
quarterly installments, beginning on the Participant’s Payment Date. The amount
of each installment payment shall be calculated by multiplying the Account
Balance on the date of such installment by a fraction, the numerator of which is
1 and the denominator of which is the number of the remaining installments
including the current installment. Notwithstanding the foregoing, the DB SERP
Distributable Amount of a Participant who terminates employment for any reason
other than Retirement shall be paid to him (or, in the case of his death, to his
Beneficiary) in a lump sum on his Payment Date.

 

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(iii) In the case of a Participant who terminates employment for any reason
other than Retirement, the Distributable Amount (other than amounts attributable
to Company DB SERP Contributions) shall be paid to the Participant in a lump sum
on the Participant’s Payment Date.

(iv) In the case of a Participant who terminates employment with the Company for
any reason and has an Account balance of $50,000 or less, the Distributable
Amount (including amounts attributable to Company DB SERP Contributions) shall
be paid in a lump sum distribution on the Participant’s Payment Date.

(b) Distribution With Future Date Withdrawal. If a Participant elects a Future
Date Withdrawal for a given Plan Year’s contributions and the Future Date
Withdrawal could occur while the Participant is still in the employ of the
Company, such Participant shall receive his Distributable Amount in accordance
with such election; provided, however, that, the Distributable Amount shall
consist solely of the deferrals of Compensation, vested Matching Contributions
and vested Company Discretionary Contributions and related earnings that were
designated by the Participant (in accordance with Section 1.2(t)) as the subject
of such Future Date Withdrawal. A Participant’s Future Date Withdrawal with
respect to amounts of Compensation, Matching Contributions and Company
Discretionary Contribution Amounts deferred in a given Plan Year shall be no
earlier than two years from the last day of such Plan Year. A Participant may
extend the Future Date Withdrawal for contributions in any Plan Year, provided
such extension occurs at least one year before the then-applicable Future Date
Withdrawal for such contributions and is for a period of not less than five
years from such date. The Participant shall have the right to twice modify any
Future Date Withdrawal. In the event that a Participant terminates employment
with the Company prior to a scheduled Future Date Withdrawal for any reason
other than death, the portion of the Participant’s Account associated with such
Future Date Withdrawal which has not occurred prior to such termination shall be
distributed in a lump sum on his Payment Date.

(c) Death Prior to Benefit Commencement. If a Participant dies while he is
employed by the Company and prior to the commencement of any distributions under
this Plan, his Beneficiary shall receive a lump-sum payment equal to the amount
of the Participant’s vested Account Balance. Such lump-sum payment shall be made
on the Participant’s Payment Date.

(d) Death After Benefit Commencement. If a Participant dies after his
termination of employment with the Company and, as of the date of his death, the
Participant’s vested Account Balance has not been fully distributed, the
remaining amount of Participant’s vested Account Balance shall continue to be
distributed to the Participant’s Beneficiary, in accordance with the applicable
of the provisions of Section 6.1(a)(i)(B), (C) or (D).

6.2 Unforeseeable Emergency Distribution.

A Participant may apply to the Committee for the distribution of some or all of
his Account due to the occurrence of an Unforeseeable Emergency. The Committee
shall have the

 

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sole authority and discretion to determine the amount of any distribution that
is made on account of such Unforeseeable Emergency. The amount of any such
distribution shall not exceed the amount reasonably necessary to satisfy the
Participant’s needs as a result of the Unforeseeable Emergency; provided,
however, that the amount of such distribution

(a) may include amounts necessary to pay any federal, state, local or foreign
income taxes or penalties reasonably anticipated to result from the
distribution;

(b) must exclude any amounts that may otherwise be relieved through
reimbursement or compensation by insurance or otherwise, liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship) or by cessation of deferrals under this
Plan; and

(c) may exclude any additional but unpaid compensation to which Participant may
be entitled under the terms of another nonqualified deferred compensation plan
as a result of the Unforeseeable Emergency.

The Committee shall cancel Participant’s Deferral Election prior to the
distribution of any portion of Participant’s account payable under this Schedule
6.2. The payment of any Unforeseeable Emergency Distribution shall occur on the
15th business day following the Committee’s approval of such distribution and
shall take the form of a single lump-sum payment.

6.3 Forfeiture of Unvested Amounts.

Notwithstanding any provision of this Plan to the contrary, upon the termination
of Participant’s employment for any reason, the unvested portion of the Matching
Contribution Amount that has been credited to his Account shall be forfeited
and, to the extent that such Amounts have been funded through contributions to
the Trust Fund, shall be credited and restored to the Company.

6.4 Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary
within two years following the required Payment Date, the amount allocated to
the Participant’s Deferral Account shall be forfeited and, to the extent that
such Amounts have been funded through contributions to the Trust Fund, shall be
credited and restored to the Company.

6.5 Installment Payments Deemed to be Separate Payments.

Each installment payment in a series of installments shall be deemed to be a
separate and independent distribution for purposes of this Agreement.

6.6 Earnings.

Except as otherwise provided in Section 6.4, the Participant’s Account shall
continue to be credited with earnings pursuant to Section 4.1 of the Plan until
all amounts credited to Account under the Plan have been distributed.

 

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ARTICLE VII

ADMINISTRATION

7.1 Committee.

A Committee shall be appointed by, and serve at the pleasure of, the Board of
Directors. The number of members comprising the Committee shall be determined by
the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of resignation to the
Board. The Board may remove any member by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of the
Committee shall be filled promptly by the Board.

7.2 Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee. Any action permitted to be taken at a meeting may be
taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to himself
as a Participant. The Chairman or any other member or members of the Committee
designated by the Chairman may execute any certificate or other written
direction on behalf of the Committee.

7.3 Powers and Duties of the Committee.

(a) The Committee, on behalf of the Participants and their Beneficiaries, shall
enforce the Plan in accordance with its terms, shall be charged with the general
administration of the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the following:

(i) To select the Funds in accordance with Section 3.3(b) hereof;

(ii) To construe and interpret the terms and provisions of this Plan;

(iii) To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;

(iv) To maintain all records that may be necessary for the administration of the
Plan;

(v) To provide for the disclosure of all information and the filing or provision
of all reports and statements to Participants, Beneficiaries or governmental
agencies as shall be required by law;

(vi) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not inconsistent with the
terms hereof;

 

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(vii) To appoint a plan administrator or any other agent, and to delegate to
them such powers and duties in connection with the administration of the Plan as
the Committee may from time to time prescribe; and

(viii) To take all actions necessary for the administration of the Plan,
including determining whether to hold or discontinue the Policies.

7.4 Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including, but not limited to, the Company and any
Participant or Beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.

7.5 Information.

To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.

7.6 Compensation, Expenses and Indemnity.

(a) The members of the Committee shall serve without compensation for their
services hereunder.

(b) The Committee is authorized, at the expense of the Company, to employ such
legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration shall
be paid by the Company.

(c) To the extent permitted by applicable state law, the Company shall indemnify
and hold harmless the Committee and each member thereof, the Board of Directors
and any delegate of the Committee who is an employee of the Company against any
and all expenses, liabilities and claims, including legal fees to defend against
such liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as
such indemnities are permitted under state law.

7.7 Quarterly Statements.

Under procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant’s Accounts on a quarterly basis as of
each March 31, June 30, September 30 and December 31.

 

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7.8 Claims and Review Procedures.

(a) Claims Procedure. If any person believes he is entitled to any rights or
benefits under the Plan, such person may file a claim in writing with the Chief
Executive Officer of the Company (“CEO”). If any such claim is wholly or
partially denied, the CEO will notify such person of his decision in writing.
Such notification will contain (i) specific reasons for the denial,
(ii) specific reference to pertinent Plan provisions, (iii) a description of any
additional material or information necessary for such person to perfect such
claim and an explanation of why such material or information is necessary, and
(iv) information as to the steps to be taken if the person wishes to submit a
request for review, the time limits applicable to such procedures, and a
statement of the person’s rights following an adverse benefit determination on
review, including a statement of his right to file a lawsuit under the Employee
Retirement Income Security Act of 1974 (“ERISA”) if the claim is denied on
appeal. Such notification will be given within 90 days after the claim is
received by the CEO (or within 180 days, if special circumstances require an
extension of time for processing the claim, and if written notice of such
extension and circumstances is given to such person within the initial 90-day
period).

(b) Claim Review Procedure. Within 60 days after the date on which a person
receives a notice of denial, such person or his duly authorized representative
(“Applicant”) may (i) file a written request with the CEO for a review of his
denied claim; (ii) review pertinent documents; and (iii) submit issues and
comments in writing. The Applicant may submit written comments, documents,
records and other information relating to the claim for benefits under this
Plan. The Applicant may request a formal hearing before the CEO, which the CEO
may grant in his discretion. The CEO shall notify the Applicant of his decision
with regard to Applicant’s claim not later than 60 days of the receipt of
Applicant’s request; provided, however, that CEO may determine that an extension
of up to 60 days from the termination date of the initial 60-day review period
is required and shall advise the Applicant in writing of the special
circumstances requiring any such extension and the date by which the expects to
render a decision. Such special circumstances that require an extension of time
for rendering a decision include, but are not limited to, the need to hold a
hearing. The decision on review shall be in written or electronic notice of the
final determination. If the claim is denied in whole or part, such notice, which
shall be in a manner calculated to be understood by the person receiving such
notice, shall include (A) the specific reasons for the decision, (B) the
specific references to the pertinent Plan provisions on which the decision is
based, (C) that the Applicant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits, and (D) a statement of the
Applicant’s right to file a lawsuit under ERISA.

Benefits under this Plan will only be paid if the CEO decides, in his
discretion, that an Applicant is entitled to them. The decision of the CEO on
review of the claim denial shall be binding on all parties when the Participant
has exhausted the claims procedure under this Section 7.8. Moreover, no action
at law or in equity shall be brought to recover benefits under this Plan prior
to the date the Applicant has exhausted the administrative remedies under this
Section 7.8.

 

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(c) In the event that the CEO makes a claim on his own behalf, the Board shall
perform the functions otherwise performed by the CEO pursuant to Sections 7.8(a)
and 7.8(b).

 

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ARTICLE VIII

MISCELLANEOUS

8.1 Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Company. No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan. Any and all of the Company’s assets shall be, and remain, the general
unpledged, unrestricted assets of the Company. The Company’s obligation under
the Plan shall be merely unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall
be no greater than those of unsecured general creditors. It is the intention of
the Company that this Plan be unfunded for purposes of the Code and for purposes
of Title 1 of ERISA.

8.2 Restriction Against Assignment.

The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation. No
part of a Participant’s Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his Beneficiary, or successors in interest, nor
shall a Participant’s Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner whatsoever.
If any Participant, Beneficiary or successor in interest is adjudicated bankrupt
or purports to anticipate, alienate, sell, transfer, commute, assign, pledge,
encumber or charge any distribution or payment from the Plan, voluntarily or
involuntarily, the Committee, in its discretion, may cancel such distribution or
payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Committee shall
direct.

8.3 Withholding.

There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Company in respect to such payment or this Plan.
The Company shall have the right to reduce any payment (or compensation) by the
amount of cash sufficient to provide the amount of said taxes.

8.4 Amendment, Modification, Suspension or Termination.

The Committee may amend, modify, suspend or terminate the Plan in whole or in
part, except that no amendment, modification, suspension or termination shall
have any retroactive effect to reduce any amounts allocated to a Participant’s
Accounts. In the event that this Plan is terminated, the amounts allocated to a
Participant’s Accounts shall be distributed to the Participant or, in the event
of his death, his Beneficiary in a lump sum on the fifteenth business day
following the date of termination.

 

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8.5 Governing Law.

This Plan shall be construed, governed and administered in accordance with the
laws of the State of Delaware.

8.6 Receipt or Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims under the Plan against the Committee and the Company. The
Committee may require such Participant or Beneficiary, as a condition precedent
to such payment, to execute a receipt and release to such effect; provided,
however, that the terms and conditions applicable to such release shall not
cause this Plan or the payment of any amounts under this Plan to fail to comply
with Section 409A.

8.7 Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.

8.8 Limitation of Rights and Employment Relationship.

Neither the establishment of the Plan and Trust nor any modification thereof,
nor the creating of any fund or account, nor the payment of any benefits shall
be construed as giving to any Participant or other person any legal or equitable
right against the Company or the trustee of the Trust except as provided in the
Plan and Trust; and in no event shall the terms of employment of any Employee or
Participant be modified or in any way be affected by the provisions of the Plan
and Trust.

8.9 Headings.

Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.

8.10 Section 409A.

The following provisions shall apply to this Plan, notwithstanding any provision
to the contrary:

(a) This Plan is intended to comply with Section 409A of the Code and ambiguous
provisions, if any, shall be construed in a manner that is compliant with or
exempt from the application of Section 409A.

(b) This Plan shall not be amended or terminated in a manner that would cause
the Plan or any amounts payable under the Plan to fail to comply with the
requirements of

 

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Section 409A, to the extent applicable, and, further, the provisions of any
purported amendment that may reasonably be expected to result in such
non-compliance shall be of no force or effect with respect to the Agreement.

(c) The Plan shall neither cause nor permit any payment, benefit or
consideration to be substituted for a benefit that is payable under this Plan if
such action would result in the failure of any amount that is subject to
Section 409A to comply with the applicable requirements of Section 409A.

(d) Notwithstanding any provision of this Plan to the contrary, if the
Participant is a Specified Employee as of the date of the termination of
Participant’s employment, then any amounts or benefits which are payable under
this Agreement upon the Participant’s “separation from service” within the
meaning of Section 409A which are subject to the provisions of Section 409A and
are not otherwise excluded under Section 409A and would otherwise be payable
during the first six-month period following such separation from service shall
be paid on the first business day next following the earlier of (i) the date
that is six months and one day following the date of the termination of
Participant’s employment or (ii) the date of Participant’s death.

(e) For purposes of Section 409A, each payment under this Plan shall be deemed
to be a separate payment.

IN WITNESS WHEREOF, the Company has caused this document to be executed by its
duly authorized officer on this 9th day of December, 2008.

 

By  

/s/ Abraham D. Garza

 

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